Ok, so generally speaking there is one simple take away here: we’re all losing when it comes to these wine tariffs. Seriously. There are literally no winners, when about half the wine consumed in America is about to be twice as expensive. But, people are still going to drink wine and this absolutely will effect the market. There is going to be less sales of EU wines, especially the cheap stuff where people are more price sensitive. California isn’t really set up to meet that sudden increase in demand, Washington can probably get some grapes on line more quickly, but really the winners in terms of distribution will be other international markets not effected by these tariffs since they’ll going to keep prices consistent and gain distribution. I think New Zealand is a logical fit for Pinot Noir and before the fires and depending on their aftermath, Australia would be a logical choice as well.
Mark Aselstine with Uncorked Ventures.
So, I’ve got a lot of content this week about the upcoming tarrifs coming to European wines and I think over the next week or two after these go into place you’re going to hear a lot about what who the potential winners and losers are and really a lot of people are going to say that California wine is going to be a giant winner in this scenario.
However, if you talk to most people within the industry, that’s just not true.
Here’s why: you absolutely cannot handle this huge difference in price coming from International markets immediately if you think about if you wanted to produce more $10 wine California you would have to have cheaper grapes you would have to have more grapes excetera excetera really talking about changing the either the entire wine making process for some places or dramatically extinct expanding production which is the most winemakers tell you virtually impossible without a year or two.
So who are the potential winners? If you’re losing a lot of cheaper EU wine sales, then a lot of people are going to say California wins but really places like Washington might have a better concept of how to do this because they deal with mostly professional farmers so cheap Washington wines like this Upper Left Merlot is a good example of that solid drinkable wine that’s the kind of thing where if you paid 7 bucks for a bottle from France from can if you know that one of the outlying regions you’d be happy with Washington’s more capable of producing the good sites in California are just too expensive and hotter Central Valley is just not capable of producing the quality that people are expecting from European grapes.
The other place that probably makes the most sense our other overseas wine making regions that aren’t affected by the tariffs so if you’re looking for $15 French Pinot Noir what that becomes is 30 or $40 Pinot Noir and at that point you might just choose something from California and support your local economy kind of thing but bottle from New Zealand New Zealand can still get wine into the country at an affordable rate and so you know you can looks with some of these secondary markets and this is all kind of exasperated by the fact that really the true winner of this should be Australia but given the fires in the destruction of Vineyards there there’s no guarantee that there’s going to be extra wine coming in the market so in reality is we have an industry that is going to struggle for a little bit with this on a partially goes to the fact that you know although I sell California Oregon Washington wine only the industry is really a larger market and this is really taking a bite out of kind of price points and it’s going to make consumer Choice a lot smaller and I think that’s why you hear a lot of people in the industry that point and you know we would logically be somebody that you say they hate these guys might do better in this scenario and we won’t ignore does anyone who even if they sold no EU wine at all, would think this was a good idea for the industry, or really the wider economy.