Wine sellers struggling to survive the coronavirus pandemic are now also being crushed by the US’s fight with the European Union over aircraft subsidies.
“It’s definitely going to drive some people out of their pockets,” said David Bowler, owner of Bowler Wine of Manhattan, an importer and distributor. “It’s like being kicked when you’re down.”
The family business had to pay $ 28,000 in tariffs earlier this month – $ 16,000 more than it would have paid if two shipments from Europe arrived on January 11.
The slight delay of the 1 987 containers containing 23 844 bottles, mostly from France to New York, was immediately subject to tariffs which came into force on 12 January – despite the fact that the wines were ordered and shipped before the tariffs were introduced . “Overnight, a $ 12,000 bill turned into $ 28,000,” Bowler lamented.
The money grab began in October 2019 when the US Trade Representative’s Office imposed a 25% tax on certain wines imported from France, Germany, Spain and the United Kingdom. The rates cover wines with less than 14% alcohol, including many rosés, Sancerres and Rieslings.
Things got worse on December 30 when the USTR expanded tariffs on wines containing more than 14% alcohol, giving the industry a crushing blow.
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U.S. importers, who have never paid more than a cent on the bottle, now levy a 25% tax on some of the wines they import from the UK and Spain – and on all the wines they import from Germany and France. , which is probably the most important wine exporter in the world.
Premium cognacs that cost $ 38 or more per gallon were also added to the last round of expensive import taxes.
Bowler’s company, which employs 37 people, including his wife and two sons, generated revenue of 10% in 2020 – only the second decline in his 17 years of business, he said.
Bowler has already reduced his and his wife’s salaries by 20% and the payment of senior executives by 10%. The sellers, whose commissions fell last year due to restaurant closures, paid 90% of their 2019 revenue using a wage protection loan, Bowler said.
“We expected to increase by 5% before the rates last year,” he said.
Vintus Wines in Manhattan, an importer and distributor of restaurants and wine shops, is facing a $ 540,000 tax burden for orders that must arrive within the first two months of 2021.
This is in addition to the $ 1.8 million extra tariffs that Vintus paid during the first tax round over the past 14 months, President Alexander Michas reportedly told the New York Post.
“It’s so frustrating,” Michas said. “We feel like we have no control over our business.”
The tariffs are intended to put pressure on the EU over its subsidies to Airbus AIR,
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and is politically supported by France, Germany, Spain and the United Kingdom
But U.S. wine importers say it is rather they who are being punished.
“We were not the point of the argument,” Michas said. “We have just been dragged along and we are all sorry.”
To cover the extra cash expenses, Vintus eliminated his marketing expenses and he will not fill three new positions he hoped to add to the family business earlier this year.
“They are kicking American businesses in the midst of a pandemic,” added Ben Aneff, president of the American Wine Trade Alliance.
Aneff, who is appealing to the Biden administration to reduce tariffs, said Bordeaux labels with a higher alcohol content would be particularly hard hit.
‘The honeymoon is over for Bordeaux,’ mourns Aneff, adding that Bordeaux from the Right Bank region of France and wines from the Rhône Valley will now see a rise in prices.
It’s not just Bordeaux. A Karine Lauverjat Sancerre that sells for about $ 22 in retail will soon rise to about $ 28, according to Bowler, which may discourage some consumers from buying it. Yet importers say demand for cheaper wines from other parts of the world or even American wines has not increased.
“If anyone wants a Sancerre, this is what they want,” Bowler said. “Wine is not one of those things that people are willing to compromise on.” This is especially true for restaurants that like to keep a strong variety of French wines, Michas said. “They need to have products that consumers know and trust,” he added.
“Consumers who pay an average of $ 15 for a bottle are now paying closer to $ 20, or a $ 15 Sancerre glass at a restaurant is probably now $ 17,” Michas said.
Among the wines Vintas will receive this month are the following wines from E. Guigal of the Rhône Valley, ranging from less than $ 20 per bottle to hundreds of dollars.
A 2018 vintage of Right Bank’s Château Troplong Mondot, which sells for about $ 110 a bottle, will soon cost about $ 140 as they reach retailers, said Daniel Posner, owner of Grapes: the Wine Co. in White Plains, NY, reports New said. York Post.
Although 50% of its sales are French wines, Posner is reluctant to bring in some of these high-priced wines.
Posner has returned to the number of Sancerre labels he carries from 10 to four, and to everyday wines from the Côtes du Rhône region that may have cost $ 12 but are now $ 15 due to the fare.
One of his wealthy customers recently asked for a 2018 Château Lafite Rothschild case, which typically costs about $ 1,000 per bottle, but now costs $ 1,250 per bottle, Posner said.
“I do not want my clients to pay rates of $ 3000, so I asked him to at least wait until the autumn, when the rate will be re-evaluated,” Posner said, referring to the cost of the rates. in a case of 12 bottles.
A version of this report appears on NYPost.com.