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Distillers Seek Federal Bailout, Economic Reforms

By Rich Duprey - Mar 19, 2020 at 2:28PM

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An industry trade group offers alternatives to benefit distillers beyond one-time cash payments.

Like many of the industries lining up to ask the federal government for a bailout, the distillers trade group says failure to provide financial assistance will cause not only alcoholic beverage makers, but farmers, bottle makers, truckers, warehouse workers, and others to suffer from the cascading effects of the coronavirus outbreak.

But unlike others asking taxpayers to support them, the group is also offering alternatives that would strengthen the industry in the future.

Well-dressed man raising a whiskey glass

Image source: Getty Images.

Alternatives to cash payments

The Distilled Spirits Council of the United States (DISCUS), which represents spirits makers such as Beam Suntory, Diageo (DEO 4.22%), the Moet Hennessy division of LVMH (LVMUY 4.44%), and Pernod Ricard (PDRDY 5.40%), sent a letter to the offices of the U.S. Senate's majority and minority leaders saying its members may have to close, some perhaps permanently, due to the forced closure of bars and restaurants. It is calling on Congress to financially help both industries.

Yet, perhaps realizing it may be further down on the list of aid recipients than some, DISCUS says if financial relief is not forthcoming, Congress should consider several economic initiatives to benefit adult beverage makers.

DISCUS has called on congress to:

  • Suspend the collection of excise taxes for one year
  • Make permanent the temporary tax cuts of the Craft Beverage Modernization and Tax Reform Act that expire at the end of this year
  • Make available "robust" no- and low interest small business loans
  • End the trade war with Europe that resulted in retaliatory taxes being imposed on distilled spirits
  • Create a government small business grant program for alcoholic beverages

According to DISCUS, the U.S. distilled spirits industry supports over 1.6 million jobs across the country and in 2018 generated over $190 billion in economic activity. 

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Stocks Mentioned

Diageo plc Stock Quote
Diageo plc
$182.80 (4.22%) $7.40
LVMH Moët Hennessy - Louis Vuitton, Société Européenne Stock Quote
LVMH Moët Hennessy - Louis Vuitton, Société Européenne
$125.02 (4.44%) $5.32
Pernod Ricard SA Stock Quote
Pernod Ricard SA
$38.13 (5.40%) $1.95

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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