Trump tariffs sour future for some in wine industry

Wine industry

More than a third of the wine consumed in the U.S. is imported, mostly from Europe

By Ariel Wesler

LOS ANGELES — At Brentwood Fine Wines, sommelier Ferdinando “Ferdi” Mucerino stocks wines and spirits from all over the world. He says about 60% of his products are imports. Wines from France are currently among his bestsellers, not surprising since Italian and French wines are the most popular in the U.S.


What You Need To Know

    • All foreign wines now have minimum tariffs of 10% as part of President Donald Trump’s plan to rebalance global trade
    • Ferdinando “Ferdi” Mucerino at Brentwood Fine Wines worries prices will go up and never come down again, even if the tariffs are lifted at some point
    • Laura Gabriel, a small winemaker from Sonoma, California predicted that people will “probably drink even less, maybe go out less and just spend their money elsewhere”
  • Many wine distributors depend on imported wines, and Gabriel said that if they have to pay more, they might buy less or raise prices on American wines to make up for lost profits

But all foreign wines now have minimum tariffs of 10%. It’s part of President Donald Trump’s plan to rebalance global trade.

“What he’s trying to do, in my opinion, is equal that playing field by really charging the same tariffs that we’re charged when our wine goes into those other countries,” said Craig Ledbetter, a wine grape grower from Lodi, California.

While winemakers and sellers are grateful it wasn’t the 200% tariff the president had previously threatened, that’s not off the table just yet, especially if Europe retaliates.

A 200% tariff would essentially triple the cost of European wines in the U.S., and that has some local wine shops concerned not only about their reputation, but how it would affect their customers.

Mucerino worries the industry could see a repeat of what happened during Trump’s first term.

“Prices are going to go up,” he said. “Then, once the tariffs are lifted or changed, prices are going to stay pretty much the same, so it’s a lose-lose for the for the consumer.”

“People are already drinking less, and so I think it’s just going to make people probably drink even less, maybe go out less and just spend their money elsewhere,” said Laura Gabriel, a small winemaker from Sonoma, California.

She started the company Paper Planes with her husband about 10 years ago. She said that even though the tariffs are designed to encourage people to buy American, there isn’t always a suitable substitute.

“You can’t make Champagne in the United States,” Gabriel said. “You can’t make Burgundy or Bordeaux in the United States.”

Many wine distributors depend on imported wines, and Gabriel said that if they have to pay more, they might buy less or raise prices on American wines to make up for lost profits.

“It’s going to affect wine shops,” she said. “It’s going to affect distributors.It’s going to affect a lot of small businesses, but I just don’t think that they can take it financially right now.”

It’s a complex puzzle that is leaving the minds of many in the wine industry swirling.

Source: Trump tariffs sour future for some in wine industry

U.S. Imports Of French Wine And Spirits Soar

After French drinks export shipments to the U.S. dropped significantly in 2020 due to tariffs—whose five-year suspension was announced this past Tuesday—exports have been rebounding strongly in the first four months of 2021. In this calendar year through April, U.S. imports of wine and spirits from France leapt 25% and 13% in volume terms respectively, according to French government agency BusinessFrance. French beer and cider also registered gains during the period.

Provence is now the single-largest region among French wines exported to the U.S. and increased 15% through April in volume terms, driven by ongoing growth for rosé (+17.5%). But the fastest-growing wine region is the Languedoc, which soared 86% year-to-date. Gains were recorded nearly across all segments as vermouth exports to the U.S. rose 41% year-to-date while Champagne surged 48%. Veuve Clicquot and Moët & Chandon together comprise over two-thirds of the Champagne market in the U.S.—according to Impact Databank—and bucked the trend last year by registering volume gains during the pandemic.

With the exception of vodka (-37% year-to-date), imports of French spirits also recorded impressive increases through April. French liqueurs soared 47% in volume terms, while the largest segment, Cognac, rose 49%. After crossing the 5-million-case mark last year, Hennessy Cognac became one of the 10 largest-selling spirits overall in the U.S. market for the first time. Hennessy and Rémy Martin, which is also growing strongly, comprise well over three-quarters of the Cognac market in the U.S., according to Impact Databank.—Juan Banaag

Source: Shanken News Daily: Exclusive news and research on the wine, spirits and beer business

Trump Keeps Tariffs on European Wines in Place

Trade Representative says 25 percent duties will remain in place for most French, Spanish and German wines; importers and merchants say the tariffs are killing American jobs

U.S. Trade Representative Robert Lighthizer had no good news for wine consumers last night. The 25 percent tariffs his office (USTR) imposed on most French, German, Spanish and UK wines nearly ten months ago will remain in place for the foreseeable future, forcing wine lovers to pay more and inflicting economic distress on importers, retailers and restaurateurs just as the hospitality industry grapples with the economic downturn triggered by COVID-19. Continue reading “Trump Keeps Tariffs on European Wines in Place”

European Products and French Wine: Le Maire

PARIS — The United States government must remove tariffs imposed on European products such as French wine, said French Finance Minister Bruno Le Maire on Friday.

Le Maire was commenting after European planemaker Airbus made what Airbus described as a final step aimed at halting a transatlantic trade war over billions of dollars of aircraft subsidies.

Source: NY Times |Reporting by Leigh Thomas; Editing by Hugh Lawson

Reaching the bottom of the barrel: Coronavirus pandemic batters European wine production

 

It’s an ancient beverage turned cultural icon, so cherished in France that the legendary Victor Hugo once provocatively wrote: “God made only water – but man made wine”. Aside from being a staple at many family dinner tables, wine is also a massive European industry – and one that’s going through its own coronavirus-induced crisis. This in a sector that was already battling against 25% tariffs imposed by Donald Trump in 2019 that have seen exports slump.

Source: Reaching the bottom of the barrel: Coronavirus pandemic batters European wine production – Talking Europe

French wine, cheese targeted in latest Trump trade fight

French wine tariff

Industry groups are sounding the alarm on President Trump’s proposal to hit $2.4 billion in French goods with tariffs, warning that the latest trade salvo will affect a broad array of goods and its effects fall on U.S. consumers and small businesses.

The administration has proposed tariffs on a wide number of French products, including cheese, sparkling wine and Champagne, beauty products, handbags and home goods, in retaliation for a French tax on online services that targets American tech giants such as Google and Amazon.

Trade watchers warned the scope of the tariffs would be broad and lead to stark price hikes for consumers.

In 2018, the average tariff rate on French imports was 2.9 percent, according to the National Retail Federation (NRF). Under Trump’s tariffs, new taxes could be up to 100 percent for many goods. Continue reading “French wine, cheese targeted in latest Trump trade fight”