The 2020 alcohol price war may not be over yet

Before June 30, 2020, the European aircraft manufacturer, Airbus had 208 aircraft orders on file, including 36 deliveries in June of their A220, A320 and A350 XWB widebody models. Two A350-900s went to Iberia (Spain) and one to Air France and SAS, the carrier from Denmark, Norway and Sweden. As of July 1, 2020, Airbus had an order book of 7,584 aircraft in stock, including 560 A350-XWB aircraft.

Citing injurious tariffs imposed by the United States Trade Representative (USTR) and a “difficult environment due to the COVID-19 crisis”, Airbus, recently announced a resolution to a 16-year dispute between the company and the World Trade Organization (WTO).

The conflict was linked to the Reimbursable Launch Investment Contracts (RLIs) between Airbus and France and Spain for the company’s A350 model, which the United States says is nothing less than a subsidy to build the planes that compete with Boeing’s 777 model planes.

In October 2019, USTR won a $ 7.5 billion award against Airbus at the WTO. Winning this case gave the United States the excuse it needed to impose a new 25% trade tariff on a variety of European Union products, including alcoholic beverages.

In a statement after the Airbus announcement in July, the United States Distilled Spirits Council (DISCUS) expressed relief saying “distillers on both sides of the Atlantic have suffered enough.”

According to DISCUS, the dispute and tariffs lowered imports of Scotch Whiskey into the United States by almost 33% between October 2019 and May 2020, compared to the same period a year earlier. Cordials and liqueurs also fell by around 23%. Imports of wines from France, Germany and Spain decreased by 44% during the period.

A retaliatory European Union tariff of 25% reduced exports of American whiskey to Europe by 33%. To make matters worse, after the Trump administration talked about increasing its tariff to 100%, the EU planned a 50% tariff increase for 2021.

The USTR deadline for comments on the proposed 100% tariff expired at the end of July 2020. DISCUS said on July 22: “More than 2,000 comments opposing the proposed tariffs on EU spirits have been submitted. submitted so far via the base platform of DISCUS Spirits United. ”

UPDATE: The Spirits United campaign ended up generating almost 9,700 comments at USTR as of the closing date.

The USTR is expected to release a decision on August 12, 2020.

On July 27, representing the U.S. and European alcoholic beverage industries, 17 associations submitted comments opposing the U.S. government’s proposed tariff increase (up to 100%) on imported distilled spirits, wine and beer. from the EU and the United Kingdom (United Kingdom). . It is estimated that an additional tariff will result in a loss of approximately 13,700 to 95,900 jobs in the United States, depending on the percentage increase in tariffs. DISCUS aims for zero tariffs on both sides of the Atlantic.

The joint press release was issued by: Distilled Spirits Council of the United States, spiritsEUROPE, Scotch Whiskey Association, American Beverage Licensees, National Retail Federation, American Craft Spirits Association, American Distilled Spirits Alliance, National Council of Chain Restaurants, Kentucky Distillers’ Association , National Association of Beverage Importers, National Restaurant Association, US Wine & Trade Alliance, WineAmerica, Wine Institute, Wine and Spirits Shippers Association, National Association of Wine Retailers and Wines & Spirits Wholesalers of America (WSWA).

Michael Bilello, WSWA’s senior vice president for communications and marketing, told Forbes: “This is an important and encouraging step in the right direction to end the punitive retaliatory tariffs on wine and spirits from the EU. However, until the WTO accepts the proposed measure and removes the US State legal justification for tariffs on EU products, our industry remains threatened by an increase or an extension of tariffs. “

Bilello added: “It is more important than ever to ensure that the USTR knows how damaging these tariffs have been, especially when combined with the devastating effects of COVID-19 on the hospitality industry. WSWA will not stop fighting until all tariffs are lifted on our industry, and we hope the USTR and our European business partners share our urgency to make a decision and end this dispute before let it do more harm to American businesses, workers and consumers.

In a recent development, more than 160 lawmakers sent a letter to USTR Ambassador Robert Lighthizer, who urges an end to the 25% tariff currently imposed and discourages any additional tariffs on EU wines and spirits.

About Mary Moser

Check Also

Broadcast Management Group Acquires Five Grass Valley LDX 86 WorldCam 4K Cameras and Becomes Official Reseller of Grass Valley Product Line

NEW YORK, NY / ACCESSWIRE / Feb. 18, 2021 / Broadcast Management Group, Inc. (BMG) …

Leave a Reply

Your email address will not be published.