Photo: Digress Wine co-owner Brian Kerney speaks to customers at a 2018 Champagne tasting

The U.S. government is about to decide whether to impose 100% tariffs on European wine. It’s just the latest in a string of proposed wine tariffs, and the issue has cast a pall over Orlando’s wine community. The U.S. Trade Representative is accepting comment on the levy through this coming Monday, January 13, and Central Florida wine professionals are taking to social media to urge their friends and customers to speak out.

“My family and I obviously have a lot at stake here, given the multi-faceted and potentially catastrophic effects a 100% tariff would have on the wine industry,” wrote Brian Kerney, co-owner of College Park’s Digress Wine, in a Facebook post last week.

Like many local wine retailers, European wines make up a large portion of the inventory at Digress. That’s not surprising, since the E.U. produces more than 60% of the world’s wine. Whenever you see “Old World” on a wine list, you’re looking at a European wine.

Tariffs will affect U.S. wine business too

Wine professionals in and around Orlando are desperate to get the word out that tariffs on E.U. wines could have dire consequences for the U.S. wine trade and the jobs it supports. If the levies go through, they say, many Americans will feel the pinch.

  1. Wine drinkers
    Yes, these tariffs will increase wine prices. This Washington Post article has a great breakdown of how that’s likely to work.Some local oenophiles are stocking up while they can.

    “I have placed pre-arrival orders on Champagne and Rhone wines,” said avid wine consumer D.j. Silverberg of Winter Springs. “These are wines that I would normally have purchased from retail in due course, but I am basically hedging my bets [in case] the tariffs are imposed.”

  2.  Businesses that sell wine
    Small, independently owned restaurants, bars, and shops could be hit especially hard. They won’t be able to absorb increased wine costs for long, and higher prices passed on to consumers will likely mean a dip in demand.Uncertainty around the tariffs is already causing problems, as evidenced by Silverberg’s decision to pre-order his favorite French wines rather than buying them from local retailers down the line. He says many of his wine loving friends are doing the same thing.

    The looming tariffs are also causing problems with inventory, as importers hold off on shipping to the U.S. while the issue is up in the air. Swirlery Wine Bar co-owner Melissa McAvoy says the hold up means she can’t get any more of Jean Paul Brun’s Beaujolais Blanc, a crowd favorite at her November Beaujolais Day tasting.

    Melissa at Swirlerly 3-year anniversary 2018
    Swirlery co-owner Melissa McAvoy

     

  3. Wine distributors and importers
    These businesses make up the second tier of America’s three-tier system of alcohol distribution. Most consumers only interface with the third tier (bars, restaurants, and retailers) and possibly the first (wineries). But distributors are a crucial piece of the pie. The good ones are always looking for new and exciting wines to add to their portfolios and making sure retailers and sommeliers have the information they need to educate consumers.Distributors also provide employment for scores of Orlando wine professionals. And they’re worried.

    “The majority of the wines that I sell come from the threatened countries,” said Jade Apisuk, a sales rep for Florida-based Progress Wine Group, “so I’m definitely nervous.”

    Progress Orlando Warehouse interior
    Inside Progress Wine Group’s Orlando warehouse

     

    He says he could substitute New World alternatives for some of his E.U. wines, but that’s not a long term solution. He’s already thinking about contingency plans.

    “I wouldn’t be a responsible father if I didn’t,” he said. “If the tariffs go through, me and whole lot of folks could be out of a job.”

  4. Supportive Services
    Wine professionals say pain in their industry will have a ripple effect beyond the world of wine. Restaurants employ dishwashers. Distributors employ truck drivers. All those jobs could be affected, they say, if the levies go into effect.

Wine Tariffs 101: How did we get here?

Like most questions of economic policy, there are no simple answers, but here’s the basic summary.

In October, the U.S. imposed 25% tariffs on scores of European goods. The list included wine from France, Germany, Spain, and the U.K., except sparkling wine and wines over 14% alcohol. The levies were in retaliation for years of European subsidies to aircraft maker Airbus. The World Trade Organization had just ruled those subsidies illegal, although Europe still accuses the U.S. of providing unfair aid to Boeing. It’s a dispute that’s been raging for more than 15 years.

In December, the U.S. proposed a separate 100% tariff on French goods, including still wine and Champagne. That move, if it happens, will be retaliation for France’s decision to tax companies like Facebook, Amazon, and Google on revenue from things like targeted advertising on French soil. The big tech companies are all for the proposed tariffs.

But the U.S. Trade Representative wasn’t done retaliating for those Airbus subsidies. Later in December, the office made yet another proposal that would impose 100% tariffs on a long list of European goods, including wine from all E.U. countries, with no exception for bubbles or high alcohol wines.

What do aircraft subsidies & digital taxes have to do with wine?

That’s exactly the question wine professionals are asking.

“At the end of the day we’re all engaged in the same thing, and that’s selling fermented grape juice,” Digress co-owner Brian Kerney wrote in his Facebook post. “Not airline parts. Not digital technology services. Fermented grape juice. In all its banality and all its glory. Without any connotation or political affiliation.”

He and his colleagues feel they’re being dragged into two disputes not of their making and unrelated to their industry. Progress sales rep Jade Apisuk says he and his clients are still hopeful that “cooler heads will prevail.”

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