NAPA, California – Tariffs on imported products are creating widespread challenges for the U.S. wine industry, affecting both imports and domestic production, according to industry representatives.
“Tariffs are a multi-layered problem,” said Dawson Hobbs, executive vice president of government affairs at the Wine and Spirits Wholesalers of America. “The most immediate thing people think of is the tariffs placed on imported wine. But there are also hidden aspects: tariffs on glass, aluminum cans, labels and even glue that holds boxes together. These universal tariffs affect the entire production process and supply chain.”
Wholesalers, who buy products from manufacturers or importers and sell them to retailers, also face higher costs. Carrying inventory becomes more expensive as transportation costs increase, and those costs must either be recouped when sold to retailers or absorbed.
“As our costs increase, so does our transportation cost, the cost of the product sitting in our warehouse,” Hobbs said. “It really creates a challenge for the entire industry and supply chain.”
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The on-again, off-again nature of rate announcements adds another layer of difficulty. The Trump administration first threatened 200% tariffs on European wine imports in the spring, before settling for 15%.
“At the beginning of the year, tariffs were threatened, then postponed, then implemented. When it takes 60 to 70 days for products to arrive, it’s very difficult to plan if you don’t know what the tariff is going to be,” Hobbs told Fox.
Hobbs warned that rising costs could soon have a more direct impact on consumers.
“Many companies have tried to absorb the costs, but as we get to the end of this year and early next year, consumers will start to see the impact on shelf prices,” he said.
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Tariffs can affect U.S. producers indirectly, when many components involved in wine production come from abroad.
“American wines are certainly affected by tariffs on raw materials, aluminum cans, glass, cardboard and glue,” Hobbs said. “But overall it creates more headwinds for the industry and doesn’t help anyone with the ultimate consumer experience.”
Lucia Hossfeld, co-owner of Hossfeld Vineyards with her husband, said they are feeling the impact of the tariffs on the winemaking side of the business.
Lucia Hossfeld drives a tractor on her vineyard. (Amalia Roy)
“French oak barrels, the glass bottles, the cork. We’ve also seen consolidation, the labeling of the wine and the sale of the wine. We’ve seen some kind of retaliatory tariffs,” Hossfeld said.
It is often difficult to obtain some of the needed materials in the United States, she explained. Other times, certain imported materials are needed for the type of wine they are making.
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Over the past 18 months, costs have increased by approximately 20%, largely due to inflation and labor costs, but the tariffs introduced earlier this year have also contributed to higher operational costs. Hossfeld said they are working with trading partners to absorb costs and keep prices stable.
The view from the Hossfeld Vineyards in Napa, California, overlooking the Napa Valley. (Amalia Roy)
“On the supplier side, our barrel company, they make concessions, you know, and split the cost with us,” Hossfeld said.
Like domestic winemakers, Hobbs says many wholesalers are also absorbing the wine costs of tariffsbut he warned that it is not a sustainable solution.
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“Our industry, for the most part, has very thin margins. Most people you talk to believe that unfortunately you will start to see real price increases as we approach Christmas and into the first day of the year,” Hobbs said.
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