Europe's Bourbon Retaliation May Hurt Some of Its Own CompaniesBy
The European Union intends to target 2.8 billion euros ($3.5 billion) of U.S. goods -- everything from T-shirts to whiskey to motorcycles -- if President Donald Trump goes ahead with his plan to impose tariffs on foreign steel and aluminum.
The tit-for-tat levy would apply to a range of consumer, agricultural and steel goods, according to a list drawn up by the European Commission and obtained by Bloomberg News. While they include iconic American brands such as Harley-Davidson motorcycles, some of the products targeted are made by companies with European owners.
Take U.S. whiskey. While a key target of a tariff would be Brown-Forman Corp., the maker of Jack Daniel’s Tennessee Whiskey and Woodford Reserve bourbon, several European distillers -- along with Japan’s Suntory Holdings Ltd. and Kirin Holdings Co. -- also own leading brands.
Pernod Ricard SA has said it will continue to target takeovers of American whiskey brands in the near term after acquiring West Virginia-based Smooth Ambler Spirits Co. in 2016. The French distiller sold Wild Turkey bourbon to Italian rival Campari for $581 million seven years earlier.
An EU tariff on American whiskey would come as the spirit category enjoys surging popularity in Europe amid demand for classic cocktails such as the Manhattan. Last year, London-based Diageo Plc opened a $115 million distillery for its Bulleit bourbon brand, anticipating further growth in the category.
Industry tracker IWSR has forecast that sales of American whiskey from countries currently in the EU could grow to more than $3 billion in 2021 from $2.4 billion last year. The figure excludes the potential impact of levies.
— With assistance by Nikos Chrysoloras, Zoe Schneeweiss, and Viktoria Dendrinou