Whisky Focus - Donald Trump Proposed US Border Tax Would Hit US Whisky Drinkers

A Donald Trump proposed US Border Tax would hit US whisky drinkers.

Alexandre Ricard, Pernod Ricard CEO, has warned that a proposed 20% US tax on imported goods which could hit Scotch whisky would have to be passed on to consumers.

Ricard commented earlier this week saying, "Retailers are saying, and we're fully in line with them, that the border adjustment tax is a consumer tax, a consumption tax." He went on to say that the proposal by Republican lawmakers to impose a 20% tax on imports was unfair to the American consumer.

The U.S. arm of the maker of Absolut vodka, Martell cognac and Mumm champagne has joined "Americans for Affordable Products", a group of over 100 businesses opposed to the tax.

The lobby group, launched earlier this month, includes other distillers Diageo North America and LVMH, as well as retailers including Walmart, Nike and Walgreens Boots Alliance, according to its website.

Pernod's business relies largely on provenance-based drinks whose production can not be moved, such as cognac and champagne, which must both be made in France.

But for some products, like blended Scotch, there is flexibility. For example, Ricard said it was possible to blend Scotch in Scotland and ship it to the United States in bulk in inert containers to be bottled locally.

He said such a move could be more efficient regardless of any border tax, since shipping whisky in bulk is lighter than shipping it in bottles.

"Maybe, it's something one could consider despite all of that, I would say it's something we should do anyway for environmental reasons."
 

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