After threats of rates as high as 200%, the August 7 implementation of 15% tariffs on European and New Zealand wines, alongside the existing baseline of 10% for Australia, Argentina and Chile, almost felt like a relief to many exporters. It certainly put an end to months of speculation and deep incertitude. “The most challenging thing this year with the tariffs was all the unpredictability that began last spring,” says Nicolas Boissonneau, who runs the family-owned Vignobles Boissonneau in the Entre-Deux-Mers region.
Months of uncertainty left the industry in limbo. Importers froze programmes while exporters held back shipments, wary of having wine “on the water” only to face higher-than-expected tariffs on arrival.
For those with the cash, frontloading became the core mitigation strategy: “By the end of February, we had most of our wines in stock to last through September,” recalls Lia Tolaini-Banville, who helms national importer and wholesaler Banville Wine Merchants in New York. “A very big investment, but many winery partners helped us with longer payment terms, which was instrumental.”
Though the onus to pay the tariffs is on the importers — with higher interest rates compounding the strain — broad collaboration is seen as the best way to avoid overwhelming one part of the supply chain. “Our winery partners have assisted in various ways with discounts, free goods or other ways to help us not increase prices more than necessary,” Tolaini-Banville adds.
The metrics paint a fairly bleak picture. SipSource figures by the WSWA reveal that wine depletions were down 8.5% by volume over the first nine months of 2025 and by a marginally improved -7.5% over 12 months. “It’s been a tough 18-month period for the industry,” said Ryan O’Hara, CEO of importer and distributor MHW Ltd, speaking on a recent Rabobank podcast.
Nicholas Boissonneau
Compounding factors
In reality, the headwinds stretch back years. From the first round of tariffs in 2019 through the pandemic, excess inventory, shipping disruptions, rising costs and declining consumption fuelled by the neo-prohibition movement, the industry was already stretched thin. That pressure is now magnified by the dollar-euro exchange rate: “Last time there were tariffs, the exchange rate was more favourable,” says Boissonneau, a one-time U.S. resident.
Rabobank drinks analyst Bourcard Nesin agrees: “Imports from the EU are also suffering from a 15% increase due to the exchange rate. It’s almost like a tariff stacked on top of a tariff.”
In recent months, the dollar has slid from near parity with the euro to around $1.20. “Foreign exchange has to be part of pricing policy alongside tariffs,” urges Rabobank global strategist Stephen Rannekleiv. “We recommend hedging programmes to range bound the impact, otherwise you could wipe out a significant portion of your margin.”
The very structure of the U.S. wine market shapes how tariffs affect consumer prices. Its multi-tiered system creates a long lag-time before increases reach retail shelves. Research by the American Wine Economists Association found that after the tariffs imposed in October 2019, retail prices did not fully respond for nearly 12 months, and lasted well beyond their expiration. The tiers and their mark-ups also amplified the effect: a wine costing $5 at the border entailed $1.59 in higher consumer costs relative to the $1.19 in tariffs paid per bottle.
Retail implications
For importers, price hikes have already begun to filter through. “We loaded up on inventory before the tariffs went into effect, but really there isn’t a whole lot you can do, we’re not able to absorb them,” says Sunil Khanna, managing partner at Virginia-based nationwide importer Hand Picked Selections, which focuses almost exclusively on French wines. “We certainly don’t have inflated margins so it gets passed on.”
Suppliers are facing a similar reality. “These people go to market with very competitive prices, there’s really not a lot of fat to trim,” Khanna notes. “So we share a little bit to try and mitigate the increase, but the reality is that this is a burden that has to get passed on to consumers.”
Tolaini-Banville, whose wholesale and import business has a strong French and Italian focus, sees a similar pattern: “Price increases started this summer and I would say by January at the latest, the prices will have worked through the three-tier system.” The architecture of that system with its multiple parties, along with the ability of some players to absorb the increase, could soften the blow. “I think the average would be less than 10% in price increase on the shelf,” she adds.
Mitigations strategy
With margins already squeezed, there is little wiggle room left in the market. However, analysts and businesses argue that several mitigation strategies, most of them stateside, can help. In a situation where “every penny counts,” Serena Campbell, operations director at import service provider USA Wine West, urges importers to maximise efficiencies and savings in storage and handling. Though more expensive, bonded warehouses and free-trade zones give importers greater control over when the tariffs are paid. Similarly, Campbell points to more long-term tactics, like shifting to bulk shipments and leveraging the duty drawback system, though these tend to be more viable for larger importers.
Private label programmes, which were already gaining traction in the U.S. prior to tariffs, are really coming into their own. “Private label conversations are growing,” confirms O’Hara of MHW. “Some of these dynamics are causing retailers to lean into that even more, because it helps them better control pricing decisions and offers greater stability.”
On retail shelves, consumers are likely to see price increases, but little change in the choice of wines available. “Like many importers, we specialise,” explains Khanna. “Most of our business is in France and some in Spain. We haven’t upended our product lines to pivot to something else. Basically, every single imported wine has some sort of tariff on it, some worse than others.”
The “non-fungibility” of imported wines, particularly European terroir-driven offerings, is certainly working to their advantage. “Consumers value the choice, stories and legacies behind these products,” confirms Campbell.
Tolaini-Banville agrees: “For some time now, there’s been a growing emphasis on authenticity — wines that tell a story, are rooted in place and reflect the people behind them. Mass-produced wines without that connection are increasingly being cut, especially as bigger importers streamline their portfolios.”
Imported wines may also offer a price advantage and availabilities that home-grown wines struggle to match, a reality recently illustrated by major boxed wine brand Gratsi’s sourcing shift from Washington State to the South of France.
As large companies rationalise portfolios and announce lay-offs, smaller, more nimble businesses are finding room to thrive. Tolaini-Banville recalls actually expanding during the 2008-2010 financial crisis, “because we were small and agile enough to gain market share from others.”
Far from the disastrous year many feared, some businesses are even seeing positive momentum, with a caveat. “We’re actually having a reasonably good year,” notes Khanna. “But it’s a lot more work for a lower result than we would have wanted and very challenging conditions to be working in.”
Vignobles Boissonneau, which has coverage in nearly 30 States, is upbeat about this year’s prospects: “We’ve had a great year. It’s not about burying our head in the sand — we want to restore hope for everyone.”
About Sharon Nagel :
British-born Sharon Nagel has been a journalist and translator specialising in wine for 35 years. She writes for leading French online publication Vitisphere and also contributes to corporate communications.
