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Wine Spectator: Trade War Roils European Wine Industry

November 19, 2019

Four weeks after the United States slapped a punishing 25% tariff on many European wines in retaliation for subsidies to airplane manufacturer Airbus, wine professionals on both sides of the Atlantic are grappling with evaporating profits as they navigate an uncertain business environment.

“We find it brutal and unjust,” said Ronan Laborde, owner of Château Clinet and president of the Union des Grand Crus, a Bordeaux trade group. “To impose a tax with 15 days’ notice, for wine which uses sea transport, there was a lot of stress and confusion. And it doesn’t touch all wines. It’s incomprehensible.”

The tariffs covered all wines from France, Spain, Germany, and the U.K., except for sparkling wines, wines over 14% alcohol, and large-format bottles. Containers of wine were on the ocean when the tariffs were announced, and when they arrived after October 18, they effectively became 25% more expensive the moment they touched U.S. soil.

“It’s like buying at a 1.12 euro and receiving when it’s gone to a 1.45 euro,” said Barbara Hermann, wine director at Illinois-based retail giant Binny’s Beverage Depot. “For Bordeaux that I’ve ordered, mainly 2017s and 2018s plus normal stock, I’ll take a 25% hit on everything that ships and falls into the tariff. I can’t pass this on to our futures buyers, so we’ll lose money on those purchases. And of course I’ll have to figure this into the shelf pricing for the wines we will have in stock.”

“Our customers’ first reaction was to freeze their import of French wines for the moment and concentrate on wines from other countries, including Italy,” said Thierry Seve, director of exports at Calmel & Joseph in the Languedoc. France’s Finance Minister Bruno Le Maire has said that French winegrowers could lose $335 million in exports due to U.S. countermeasures in the Airbus dispute. Wine Spectator has the full story.—Suzanne Mustacich

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