Atlanta wine lovers may soon be shelling out more cash for their favorite bottles due to an ongoing trade dispute between the United States and the European Union (EU).
In October, the United States Trade Representative implemented a 25 percent tariff on select European food products ranging from single malt whisky and wine to olive oil and cheese. The tariff is in retaliation for the EU’s illegal subsides to aerospace company Airbus.
Earlier this month, the Trump administration announced it was considering imposing further tariffs of up to 100 percent on EU products — including all European wines. The current tariffs only affect wines from France, Spain, Germany and the United Kingdom, and excludes sparkling wines, large format bottles, and wines over 14 percent alcohol.
Whether these new tariffs will even go into effect remains to be seen. Officials from the U.S. and the EU continue to negotiate on the terms of the Airbus dispute and hope to reach an agreement before late-January when tariffs would likely go into effect.
Proponents of the the new tariff policy argue that not only has it been sanctioned by the World Trade Organization, high tariffs in the European Union, China, and other countries hurt the export and sale of American wine abroad. But the new proposed tariffs still have the Atlanta wine industry rattled.
According to Carson Demmond, owner of Rive Gauche Wine Company — a Georgia-based distributor with an approximately 80 percent European wine portfolio — increasing tariffs by up to 100 percent would be “absolutely crippling” to Atlanta’s burgeoning wine industry. The Trump administration is also proposing 100 percent tariffs on French sparkling wines in retaliation for France’s digital tax on large tech companies like Facebook and Google.
Demmond, along with other Atlanta wine industry professionals like chef Hugh Acheson’s wine director Steven Grubbs, Jr., posted calls for action on social media last week to protest the new proposed tariffs.
“How convenient that the government is imposing these changes during everyone’s busiest time of year, when we have less time to try to challenge this,” says Sarah Pierre, owner of 3 Parks Wine Shop in Glenwood Park.
Pierre says that retailers like herself as well as importers and distributors like Demmond are already absorbing the cost of the 25 percent tariffs to minimize the direct impact on their customers. However, they can only hold off on price increases for so long, especially if the tariffs rise to as high as 100 percent.
“The majority of my shop is French wine,” Pierre says. “How am I going to explain to my customers that their favorite $20 bottle of wine is now $35 or even $40?”
Grubbs says guests could see similar increases on restaurant menus throughout Atlanta, especially on previously budget-friendly European wines by the glass. While Grubbs admits the lists at Midtown’s Empire State South and Five and Ten in Athens could pivot to all-American wines fairly easily, the impact to Acheson’s newly opened downtown Atlanta French restaurant, By George, would be substantial.
“It’s a French restaurant with 90 percent French wine,” Grubbs says. “Right now, with the 25 percent tariffs, we’re just trying to ride out the storm. But if they [tariffs] indeed go up to 100 percent, we have no way to absorb that cost without passing it along to our guests.”
Many restaurants rely on wine and liquor sales to bolster profits. Grubb claims potentially charging two times more for wines by the glass would be “untenable.”
Andres Loaiza, general manager and wine director at Aria in Buckhead, agrees that the potential policy would “drastically change” the restaurant’s approach to buying wine. Even with the 25 percent tariff, customers will see slight increases in European wine prices on restaurant menus starting in 2020.
“Right now, importers, producers, and distributors on the supply side are trying to minimize the impact to consumers,” says Loaiza. “We don’t want to throw price increases into the equation, especially around the holidays, but expect things to trickle up after the first of the year.”
Loaiza believes if tariffs increase to 100 percent in January and European wines do become twice as expensive, Aria’s deep wine list will likely change and include fewer options.
Pierre worries consumers won’t notice or take action until it hits their wallets. “We’re all making sure that customers will be the last to feel [the impact of the tariffs,] but that also means they aren’t as aware of what’s going on.”
Grubbs is also concerned that the general public has been slow to respond to the tariff news. “This impacts not just wine, but also scotch, olive oil, prosciutto,” he says. “If you care about anything in the food and drink realm, you should be making a big stink about this.”
And while the proposed policy is supposed to punish the EU, Demmond believes it’s ultimately American workers and businesses that will suffer, who predicts a loss of “hundreds of thousands of jobs” working within the food and beverage sector, from sales people to truck drivers.
“It [new tariff] will impact the entire supply chain, which is really unfair, because the wine industry has no place in this argument about airplane parts, and taxes are being unduly shifted onto people who were unsuspecting and undeserving,” Demmond says.
Comments on the proposed tariffs can be left on the public docket, found here. Commenting ends January 13. If approved, the tariffs go into effect January 23.