Newspaper article The Canadian Press

Whisky vs. Bourbon: Canadian Distillers Wary of a Cross-Border Tariff Showdown

Newspaper article The Canadian Press

Whisky vs. Bourbon: Canadian Distillers Wary of a Cross-Border Tariff Showdown

Article excerpt

Whisky vs. bourbon: Canada Day kicks off tariff showdown

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Ottawa's new 10 per cent tariff on American whiskey could force bourbon aficionados to shell out more for a drink, prompting some to switch to a domestic blend, but Canadian distillers fear the politically motivated move could paint a reciprocal target on their industry.

The federal government confirmed Friday that American whiskey is on its final list of dozens of American goods subject to retaliatory tariffs starting July 1 in response to the crushing steel and aluminum tariffs imposed by the Trump administration.

The strike is both political and symbolic -- it would target Kentucky, the home state of Senate Majority Leader Mitch McConnell and the heart of a distinctly American product in the midst of a rise in global popularity.

Any price increase could drive some Canadian drinkers to choose a domestic blend, an historic Canadian product that is experiencing its own moment in the global spotlight, including the recognition of Crown Royal's Northern Harvest Rye as 2016 World Whisky of the Year.

But Canadian distillers also fear the tariffs could spark reciprocal levies from U.S. President Donald Trump against Canadian whiskies sold into the bigger U.S. market, just as Americans seem to be embracing the lighter-tasting spirit from north of the border.

U.S. whiskey producers of popular Kentucky bourbons and Tennessee-style whiskeys could pass along the 10 per cent tariff to Canadian consumers. Jack Daniel's producer has already announced it will increase prices by about 10 per cent in the European Union due to the impact of a new 25 per cent tariff in response to Trump's tariffs on steel and aluminum from the trading bloc.

Jack Daniel's maker Brown-Forman said it's taking a brand-by-brand and province-by-province approach to dealing with Canada's tariff.

"Tariff increases could be passed directly to the customer in full, partially or not at all," it said. …

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