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A year after EU tariffs, whiskey makers struggle

Credit: Reuters Studio
Published on August 18, 2019 - Duration: 01:44s

A year after EU tariffs, whiskey makers struggle

U.S. whiskey makers are struggling one year after the European Union imposed tariffs of 25 percent on what had been a booming business.

Nathan Frandino has more.

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A year after EU tariffs, whiskey makers struggle

(SOUNDBITE) (English) HERMAN MIHALICH, OWNER OF MOUNTAIN LAUREL SPIRITS, SAYING: "This is the one of which we're most proud.

This is our straight whiskey." Herman Mihalich stands by his Dad's Hat Pennsylvania Rye Whiskey.

(SOUNDBITE) (English) HERMAN MIHALICH, OWNER OF MOUNTAIN LAUREL SPIRITS, SAYING: "And one that we think would do very well in the European market." But that market is currently on the rocks.

Ever since the European Union imposed 25 percent tariffs on U.S. whiskey in June 2018, the industry is no longer seeing top shelf profits.

The E.U.

Move was in response to President Donald Trump's tariffs on steel and aluminum imposed last June.

Mihalich's distillery in Bristol, Pennsylvania, lost 10 percent of its sales overnight after his European distributors stopped buying his award-winning whiskey.

(SOUNDBITE) (English) HERMAN MIHALICH, OWNER OF MOUNTAIN LAUREL SPIRITS, SAYING: "No, we didn't lose them.

They stopped buying for the time being, so we're in a bit of a hiatus with them until they find out where this thing is going." MIHALICH is not alone.

The Distilled Spirits Council industry group says U.S. whiskey exports to Europe fell almost 20 percent between June 2018 and 2019.

The group also says roughly 11,000 jobs are at stake if the EU-U.S. conflict worsens, which is expected, as the U.S. is targeting $1.8 billion worth of European spirits and wine for more tariffs, which could come as soon as this fall.

The tariff war is cutting short a boom for U.S. whiskey.

In 2018, production of Kentucky bourbon, a popular variety of whiskey, reached its highest levels in over 45 years.

And with cocktail bars thriving in Europe, Mihalich says it'd be a shame for consumers to miss out on rye.

(SOUNDBITE) (English) HERMAN MIHALICH, OWNER OF MOUNTAIN LAUREL SPIRITS, SAYING: "Oh yeah.

Still delicious.

Really good."

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