There's a technical reason why imported wines are not fungible, that is, why California wines make unacceptable substitutes. It called sterile bottling. California is, for the most part, in the business of making good, clean, stable wines that don't develop in the bottle. To do this, they eliminate all microbes from their wines using integrity-testable (bubble-pointable) absolute filters or other alternatives such as Velcorin injection, which kills everything and stabilizes the wine. They do this because California only started making modern table wines in the 1960s and we still are fearful of active microbiome.
By contrast, Europeans have been making wines without these practices since Roman times. Soulful bottle bouquet is the trademark of all the great wines of Europe: Bordeaux, Burgundy, Chateauneuf du Pape, Barolo and so on. This earthy, leathery, tobacco-like funk is what caused many, perhaps even most winelovers to lose their minds, spend fortunes and perhaps even devote their lives to wine production and sales. This includes California winemakers. They love to drink Bordeaux, but they're afraid to actually make it.
If the Trump tariffs come to pass, it will drive winelovers away from the good stuff. Already, wines with high scores are out of reach, but we still have lots of affordable European stuff thanks to valiant explorers like Kermit Lynch. But take that Guy Breton Regnie from $37 to $75 and Kermit will not go to the Russian River for a substitute. He's likely just hang up his spurs.
Sometimes we run it through a crossflow, run a .45 micron in-line, and then hit it with DMDC just to make sure there is nothing living in the 15.5% wine acidulated down to 3.4 pH with 0.6 molecular.
There is something particularly perverse, for those of us on the ground and in the vineyards here in the United States, to read of the “American wine industry” as an entity defined by the economic interests of a narrow band of wholesalers, retailers, restaurateurs, and the largest American wineries and bulk importers. That is, to say the least, a woefully incomplete accounting of our industry and results in an equally woeful understanding of what actually constitutes the impact of wine imported into this country.
There is a reason many of those margins are so attractive on imported wines (both in bottle and in bulk), and it has nothing to do with production efficiencies and much to do with supply side subsidies and price supports for foreign producers; benefits American growers do not enjoy. On the contrary, the vast majority of American wines are grown and vinified under strict (read costly) regulatory controls that put our product at a competitive disadvantage within our own backyard.
Put simply, the USWTA’s opposition to these tariffs does not seek to protect the “American Wine Industry”. They seek to protect their bottom line, and will do so at the expense of American farmers and labor who will again this year watch crops rot on the vine, and jobs disappear, while subsidized foreign competition lands cheaply in American ports. American wine grape growers, and the many who derive their living working in those vineyards, constitute the *real* foundation of the “American Wine Industry”. Right now those people are bringing knives to a gunfight. Any discussion of trade policy with regard to the American Wine Industry should begin with their interests, and not those of executives in distribution and sales
Tom, as you have stated Tariffs are passed down. In reality they are worthless in all but a few examples. Why can't "learned " men not see the futility of such nonsense.
NPR highlighted a case during the Trump Tariffs, where a maker of steel cables used a certain constructed cable in their system. There was not a domestic supplier for that cable. That Tariff was illogical. Maybe if the commodity had a domestic manufacturing base it would be reasonable.
The best place to start is the elimination of the “wine substitution duty drawback” that allows imported wine to enter the US marketplace virtually tax free. This is not a tariff, but a US subsidy that benefits a handful of large global wine companies that both import and export. For each gallon exported, they are able to reclaim 99% of the excise (alcohol) taxes of comparable wine imported. In 2003 the feds changed the rules allowing for substitution. Since then, we’ve seen an explosion in cheap bulk imports that has seen CA wine market share drop from 69% in 2000 to 52% in 2020. In the past six years this subsidy has given over $200 million back to a handful of large companies on the backs of California growers, vintners, ag workers and rural communities.
I'm not sure if I follow the fourth to last paragraph? Is there solid evidence for this. LVMHs wine and spirits division had some of its most profitable quarters during the tariffs. Obviously the pandemic is a huge confounding factor, but then it would be a huge confounding factor interpreting decisions or data from any retailer, producer, or wholesaler at the time. If I'm remembering right, the tarrifs were repealed the summer of 2021 (I remember as I expected Champagne prices to go down, not even higher!)
I think it'd be interesting to hear your take on subsidies too, which provides a sort of economic contrast to the tarrifs. I think most in the industry would agree this was pretty erroneously tacked on to the Airbus case, but it is true that EU wine is pretty heavily subsidized as well when compared to the US (not unlike US corn and soy, though in the case of the EU they're propping up thousands of small, unprofitable farms rather than large unprofitable farms). Then there is the case of Chinese glass, which Biden has continued the tarrifs on, which, from what I've read seems US manufacturers presented a pretty good case to the WTO to evidence Chinese dumping.
I think ultimately, it was a little silly to have a wine, cheese, and Cognac vs. Harley's, Levis, and Bourbon trade war, and what a waste of our collective legislative power to have this sort of useless tit-for-tat with countries we've been closely allied to for over a century.
Does anyone realize that 65% of the wine industry is from Modesto south? Duty drew back is killing us with cheap imports.
Your Bordeaux will be fine. Those consumers will continue to buy, but that’s a tiny fraction of the industry. California winegrowers are under incredible pressure to remain in business with wage and overtime laws, water restrictions and all input cost increases due to inflation and the war on fossil fuels by the current federal administration.
Currently, imported wines can be purchased for less than the cost of making the wine, if the grapes were free.
Maybe the tariffs aren’t such a bad idea when you are competing with subsidized imported wines.
There's a technical reason why imported wines are not fungible, that is, why California wines make unacceptable substitutes. It called sterile bottling. California is, for the most part, in the business of making good, clean, stable wines that don't develop in the bottle. To do this, they eliminate all microbes from their wines using integrity-testable (bubble-pointable) absolute filters or other alternatives such as Velcorin injection, which kills everything and stabilizes the wine. They do this because California only started making modern table wines in the 1960s and we still are fearful of active microbiome.
By contrast, Europeans have been making wines without these practices since Roman times. Soulful bottle bouquet is the trademark of all the great wines of Europe: Bordeaux, Burgundy, Chateauneuf du Pape, Barolo and so on. This earthy, leathery, tobacco-like funk is what caused many, perhaps even most winelovers to lose their minds, spend fortunes and perhaps even devote their lives to wine production and sales. This includes California winemakers. They love to drink Bordeaux, but they're afraid to actually make it.
If the Trump tariffs come to pass, it will drive winelovers away from the good stuff. Already, wines with high scores are out of reach, but we still have lots of affordable European stuff thanks to valiant explorers like Kermit Lynch. But take that Guy Breton Regnie from $37 to $75 and Kermit will not go to the Russian River for a substitute. He's likely just hang up his spurs.
Sometimes we run it through a crossflow, run a .45 micron in-line, and then hit it with DMDC just to make sure there is nothing living in the 15.5% wine acidulated down to 3.4 pH with 0.6 molecular.
I wish politics not be in every publication
Me too.
So, who are YOU supporting?
The United States Wine Trade Alliance
There is something particularly perverse, for those of us on the ground and in the vineyards here in the United States, to read of the “American wine industry” as an entity defined by the economic interests of a narrow band of wholesalers, retailers, restaurateurs, and the largest American wineries and bulk importers. That is, to say the least, a woefully incomplete accounting of our industry and results in an equally woeful understanding of what actually constitutes the impact of wine imported into this country.
There is a reason many of those margins are so attractive on imported wines (both in bottle and in bulk), and it has nothing to do with production efficiencies and much to do with supply side subsidies and price supports for foreign producers; benefits American growers do not enjoy. On the contrary, the vast majority of American wines are grown and vinified under strict (read costly) regulatory controls that put our product at a competitive disadvantage within our own backyard.
Put simply, the USWTA’s opposition to these tariffs does not seek to protect the “American Wine Industry”. They seek to protect their bottom line, and will do so at the expense of American farmers and labor who will again this year watch crops rot on the vine, and jobs disappear, while subsidized foreign competition lands cheaply in American ports. American wine grape growers, and the many who derive their living working in those vineyards, constitute the *real* foundation of the “American Wine Industry”. Right now those people are bringing knives to a gunfight. Any discussion of trade policy with regard to the American Wine Industry should begin with their interests, and not those of executives in distribution and sales
Tom, as you have stated Tariffs are passed down. In reality they are worthless in all but a few examples. Why can't "learned " men not see the futility of such nonsense.
NPR highlighted a case during the Trump Tariffs, where a maker of steel cables used a certain constructed cable in their system. There was not a domestic supplier for that cable. That Tariff was illogical. Maybe if the commodity had a domestic manufacturing base it would be reasonable.
Politicians & Bureaucrats do not understand wine.
The best place to start is the elimination of the “wine substitution duty drawback” that allows imported wine to enter the US marketplace virtually tax free. This is not a tariff, but a US subsidy that benefits a handful of large global wine companies that both import and export. For each gallon exported, they are able to reclaim 99% of the excise (alcohol) taxes of comparable wine imported. In 2003 the feds changed the rules allowing for substitution. Since then, we’ve seen an explosion in cheap bulk imports that has seen CA wine market share drop from 69% in 2000 to 52% in 2020. In the past six years this subsidy has given over $200 million back to a handful of large companies on the backs of California growers, vintners, ag workers and rural communities.
I'm not sure if I follow the fourth to last paragraph? Is there solid evidence for this. LVMHs wine and spirits division had some of its most profitable quarters during the tariffs. Obviously the pandemic is a huge confounding factor, but then it would be a huge confounding factor interpreting decisions or data from any retailer, producer, or wholesaler at the time. If I'm remembering right, the tarrifs were repealed the summer of 2021 (I remember as I expected Champagne prices to go down, not even higher!)
I think it'd be interesting to hear your take on subsidies too, which provides a sort of economic contrast to the tarrifs. I think most in the industry would agree this was pretty erroneously tacked on to the Airbus case, but it is true that EU wine is pretty heavily subsidized as well when compared to the US (not unlike US corn and soy, though in the case of the EU they're propping up thousands of small, unprofitable farms rather than large unprofitable farms). Then there is the case of Chinese glass, which Biden has continued the tarrifs on, which, from what I've read seems US manufacturers presented a pretty good case to the WTO to evidence Chinese dumping.
I think ultimately, it was a little silly to have a wine, cheese, and Cognac vs. Harley's, Levis, and Bourbon trade war, and what a waste of our collective legislative power to have this sort of useless tit-for-tat with countries we've been closely allied to for over a century.
I'm just voting for the candidate least likely to bring us into nuclear war.
Does anyone realize that 65% of the wine industry is from Modesto south? Duty drew back is killing us with cheap imports.
Your Bordeaux will be fine. Those consumers will continue to buy, but that’s a tiny fraction of the industry. California winegrowers are under incredible pressure to remain in business with wage and overtime laws, water restrictions and all input cost increases due to inflation and the war on fossil fuels by the current federal administration.
Currently, imported wines can be purchased for less than the cost of making the wine, if the grapes were free.
Maybe the tariffs aren’t such a bad idea when you are competing with subsidized imported wines.