Scotch whisky takes to the skies to beat Trump’s tariffs

Distilleries have taken to flying their whisky across the Atlantic in a rush to get bottles into the US before Donald Trump’s trade tariffs take effect.

Scotch usually arrives in the US by sea since its weight makes air freight too costly. There is normally no need to hurry either as there is with fresh produce such as salmon, another of Scotland’s big exports. But 25 per cent tariffs, which barring a last-minute U-turn are due to be imposed from Friday, have prompted some producers to take to the skies.

They include Kilchoman, a distillery on the famous whisky-producing island of Islay. Anthony Wills, Kilchoman’s founder, sent about 3,000 bottles by aeroplane this month.

“We’ve just air freighted a shipment to get there just prior to the deadline,” Mr Wills said. He estimated the expense of air freighting was probably double that of shipping, adding about 10 per cent to the overall costs. But this would still be cheaper than the looming tariffs.

Single malts have emerged as a big loser from Washington’s tit-for-tat trade dispute with the EU. The Trump administration this month received approval from the World Trade Organization to slap levies on $7.5bn worth of EU goods annually in retaliation for Brussels’ aircraft subsidies.

Italian cheese, French wine and Spanish olive oil are also to be subjected to the tariffs. Among UK products whisky is the biggest target. More than four bottles per second on average were exported last year to the US, the industry’s largest and most valuable market, according to the Scotch Whisky Association.

While blended Scotch is exempt, single malts accounted for £344m worth, or about a third, of exports into the US last year, according to the SWA. Bourbon and other American whiskey imports into Europe were hit in a previous round of EU tariffs.

To get Scotch from the distillery to the shelf in the US takes about four weeks by sea. Scotland lacks deep sea facilities, so it is typically transported first by rail to ports in England.

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Ahead of the tariffs, several other distilleries had been “running the numbers” on air freight and some had found it was “working in their favour”, said another person close to the industry.

“Shipping by air is expensive, but it might make sense to do that for higher-end stuff,” said Chris Rogers, at trade specialist Panjiva.

While the scale of the whisky airlift could not be established, industry data show that producers have also been accelerating sea shipments. About 1,300 20-foot equivalent units arrived in the US in September, according to figures from Panjiva, about a quarter more than the previous month and a fifth more than in the same period last year.

Diageo, whose single malts include Lagavulin, Talisker and Glenkinchie, accounted for almost a third of US-bound sea shipments in the past year. It was followed by Glenlivet-owner Pernod Ricard and then Bacardi, whose brands include Craigellachie and Aberfeldy. All three companies also have interests in blended whisky.

Industry lobbyists have warned of a detrimental impact of the tariffs on the Scottish economy. The Scotch whisky industry directly employs about 11,000 people in Scotland, according to the SWA.

Additional reporting by Lindsay Fortado in New York