Why Advocacy Matters
In Washington, D.C. and state capitals across the nation, politicians are writing and enacting laws that can have a profound impact on your business and our everyday lives as spirits consumers. It is up to us to make sure lawmakers are educated on how their actions will help or deter the ability to produce great spirits brands for consumers to enjoy. Advocacy is a team sport and we need your engagement with Spirits United. Your voice is a critical asset on the issues that impact our industry and consumers.
Distilled spirits are enjoyed by millions of adult consumers responsibly every day. Collectively, we are joined together to support this great industry and promote the enjoyment of distilled spirits responsibly.
Market Modernization in the States
When Prohibition in the United States ended in 1933, states and localities were given the power to regulate the sale and distribution of alcohol, pursuant to the 21st Amendment. However, many states still have ill-conceived and outdated laws limiting a consumer’s access to the spirits market.
We fully support proper regulations to ensure beverage alcohol is only consumed by those of legal drinking age.
Today, 43 states allow the sale of distilled spirits on Sundays. However, 7 states (Texas, Oklahoma, Utah, North Carolina, Montana, Mississippi, Alabama) completely prohibit the sale of spirits on Sunday. These laws are called “blue laws” and are antiquated restrictions intended to limit convenient consumer access to spirits based on Prohibition-era ideas. It should be up to the consumer, not the government, to buy spirits on a Sunday. It is our mission to enable consumers to make the ultimate choice of buying their preferred spirits on the day and at the location of their choice.
The distilled spirits industry produces thousands of different brands and continues to develop new products every year. A consumer can easily be overwhelmed by the number of quality products available for purchase. Tastings, small samples of distilled spirits, can be an incredibly effective way for consumers to make an informed and personal decision on how to spend their hard-earned money.
Currently, 46 states allow some form of distilled spirits tastings, with 37 states allowing tastings both at on-premise and off-premise establishments. These states have regulations in place to limit the size and number of tastings (i.e., no more than three ¼ ounce samples per person per day), as well as prohibit illegal, underage consumption. Of course, tastings for legal drinking age consumers need to uphold high standards of responsibility. However, tastings should be permitted in any retail establishment where beverage alcohol is sold to allow adults to try different brands or products.
Furthermore, many states allow wine and beer tastings, but not for spirits. This contributes to an uneven marketplace. After all, alcohol is alcohol and spirits, beer and wine products should be treated the same.
Alaska, Georgia, North Carolina, and Utah have a complete ban on spirits tastings, making it harder for the consumer to decide which brand or product they want to purchase.
At the federal, state, and local levels, burdensome taxes are applied to spirits that are not required of other industries or consumer products. When all of these taxes and fees are stacked on top of each other, this equals more than 50 percent of the retail price of a typical bottle of distilled spirits going toward a tax or fee of some kind in most states.
There is no evidence an increase on taxes deters those who abuse alcohol. High taxes on distilled spirits, however, is a significant burden on purchasers of distilled spirits who consume in moderation and responsibly. These taxes impact the local economy and jobs and often times cause consumers to take their business to other states.
Trade & Tariffs
Free trade and access to international markets are critically important for the growth of the U.S. distilled spirits industry. However, tariffs restrict free trade and result in serious consequences for our industry. Since June 2018, there has been a steady escalation in tariffs on distilled spirits on both sides of the Atlantic as part of unrelated trade disputes.
Due to the EU’s 25% tariff on American Whiskey, the value of American Whiskey exports to the UK and EU have decreased 53% and 37%. In June 2021, the EU’s tariff on American Whiskey will automatically increase to 50%. Similarly, U.S. retaliatory tariffs on certain imported spirits have resulted in a 36% decline in U.S. imports of Scotch Whiskies since the imposition of a 25% tariff on Single Malt Scotch Whisky in October 2019.
These tariffs have a damaging ripple effect throughout the entire industry harming distillery workers, importers, exporters, distributors, retail and restaurant workers, farmers, packaging companies and logistic providers. The added pressure resulting from these tariffs compound the negative impact on businesses and workers impacted by the global pandemic.
Engagement with Spirits United will help us educate lawmakers to understand the importance of resolving the on-going trade disputes with the EU, UK, China and Turkey.