For the wine industry the New Year is starting off on a poor note.
As you may know if you haven’t been totally overwhelmed by the coverage of the Impeachment hearings, last Fall the government imposed a 25% tariff on wines under 14% abv (alcohol by volume) from France, Spain & Portugal.
Now (while our suppliers are still trying to adjust) the Trump administration is threatening to expand the tariff to 100% on all European wines. If enacted this tariff will have devastating effects on the wine industry.
Madrona Wine, a small shop in the scheme of things, buys our wine from maybe 20 small importers/distributors, 6 or so mid-sized ones, and 2 of the 3 big ones in Seattle. The tariffs over time will most likely force the small importers out of business, the mid-sized ones will struggle to adjust their business model and the big ones will ride it out, probably benefiting in the long term from the demise and problems of their competitors.
So, what does this mean?
First off it is a loss of local jobs. Take 20 small importer/distributors with 6 to 24 employees each just in Seattle, then expand it out to the rest of the country and you get an idea of the immediate impact. These are local domestic jobs.
The same will be true for the European wineries effected by this. At Madrona Wine we carry a lot of wines from small family operations that are not wealthy but have managed to make a living between farming, grape growing and winemaking. A number of these wineries will not make it. The mid-sized ones will struggle to adjust, and the large corporate wineries will benefit benefiting in the long term from the demise and problems of their competitors. See a pattern?
All of this will result in less choices and higher prices on our shelves. The good value wines that we pride ourselves on finding will disappear. Yes, the $15 Côtes du Rhone or Chianti that you like to have with dinner will cost more like $25 to $30.
For those of you who want to act on this, you can:
- Comment on the proposal – https://www.regulations.gov/comment?D=USTR-2019-0003-2518
- Sign this Petition by Change.org asking members of congress and other government officials to stand for U.S. wine jobs and stop these unfair, punitive tariffs.
- Contact you Senators (although two democratic senators may not have much of an ear to the current administration at the moment.)
A last note is that none of these tariffs have anything to do with the trade of wine. They are mainly retaliation for subsidies to Airbus on behalf of Boeing and possibly for a threatened software tax on behalf of big tech. Again, small businesses being thrown under the bus for the benefit of large corporations.