US wine sellers and bars nervously wait for tariff decision: ‘It's a sad situation'

The Guardian

27-03-2025

As the threat of exorbitant US tariffs on European alcohol imports looms, a warehouse in the French port city of Le Havre awaits a delivery of more than 1,000 cases of wine from a dozen boutique wineries across the country.
Under normal circumstances, Randall Bush, the founder of Loci Wine in Chicago, would have already arranged with his European partners to gather these wines in Le Havre, the last stop before they are loaded into containers and shipped across the Atlantic. But these wines won't be arriving stateside anytime soon.
After the Trump administration threatened on 13 March to impose 200% tariffs on alcoholic products from Europe, many US importers like Bush have halted all outgoing shipments from Europe.
The 1,100 cases of his wine, from family-owned producers in his company's modest European portfolio, have already been paid for. But due to the tariff threat, they will remain stranded at their respective domaines at least until 2 April when the Trump administration is expected to reveal a 'reciprocal tariff number' for each of its global trading partners.
The newfound uncertainty around tariffs has many restaurant owners, beverage directors, liquor distributors and wine importers on edge in recent weeks. The only certainty among the trade professionals interviewed is that a 200% tariff would be catastrophic for the wine and spirits industry globally. And while most believe the actual number will end up much lower, everyone agrees that even modest tariffs would send shock waves throughout the entire food and beverage ecosystem, weakening distribution channels and further driving up already astronomical prices.
'What scares me is how these hypothetical tariffs would affect [the many] European-themed restaurants like French bistros, Italian trattorias and German beer halls,' said Richard Hanauer, wine director and partner with Lettuce Entertain You. The Chicago-based group owns, manages and licenses more than 130 restaurants and 60 brands in a dozen different states and Washington DC. Hanauer predicts that concept-driven eateries that rely on European products would have to source wine and spirits from other regions because 'the consumer is not going to accept the markup'.
Even though Trump has been known to walk back dubious claims about tariffs before, the wine and spirits industry is taking this recent threat very seriously. Most American importers, such as Loci's Bush, are adhering to the US Wine Trade Alliance's (USWTA) guidance issued in mid-March warning its members to cease wine shipments from Europe. Without guarantees that any potential tariffs would come with a notice period or exemptions for wines shipped prior to their announcement, the organization had no choice but to advise its constituents to halt all EU wine shipments.
'Once the wine is on the water, we have no power,' said Bush. 'We're billed by our shippers as soon as the wine arrives.'
Tariffs are import taxes incurred by the importer and paid as a percentage of the value of the freight at the point of entry upon delivery. Since shipments from Europe can often take up to six to eight weeks to arrive, firms like Loci face the predicament of not knowing how much they will owe to take delivery of their products when they reach US ports.
'We've had many US importers tell us that even a 50% unplanned tariff could bankrupt their businesses, so we felt we had no choice,' said Benjamin Aneff, president of the USWTA, of the organization's injunction. 'It's a sad situation. These are mostly small, family-owned businesses.'
Europe's wineries can also ill afford to be dragged into a trade war with the United States. According to the International Trade Center, the US comprises almost 20% of the EU's total wine exports, accounting for a total of $14.1bn (€13.1bn) of exported beverage, spirit and vinegar products from the EU in 2024.
Many independent importers still recall Trump levying $7.5bn of tariffs on exports from the EU during his first presidency, which included 25% duties on Scotch whiskey, Italian cheeses, certain French wines and other goods. These retaliatory measures, which took effect in October 2019, resulted from a years-long trade dispute between the US and the EU over airline subsidies.
'We were hit with duties in late 2019. But we negotiated with a lot of our suppliers, so we were able to stave off any significant price increases,' said André Tamers, the founder of De Maison Selections, a fine-wine importer with a large portfolio of French and Spanish wines and spirits. But because the Covid-19 pandemic hit shortly thereafter, Tamers admitted, it was difficult to gauge the impact of the first round of Trump tariffs. The Biden administration eventually rescinded the measures in June 2021.
To pre-empt any potentially disastrous news on the tariff front, many restaurants and bars are ramping up inventory purchases to the extent that their budgets allow. 'We made some large commitments for rosé season,' said Grant Reynolds, co-founder of Parcelle, which has an online wine shop as well as two bars and a bricks-and-mortar retail outlet in Manhattan. 'To whatever we can reasonably afford, we've decided to secure those commitments sooner than later so that we can better weather the storm.'
The same is true for many cocktail-focused bars around the country, which are looking to shore up supplies of popular spirits that could end up a victim of tariffs, including allocated scotches and rare cognacs.
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'If it becomes very apparent that these tariffs are going to go live, we could be looking at dropping close to $100,000 on inventory just to insulate ourselves because it will save us so much money over the next six months,' said Deke Dunne, beverage director of Washington DC's award-winning cocktail bar Allegory. 'It will have to be a game-time decision, though, because the last thing I want to do is to buy up a lot of inventory I don't need.' Hanauer said that he's seen some vendors offering wine buyers heavy discounts and incentives to stockpile cases of European products to prepare for the possibility of onerous tariffs.
One bar owner feeling a little less panic compared with his industry counterparts is Fred Beebe, co-owner of Post Haste, a sustainability-minded cocktail bar in Philadelphia. Since it opened in 2023, Post Haste eschews imported spirits of any kind; the bar is stocked exclusively with US products from east of the Mississippi River. 'We always thought it would be advantageous to have our producers close to us for environmental reasons and to support the local economy,' said Beebe, 'but we didn't necessarily think that it would also benefit from fluctuations in distribution or global economic policy.'
Instead of serving popular European liquor brands such as Grey Goose vodka or Hendrick's gin, the bar highlights local craft distillers such as Maggie's Farm in Pittsburgh, which produces a domestic rum made from Louisiana sugar cane. After the recent tariff threats, Beebe says, the decision to rely on local products has turned out to be fortuitous. 'I feel really bad for anyone who is running an agave-based program, a tequila or mezcal bar,' said Beebe. 'They must be worried constantly about whether the price of all of their products are going to go up by 25% to 50%.'
On the importing side, there is agreement that this is an inopportune moment for the wine industry to face new headwinds. Wine consumption has steadily declined in the United States in recent years as gen Z and millennial consumers are turning to cannabis, hard seltzers and spirits such as tequila, or simply embracing sobriety in greater numbers.
'Unfortunately, the reality is that wine consumption was already down before this compared to what it was five years ago,' said Reynolds. 'This obviously doesn't help that. So, with more tariffs, you would start to see a greater shift of behaviors away from drinking wine.'
But despite slumping sales and the impending tariff threats, niche importers like Tamers say they have little choice but to stay the course. 'You leave yourself vulnerable, but if you don't buy wine, then you don't have any wine to sell. So, it's a double-edged sword,' he said. 'Our customers are still asking for these products, so there's not much else we can do.'
Aneff hopes that commonsense negotiations will lead to both parties divorcing alcohol tariffs from other trade disputes over aluminum, steel and digital services.
'I do have some hope for a potential sectoral agreement on wine, and perhaps spirits, which would benefit domestic producers and huge numbers of small businesses on both sides of the Atlantic,' he said. 'I can't think of anything that would bring more joy to people's glasses than ensuring free trade on wine.'