If you’ve glanced at a wine list in the past few months, you might have noticed a subtle uptick in pricing. Blame the feds: Back in October, the Office of the U.S. Trade Representative (USTR) announced a 25 percent tariff on wines from Europe’s major wine-producing countries.
Rooted in a long-running trade war between Boeing and Airbus, the initial tariffs targeted wines made in France, Germany, Spain, and the U.K. Also on the list: whiskey from Scotland and Ireland. Greek and Italian wines aren’t in the mix, but other products — like Greek yogurt, and Italian cheeses and olive oil — are.
Since the increase went into effect, most importers are adjusting costs accordingly, though some held off during the holiday season. Local importer Cream Wine is a textbook example. Andy Pates, one of Cream’s founding partners and director of sales and marketing, says that if the tariffs remain at 25 percent, the region won’t be as popular on by-the-glass lists and business will be “painful,” but it won’t stop altogether.
“Europe just won’t be the iconic go-to [for wines],” he says.
But things could get worse. In mid-December, the USTR announced that it was considering new tariffs as high as 100 percent, to be imposed in early 2020. That number would literally double the price of European wines and risks devastating the restaurant industry, which is already built on minor profit margins.
“Most importers will stop bringing in wine,” Pates predicts. “Customers will buy up all of the existing pre-tariff stock, then pivot to other countries or territories.”
And it’s not just wine — even cocktails are part of the equation, as Boka Group beverage director Lee Zaremba explains. While Zaremba says that Boka’s properties aren’t adjusting beverage menus in reaction to the 25 percent tariffs, other bars around town are.
“Pretty much all spirits will be affected,” Zaremba says, citing companies like Italian-based Gruppo Campari, which imports dozens of staples to U.S. bars. “The cocktail canon is a lot of French and Italian stuff. Spritzes have been a large part of everybody’s brunches for a while now. And there’s increased interest in aperitivo hours and lower-alcohol drinks, so we’re definitely seeing a bit of a cost increase on our end.”
Earlier this week, the U.S. and France backed off from a separate tariff spat, indicating that trade tensions with the European Union may be cooling. However, President Trump still hasn’t completely dismissed the possibility of a 100 percent tariff, and the Organization for Economic Cooperation and Development (OECD) is continuing to deliberate on the increase. Though the move might have been intended to champion American industries, as Pates explains, those affected most aren’t big businesses, big farms, or even the aerospace industry (whose tariffs are, ironically, just 10 percent).
“Restaurants are at the frontline of the economy,” Pates says. “If restaurants can’t use wine as a profit center, then they will need to adjust their pricing of wine, adjust food costs and, eventually, the cost of their overhead — which could lead to cutting staff.”
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