The rates would help the winemakers. Why are they still in trouble.

Last week, President Donald Trump threatened in a social-media to impose that alcoholic beverages in the European Union, saying that “this will be excellent for the US wine and champagne business” Champagne, Bordeaux and Barolo, to name only a few, they would become much more expensive.

“In isolation, a tariff in imported wine would probably help more than harm the US wine industry,” says Rob McMilla, wine business analyst at Silicon Valley Bank.

The industry has struggled to decrease the volume of sales in recent years. Not only does inflation affect the demand, there are renewed concerns about the health risks associated with alcohol. Non -alcoholic alternatives, such as cannabis, refer to demand.

Total US wine sales reached $ 107 billion in 2023, up 46% compared to five years ago. But the increase was largely the result of price increase. The volume of table wine sold decreased to 319 million cases in 2023 out of 370 million cases in 2021.

Constellation Brands, The Beer, Wine and Spirits Company said that while sales of beer improved 3% compared to one year ago, in the three months ended in November, wines and spirits decreased by 14%. He mentioned “the weaker demand for consumers and continuous inventory of the retail inventory”.

A recent poll on 15 major alcohol drinks shows that 48% “actively choose to drink less” in the last six months, according to IWSR, a data company and analysis for the alcohol for beverages.

“Whether they participate in Dry January, they comply with warnings from public health officials, replacing with alcohol-free drinks or looking for evening or weekend activities that do not involve buying a drink, consumers throughout the age and the income spectrum mode,” the group wrote in a post.

IWSR expects the US alcohol market to be about 9% lower in 2028 than in 2019.

The wine inventories are large, while there is a grape joke left in the 2024 harvest. This means that cultivators are struggling to sell their fruits due to excessive offer, and many have lifted thousands of vineyards to reduce losses.

Many cheaper European wines, often from Spain or Italy, are important and mixed in products from internal brands. If the cost of those wines increases as a result of tariffs, some wineries may have to move to American supplies.

“If the winemakers could use more American grapes instead of the imported bulk, this also benefits from the cultivators,” McMillan said.

Rates against European imports would also bring “pain pockets,” McMillan said. Although domestic producers have enough offer to fill the void, many consumers prefer European wines due to their different flavors. The tradition and prestige associated with the respective wines, especially when it comes to high quality products, is added to their call.

Smaller importers and distributors who relieve strongly on European wines would be injured. Some could be forced to get out of business, which could also affect internal wine sales.

“People who work with Europeans to bring their products here, they are American jobs,” McMillan said.

This is why, even if American winemakers could see some benefits from tariffs, the American industry has long argued that wine should not be targeted for reprisals in unrelated disputes.

“The current dispute has never been about wine, and these rates will only hurt the larger wine -growing sector, including farmers, winery, distributors, retailers and millions of people working in the extended wine supply chain,” wrote The Wine Institute, a commercial group representing California winemakers.

Write to Evie Liu at [email protected]