US reaffirms commitment to wine and spirits trade post Brexit

The Distilled Spirits Council has welcomed the US and UK government’s promise to protect the trade of wine and spirits between both countries after the UK leaves the European Union in March, regardless of whether a deal with the EU is reached.

In 2017, the UK was the top export market for US distilled spirits, totalling $187 million, and the largest single market for American whiskey exports, which accounted for almost $150 million of that total.

The US and UK signed an agreement on 31 January to ensure reciprocal protection for Bourbon, Tennessee Whiskey, Scotch whisky, Irish whiskey and wine after the UK leaves the European Union (EU), and that trade will continue uninterrupted.

Currently the United States has agreements on wine and distilled spirits with the European Union which cover trade with the UK by virtue of its membership in the EU.

The agreement will also extend to wine exports between the two countries, benefitting the UK’s burgeoning English wine industry, and Californian wine in the UK.

“Ensuring that our flagship spirits exports – Bourbon and Tennessee Whiskey – will continue to be protected provides our companies much-needed assurances as the UK. negotiates its departure from the EU,” said Distilled Spirits Council President & CEO Chris Swonger.

The agreement will ensure that the terms Bourbon and Tennessee Whiskey will continue to be protected in the UK, and visa versa with Scotch in the US, and includes commitments to winemaking practices and labeling requirements, with the terms of their trade remaining unchanged after Brexit, whatever the outcome.

In 2017, the UK was the top export market for US distilled spirits, totalling $187 million, and the largest single market for American whiskey exports, which accounted for almost $150 million of that total. American whiskey exports to the 28 members of the EU were valued at $667 million. The UK was also the fourth largest export market for US wine products in 2017, with a value of $227 million.

“On behalf of all of our American Whiskey producers, we thank the US government and the staff of the US-UK Trade and Investment Working Group for securing this important outcome,” Swonger added.

CHILE TRADE DEAL

Last week, Chile took similar steps towards reaffirming its relationship with the UK, with each countries’ respective governments signing a trade continuity agreement to ensure that after the UK’s departure from the European Union the two countries will continue to enjoy uninterrupted and “beneficial” trading arrangements.

The government press release added that it expects to sign “a number of other arrangements…in the coming weeks.”

The UK’s ambassador to Chile, Jamie Bowden, said: The UK and Chile enjoy a long-lasting trade relationship. The UK is still working to achieve an agreement with the European Union on the terms of our departure. The success of those talks will determine whether the current EU-Chile agreement ceases to apply to the UK at the end of March this year, or at the end of an Implementation Period.

Miles Beale, chief executive of the WSTA

“In either scenario, the agreement we have signed today means that there will be no disruption to UK-Chile trade as the UK leaves the EU.”

The WSTA has already stated its belief that a no-deal Brexit would be catastrophic for the drinks industry. A no deal Brexit essentially means that there would be no formal agreement between the UK and the EU on ongoing relations in terms of trade, and a transition period, which Prime Minster Theresa May has proposed, would be off the table.

In that situation, independent agreements with as many trading partners as possible around the world should be welcomed, maximising the potential for frictionless trade, but would not solve the issue of trade with countries in the European Union, or afford the UK a transition period in which to negotiate tariffs.

Currently, 55% of wine consumed in the UK is imported from the EU, whilst 45% of spirits exported from the UK is destined for the EU.