‘These times are something the industry hasn’t seen in a very, very long time’ – Distilled Spirits Council of the United States CEO Chris Swonger speaks to Global Drinks Intel

Which categories have been affected the most? Where are the bright spots?

All of spirits have been affected across the board. We’ve seen an unfortunate downturn in both wine and beer consumption as well. I think that’s just a reflection of the marketplace.

Spirits-based RTDs are enjoying the most exciting growth – Discus has been on point from an advocacy perspective in some states, to make sure that LDA consumers can access these, many of which have the same level of alcohol as many other (alcoholic) products.

In some states, the taxation on spirits-based RTDs is extraordinarily high. In Washington state, for example, it’s 50 times higher than a malt product. So, we’re working to reduce the taxes on these and enable greater market access, because this category is really the shining light in the marketplace.

Tequila also continues to intrigue the American consumer. Even with a slowdown, there’s no doubt there’s a long runway of momentum for tequila and American whiskey.

What is the sentiment among your members?

They continue to focus on the consumer. I can’t say there’s no anxiety, but really, there’s a focus on bringing great products to the marketplace.

Over the last 15 to 20 years, the spirits industry has utilised storytelling, the heritage of products, great innovation and great-tasting products to connect with consumers like never before. That gives me optimism and hope that we will persevere and prevail in the face of the current market headwinds.

Anytime there are challenges in the marketplace, it can make you better. When it’s an easy market­place, it’s easy. Challenges bring strength and creativity and helps find unique ways to connect with consumers. Across the board, I’m seeing many of our companies focused on that.

Discus also represents craft producers that have been particularly hard hit recently. How do you see the segment evolving?

It’s going to require resilience, but the craft distilling movement is a great American success story. Twenty-five years ago, there were about 60 distilleries in the US, and today there are over 3,100, and I’ve had the privilege to visit many of them.

It’s important, through proper regulation of alcohol, that policy helps enable the craft distilling community to thrive in the marketplace. One of the challenges that we’re having in the current trading environment, which is reflected in our recent export report [American Distilled Spirits Exports 2025 Mid-Year Report], is that we’ve seen a 9% decline in American distilled spirits exports to many of our key trading markets. So, we hosted a group of craft distillers through our market access programme to go to Berlin, and we’ve been working with the US Department of Agriculture to help promote US exports.

There are opportunities to bring craft spirits to markets around the world, but a key enabler is to have a more predictive trade policy environment.

The Trump administration is leaning in on a fairly aggressive trade posture in an effort to reduce the US trade deficit with key trading partners and to bring more American manufacturing jobs. Our indus­try really is the model for fair and reciprocal trade; whenever there is a predict­able zero-for-zero, meaning zero tariffs, the trading environment will enable the American distilled spirits industry to thrive.

One of the alarming aspects of the significant decline in American distilled spirits exports is that we haven’t been operating in a predictable trading environment as the Trump administration locks in to negotiate free trade agreements, or more balanced trade agree­ments, with key markets around the world. Our industry is not immune to that.

That has created a lot of uncertainty, probably some reluctance to invest time and effort, and Discus is working hard to help the Trump administration understand why a zero-for-zero predictable trading environment will ensure the American distilled spirits industry will continue to thrive and ultimately benefit the American economy.

Bourbon has been experiencing a steep decline in sales for a multitude of reasons. How can ‘America’s Native Spirit’ regain its spark?

First and foremost, with our efforts with the Trump administration, getting a more predictable trading environment, particularly with our key trading partners – Canada, the UK and the EU ­- is critical.

We’ve seen phenomenal growth for American whiskey over the past 15-plus years, and we certainly saw it 2020 to 2023. This is just the beginning of the reemergence of American whiskey, whether it’s Tennessee whiskey or the bourbons that come from 45-plus states.

Making whiskey and bringing great products to market is a combination of science and art. Distillers have to both predict and forecast when they’re looking to take a product and age it. There is great opportunity and hope, despite the current challenges. One of the critical aspects that will help us is a zero-for-zero trading environ­ment.

I’ll give one sidebar where this is a longer-term opportunity. India is the largest whisky market in the world and has historically held a 150% tariff on American distilled spirits products. Thankfully, when meeting with President Trump in Febru­ary, Indian Prime Minister Narendra Modi made the proactive decision – thanks to the support and engagement of organisations like Discus — to reduce that tariff from 150% to 100%.

Now it’s still a 100% tariff and way too high, but as the Trump administration hopefully negotiates a more balanced, fair and reciprocal trade agreement, the opportunity for American whiskey there is going to be significant. But the 100% tariff still needs to come all the way down to zero.

Canada recently removed its 25% retaliatory tariff on American spirits. Has this increased exports and sales, or are territories continuing to boycott?

Many of the provinces still have a ban on purchasing American distilled spirits. We were very thankful that, on 1 September, Canadian Prime Minister Mark Carney eliminated the 25% tariff being applied to American spirits, but it’s unfortunate that many provinces continue to dig in and keep our products off their shelves.

I’m happy to report that Alberta and Saskatchewan have put American spirits back on the shelves, but it’s really incumbent upon the President and the Prime Minister to get US spirits back to the Canadian marketplace. Canada exports US$500m in its domestic spirits to the US, while the US exports about $220m to Canada, so it’s having a significant impact on American businesses.

What’s unique is that we’re an industry of distinctive products. You can only make American whiskey in the US. You can only make Canadian whisky in Canada, the same with Irish and Scottish whisky, Cognac in France, and so forth. We aren’t an industry of widgets and we’re doing our best to try to educate the Trump adminis­tration on that.

The US and Canadian distilled spirits industries are so intertwined; their success is our success and vice versa. We’re working hard to call on the political leadership in both countries to help get this resolved.

There had been hopes that ongoing UK tariff discussions might lead to the elimination of the current 10% rate on scotch and other spirits, but that has yet to materialise.

We continue to be hopeful that there’s a deal to be made. We know that the UK and the US are in direct negotiations on hopefully removing the 10tariff on UK spirits, and grappling with other issues related to steel, aluminium and so forth.

We work very closely with the Scotch Whisky Association; I was in Scotland in August when the President was there. First Minister of Scotland John Swinney and UK Prime Minister Keir Starmer have engaged directly with the President, so we’re optimistic that the 10% tariff will be removed in good order.

The US and the UK have also long enjoyed a zero-for-zero trading environment, with the exception of a few years ago when the UK applied a 25% tariff on American whiskey. We’re working in close coordination with our UK counterparts. The ball is directly in the President’s court.

How will this matter impact sales in the US?

We’ve conveyed to the Trump administration that it could impact the US hospitality industry by US$300m in economic dollars annually and 3,000 jobs for the 15% tariff on all EU spirits exports coming into the US. We’ve projected a US$1bn impact annually on the US economy and over 300,000 jobs — in return, that has created a very unpredictable environment.

We appreciate that, at this point, most of our key trading partners aren’t applying a tariff on American spirits. That’s good news. But the magic recipe for our industry’s success is zero-for-zero tariffs and a predictable and fair trading environment. We don’t have that right now.

The final draft of the federal government’s ‘Alcohol Intake & Health Study’ was withdrawn in September. There has been criticism that it was suppressed because it highlighted the negative impacts of alcohol. A different review, reportedly more favourable towards alco­hol’s health effects, is being published instead. As a result, do you anticipate that the 2025 US Dietary Guidelines might drop daily alcohol consumption limits?

The beverage alcohol industry is committed to and supports the US Dietary Guidelines, which have been guided by the preponderance of evidence over decades. We have certainly seen examples that an advocacy agenda against alcohol may have infiltrated the process this time around, but we’ve advocated that the US Dietary Guidelines are guided and directed by science and evidence that is fair, balanced and independent. We are hopeful that when they’re published, they’ll continue to follow the preponderance of evidence.

What are the longer-term challenges facing the spirits industry in the US?

There’s been a lot of media attention on the alcohol and science issues that were generated by organisations such as the World Health Organization, where they produced a document a couple of years ago saying there is no safe level of alcohol to consume.

The industry is very invested in ensuring we follow the preponderance of evidence when it comes to alcohol – we want all consumers to be guided by their doctor and guided by the science, whatever choices they make.

Of course, that means supporting a balanc­ed lifestyle and the moderate consumption of alcohol if they choose to drink. We want to ensure there’s a balanced review, even in the media. That’s been a significant challenge for the industry.