Good morning everyone and welcome to 2021: the year that every thing gets better, right?
Not so fast.
Let’s get to it:
If you’ve been living under a rock, the wine and spirits industry is being used as foil for the Boeing/Airbus trade war between the U.S. and the EU. As a result, Scotch whisky and a number of European wines have been subject to a monster 25% tariff for most of 2020. It’s completely gutted the sales for a number of producers and we all hoped this would all go away come January of 2021. Instead, the USTR doubled down this week and added Cognac, and a number of German wines to the list. So get ready to pay 25% more for your Hennessy at some point if this all doesn’t go away soon.
Last year, I wrote an independent article about how the real “whiskey of the year” for 2019 should have been Crown Royal Peach in a complete sweep. No whiskey had the impact that Crown Royal Peach had on sales, demand, and pop culture for that year, and in what constitutes an incredible staying power, I think the same is true for 2020. Looking at the industry growth numbers year over year, the top performing whiskey AGAIN was Crown Royal, thanks AGAIN to the incredible performance of Crown Royal Peach (and Apple). In a year decimated by COVID, the Crown still grew by 7.7% year over year, more than Jack Daniels and more than Jim Beam. To give you some context, when I go through the Mission sales queue every morning, I would estimate that one out of every three orders has Crown Royal Peach attached to it.
In what seems like a continuation of 2020, no good deed goes unpunished. It turns out that the FDA now wants distillers who stepped up and began producing hand sanitizer for the good of the nation to now pay fees normally designated for “monograph drug facilities.” Because hand sanitizer is on the list of “over-the-counter” drugs, the FDA is dinging struggling craft distillers with a $14K fee for having operated as such. HAPPY NEW YEAR!
That being said, apparently the Department of Health and Human Services has asked the FDA to cancel the surprise fee, so we’ll see what happens.
Given all the news right now, wait and see seems like the best approach across the board. As for me, I’ll be waiting with a stiff drink in my hand.
-David Driscoll