Import tariffs from the Trump Administration are expected to have sizable albeit varied impacts on the global liquor trade, finds the latest analysis from the IWSR.
While Tequila and Canadian whiskey imports to the US have been identified as most at risk, still wine exports from Europe to the US have also been identified as a potential loser to changes in import taxation policy.
“If tariffs are imposed on the EU, this could have a serious impact on Prosecco and Champagne exports to the US,” says Marten Lodewijks, President of IWSR’s US division. “However, US-produced wine is mainly consumed domestically, and should benefit from a competitive advantage on price.”
Regarding the impact to Australian wine imports, Lodewijks says that the “same rationale would apply to other exporters to the US from outside the EU: Wine producers in Australia, New Zealand, Chile and Argentina should all benefit, provided that they escape US import tariffs, as they have done previously.”
CreditorWatch CEO Patrick Coghlan also confirmed that the tariffs should not have any impact on business confidences and operations in Australia’s hospitality sector.
“I think there will be certain industries that could be concerned – like media and steel and aluminium – but it’ll be very industry specific, and we’re yet to see exactly what’s going to happen,” Coghlan told Drinks Trade. “I don’t think that any tariffs are necessarily going to target hospitality per se.”
However, while the IWSR is confident that the new tariffs will negatively impact the US liquor sector, it is less certain about the impact on the global market.
“The second Trump Administration’s policies on tariffs will almost certainly be net negative for total beverage alcohol in the US market, with global implications likely to be more limited, but there is major uncertainty about the extent of the impact,” said Lodewijks.
Within the US, less origin-specific liquor categories such as US spirits, beer and RTD are expected to benefit by increased prices on competing products.
“US whiskey, vodka and rum, all of which are mostly or completely produced in the US, should expect to see gains in domestic consumption as a result of tariffs, Lodewijks said.
“Meanwhile, RTDs too are almost entirely produced in the US … They may even benefit from price increases for imported spirits, potentially attracting more people to try spirit-based RTDs.
“As a whole, US domestic beer and RTDs should steal share from imported beer and possibly spirits too.”