Exclusive news and research on the wine, spirits and beer business

Wine Spectator: Importers Scramble To Raise Inventory Within Four-Month Tariff Window

April 6, 2021

Wine importers breathed a sigh of relief when the Biden Administration paused the tariffs on wines from France, Spain, and Germany last month. But they continue to face a major challenge: It has become increasingly difficult to get wines, or any cargo for that matter, to the U.S., and in the short term it’s possible the tariff reprieve has made things worse.

“Just as we began to normalize from the tariffs, we experienced a new and potentially more devastating blow from Covid,” said Peter Monteleone, director of purchasing for French wine importer Martine’s Wines. Not only did the pandemic shut down vital customers like restaurants, but it also made shipping far more difficult.

Port and shipping operations have been weakened by ill workers and new safety constraints, tying up docks. China—a critical source of shipping equipment—has not effectively supplied containers and reefer ships (refrigerated freighters) for many routes, leading to backlogs of unused containers. According to Freixenet Mionetto USA president and CEO Enore Ceola, much of the world’s freight equipment has been reserved for a recent boom of demand in Asian markets, adding to the crunch.

On top of this, several importers report rising shipping and logistics costs. According to Kermit Lynch president Dixon Brooke, shipping companies have increased congestion surcharges to pay for cargo refrigeration as wines wait longer in ports.

The tariff pause has offered some relief to importers. But it also means more traffic as they try to get wine to the U.S. before the four-month pause expires. “The delays were initially a few days up to perhaps a week or more,” said Monteleone. “Now with the tariff pause we’re seeing those capacity issues exacerbated by a flood of new orders, as importers scramble to get inventory stateside without tariffs.” While some companies remain hesitant to increase imports, fearing delayed shipments could arrive after the pause ends, most are ordering now.

“This rush to bring in goods before the four-month tariff repeal window closes is certainly exacerbating issues,” said Vintus president and COO Alexander Michas. And importers may encounter even more expenses as they race to deliver inventory to warehouses by any means necessary. Wine Spectator has the full story.—Collin Dreizen

Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.

Tagged :

Get your first look at 2019 data and 2020 projections for the wine and spirits industries. Order your 2020 Impact Databank Reports. Click here.

Previous :  Next :