(NABI Press Release No. 2019-5) | National Association of Beverage Importers, Inc. | Washington, DC
Tariffs are taxes. Paid by importers at the time of the entry of these products, these monies fill the Treasury coffers in the identical manner as do taxes. But then these financial impositions on imported distilled spirits, wines, and beers are borne by consumers.
The United States has proposed retaliatory tariffs against European Union (EU) products as a result of the World Trade Organization (WTO) decision that the EU gave improper subsidies to Airbus that, in turn, harmed Boeing from a competitive disadvantage point of view. In addition to tariffs aeronautical parts (which are at the heart of the dispute), the proposed retaliatory tariffs include grape wines from the EU, grape-based distilled spirits, liqueurs and cordials, and nonalcoholic beers.
NABI President Robert M. Tobiassen said “the wide range of imported alcohol beverages available to consumers reflect their demand for these products. The United States is a hugely consumer driven economy and retailers offer products that consumers want for their pleasure and enjoyment.” For fiscal year 2018, TTB approved 185,072 certificates of label approval (COLAs) of which 86,958 represented domestic products and 98,114 represented imported products. Consumers want these unique products and are demanding them. Tobiassen asks “Why tax their happiness?”
Earlier this month, at a public hearing in Washington, DC on the proposed tariffs, trade officials suggested that they view many of the goods and commodities on these proposed tariff lists as fungible or generic in nature. That is, red wine is a red wine or a liqueur is a liqueur. This assumption fails to recognize the fact that consumers of alcohol beverages have very subjective tastes and loyalties to specific types of these beverages. Visit any bar or pub and many, many customers order their alcohol beverages by brand or place of origin. A red Burgundy/Bourgogne is not an American Pinot Noir to them, nor is a white Burgundy/Bourgogne an American chardonay to these wine consumers. Flavors, taste characterisitcs, and aromas between wines are all distinctive to these consumers. Why should they be penalized to pay more for these wines they enjoy. These consumer preferences are equally held by consumers in distilled spirits and non-alcoholic beers as well. Grappa consumer want their grappa from Italy as do Cognac consumers want their product from France.
Moreover, the public is turning to more low alcohol or nonalcoholic beverages. Importation of nonalcoholic beers enable retailers to meet this consumer demand, as well as advance public health and safety policies. The Federal government through the Department of Health and Human Services (HHS), National Institute on Alcoholism and Alcohol Abuse (NIAAA), National Institute of Health (NIH), and the Dietary Guidelines for Americans, among others, has a strong public health policy of promoting responsible and moderate consumption of alcohol beverages by those consumers who decide to drink in the first instance. Nonalcoholic beers directly advance and support this vital public health policy. Retaliatory tariffs making access to these nonalcoholic beers harder undercuts the promotion of this sound public health policy.
Similarly, sound public welfare policies are advanced here too in regards to preventing automobile deaths by drunk drivers. Designated drivers may safely consume nonalcoholic beers as part of their friends’ social gatherings.
This is a dispute over large civil aircraft. Other than being served on airplanes, alcohol beverages have no nexus to aircraft. Sufficient tariffs imposed on aeronautical parts will compensate the United States and deal directly with negating the competitive advantages from the improper EU subsidies.
Don’t tax consumers’ happiness; don’t undercut sounds public policies on responsible consumption.