TAUTAVEL, FRANCE – AUGUST 29: Workers from Italy, Spain, Morocco, and Algeria have gathered in this renowned wine-producing region earlier than expected for the annual grape harvest. (Photo by Giloustan France/Getty Images)

With the ongoing discussions regarding proposed tariffs on imported goods, the impact on the wine and spirits industry could be significant. To explore this further, I had a conversation with Ben Aneff, who serves as the President of the U.S. Wine Trade Alliance (USWTA) and is also a Managing Partner at Tribeca Wine Merchants.

Ben Aneff of the USWTA views tariffs on wine and spirits as an issue that affects all countries involved.

First of all, can you explain the “three-tier system”?

Certainly! In the United States, the distribution of alcohol operates through a three-tier system. The first tier is made up of producers, who sell their products to wholesalers in the second tier, and those wholesalers then distribute to retailers and restaurants in the third tier.

Do you believe changes to this system represent a positive development?

That’s an interesting question, but at the moment, this remains the existing legal framework.

Potential buyers sample wine at the International Wine and Spirits Fair held in Hong Kong on November 5, 2009.

Wine consumption is experiencing a decline worldwide, including in traditional markets like France and Italy, and the anticipated growth in Asia has not materialized. What is your vision for the wine market five years from now?

The trend of “premium-ization” in the wine industry is gaining attention. While people are reducing their overall wine intake, they are opting for higher-quality options. The market is seeing a decrease in purchases of very low-cost wines as consumers increasingly desire exceptional quality and engaging narratives behind the wines they choose. Individuals are now more curious about the winemakers and the vineyards that craft the wines they enjoy. This heightened awareness is fostering a shift away from generic big-box brands as consumers seek to connect with the stories and craftsmanship behind smaller, more artisanal producers. In five years, this could lead to challenges for bulk commercial wine sales, whereas small-scale vineyards dedicated to producing high-quality wines—even from lesser-known regions—are likely to thrive.

What impact will tariffs have?

Tariffs imposed on imported goods inevitably raise prices for U.S. consumers and reduce profit margins for businesses reliant on these wines. There is optimism that future administrations will recognize that such tariffs adversely affect American businesses more than those in other countries, rendering them ineffective tools for addressing trade concerns. Even domestic wine producers share reservations about tariffs on imports, as they rely on robust distribution networks to access markets. Ultimately, the next administration should focus on ensuring that tariffs on foreign products genuinely benefit U.S. interests, as the current tariffs on wine are detrimental to small American businesses and fail to motivate any change in behavior abroad.

How might this impact small, family-owned businesses nationwide?

Imported wine plays a vital role for restaurants, importers, and retailers in every state. Imposing tariffs on these wines significantly harms these businesses by increasing their expenses and decreasing their sales. Most of these establishments are small and family-owned, struggling to absorb the adverse effects of government policies.

Will tariffs on imported wines encourage Americans to purchase more domestic wines?

No. Wine is not interchangeable, meaning that a wine from one country cannot easily replace a wine from another. For instance, a Chianti from Italy would not be swapped with a wine from California. Consumers have a strong attachment to the origin of the wine they enjoy, so tariffs on imported wines do not lead to a rise in domestic wine sales. Additionally, these tariffs negatively impact local wineries by harming their distributors, who may become less capable of supporting new domestic producers—an often costly endeavor that is frequently supported by the revenues from imported wines.

Are tariffs typically reciprocal, leading to American wines facing challenges in their export markets, especially in comparison to China versus Australia, which significantly contributed to a surplus in wine supply?

This is indeed a possibility, which raises considerable concerns among domestic wineries. U.S. wineries are eager to explore new markets abroad, and the presence of tariffs on wine imports from the U.S. negatively impacts our export potential.

How does the USWTA operate as an advocacy organization and what successes has it achieved in recent years?

We advocate for a wine industry free from tariffs. The imposition of tariffs on wine proves ineffective and tends to disadvantage U.S. businesses more than those overseas. Our efforts involve educating lawmakers and stakeholders in Washington, D.C., about our industry, ensuring that trade policies pertinent to wine align with the interests of the United States. An important aspect of our work includes facilitating connections between D.C. representatives and their constituents. Notably, we have assisted constituents in sending more than 30,000 letters to their representatives, urging the exclusion of tariffs on wine.

The upcoming election is poised to impact American industries significantly, particularly since wines and spirits are often the first to face increased taxation. What measures are you implementing to mitigate this situation?

We are actively collaborating with various congressional offices to facilitate meetings between lawmakers and local business owners. These discussions emphasize the crucial role that these products play in fostering local businesses nationwide. It is vital to recognize that due to the three-tier system, U.S. businesses generate more than $4 for every $1 spent on European wines. The importation of these wines sustains hundreds of thousands of American jobs, and they are essential for the thriving of small businesses across all 50 states.

Has the USWTA made any endorsements for a Presidential candidate?

No, we have strong supporters on both sides of the political spectrum. When informed about how the impact of wine tariffs primarily affects small businesses in the United States, they acknowledge it as a significant issue that needs addressing. Although wine tariffs have been previously imposed, we remain optimistic that both parties will recognize the adverse effects of such measures.

One Community. Many Voices. Create a free account to express your thoughts.

Our community focuses on bringing people together through open and engaging discussions. We encourage our readers to share their opinions and exchange ideas in a secure environment.

To facilitate this, please adhere to the guidelines outlined in our site’s Terms of Service. Below are some of the key rules summarized for your convenience. Simply put, please maintain a respectful tone.

Your post will be declined if it appears to include:

User accounts will be blocked if we notice or believe that users are engaged in:

So, how can you be a power user?

Thanks for reading our community guidelines. Please read the complete set of posting rules available in our site’s Terms of Service.