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Importers react to American tariff.

With the United States government's July 24th imposition of a nearly $3-per-case tariff of all beer imported from the Canadian province of Ontario, many American importing agencies have been caught between a rock and a hard place.

According to one industry source, Molson Breweries U.S.A., which imports a large percentage of its products from Ontario, anticipated a tariff imposition by building up some of its inventory prior to July 24. Molson executives also urged U.S. wholesalers to absorb the price increases until the disagreement is resolved in the next six to eight weeks, the source said.

Foster's Lager, which recently began full production of U.S.-bound beer in Ontario, will be hit quite heavily. Before the decision to brew Foster's exclusively in Canada, Molson had paid nearly $3-per-case in freight costs from Australia. At this point, the question remains whether the importer will pick up that tab again, or push it down to the wholesale level. A Foster's spokesperson was unavailable for comment. Labatt's USA, also, imports heavily from the province of Ontario. According to Labatt's president Richard Fogarty, "We are very disappointed by an action that makes it more difficult to arrive at a trade pact and also directly impacts our U.S. business, employees and wholesalers."

Nonetheless, Fogarty was hopeful that Labatt's could shrug off this problem. "We are confident that Labatt's USA can manage through this situation working closely with its wholesalers. Meanwhile, we feel that the U.S. and Canada will resolve their differences shortly."

As for the the Guinness Import Co., which imports Moosehead beer from Canada, the situation is better than for most other importers. "Because exports of Moosehead to the U.S. originate exclusively from the provinces of the New Brunswick and Nova Scotia, Moosehead will not be directly affected by the increased duties," Guinness' Paul Block pointed out. "Nonetheless, we view [this] action as unfortunate because it is bound to have a disruptive impact on our marketplace and to place undue strain on a large and otherwise friendly bilateral trade relationship."

Block went on to praise the provinces for complying with the GATT agreements. "We take satisfaction that the province of New Brunswick is committed to the terms and time frames of the Agreement in Principle concluded by the U.S. and Canadian governments last April."

Also in the same boat, Kirin USA imports most of its product from a plant near Vancouver, Canada, so therefore is relatively unaffected by the tariff.
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Title Annotation:$3-per-case tariff on all beer imported from the Canadian province of Ontario
Publication:Modern Brewery Age
Date:Aug 3, 1992
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