Wine sellers struggling to survive the coronavirus pandemic are now also coming under fire for the United States’ fight with the European Union over airplane subsidies.
“This is sure to put some people out of business,” said David Bowler, owner of Bowler Wine of Manhattan, an importer and distributor. “It’s like getting kicked when you’re already depressed.”
The family business was forced to pay $ 28,000 in tariffs earlier this month, $ 16,000 more than it would have paid if two shipments had arrived from Europe when they were supposed to do so on January 11.
The slight delay of the 1,987 cases containing 23,844 bottles coming mostly from France to New York City were immediately subject to tariffs that went into effect on January 12, even though the wines were ordered and shipped before rates will apply. “Overnight, a $ 12,000 bill became $ 28,000,” Bowler lamented.
The money grab began in October 2019, when the Office of the US Trade Representative imposed a 25% tax on certain wines imported from France, Germany, Spain and the UK. The tariffs covered wines with less than 14% alcohol, including many rosés, Sancerres and Riesling.
Things took a turn for the worse on December 30 when the USTR extended tariffs to cover wines containing more than 14% alcohol, dealing a severe blow to the industry.
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American importers, who had never paid anything more than pennies per bottle in import duties, are now shelling out 25% taxes on some of the wines they import from the UK and Spain, and on all the wines they import from Germany and France. , which is possibly the most important wine exporter in the world.
Premium cognacs that cost $ 38 or more per liter were also added to the latest round of expensive import taxes.
Bowler’s company, which employs 37 people, including his wife and two children, suffered a 10% impact on revenue in 2020, only the second drop in its 17 years in the business, he said.
Bowler has already cut his salary and that of his wife by 20% and that of top executives by 10%. Sales reps, whose commissions plummeted last year due to restaurant closings, received 90% of their 2019 income with the help of a loan from the Payroll Protection Program, Bowler said.
“We were expecting to increase 5% last year before rates,” he said.
Manhattan-based Vintus Wines, a family-owned importer and distributor for restaurants and wine stores, faces a tax bill of $ 540,000 for orders scheduled to arrive in the first two months of 2021 alone.
And that is in addition to the additional $ 1.8 million in tariffs that Vintus paid over the past 14 months during the first round of taxes, President Alexander Michas reportedly told the New York Post.
“It’s very frustrating,” Michas said. “We feel like we have no control over our business.”
The tariffs are intended to pressure the EU on its subsidies to Airbus AIR,
competing with the American Boeing BA,
and has the political backing of France, Germany, Spain and the United Kingdom
But American wine importers say they are the ones being punished.
“We were not the point of discussion,” Michas said. “We just got dragged off and everyone feels sorry for us.”
To pay for the additional cash outlay, Vintus eliminated its marketing expenses and will not fill three new positions that it hoped to add to the family business earlier this year.
“They’re kicking American businesses in the middle of a pandemic,” added Ben Aneff, president of the US Wine Trade Alliance.
Aneff, which is calling on the Biden administration to cut tariffs, said Bordeaux labels with higher alcohol content will be particularly hit.
“The honeymoon is over for Bordeaux,” laments Aneff, adding that Bordeaux from the right bank region of France and wines from the Rhone Valley will now experience an increase in prices.
It is not just Bordeaux. A Karine Lauverjat Sancerre that retails for around $ 22 will soon climb to around $ 28, according to Bowler, which could discourage some consumers from buying it. Still, demand for less expensive wines from other parts of the world or even American wines has not increased, importers say.
“If anyone wants a Sancerre, that’s what they want,” Bowler said. “Wine is not one of these things that people are willing to compromise on.” This is especially true for restaurants, which like to have a solid selection of French wines, Michas said. “They need to have products that consumers know and trust,” he added.
“Consumers who pay an average of $ 15 for a bottle are paying closer to $ 20 now, or a $ 15 glass of Sancerre at a restaurant probably costs $ 17 now,” Michas said.
Among the wines that Vintas is receiving this month and next are those of E. Guigal from the Rhone Valley, whose price ranges from less than $ 20 a bottle to hundreds of dollars.
A 2018 vintage from Château Troplong Mondot of the Right Bank, which retails for around $ 110 a bottle, will soon cost around $ 140 as it hits retailers, Daniel Posner, owner of Grapes: the Wine, reportedly Co. in White Plains, New York, he told The New York Post.
Despite 50% of its sales being French wines, Posner is refraining from bringing in some of these wines at very high rates.
Posner reduced the number of Sancerre labels it carries from 10 to four and on wines from the Côtes du Rhône region that could have cost $ 12 but now cost $ 15 because of the fee.
One of his wealthy customers recently ordered a case of 2018 Château Lafite Rothschild, which typically costs around $ 1,000 a bottle, but will now cost $ 1,250 a bottle, Posner said.
“I don’t want my customers to pay $ 3,000 in fees, so I asked you to wait at least until the fall, when the fee will be reassessed,” Posner said, referring to the cost of fees in a 12-bottle case.
A version of this report appeared on NYPost.com.