How European Union Tariffs Could Impact Wine Prices

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Could leaving grapes on the vine one week longer during the harvest season keep the price of a bottle of wine from increasing by 25 percent?

That’s one of the intriguing questions — at least for us wine lovers — that has emerged from the ongoing discussions regarding tariffs on European Union countries and their products.

The proposals regarding wine are confusing at best because they involve different guidelines based on the alcohol levels of the wines.

As the plan is currently structured, table wines with lower than 14% alcohol from France, Germany and Spain would be subject to a 25 percent tariff. However, wines with a higher alcohol level would not be subject to the tariff.

Why? We’re not quite sure.

But here’s the deal: Bordeaux wines really caught on in America when they were being championed in print by Robert Parker, a.k.a. The Wine Advocate. Parker preferred a style that involved a higher alcohol level — more than 14% — so numerous Bordeaux estates began chasing higher Parker ratings by making wines with higher levels of alcohol.

That, for the most part, has become the “Bordeaux style” we now know today.

Under the proposed tariff program, those wines would essentially be protected. But wines that fall below that 14% alcohol threshold — a style many people prefer, even if the “ratings” aren’t as high — would be targeted, and their prices would go up.

That leaves vintners with a difficult decision to make: continue to craft their wines in a style they’ve long embraced, or leave the grapes on the vines for an extra week or so to increase the alcohol level and avoid the tariff.

It’s a conundrum winemakers likely never encountered when they were going to viticultural school.

P.S.: The tariffs could impact the prices of Italian and Portuguese wines as well. Under the tariff program, they are not subject to an additional tax. That, at first glance, would seem to be a positive thing.

However, the tariffs on the wines of other countries could elevate the demand for wines from Italy and Portugal, and when demand increases, prices often follow suit.

We’ll be keeping a close eye on how all of this shakes out.

 

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Posted in Wine Buzz

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