Distilleries NAICS 312140

Apr 29, 2025 - Tariffs Threaten Export Growth

• After a record-breaking year for exports, ongoing trade disputes between the US and its trading partners threaten to derail growth for the US spirits industry, according to the Distilled Spirits Council of the United States (DISCUS). US spirits exports hit a record $2.4 billion in 2024, driven by a 39% increase in exports to the European Union, the largest market for US spirits, which has zero tariffs on spirits imports. Exports to the rest of the world fell nearly 10%, reflecting a softening of the global market for spirits. According to DISCUS, the current outlook for US spirits exports is highly uncertain due to ongoing trade disputes, negotiations, and retaliatory tariffs. Canada, the second largest market for US spirits exports, began imposing a 25% tariff on all American-made spirits on March 13, and most Canadian provinces have removed all US alcohol products from retail shelves.
• Dry January is over, but distillers aren’t breaking out the champagne as the sober curious movement continues to gain momentum in the US. New findings from marketing firm NCSolutions (NCS) reveal that nearly half of Americans (49%) say they plan to drink less alcohol this year, a 44% increase since 2023. The percentage of people planning to cut back on alcohol consumption has been trending upward over the last three years. In 2023, 34% of Americans planned to drink less, rising to 41% in 2024. In 2025, 30% of Americans say they’re taking part in Dry January, a 36% increase from last year. Per NCS purchase data, Dry January is the least popular month to buy alcohol. In 2024, purchases of spirits tumbled 39% compared to December, while wine purchases fell 36% and beer/cider/hard seltzer purchases decreased 21%.

• US distillers, already facing the threat of a 50% tariff on American whiskey by the EU at the end of March 2025, could face retaliatory tariffs on tequila and Canadian whisky imposed by Canada and Mexico if President Trump follows through on his threat to slap 25% tariffs on products from those countries unless they stop the flow of drugs and migrants to the US, the Distilled Spirits Council of the United States (DISCUS) warns. Under the United States-Mexico-Canada Agreement (USMCA), tequila and Canadian whisky are designated as distinctive products and can only be made in their country of origin. Consequently, imposing a tariff on tequila and Canadian whisky won't help boost American jobs because they can’t be produced here. Import tariffs on spirits will only serve to raise prices for US consumers and lead to job losses across the hospitality industry, DISCUS warns.
• Employment by breweries, wineries, and distilleries grew 5.9% in January compared to a year ago, amid rising beverage sales and shipments, according to the latest US Bureau of Labor Statistics data. Sales of beverage and tobacco products increased 3.9% in the fourth quarter year over year and 2.8% from Q3, according to the Census Bureau. More recently, February beverage shipments rose 1.1%YoY but fell 2.5% from January. Producer prices for distilleries fell 0.9% in 2024, BLS data shows. Prices for distillers have been relatively flat since mid-2023 as sales and demand softened following a steep run up in the aftermath of the pandemic fueled by the reopening of bars and restaurants. Despite weak pricing power, after-tax profits for beverage and tobacco products companies soared 145.5% in the fourth quarter versus a year ago but dipped 0.7% from Q3, per the Census Bureau.