What impact have tariffs and the coronavirus had on the US wine market?

Monday March 23 2020 by Vitisphere

Sales outlets are closing as the coronavirus spreads, but wine sales are not necessarily dropping because of this.Sales outlets are closing as the coronavirus spreads, but wine sales are not necessarily dropping because of this. - Photo credit : Bottlerocket

How would you describe the overall mood among your members at the moment?

Robert Tobiassen, president of the National Association of Beverage Importers: A couple of weeks ago, I would have said they were mainly focused on the tariffs and also the Craft Beverage Modernisation Act, renewed last December for another one year. It reduces tax rates for wine, spirits and beer on imported and domestic products. Importers in many cases had to pay the pre-CBMA rates and then file an application for refund from customs, requiring a lot of documentation. Customs has been very slow in paying those refunds. So the government is holding money on the one hand and demanding more on the other. Now you throw into the mix the complete disruption of the supply chain due to the coronavirus.

 

To what extent has the coronavirus disrupted wine shipments?

So far, no package has been identified as having a coronavirus risk. Customs has not imposed any additional inspections or examination rules for cargo. They’ve only applied them to people. So cargo from Italy, France or Germany, say, does not have trouble clearing customs. So far, there is no real negative impact on customs of the virus, apart from a few inspectors being quarantined. I’m not aware that any consignments have been stuck at ports.

 

Do you have any figures on the impact of the coronavirus on US wine sales?

I don’t have any figures, just anecdotal evidence from some retailers who say the volumes have actually gone up because people seem to be stocking up a bit. Most of the wine market experts, like Silicon Valley Bank, feel that people will continue to buy wine. In good times, people buy wine and trade up; in hard times, people buy wine and trade down.

 

 

 

 

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