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Wine Spectator: Industry Members To Testify Today On Proposed Tariffs

January 7, 2020

It’s an unusual witness list for Washington, D.C. Nearly two dozen members of the wine industry, including Barkley Stuart of Southern Glazer’s Wine & Spirits, Zachy’s president Jeff Zacharia, Weygandt-Metzler Importing’s Peter Weygandt, and other wine importers, distributors, and retailers, will testify today at a hearing of the Office of the United States Trade Representative (USTR). The topic? How a potential tariff of 100% on French sparkling wines would impact their industry. They each have five minutes to speak.

The potential tariffs are designed to punish France for its digital services tax on big tech companies, such as Google, Facebook, and Amazon. The USTR and President Donald Trump have called that tax discriminatory against American companies.

Zacharia, who is representing both his family’s wine shop and the National Association of Wine Retailers, says his message is simple. “The wine industry is primarily small businesses, operating on very small margins,” he told Wine Spectator. “These tariffs will not have the desired effect. They will hurt American companies and kill American jobs.”

But the sparkling wine tariff is just one of the trade fights involving European wine and the U.S. market making news this week. Jan. 13 is the deadline for the public to submit comments to the USTR on the other battle. The Trade Representative is reviewing 25% tariffs the office imposed on many wines from France, Spain, and Germany in October as part of a fight over European Union subsidies to Airbus.

As part of the review, the USTR is considering raising the tariffs to 100% and extending them to all E.U. wines. That possibility has triggered a panic in the wine industry, from small vintners in European villages to some of the biggest players in American retail and restaurants.

If the government imposes 100% tariffs, prices will go up. “You’d see significant price increases,” said Peter Deutsch, CEO of Deutsch Family Wine & Spirits. “I think it will be devastating. I don’t believe producers and importers will be able to absorb it.”

But almost everyone Wine Spectator spoke with said the biggest danger is that consumers will have far fewer wines to choose from. “It’s not a matter of a bottle of Veuve Clicquot Yellow Label was $50 and now it will be $100,” says Chris Adams, president of New York retailer Sherry-Lehmann. “No. It just won’t be here.” Wine Spectator has the full story.—Mitch Frank

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