Impact of Tariffs on Imports/Exports

The email that I received yesterday from Garagiste provides an usually good example of the impact of tariffs on the global dynamics of the wine industry:

---------- Forwarded message ---------
From: Nicki (Garagiste Offers) <nicki@garagistewine.com>
Date: Wed, Jan 22, 2020 at 4:08 PM
Subject: 2019 Rosé/Tariffs
To: Alyssa Rapp

Dear Friends,

No wine region in France has been hit harder by the current Airbus/Boeing dispute tariff than the Savoie.

Nearly EVERY wine in the Savoie is under 14.0% alcohol (the laughable/invented cut off for “tariff or no tariff” - even Beaujolais has more wine over 14.0% and the Loire has been aided by the very ripe 2018 vintage which is shipping now – it’s a year that can have excessive alcohol in northern climes with many whites and reds pushed beyond the 14.0% threshold). In addition, due to the small nature of the wineries in the Savoie, hardly any can afford to give pleading US hands a break on $ to offset the 25% tariff. They simply can’t afford to do so because their wine was already among the lowest $ in winedom and their production is so small.

Because of this, the US market has pretty much come to a halt for Savoie wine and its basket of freshness and mineral-drenched delight.

I am currently in France, with plenty of face time (both the actual Face Time and always appreciated in-person variety) with French “powers that be” and I can tell you that any false report of the tariffs being “on hold” is complete nonsense. All French wine under 14.0% alcohol is currently and will continue to be subject to a LANDED 25% tariff increase on-going until the US government decides to exclude wine (or not) from the Airbus/Boeing list. There’s a meeting in February and another in August/September to determine next steps which could be status quo, increased tariffs, reduced tariffs or other – it’s an unknown. They can add items, they can delete items - they may add countries (Italy?) or delete countries (Spain?). The only thing we know for certain is that we are currently trading an additional 25% for French wine under 14.0% alcohol (that means the tariff is placed on our landed cost as it reaches port in the US, not what is traded at the winery!).

There is one unusual and odd exception to this: Champagne and sparkling wine. There are many theories as to why Champagne and sparkling wine have been excluded but it doesn’t take a great deal of research to uncover the fact that most, if not all, top-level hotels, restaurants and resorts serve a lot of Champagne and that it is one of the only vinous beverages that carries worldwide prestige with the region’s name itself (Champagne) and with the contents of the bottle in nearly equal weight. Every other impacted wine (it seems, according to those who are writing the tariffs) can be replaced by another “like” unaffected domestic/New World beverage but Champagne cannot...especially with New Year’s Eve a few weeks ago sandwiched uncomfortably in the crosshairs of the current 25% add-on.

Does that make Champagne/sparkling’s exclusion from the tariff fair?

Hardly.

So...

As I sit with producers and officials in France I can tell you there’s a great deal of worry – not just for the US wine consumer and their own livelihood as farmers/producers but that a precedent may be set that becomes the “new normal”. Once the center-point is moved in one direction or the other, and that new “center-point” becomes the accepted middle (either by apathy, time or other), people tend to forget what the actual and “real” middle looked like before the needle was moved (by a non-organic event or process - in this case, the middle was not moved by a slow process of consumer or producer change it was quickly moved by an “artificial” impetus – a tariff).

In other words, once the new/artificial center-point becomes the actual center-point, rarely does the needle move back to where it once was.

In a region such as the Savoie, they are fortunate to have a captive audience with the raucous ski industry that surrounds them. Savoie producers tend to be small, with a tiny output – they can find willing outstretched arms in the ski resorts for whatever the US importers/consumers refuse to support.

The good news is that all of the Savoie entities I work with adore their US partners (you) and they hope the tariff mess is resolved quickly.

The other good news?

I have 2019 Rosé in my glass as I type this.

If you were less than thrilled with 2018 rosé (in general), I can tell you (as a gross generalization) that caution can be thrown to the wind with just about every 2019 rosé I’ve sampled thus far. From Provence to Bordeaux (and the Savoie!), it’s a rosé vintage with ECHO deep material (and somewhat elevated alcohol) that packs a punch as well as a taut and energetic line. Those that picked at the right time will make ageworthy and also electric rosé that can drink almost like a translucent mix of white and red wine. In areas of elevation or normally lower alcohol, the vintage has rosé potential that is pretty darn exciting indeed and the alcohol did not increase in 2019 (or very slightly, maybe a quarter point).

Guess where we’re headed?

To an area of elevation and normally lower alcohol: the Savoie.

We’ve offered the wine of Domaine de l’Idylle for years and the new 2019 Rosé blends Mondeuse and Gamay into a LOW ALCOHOL (11.5%) sumptuous delight that reminds me of a 2015/2010/2005 rosé hybrid mixed with rocky sparks. The wine teems with freshness and drive in a more serious way than past vintages but do not worry, it’s still a no-thought/Sunday afternoon rosé that you can toss in the back of your 1976 Pacer and head to the beach. I rarely make the “this is a full case acquisition” statement but...

This is a full case acquisition!

(...and it’s still only $11+, even with the 25% tariff...because we are absorbing most of it on your behalf)

The first 2019 Rosé and it’s a “wow” – I mean, a major mountain-bred WOW!

This parcel is set to arrive in the late winter with the finest/freshest original provenance available – it is not a long-term pre-arrival.

ONE SHIPMENT ONLY of 2019.

FIRST COME FIRST SERVED up to 24/person until we run out:

2019 Domaine de l’Idylle Rosé Vin de Savoie 750ml (Savoie) - $11.76

To order: click the name of the item above in blue and follow the easy instructions – simply follow the prompts, enter the number of bottles desired and we’ll do the rest. That’s it!

This parcel is set to arrive in the late winter - it is not a long-term pre-arrival. All will ship to you during the first available window and/or with your region’s schedule (weather permitting!). Please check your CHOA (Customer Hang Out Area) for local pick up in the late winter. Drink: 2020 – 2024.

Out of state orders will be held for free under ideal storage conditions (56 degrees/70% humidity) until shipping is possible. Locals may pick up at their leisure.

For current order status information, please log into the Customer Hang-Out area (CHOA): https://app.garagiste.com/orders.

For local pick-ups, please go to https://garagiste1.schedulista.com/ to schedule a time to pick up your order(s).

For any question or inquiry, please contact: friends@garagistewine.com or call us anytime at (888) 264-0053.

NO SALES TO RETAILERS OR WHOLESALERS

Thank you,

Jon Rimmerman
Garagiste
Seattle, WA