LOUISVILLE, Ky. — America bourbon and whiskey will once again be free-flowing into the European Union.
Gov. Andy Beshear celebrated the news Monday and said the tariffs on the bourbon industry were unfair since bourbon can only be produced in Kentucky.
"These things were retaliatory," Beshear said during an unrelated COVID-19 press conference Monday. "They were hitting bourbon harder than anywhere else because we can't move production offshore like other companies were gonna be able to do with other products. This is an $8.6 billion industry for us, 20,000 Kentucky jobs."
The EU agreed to lift the tariffs on the spirit after three years during the G-20 summit Saturday.
In 2018, the U.S. imposed tariffs on steel and aluminum imports and the EU responded with an added tax on American whiskey.
Distillers said the move came just in time since the 25% tariff was set to double next month.
"We're really excited that not only it goes away, but it didn't double," Kentucky Distillers' Association President Eric Gregory said. "That would have been a crippling blow to our industry. We're already seeing hundreds of millions of dollars lost with a 25% tariff. Just imagine what a 50% tax would do."
Gregory said whiskey makers were seeing double-digit growth for decades, but that number dropped dramatically.
“Since the tariffs were enacted, we lost about 35% of our global exports and that includes 50% to the European Union and 50% to the United Kingdom,” Gregory said.
Gregory said prior to the tariffs, the industry was exporting roughly $600 million overseas and he thinks that number could return soon.
Andrea Wilson, master of maturation and general manager at Michter's Distillery, said they too are happy about the tariffs being lifted.
"The relief will provide a much brighter opportunity for all of us to continue to invest and grow and build and employ more people and that's great things for the Commonwealth of Kentucky," Wilson said.
Wilson said Michter's, which is based in Kentucky, has expanded operations with the tariffs in place, but the added free trade opportunities will help them grow even more.
"We want to continue to see our footprint grow and a part of that is growing beyond our borders," Wilson said. "It is very important to us. It's an intrinsic part to continue to develop our brand globally."
The United Kingdom and China still have bourbon tariffs in place.
The Brown-Forman Corporation, which owns Woodford Reserve, released a statement applauding the end of the tariffs.
"Brown-Forman looks forward to the return of a level playing field on January 1, 2022, and continued international growth for American Whiskey," Brown-Forman President and CEO Lawson Whiting said. "We hope a similar outcome can soon be achieved between the U.S. and the UK."
The Kentucky Distillers Association says the China tariff hasn't impacted the industry much, but they'd still like to see it removed.
"We barely scratched the surface on exports to China anyway, so it didn't affect us as much as it does the European market, but still, we're all for zero-zero tariffs and free, fair trade," Gregory said.
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