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<\/p>\nAfter 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. \u201cThe most challenging thing this year with the tariffs was all the unpredictability that began last spring,\u201d says Nicolas Boissonneau, who runs the family-owned Vignobles Boissonneau in the Entre-Deux-Mers region.<\/p>\n
Months of uncertainty left the industry in limbo. Importers froze programmes while exporters held back shipments, wary of having wine \u201con the water\u201d only to face higher-than-expected tariffs on arrival.<\/p>\n
For those with the cash, frontloading became the core mitigation strategy: \u201cBy the end of February, we had most of our wines in stock to last through September,\u201d recalls Lia Tolaini-Banville, who helms national importer and wholesaler Banville Wine Merchants in New York. \u201cA very big investment, but many winery partners helped us with longer payment terms, which was instrumental.\u201d<\/p>\n
Though the onus to pay the tariffs is on the importers \u2014 with higher interest rates compounding the strain \u2014 broad collaboration is seen as the best way to avoid overwhelming one part of the supply chain. \u201cOur winery partners have assisted in various ways with discounts, free goods or other ways to help us not increase prices more than necessary,\u201d Tolaini-Banville adds.<\/p>\n
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. \u201cIt\u2019s been a tough 18-month period for the industry,\u201d said Ryan O\u2019Hara, CEO of importer and distributor MHW Ltd, speaking on a recent Rabobank podcast.<\/p>\n
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Nicholas Boissonneau<\/p>\n
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: \u201cLast time there were tariffs, the exchange rate was more favourable,\u201d says Boissonneau, a one-time U.S. resident.<\/p>\n
Rabobank drinks analyst Bourcard Nesin agrees: \u201cImports from the EU are also suffering from a 15% increase due to the exchange rate. It\u2019s almost like a tariff stacked on top of a tariff.\u201d<\/p>\n
In recent months, the dollar has slid from near parity with the euro to around $1.20. \u201cForeign exchange has to be part of pricing policy alongside tariffs,\u201d urges Rabobank global strategist Stephen Rannekleiv. \u201cWe recommend hedging programmes to range bound the impact, otherwise you could wipe out a significant portion of your margin.\u201d<\/p>\n
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.<\/p>\n
For importers, price hikes have already begun to filter through. \u201cWe loaded up on inventory before the tariffs went into effect, but really there isn\u2019t a whole lot you can do, we\u2019re not able to absorb them,\u201d says Sunil Khanna, managing partner at Virginia-based nationwide importer Hand Picked Selections, which focuses almost exclusively on French wines. \u201cWe certainly don\u2019t have inflated margins so it gets passed on.\u201d<\/p>\n
Suppliers are facing a similar reality. \u201cThese people go to market with very competitive prices, there\u2019s really not a lot of fat to trim,\u201d Khanna notes. \u201cSo 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.\u201d<\/p>\n
Tolaini-Banville, whose wholesale and import business has a strong French and Italian focus, sees a similar pattern: \u201cPrice increases started this summer and I would say by January at the latest, the prices will have worked through the three-tier system.\u201d The architecture of that system with its multiple parties, along with the ability of some players to absorb the increase, could soften the blow. \u201cI think the average would be less than 10% in price increase on the shelf,\u201d she adds.<\/p>\n
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 \u201cevery penny counts,\u201d 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.<\/p>\n
Private label programmes, which were already gaining traction in the U.S. prior to tariffs, are really coming into their own. \u201cPrivate label conversations are growing,\u201d confirms O\u2019Hara of MHW. \u201cSome of these dynamics are causing retailers to lean into that even more, because it helps them better control pricing decisions and offers greater stability.\u201d<\/p>\n
On retail shelves, consumers are likely to see price increases, but little change in the choice of wines available. \u201cLike many importers, we specialise,\u201d explains Khanna. \u201cMost of our business is in France and some in Spain. We haven\u2019t 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.\u201d<\/p>\n
The \u201cnon-fungibility\u201d of imported wines, particularly European terroir-driven offerings, is certainly working to their advantage. \u201cConsumers value the choice, stories and legacies behind these products,\u201d confirms Campbell.<\/p>\n
Tolaini-Banville agrees: \u201cFor some time now, there\u2019s been a growing emphasis on authenticity \u2014 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.\u201d<\/p>\n
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\u2019s sourcing shift from Washington State to the South of France.<\/p>\n
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, \u201cbecause we were small and agile enough to gain market share from others.\u201d<\/p>\n
Far from the disastrous year many feared, some businesses are even seeing positive momentum, with a caveat. \u201cWe\u2019re actually having a reasonably good year,\u201d notes Khanna. \u201cBut it\u2019s a lot more work for a lower result than we would have wanted and very challenging conditions to be working in.\u201d<\/p>\n
Vignobles Boissonneau, which has coverage in nearly 30 States, is upbeat about this year\u2019s prospects: \u201cWe\u2019ve had a great year. It\u2019s not about burying our head in the sand \u2014 we want to restore hope for everyone.\u201d<\/p>\n
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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.<\/p>\n","protected":false},"excerpt":{"rendered":"
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 (\u2026)<\/p>\n","protected":false},"author":14,"featured_media":41226,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[359],"tags":[],"class_list":["post-43299","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","format-article"],"acf":[],"yoast_head":"\n