President Donald Trump's proposal for a 200% tariff on European alcohol imports has sent shockwaves through the beverage industry, raising fears that champagne, cognac and high-end wines could soon be unaffordable for U.S. consumers and disappear from the market entirely.
In an exclusive interview with Benzinga on Monday, Marten Lodewijks, President of IWRS America, a global leader in data and analytics for the beverage alcohol industry, said there is no scenario where a tariff of this magnitude does not inflict serious damage on European alcohol sales in the U.S.
“China imposed a 220% tariff on Australian wine, and exports to China collapsed by 96%. That effectively shut down the entire export market,” he said, pointing to a precedent for how devastating such a move could be.
The Data Speaks: What Past Tariffs Tell Us
Tariffs on alcohol are not new, and past data provides insight into their potential impact.
In 2019, a 25% tariff on U.S. whiskey exports to Europe resulted in a 20% decline in sales within a year. A similar 25% tariff on Scotch whisky imports to the U.S. led to a 17% drop in sales.
“This would significantly harm the European export market to the U.S., which remains one of the most valuable in the world,” Lodewijks said.
The U.S. is the largest market for European wines and spirits, accounting for nearly a fifth of their total product shipments.
In 2024, the U.S. imported $5.6 billion worth of wine and $5.5 billion in other alcoholic beverages from the European Union, according to data from the International Trade Centre.
Who Stands To Lose The Most?
The biggest losers would be high-end European producers, particularly those relying on U.S. demand. French champagne, Italian prosecco, Spanish wines, and Scotch whisky all risk seeing sharp sales declines.
American consumers, especially those accustomed to premium European wines and spirits, would also feel the impact through higher prices.
Surprisingly, some U.S. whiskey producers could also be hit, as Europe and the UK—two of the biggest markets for American whiskey—may retaliate with their own tariffs.
“The biggest market for U.S. whiskey is precisely the one facing tariffs,” Lodewijks said.
Are There Any Winners?
Not all companies will be on the losing end. American craft whiskey and bourbon producers could see an uptick in demand as European imports become too expensive.
Shares of Brown-Forman Inc. (NYSE:BF), the maker of Jack Daniel's, have gained nearly 5% since Trump's tweet threatening a 200% tariff on European alcohol unless Brussels reduces tariffs on U.S. whiskey.
U.S. wineries may also benefit if French and Italian wines are priced out of the market, pushing consumers toward Napa Valley or Oregon Pinot Noir.
Industry Response: Stockpiling Before The Storm?
Facing the looming tariff risk, some industry players are front-loading inventory, importing products in bulk before potential price spikes.
“Tequila producers, for example, are increasing shipments to the U.S. ahead of tariffs,” Lodewijks confirmed.
Yet, the U.S. alcohol market is already overstocked, limiting how much additional inventory can be absorbed.
“Distributors are sitting on historic levels of stock. There's only so much they can take before logistics and financing become a problem,” Lodewijks said.
Beyond the immediate impact on pricing and supply chains, the biggest issue remains uncertainty.
“The biggest problem with this trade war is the lack of clarity. It's changing every day,” Lodewijks said. This unpredictability makes it difficult for businesses to plan, creating a “paralysis” in decision-making.
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