DiSCUS Annual Report: Tariffs, Premium Spirits, & Excise Breaks

By Neat Pour Staff |

On February 12, the Distilled Spirits Council of the United States (DiSCUS) presented their annual report about the state of the spirits industry in America. The key talking points were not shocking to most industry-watchers: the current trade wars are devastating for American Whiskey producers; the premium and super premium sectors are booming; and the Craft Beverage Modernization and Tax Reform Act (CBTRA) is a win, but more work is needed.


2019’s biggest story was the ongoing trade war between the United States and the European Union. Specifically, a 25% retaliatory tariff from the EU, the largest market for American Whiskey, is hammering domestic distillers.

“The data is clear. These tariffs are chipping away at American Whiskey’s brand equity in our top export markets. These great American Whiskey products that have been the toast of the global cocktail scene are struggling under the weight of the EU tariffs.”

DiSCUS’ data showed a 27% drop on liquor exports to the EU from 2019 to 2018. Exports were notably down to Europe’s major markets: UK (-32.7%), France (-19.9%), Germany (-18.2%) and Spain (-43.8%).

“We are now gravely concerned that the U.S. tariffs on EU spirits imports will have the same deleterious effect in the United States,” said Swonger.  “If this trade dispute is not resolved soon, we will more than likely be reporting a similar drag on the U.S. spirits sector, jeopardizing American jobs and our record of solid growth in the U.S. market.”

Fill ‘er Up With Premium

DISCUS Chief Economist David Ozgo remarked that once again the strongest revenue growth in the U.S. spirits market in 2019 was generated by high-end premium and super premium spirits.

“Sophisticated consumers, with their preference for prestige bottles and unique experiences, are the key drivers of growth in the spirits industry,” said Ozgo. “A strong U.S. economy coupled with market modernizations that provide greater access to spirits, has put wind in the sails of the super-premium spirits category.”

Ozgo also noted some industry standouts including Rye (sales up 14.7 percent or $30 million, reaching $235 million); Tequila/Mezcal (up 12.4 percent or $372 million to $3.4 billion); Irish Whiskey (up 5.6 percent to $1.1 billion) and Single Malt Scotch (up 9.6 percent or $81 million to $925 million).

Excessive Excise

However, the CBTRA was likely the industry’s biggest win in 2019. With bipartisan backing, 

Congress once again renewed the temporary measure, leveling the playing field for smaller producers.

The legislative package aim to cut the federal excise tax on small manufacturers for two years. For example, the current $7 per barrel fee would be reduced down to $3.50 per barrel on the first 60,000 barrels for domestic brewers making fewer than two million barrels. Brewers making less than six million barrels would be taxed at $16 a barrel, down from $18. On the spirits side, small distillers would see their tax slashed from $13.50 per proof gallon to $2.70.

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