‘Trump tax’ effect causes drop of 130 container shipments according to Hillebrand

Monday November 25 2019 by Vitisphere

Every year, Hillebrand handles the transit of 14,000 containers to the United StatesEvery year, Hillebrand handles the transit of 14,000 containers to the United States - Photo credit : DR

Hillebrand is a leading overseas carrier of French wines and spirits. Every year, it handles the transit of approximately 60,000 containers for international buyers, including 14,000 to the United States alone. Its export director answered our questions about the impact of the ‘Trump tax’ introduced on October 18.

Vitisphere: Has the introduction of the 25% tax on wines imported into the American market had any consequences?

Clément Desbois: It definitely has had a real impact on our business. The market had been following an extremely positive trend in recent years, with growth of around 6%. Since the introduction of the tax, we have seen a 20% decrease in orders from our import clients, equating to 1,400 fewer orders compared with the same period last year. This is equivalent to around 130 containers less in one month, or 1.7 million bottles. We also have a few more storage requests; our customers are erring on the side of caution and bringing in wine gradually... They are holding back orders, and this is only the beginning.

Vitisphere: Is this because they are already experiencing declining sales?

C.D.: No, the decrease in procurements is clearly linked to their lack of visibility and the sudden introduction of the tax. They do not know how the American consumer will react nor how long the tax will last. In doubt, they import what they really need and store less wine. The policy is very much wait-and-see. The real test on sales will occur in December: changes in wine prices with incorporation of the 25% tax will only filter through to consumers from 1 December onwards.

 

 

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