The U.S. wine and spirits industry is reported to be hurting. The tariffs imposed over the past three months are having an impact on both its markets and costs. The industry sees little or no silver lining in the current situation – which may, of course, change.
Up to now, the largest export market for U.S. wines has been Canada, worth more than $1 billion per year. However, the Canadian provincial governments, who run most of the retail outlets, have retaliated against tariffs imposed on Canadian products by orchestrating boycotts of both U.S. wines and liquors. The Canadian market may not be a total loss, but little is reported to be crossing our northern border now, and once a market is lost, it’s not easy to recapture.
On the cost side, the news is also not good for the industry. Corks come from Spain and Portugal, oak barrels from France and glass bottles from China. All are suddenly more expensive, some much more so. Some of these cost increases are avoidable to some extent – substituting screw caps for corks, for instance, or using wine boxes instead of bottles, but at the price of considerable capital investment. Small U.S. wineries do not have considerable capital.
So what is a wine drinker to do? Some substitution is possible, bearing in mind that costs to U.S. wineries may be rising faster than to our international competitors – for bottles, for example.
Some French wines are literally irreplaceable – Champagne, for example, can only be produced in France. So we will just pay more, or switch to California sparkling wines, which can be excellent. Burgundian style wines from Pinot Noir are produced in Oregon and California (and New Zealand, for that matter). Bordeaux based on Cab Sauvignon has excellent imitators in California (and Chile and Argentina).
Similarly, most Italian wines have few U.S. equivalents, with the exception of Barbera and Primitivo (aka Zinfandel). So we’ll just have to suck it up (pun intended) with respect to Pinot Grigio, Prosecco and Chianti from Italy and Rioja, Albarino and Cava from Spain. If these are your favorites, stock up now before it’s too late.
Will there be any winners? It’s difficult to see any. The losers will be the consumers, as with all tariffs – that’s you and me. So, stock up quickly and fill your cellar. At least you’ll be able to drown your sorrows as prices take off.
Cheers!
-Submitted by Guy Gimson
(Image credit: Pixabay.com and Vinepair.com)