The interconnected nature of our countries (which allowed this virus to spread so quickly) will ironically be the antidote to the disastrous economic implications we can expect. International trade is the accelerant that will get our economies moving again.
ADVERTISEMENTNever before has a situation demonstrated the interdependence of countries, citizens and businesses as the coronavirus has. This disease is truly global and so too must be our response.
SpiritsEUROPE and our members are trying to help in the ways we know best. Distillers across Europe are shifting their production to make and donate alcohol for hand sanitisers to help fight the spread of this deadly disease. They are also providing direct financial support and training to bartenders and others most affected by the shutdown of the hospitality industry.
While everyone is rightly focused now on the immediate health crisis at hand, and on rescue packages and crisis investment programmes, policymakers should also consider how they can act now to remove barriers to a swift economic recovery when the crisis passes.
The interconnected nature of our countries (which allowed this virus to spread so quickly) will ironically be the antidote to the disastrous economic implications we can expect. International trade is the accelerant that will get our economies moving again, yet artificial barriers, imposed in a hugely different geopolitical context, remain.
For our sector, the most obvious issue is the introduction of a 25% tariff on American bourbon by the EU in 2018 and on a number of EU-made spirits by the US in 2019. These obstacles to international trade blindsided our sector and resulted in painful drops in sales, well before the COVID-19 crisis. According to DISCUS, our US-based counterpart, imports of bourbon to the EU fell rapidly by 27%. Exports of European spirits affected (for example, Irish cream, German and Italian liqueurs, single malt Scotch) have dropped by a similar figure.
These contractions in sales will be compounded by COVID-19. Many of our member companies have already announced profit warnings; we expect this be replicated across the sector in the coming months.
While our leaders cannot end the coronavirus overnight, they can work now to lift barriers to our economic recovery, like the EU-US tariffs. EU Trade Commissioner, Phil Hogan has previously stood up for the spirits sector in this debate, saying the industry is collateral damage in the dispute between Airbus, Boeing and the US and EU. Commissioner Hogan has proven himself to be a strong defender of EU businesses and agriculture, and a strong advocate for fair and free trade.
We trust that the Commissioner will now, more than ever, prioritise finding a swift resolution to this unnecessary trade dispute, even as he does all he can to support his colleagues in the European Commission in their efforts to stem the human costs of the coronavirus crisis.
- Ulrich Adam is the Director General of spiritsEUROPE, an industry body that represents producers of spirits drinks at EU level.
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