By Jeffrey H. Coleman, C. Haven Imports, LLC
In WIN’s July 8th Afternoon Brief News article, “Trump’s Tariffs on European Wine Backfires on US Wine Industry,” Mr. Aneff states, “For every dollar of damage tariffs on wine do to the EU, they do a little more than four times that damage to businesses here in the USA.” Aneff claims US importers, distributors, and retailers all suffer from the imposed tariffs.
As a small, yet longtime importer of wines from western Europe, my Company is more challenged than most by the current trade war with Europe. However, we believe these tariffs are necessary in the battle for fair and equal trade practices. Current US:EU tariffs, whether politically leveraged per Airbus vs. Boeing, or securing fair trade tariffs in overall, are potentially positive for the vast majority of small to medium sized USA wineries, their distributors, retailers, and US consumers.
The Goliath’s of Southern-Glazer’s, RNDC-Young’s, and Breakthru, combined with their mega-supplier portfolios, i.e. Constellation, Brown-Forman, Treasury, etc., make securing qualified, supportive wholesale representation extremely limited today. Without sufficient wholesale distributor representation, over 80% of all USA wineries today make much of their income from tasting room and DTC sales. Meanwhile export potentials to Europe are limited based on heavy EU wine tariffs.
The EU’s ongoing tariff on wine imports from the USA is substantial, varying up to 100% tariffs*. The EU wine tariffs have long been major trade barriers to small and medium-sized USA wineries exporting to Europe. In contract, Trump’s current 25% tariff on wine imports from select EU countries does not include many wines from the USA’s largest international suppliers of wine. The current wine tariff does not apply to bulk shipments.
The USA’s large wine importers are already bringing wine in per bulk 23,000L flex-tanks, and filling bottles in the USA. As smaller importers and wineries do not have the bulk sales capacities, this loophole gives further price advantages to international mega-suppliers and their large USA national distributor networks.
Wine’s current 25% tariff is not effective as implemented today. The issues Mr. Aneff details for the tariff’s ineffectiveness are biased. To be effective in bringing about fair trade with the EU, US wine tariffs must match those imposed by the EU and be void of big supplier bulk shipment loopholes.
*Editor’s note: The EU’s common external tariff on wine, including US wine, is applied by volume, not value and ranges from €0.13 to €0.32 per liter of wine (a max of approximately $0.27 per 750ml bottle). By comparison, the normal US tariff on wine imports range from about $0.04 to $0.22 per liter of wine, but the current additional 25% tariff is on the value.