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Proposed Tariffs would Create Stranglehold on US Wine Industry

The National Association of Wine Retailers (NAWR) has aligned with numerous importers, shops, and wine enthusiasts to petition the United States Government to ease up on its recent determination to impose 100% tariffs on wines from the European Union (including French, Italian, Spanish, Portuguese and German wines). If these tariffs come to pass, not only will it have a negative impact on importers and suppliers, it will also severely limit the varieties of foreign wines available for purchase. The NAWR is urging wine lovers to reach out to U.S. Congresspersons and U.S. Senators, as well as the U.S. Trade Representatives, to tell them what they think about these tariffs, which would wreak havoc on the industry. 

On December 10, 2019, USTR proposed imposing tariffs of up to 100 percent on all wines from the EU.

Eric Frick of Cuvée Imports is one of the people locally leading the charge, to ensure that Buffalo “… continues to benefit from the quality people who bring every bottle of wine and plate of food to this city.”

Photo by Zachariah Hagy

“The effects of these potential tariffs would be devastating,” said Frick. “Dan Christmann and I created Cuvée Imports from the ground up, with our first shipment of wine arriving nearly two years ago. We’ve been pounding the pavement since then, growing the business from Erie County at the start, to now covering 23 counties in NY and distribution in Tennessee, working with distributors to offer them wines of character from small family producers in France, Italy, and Spain. Our entire portfolio would be affected should these tariffs go through and we would have no choice but to close up shop. This dream that we worked so hard for would be over just like that. The tariffs would double the price of the wines and no one will pay double, they just won’t. We are already feeling the pain from a 25% tariff imposed on French and Spanish wines in October. At the time that was put into place, we were ordering wines that were low in stock and needed them for the holiday rush. So we paid 25% more for those wines, absorbed it so as not to increase prices to the consumer, and essentially made no money on those wines. We did it out of necessity, but the business can’t be sustained without raising prices on future orders. We already operate on lean margins because we want to see our wines priced competitively. If the 100% tariff happens, it’s game over.”

A 100-percent tariff on wine imports will likely result in a 150-percent increase in prices for consumers.

Frick joins Christian Karnath from Winebow, Melissa Winkler of Winkler & Samuels, Paula Paradise (Paradise Wines), restaurateur Tommy Lombardo, among many others, who are advocating against the drastic, unprecedented, and unruly measures, which some say will also impact the American wine market.

“We will be hit with a lot of ‘then drink more American wine’ sentiments from those who look at this as an us vs. them issue,” noted Karnath. “We must look at the broader picture here – these tariffs have the potential to force some smaller distributors to close. And a lot of small and family owned domestic wineries use these companies to get their wines into other states. Because they are small, they don’t have the capital of the big brands, and aren’t distributed through the major wholesalers in the country, as they don’t represent a large enough revenue stream for the big guys. I think this is a very important part of this, as it will hurt American wineries as well.”

Already there is a thin profit margin when it comes to selling wine. A 100% tariff hike would mean that wines from the European Union would no longer be affordable, let alone available for sale locally.

“Here in NYS we live in arguably the greatest wine and specialty foods market in the entire world,” said Tommy Lomardo, General Manager Ristorante Lombardo and co-owner of The Little Club wine bar. “It really is special, and it’s one of the big reasons I wanted to open our wine bar, to take advantage of it.  The proposed 100% tariffs would surely destroy that marketplace consolidating distribution to the large companies that could sustain this cut in profits and taking us back to the dark ages when it comes to consumer choice and quality.  The quality that we are getting out of wines right now and the choices we have has never been better, and it’s absurd that this may all come to an end because of these tariffs.  These tariffs are the U.S. Government’s response to tariffs the EU is proposing will be put on a few billion dollar tech companies.  The stupidity and absurdity of all of this is gut wrenching. We live in a time where the shrinking of the middle class and the run-away profits of massive billion dollar companies that pay little to no income tax dominates our politics, and to protect these companies our government is preparing to sacrifice thousands and thousands of U.S. small businesses that deal in imported wines and foods.”

Photo by Caroline Attwood

“We don’t expect most people to care about a couple of guys’ small business, but we are part of a greater community of wine professionals and restaurants that will all be severely hurt by this, some going out of business as well,” added Frick. “Every bottle of wine and spirits that is available here in WNY has a sales rep behind it, and these people are ingrained in the local community, calling this place home, and enriching it. I must also point out that these tariffs would also affect countless food items imported from Europe, so this will damage a restaurant’s ability to provide exciting and authentic foods that are integral to the vision of the chef and to the dining experience. Italian restaurants and others using imported goods will be hit especially hard. This situation affects many Americans, encompassing warehouse workers, truckers, dock workers, office staff, sales reps, importers, retailers, distributors, and on and on. Every business that is connected in some way with food and wine will suffer.

Photo by Amy Chen

“We help bring a diversity of wine to Buffalo, and such diversity has only improved over the last decade,” said Frick. “Dan and I love to introduce wines from lesser known regions, made with grapes most people haven’t heard of despite their indigenous roots going back thousands of years. All of this rich diversity will all but disappear should these tariffs go through. Retailers, especially those that celebrate European wines and dedicate large amounts of shelf space to them, will struggle. And what I think most people won’t understand until it’s too late, is that wines aren’t interchangeable. A California Cab doesn’t make a good substitute for Chianti, an Argentinian Malbec can never be a Beaujolais, and a New Zealand Sauvignon Blanc can’t replace a Sancerre. What makes wine special is the uniqueness of where it comes from. The New World has many great wines, but the Old World has characteristics that can’t be found elsewhere and definitely can’t be manufactured, and all that will vanish. It’s not hyperbole, it will happen if these tariffs are enacted. No one wins. And I for one will struggle to replace the wines I love, and will likely switch to drinking Manhattans, oh but wait, those have vermouth in them, so just straight Bourbon for me, lots of it.”

Just as the local wine scene appears to be getting healthier, these tariffs would reverse that trend.

“While the October tariffs were hard enough to absorb by independent US importers and distributors, and we already seeing a rise in wine pricing, the new tariff at a whopping100% increase will be devastating to those of us in the trade who support affordable, quality wine,” said Paula Paradise of Paradise Wine. “The tariffs are paid by US wine importers! This 100% tariff extends to wine, olive oil, whiskey and cheese.

“The hardest hit by these tariffs will be the small family wine growers, independent US importers, small retailers, and every restaurant that sells wine—and you, the consumer, who will pay double for your favorite bottle of wine! Thousands of American businesses and workers will lose their jobs in the aftermath and millions of dollars in tax revenue will be lost. $20 Sutter Home anyone?

“This tariff is being called the most damaging act to the wine and spirits industry since Prohibition.

“The argument that domestic wines or wines sourced from outside the EU could compensate or replace the gap left in the market is ludicrous—wine is site-specific and cannot be recreated in another location.

“The impact goes beyond the economic to a complete loss of dining culture as we know it. Gone will be the days of pairing wine with a special dinner for friends and family. Prices on wine worldwide will soar. The small, artisanal producers in Europe that US importers have worked so diligently with for decades will go to easier markets like China and Russia severing ties with the US market that will make a recovery, once tariffs are lifted, nearly impossible.”

Photo by Jean-Luc Benazet

“The same network that sells and distributes European wines also sells and distributes American wines,” concurred Melissa Winkler of Winkler & Samuels. “If those networks break down because distribution companies go out of business, American wineries in California, Oregon, Washington State, New York State, etc. could lose representation nationally. These are companies that do not have the resources or staff to get their product to market without the current distribution system. Further, our American wineries cannot magically increase production overnight to fill the void that will be empty store shelves should European wines become cost prohibitive to import and sell. It takes years to decades to bring a vineyard into operation. We could see a lack of available American products for people to purchase because the supply will not be able to meet the demand. So, now we’re looking at harming the consumer both by crippling their decisions in the store as to where their wine comes from, and if they can even find an alternative product at all.

“While the comment period has ended, we could really use some help from constituents reaching out to their representatives in Congress and the Senate (see below). We were fortunate to secure a win yesterday when Presidents Macron & Trump struck a deal to avoid the digital tax/Champagne tariff . HOWEVER, there is still the issue of possible 100% tariffs in relation to the Airbus subsidies. Currently there are 25% tariffs doing harm on those Spanish, French, German, and UK wines and we really cannot see that extended to all EU wines.”


Get informed:

www.nytimes.com

www.washingtontimes.com

www.washingtonpost.com

www.winespectator.com

www.winespectator.com


WRITE YOUR CONGRESS

Click Here to Email Your U.S. House Representative

Click Here to Email Your U.S. Senators

Click here to email Senator Schumer

Click here to email Senator Gillibrand

Click here to learn more about retaliatory tariffs, and to help get the message across

Click To Email the U.S. Trade Representative

Also, send a letter to:

The Honorable Robert Lighthizer
U.S. Trade Representative
Executive Office of the President
600 17th Street, NW
Washington, DC 20006

Lead image – photo by Lana Abie

Written by queenseyes

queenseyes

Newell Nussbaumer is 'queenseyes' - Eyes of the Queen City and Founder of Buffalo Rising. Co-founder Elmwood Avenue Festival of the Arts. Co-founder Powder Keg Festival that built the world's largest ice maze (Guinness Book of World Records). Instigator behind Emerald Beach at the Erie Basin Marina. Co-created Flurrious! winter festival. Co-creator of Rusty Chain Beer. Instigator behind Saturday Artisan Market (SAM) at Canalside, Buffalo Porchfest, and Paint vs. Paint. Founder of The Peddler retro and vintage market on Elmwood. Instigator behind Liberty Hound @ Canalside. Throws The Witches Ball at Statler City, the Hertel Alley Street Art Festival, and The Flutterby Festival.

Contact Newell Nussbaumer | Newell@BuffaloRising.com

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