EU still seeking lower US tariff for wine and spirits, says trade commissioner

The European Commission will keep pressing for a preferential tariff for wine and spirits exports to the U.S. that would spare the sector the 15% rate applied on most items under the EU-U.S. trade deal, the EU's trade commissioner said on Thursday.

"This one we didn't get in. But I can tell you that there is clear commitment from the European Commission to put it on the table," Maros Sefcovic said when asked if a preferential rate for the sector had been secured.

Sefcovic spoke after the European Union and the U.S. detailed commitments made in the deal reached last month, which includes a 15% U.S. tariff on most imports from the bloc, including autos, pharmaceuticals, semiconductors and lumber.

The same rate also applies to EU wine and spirits exports, despite industry efforts to get a lower, or even zero rate.

That means U.S. buyers of French Champagne, Irish whiskey and Italian Prosecco could face significant price rises, with the tariffs impacting some $10 billion worth of alcoholic beverage imports each year, analysts say.

Brands affected include Diageo's Guinness beer and Pernod Ricard's Jameson Irish whiskey.

The Distilled Spirits Council of the United States, an industry group representing spirits producers and marketers, has called for permanent zero tariffs by both sides and expressed disappointment that no preferential rate had been agreed.

"Without a permanent return to zero-for-zero tariffs on spirits, American distillers do not have the certainty to plan for future export and job growth without the fear of retaliatory tariffs returning," it said.

It added that it was "determined to continue engaging with the Trump administration to urge for additional negotiations".

That message was echoed by Herve Dumesny, director general of European industry group spiritsEUROPE.

"We urge both sides to remain at the negotiating table and deliver a swift, full return to zero-for-zero," Dumesny said.

"This means reaffirming the support for our sector across the Atlantic by removing U.S. tariffs on EU spirits and lifting any suspended EU retaliatory measures on U.S. products."

The lack of a preferential deal for European alcoholic drinks in the trade agreement announced on Thursday is "a huge disappointment," Gabriel Picard, president of France's federation of wines and spirits exporters FEVS, told Reuters.

He estimated the tax, along with unfavourable exchange rates, could reduce annual sales for the French industry by around 1 billion euros.

The EU announced a six-month suspension of retaliatory tariffs on U.S. imports, including distilled spirits and wine, on August 5, according to the U.S. spirits council.