H.R. 9601: Combating Attacks on our National Alcoholic Drinks by Allies Act

This bill would require the U.S. Trade Representative to look into whether certain U.S. trading partners are restricting the sale of American alcoholic beverages in ways that could violate U.S. trade law.

What the bill does

• Within 30 days of enactment, the U.S. Trade Representative would have to start an investigation into whether a “covered foreign country” has stopped or limited the importation and distribution of U.S. alcoholic beverage exports in a way that can be challenged under Section 301 of the Trade Act of 1974.
• For this bill, a “covered foreign country” means a country that has a free trade agreement with the United States, and it specifically includes Canada.
• Before deciding whether the foreign country’s actions are legally actionable, the Trade Representative would have to consult with U.S. alcoholic beverage manufacturers affected by the restrictions, the Secretary of Commerce, the Secretary of State, and the U.S. International Trade Commission.
• The Trade Representative would also have to gather information from trade associations and from domestic producers and distributors of U.S. alcoholic beverages, if relevant.
• If the Trade Representative decides a country has not violated the trade law, the office must send Congress a written explanation.

Reporting requirements

• Within 90 days, the Trade Representative would have to report to Congress on the status of the investigations, the foreign countries’ policies on U.S. alcohol imports and distribution, and the effects of those policies on U.S. beverage manufacturers.
• After that, the office would have to file quarterly reports for two years.
• Those quarterly reports would need to describe consultations held, any enforcement or remedial action taken under Section 301, and any ongoing engagement with the foreign countries about the trade issues.
• A public summary of the reports would have to be released, but confidential stakeholder information would be excluded.

Possible outcomes

• If the investigation finds a covered foreign country is acting unlawfully under Section 301, the U.S. government could consider trade enforcement actions.
• The bill says any such action should be targeted and proportionate, and should try to reduce unintended effects on U.S. consumers and U.S. allies.

Relevant Companies

• DEO — Diageo, a major global spirits company that sells alcohol in the U.S. and could be affected if trade tensions change market access in Canada or other free-trade partners.
• BF.B — Brown-Forman, a U.S. alcohol producer with significant exports that could be directly affected by foreign restrictions or resulting trade responses.
• TAP — Molson Coors, which sells alcoholic beverages in North America and could be affected by changes in cross-border alcohol distribution rules.
• STZ — Constellation Brands, a large beer, wine, and spirits company with exposure to cross-border alcohol trade and distribution.