As States begin to reopen under social distancing and partial capacity policies in restaurants, taverns, hotels, and other "on-premise retailers," America’s wine and spirits wholesalers continue to face unprecedented regulatory and economic disruption and mounting business and labor challenges.

Wholesalers in many cases extend credit sales to retailers to bring new, craft, and established brands to diverse markets. As a result of the COVID-19 closures over the last three months, a majority of those receivables will never be collected -- totaling an anticipated and unprecedented $922 million in debt. This on top of excise taxes that have been remitted by wholesalers accounting for $6 billion annually to the federal government and more than $4 billion annually to the states -- a critical source of revenue for the public good. Wholesalers need the ability to accelerate the deduction of this “bad debt” into this taxable year to inject much needed cash flow, keep employees on staff, and help our retailer partners get back on their feet.

Additionally, wholesalers now face the imposition of additional U.S. tariffs on wine and spirits products imported from Europe, which could prove to be a knock-out blow to the American alcohol and hospitality industries working to recover from a pandemic. This includes importers, producers, distributors/wholesalers, retailers, and restaurants, as well as the related jobs throughout the distribution chain, such as shippers, truckers, warehouse workers, bookkeepers and accountants, sales representatives, customs brokers, managers, hospitality, and others. Many are solid middle-class family jobs. Imposing tariffs on alcohol products from Europe only harms the U.S. economy and consumers, threatens to lead to additional retaliatory tariffs on U.S. exports, and results in job losses across the U.S. in industries working to survive through the global pandemic.

In order to avoid this compounding economic disaster and enable wine and spirits wholesalers to continue to meet American consumers’ diverse and evolving demands, WSWA urges Congress and USTR to remove alcohol products from the lists of proposed products that may be subject to tariffs in ongoing trade disputes.