Navigating the complexities of international wine imports through Flying Blue's lens
In the world of wine, authenticity and a sense of place remain highly valued by consumers, according to John Poggemeyer, director of wine and beer for Heinen's, a grocery store chain. However, the unpredictable US tariff regime is causing concern for Poggemeyer and other industry players, particularly with regards to the potential 15% tariff on most EU goods, including wine.
Currently, the tariff status on wine and spirits remains unresolved, causing uncertainty and disruption in the market on both sides of the Atlantic. This uncertainty has sparked deep concern among wine industry groups such as the Italian Unione Italiana Vini and the Comité Européen des Entreprises Vins (CEEV). The US is the largest export market for EU wines, accounting for 27% in value and 21% in volume.
The key impacts of these tariffs include price increases for consumers. For instance, Italian wine exporters estimate that a bottle previously priced at $11.50 in the US will climb to nearly $15 due to the 15% tariff. This price hike could reduce competitiveness and sales in the US market.
The uncertainty also creates market instability. European winemakers and exporters are calling on EU and US authorities to exclude wine and aromatized wines from tariffs. They argue that imposing tariffs undermines a "win-win" trade relationship.
The economic ripple effects in the US are also significant. Around every $1 of European wine sales potentially generates $4.50 for American companies across the three-tier alcohol distribution system. Thus, tariffs could harm American businesses involved in wine distribution and retail.
Negotiations are ongoing, with the US-EU trade deal framework announcing broad tariffs but leaving open discussions specifically around alcoholic beverages. European Commission President Ursula von der Leyen has stated that the alcohol tariff agreement is still being negotiated and a “zero-for-zero” tariffs deal remains a hopeful option.
In the meantime, some wine importers are taking measures to mitigate the impact of tariffs. Flying Blue Imports, for example, is sharing the weight of tariffs with producers, importers, and distributors, believing they are temporary.
In Ohio and Pennsylvania, pricing is tightly regulated, eliminating competition on pricing. However, the current tariff situation presents a significant threat to the competitiveness of European wines in these markets.
As the wine industry faces steep US tariffs and declining global demand for wine, the importance of offering wines with authenticity, story, and soul to today's savvy consumers cannot be overstated. Both Poggemeyer and Trimble highlight the importance of working with producers who are authentic, passionate, and dedicated to crafting wines of integrity and character.
Some standout wines currently available include:
- Under the Tuscan Sun, Rosso, Tuscany, Italy 2023, a medium-bodied wine with notes of blackcurrant, underbrush, black olive, and rose petals.
- White Cloud, Sauvignon Blanc, Marlborough, New Zealand 2024, with fragrant notes of sea grass, white flowers, tropical guava, and a flinty mineral edge.
- Domaine Mickaël Mothe Chablis, France 2023, a lemon-bright wine with aromas of lime blossom and wet slate.
- Aleixo, Family Collection Grande Reserva Tinto, Bairrada, Portugal 2022, a mineral-driven red wine with bold fruit and earthy minerality.
However, the current situation is a "giant mess," according to Michael Kaiser, Executive Vice President of WineAmerica. The lack of clarity on future policy is the biggest challenge for wine businesses, with some waiting to see what President Trump does next. Wine importer La Lumière Selections, founded by Bob Trimble, is struggling due to this lack of clarity on future policy.
In conclusion, European wine businesses face a significant current and near-term threat from tariffs raising export prices to the US, impacting competitiveness and market dynamics. The ultimate trade agreement could either protect or erode this important transatlantic wine trade sector.
- The unpredictable US tariff regime on EU goods, such as wine, poses a threat to American businesses involved in wine distribution and retail, as around every $1 of European wine sales potentially generates $4.50 for these American companies.
- European wine businesses are calling on EU and US authorities to exclude wine and aromatized wines from tariffs, arguing that imposing tariffs undermines a "win-win" trade relationship and could harm the competitiveness of European wines in markets like Ohio and Pennsylvania, where pricing is tightly regulated.
