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How does Russia's invasion of Ukraine affects tequila?

By Dumont - 14/06/2022

Mexican tequila producers hope to win ground in the United States alcoholic beverage market, after the U.S. sanctions over vodka have open up opportunities for other products and brands.

The Russian distillate is one of the most consumed alcoholic beverage in the U.S. with 25% of the market, while tequila represents 8% of U.S. consumption of alcoholic beverages.

“The withdrawal of vodka from some stores can benefit our producers, but we need to work on tax schemes to be more competitive," said Ramón González, general director of the Tequila Regulatory Council (CRT), which overheads all things related to the tequila appellation of origin (AO).

Tequila, an alcohol beverage distilled from the agave plant, has been given worldwide recognition as a distinctive product of Mexico. As such, while the Tequila AO can only be produced in Mexico, bulk shipments of finished tequila, destined for bottling abroad, are allowed.

Currently Mexico and the U.S. have an agreement that ensure that bulk exports of tequila from Mexico to the United States continue without interruption. The U.S. is Mexico’s largest export market for tequila.

In March 2022, U.S. President Joe President Biden and G7 Leaders from Canada, France, Germany, Italy, Japan, and the United Kingdom as well as the European Union announced economic actions to hold Vladimir Putin accountable for his continued assault on Ukraine and further isolate Russia from the global financial system.

Among the measures, the U.S. prohibited the import of goods from several signature sectors of Russia’s economy – including seafood, spirits/vodka, and non-industrial diamonds. This will deny Russia more than $1 billion in export revenues and ensure U.S. citizens are not underwriting Putin’s war. 

By Dumont - 14/06/2022
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