Distillers vent fury at politicians on US tax

The Trump administration angered the whisky industry when it applied a 25 per cent import duty on single malt whisky imports in October, part of a trade dispute with the European Union (EU) sparked by Brussels’ award of subsidies to Airbus.

The Scotch Whisky Association warned the new trade barrier would undermine distillers’ ability to compete in a market which imported more than £1 billion of Scotch last year.

And Billy Walker, the industry veteran who heads the GlenAllachie Distillery in Speyside, said he has been disappointed that UK-based politicians have not done enough to counter the move.

Mr Walker, who exports the GlenAllachie single malt to the US, said: “My own feeling is our own politicians, frankly, are not doing enough, either from a Scottish Government point of view, a Westminster point of view, or a broad front of both of these political entities.

“And for the life of me I don’t know why they are not challenging the Europeans, in terms of the subsidies Airbus are getting. We can’t understand why the problems that exist between two large air businesses end up in our lap.”

The US tariffs have been applied to $7.5 billion of EU goods in total. According to the SWA, single malt will account for more than have the value of UK products on the list, at more than $460m.

The organisation fears the US tariffs will have a disproportionate effect on smaller Scotch whisky producers, and it has already led so some altering their export plans. Last month Fife-based Kingsbarns Distillery revealed it had delayed the launch of its debut malt in the US because of the tariffs.

Martin Leonard, managing director of Airdrie-based Inver House Distillers, agreed.

He said: “It is disappointing that single malt whisky is effectively taking up most of the contribution of the UK’s…part of that dispute. We’re taking a big chunk.

“Some other Scottish products are also involved [such as] cashmere and shortbread, but in terms of scale, single malt is the biggest contributor in terms of sales values.”

Mr Leonard added: “We’ve been lobbying Westminster, Brussels and Washington to get this reversed, but I don’t think there will be an immediate change there.”

Mr Leonard raised the prospect of whisky featuring in future trade talks between the US and the UK following Brexit, but added: “There is still quite a bit of uncertainty.

“I think it will have a bigger impact on the smaller producers, because it is single malt and liqueurs. Blended whisky is not affected.

“The bigger companies tend to have a bigger position in blended whisky. Smaller producers, especially some of the newer entrants to the market, are likely to have a bigger impact [on them].

“Scotch may become less competitive against other whiskies in that market [and] consumer choice might diminish.”

Asked how long he anticipates the US tariffs to be in place, Mr Walker replied: “I wrote to the Scottish Government to enquire if there was any information they could give us. I have to say I didn’t get any reply. I don’t think they (the tariffs) will last too long. If, in fact, January 31 is an exit point from the European market, does that mean that the tariffs dissolve?”

He added: “The whole thing is unwelcome. We are on a fairly positive trajectory generally throughout the world. This is just a hiccup that was unnecessary. Hopefully there are big intellects somewhere in our regional or national governments that will address this as quickly as possible.”

Mr Walker, who acquired GlenAllachie with Trisha Savage and Graham Stevenson in 2017, said the distiller now exports to 39 markets, and identified Russia, the Ukraine, Poland and South Korea as markets offering strong sales potential. He reiterated his commitment to move into rum distilling after revealing the idea around a year ago.

GlenAllachie has already been experimenting by ageing rums produced elsewhere in the world in casks at its Speyside distillery. “We are committed to doing it,” he said.