John Cassimitidis, chairman and CEO of United Refining Company and Red Apple Group, discusses Mr. Biden's non-intervention in the port strike and how it fuels inflation. , explain what will increase the price of food and oil.
The industry group said the spirits industry and its consumers were facing the effects of the longshoremen's strike at Eastern and Gulf ports and could be hit even harder if this continues.
Chris Swonger, CEO of the Distilled Spirits Council of the United States, told FOX Business on Wednesday that the industry is “heavily reliant on the vitality of the U.S. port system,” even if work is halted for a day. “It's impacting the entire supply chain,” he said.
His comments come ahead of tens of thousands of longshoremen represented by the International Longshoremen's Association (ILA) beginning a third-day strike on Thursday at 30 ports along the East Coast and Gulf Coast. It was done. Both men quit their jobs Monday after the ILA and the United States Maritime Alliance (USMX) were unable to reach an agreement by the expiring contract deadline.
On October 1, 2024, longshoremen go on strike at the Bayport Container Terminal in Seabrook, Texas. Employees at 14 ports along the eastern United States and the Gulf Coast were making last-minute preparations on Sept. 30 for what could be a prolonged labor strike. (Mark Felix/AFP via Getty Images/Getty Images)
The ports affected by the ILA work stoppage handled 77% of U.S. spirits exports and 43% of imports last year, according to the Distilled Spirits Council.
This means the strike could affect the export of spirits such as American whisky, as well as imported spirits such as cognac, Scotch whisky, Irish whisky, gin and certain liqueurs.
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“If, in fact, this strike goes on for an extended period of time, God forbid, for a week or so, or even weeks, it ends up happening in the industry's busiest months, usually October, November, December. During the holiday season, our valued customers will want to purchase special bottles of Cognac and Scotch, and our consumers and American whiskey lovers in Europe and abroad will be interested in purchasing special bottles of Cognac and Scotch. may not be able to access it,” Swonger explained.
“Therefore, if this strike continues, it could not only negatively impact the industry's economics, but ultimately the consumers who love to taste great spirits brands. ”
Consumers may see higher prices for affected spirits as a result of the work stoppage at Eastern and Gulf ports, the Distilled Spirits Council's CEO said.
A large selection of bottles for the bar. cocktails and alcohol. (Photo courtesy of Godong/Universal Images Group, Getty Images) (Godon/Universal Images Group via Getty Images/Getty Images)
“Our member companies are now looking for alternative ways to get their products back and forth. As you know, air shipping is going to be much more expensive than sea freight,” Swonger told FOX Business. “Our member companies and their supply chain stakeholders are all scrambling to find alternatives, because no one knows how long the strike will last and it will only add costs to the system. Because that can also have an impact on the consumer. ”
Some in the spirits industry are considering West Coast ports as potential alternatives.
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Mr Swonger called on the ILA and USMX to “come to the negotiating table and resolve the issue”, saying the strike could impact not just spirits but other sectors as well, including job creation, the economy and the supply chain. warned of the effects of DISCUS and various other industry trade groups are also calling on President Biden and his administration to end work stoppages.
“The strikes cost the economy billions of dollars a day and cost businesses large and small that are not part of the negotiations but rely on the free flow of import and export goods through these vital ports. “will have an impact,” the nearly 300 organizations said. he said in a letter Wednesday. “The closure of these ports means that farmers will not be able to sell their crops to overseas markets, manufacturers will not be able to receive critical parts for their manufacturing facilities, retailers will not be able to obtain holiday goods on time, and other This means that many industries will be adversely affected. ”
On October 1, 2024, longshoremen go on strike at the Bayport Container Terminal in Seabrook, Texas. Employees at 14 ports along the eastern United States and the Gulf Coast were making last-minute preparations on Sept. 30 for what could be a prolonged labor strike. (Photo by MARK FELIX/AFP via Getty Images/Getty Images)
JPMorgan predicts that work stoppages at Eastport and Mexico's Gulf Coast ports could cost the economy up to $4.5 billion per day, FOX Business previously reported. .
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The ILA announced earlier this week that its members would picket “as long as necessary to help USMX meet its contract demands.”
While widespread port strikes have occurred, the union has also vowed that its members will continue handling U.S. military cargo and operating cruise ships.
Eric Revell contributed to this report.
