GlenAllachie signs US deal as tariffs hit product plans
Single malts hit by hike in tariffs
GlenAllachie Distillery has signed a new distribution deal in the US as it admits that higher tariffs on single malt whiskies will hit margins and investment in new products.
The agreement with California-based ImpEx Beverages will increase availability of the GlenAllachie brands to 20 additional states.
But it is also faced with challenges caused by the decision by the US trade authorities last October to impose a 25% tariff on imports of single malt scotch whisky.
It was part of a long-running dispute between the US and the EU. The Scotch Whisky Association warned that the dispute could cost the Scotch industry £100 million in lost sales.
David Keir, sales & marketing director at GlenAllachie, admitted that passing on the tariff rise to customers would lead to a “significant price increase”.
Consequently, GlenAllachie and ImpEx have decided to absorb the cost of tariffs on the core range, resulting in reduced margin for both parties and less investment available for brand building.
The launch of new products has been delayed until 2021 “when hopefully the tariffs will have been removed,” said Mr Keir.
“The new deal doesn’t really help regarding tariffs. However, it does help us extend our distribution footprint into almost every US state.”
He added: “We’re very excited about this partnership with ImpEx who have many years of experience building brands.”
Sam Filmus, president of ImpEx Beverages, noted: “We have been following The GlenAllachie for a long time and are thrilled to be a part of its future success in the US Market.”
Master blender and entrepreneur Billy Walker and his team acquired The GlenAllachie Distillery in 2017 and formed The GlenAllachie Distillers Co.