• What the Wine World Stands to Lose in the Face of Proposed Tariffs

What the Wine World Stands to Lose in the Face of Proposed Tariffs

What the Wine World Stands to Lose in the Face of Proposed Tariffs

What the Wine World Stands to Lose in the Face of Proposed Tariffs

Across the U.S., wine professionals and restaurateurs predict catastrophe for their businesses and slim choice for consumers should new tariffs on European wine take hold. (Includes comments from our COO/CFO Constance Oehmler)

article originally featured in The Wall Street Journal Jan 7th 2020
WHAT IF YOUR favorite Prosecco suddenly shot up to $30 a bottle, your weeknight Côtes du Rhône doubled in price or that biodynamic Beaujolais you favor disappeared altogether, along with just about every reasonably priced natural wine?

A series of proposed and imposed tariffs has the wine world on edge. It started in October, when the Office of the U.S. Trade Representative (USTR) announced a 25% tariff on several items, including certain wines from France, Germany, Spain and the U.K. That tariff was levied in response to EU subsidies granted to the aerospace company Airbus. In early December, the USTR proposed tariffs of up to 100% on French sparkling wine (excluded from the October tariff) and other items, in response to the French digital services tax, which, a USTR investigation concluded, “discriminates against U.S. digital companies, such as Google, Apple, Facebook, and Amazon. ” Then on Dec. 12, the USTR said it could expand the October tariffs to additional products, including putting levies of as high as 100% on nearly all wine from Europe. There is no timeline for when these tariffs might go into effect, and the USTR didn’t respond to repeated queries.

Why does this matter to American wine drinkers? A 100% tariff on European wine would cripple the wine importing and distribution business and also harm wine retailers. American wineries would be affected, too, if their distributors go out of business and retailers and restaurants close. Distributors sell both imported and American wines, and their fortunes depend on a healthy market for both...

Some wine professionals have even toted up the tariffs’ potential cost. “You are looking at up to 10,000 layoffs at just the distributor and wholesaler level, and up to $1 billion in lost payroll and $400 million in lost liquor taxes,” speculated Constance Oehmler, COO and CFO of Monsieur Touton, a Manhattan-based wine distributor with a national network and a portfolio of wines that is 85% European. She questioned the efficacy of wine as a tool of negotiation, as it represents less than 1% of all European imports...

The U.S. is now the world’s largest market for wine. That transformation took decades and the work of importers, distributors, retailers and restaurateurs—passionate people who introduced Americans to wines from all over the world.

The USTR is accepting comments on the tariffs connected to the Large Civil Aircraft Dispute until Jan. 13. Wine lovers who want to weigh in can do so Here

To read the rest of Lettie Teague's article please click Here

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