WHISKY distillery chiefs have called on the UK and Scottish governments to keep up the pressure on Donald Trump on tariffs after the US president departed the UK with no sign of an improved deal emerging.
After First Minister John Swinney held talks with Trump in Washington DC earlier this month, it was hoped whisky would be on the agenda when the president arrived in London last week for an unprecedented second state visit.
But there was no fresh deal struck and instead, the UK and the US agreed to work more closely on nuclear power and shook hands on a deal to boost co-operation on AI.
Trump introduced a 10% tariff on Scotch whisky imports earlier this year which the industry says is costing businesses £4 million a week.
Arguably, the impact of the import taxes this time is more wide-ranging than the previous 25% applied to single malt in Trump’s first term, as this 10% tariff applies to all kinds of Scotch including blends.
William Wemyss, founder and chairman of Wemyss Family Spirits which runs Kingsbarns Distillery in St Andrews, has said the tariffs have come at an “untimely” moment for his business as it has started putting more focus into the American market – which makes up 10% of their sales.
He said the tariffs will be “detrimental” for industry jobs in Scotland and has called for governments to work together to secure a better deal.
“We’ve started our own little import business in the US so we’re putting increasing amounts of focus on it, so it’s pretty untimely for our business as we seek to build the American market,” said Wemyss.
“The Scotch Whisky Association calculated it’s costing about £4m a week in export value so it’s definitely going to be detrimental.
“If you’re losing exports it’s going to have a knock-on effect through the supply chain. That’s lost revenue, lost profit and ultimately probably lost jobs in the long term.”
Asked what difference it would make if the tariffs were removed, Wemyss (above) said: “It creates certainty which is what all businesses want, whereas at the moment we’re getting asked by our customers in the US ‘what’s happening with the tariffs, are you passing on the price or are you not’, and so ultimately it’s a very fluid situation.”
As if the 10% tariff wasn’t enough for the whisky industry to grapple with, there is still a looming threat of further trade taxation in the future. A deal struck to suspend the 25% levy on single malt during Joe Biden's time in office is due to expire next summer.
Wemyss said it is “very difficult” for businesses to second guess what’s going to happen next which makes planning for growth extremely challenging.
The 10% tariff has been applied to most UK goods, but a deal was signed in May which reduced tariffs on key areas such as UK exports of cars.
Wemyss Family Spirits is pushing for the UK Government to secure a “zero-for-zero” deal, given American bourbon is not currently subjected to any taxes when it arrives in the UK.
“I think it’s up to both governments to keep pushing the agenda for Scotch,” said Wemyss.
“If they can work collaboratively that would be for the industry’s benefit.
"[My message would be] keep the pressure on."
Swinney came out of talks with Trump in Washington suggesting there was a “real chance” of an improved deal, but he went on to say last week the UK Government was too distracted with internal issues such as the Peter Mandelson saga and a recent reshuffle sparked by the resignation of Angela Rayner as deputy prime minister and housing secretary.
Mandelson was sacked from his role as US ambassador after emails emerged showing he had kept up relations with Jeffrey Epstein even after his paedophilia conviction.
Anthony Wills (below), founder and managing director of Kilchoman Distillery in Islay, said Swinney was “absolutely right” and he did not feel confident whisky would be a priority for the UK Government.
He said: “I think it’s great he [Swinney] went over and engaged with President Trump and tried to make him realise this wasn’t working for Scotland, but it’s up to the UK Government to decide if this is going to be something they work towards and whether they have the same passion to have these [tariffs] removed is another matter.”
He went on: “The UK Government is totally distracted with all its internal issues and the way the economy is performing because of what they’ve done to businesses up and down the country.
“I can’t see them sort of focusing in on Scotch whisky as something they need to get a deal over the line with.
“It would make it a very unlevel playing field if suddenly Scotch and only Scotch gets removed [from the tariffs]. I can’t see it happening, but I hope I’m wrong.”
Wills also hit out at the UK Government for “hammering” the whisky industry with constant increases in duty.
The Conservatives initially imposed a 10.1% hike in duty on whisky on August 1, 2023. In her Budget last October, Rachel Reeves increased the burden on whisky in line with inflation, which meant a further 3.65% increase which came into effect on February 1 this year.
“The UK Government and the Scottish Government have to look upon Scotch whisky as unique and special and a hugely important export around the world and get behind it,” he said.
“Taxes go up every year for whisky we sell in the UK which has not helped increase the revenue into the Exchequer. We feel as an industry that we’re got at every time, and they don’t support an industry which is massive in terms of employment in Scotland.”
Speaking to The National earlier this year, Wills explained he had chosen to split the cost of the tariff with his US importer as he did last time in a bid to keep his prices the same.
But he said he is having to keep prices under review as whisky faces tighter margins in the US than anywhere else in the world.
“We’re keeping them in place until the end of the year and then we’ll be reviewing it and seeing what’s best in terms of sales,” Wills said.
“The USA is a difficult market to get into because of the three-tier system they have. You have to have an importer, who then sells to a wholesaler in each state, and then they sell to a retailer, so there’s another layer of margin.
“So that is a negative for us but we know how important the market is, and we need to be there, so we’re prepared to take a bit of a hit. The tariffs are just another nail in the coffin to what we do over there.”
First Minister John Swinney said: “While we await further updates on whisky tariffs, I am pleased we have succeeded in putting it firmly on the trade agenda.
“Now that the state visit has ended, it is vital that the UK Government maintains focus on whisky. I will continue to make the case for our whisky industry and the mutually beneficial deal that is on the table.”
The UK Government has been approached for comment.
