Napa, California – Industry representatives are highlighting a variety of challenges the U.S. wine sector faces due to tariffs on imported goods. These tariffs influence both imports and local production.
“Tariffs are quite complex,” mentioned Dawson Hobbs, vice president of government affairs at Wine and Spirits Wholesalers of America. “While many immediately think of tariffs on imported wine, there are also less obvious costs, like those on glass, aluminum cans, labels, and even adhesives used in packaging. These tariffs affect all parts of the production process and supply chain.”
Wholesalers—who purchase products from producers and importers to sell to retailers—are encountering increased costs as storage fees rise. With higher inventory costs, there’s pressure to recapture or absorb these expenses when selling to retailers.
“As costs rise, so do our storage costs and the costs associated with products in warehouses,” Hobbs explained. “This situation presents significant challenges for the industry as a whole.”
The repetitive announcements regarding tariff rates have complicated planning further. Initially, the Trump administration considered a staggering 200% tariff on European wine imports, eventually settling on a 15% rate.
“Tariffs were proposed at the beginning of the year, postponed, and then implemented. It’s tough to plan when you’re unsure about tariffs, especially since shipping takes 60 to 70 days,” Hobbs noted.
He cautioned that rising expenses may soon directly affect consumers.
“Although many businesses are trying to absorb these costs, consumers will likely notice price increases in stores by the end of this year or early next year,” he stated.
Additionally, tariffs could indirectly affect U.S. producers since many materials used in wine production are sourced from abroad.
“American winemakers definitely feel the effects of tariffs on raw materials like aluminum cans, glass, cardboard, and adhesives,” Hobbs pointed out. “Overall, this creates additional challenges and doesn’t benefit consumers.”
Lucia Hossfeld, co-owner of Hossfeld Vineyards, shared her experiences with the impact of tariffs on her winemaking business.
“We’ve noticed increases not just in wine sales, but also in consolidation and labeling due to these tariffs,” she detailed. She explained that some essential materials are hard to find in the U.S., and depending on the type of wine, specific imported ingredients might be necessary.
Costs have surged by around 20% over the past year and a half, largely attributable to inflation. The tariffs introduced earlier this year have compounded operating costs. Hossfeld mentioned that the country is working with partners to stabilize prices.
“Our suppliers, such as barrel manufacturers, are collaborating with us to share some costs,” Hossfeld said.
Similar to domestic winemakers, many wholesalers are also taking on shipping costs, Hobbs revealed, but he warned that this is not a tenable long-term strategy.
“Typically, our industry operates on very slim margins. Unfortunately, there’s a growing sentiment that we’ll start seeing substantial price hikes as we approach the holiday season and into the new year,” Hobbs concluded.
