The threat of tariffs has been to keep Lou Amdur at night. As owner of Lou Wine Shop, a small retail establishment in the neighborhood involved in a mall in the happy, his is the place where the neighbors, the edible in their hands, pass before they get home to collect a bottle for dinner. Amdur is known for looking at that grocery bag, asking what is there and helping to select a wine that will combine with what is for dinner.
It is a store with a comfort zone, where the median price of the week during the week is around $ 30. After 10 years in the business, Lou's median is a known amount. Customers feel comfortable spending $ 30 for a good bottle; $ 40, however, not so much.
“We don't really work with anything that is Super Bougie here,” says Amdur, whose old Lou wines bar was inaugurated in Hollywood in 2005 and began the movement of natural wine in Los Angeles. “I mean, we have a couple of more elegant bourgeois that are not cheap. But beyond that, a $ 80 bottle is a kind of high -end wine for us.”
A rate for global wines
What keeps Amdur at night is that the tariffs are going to decimate their sweet point. “The wines that we are currently selling for $ 30 and could be feasible for one night of the week, for some people it will no longer be feasible to $ 40. Wines that people take without thinking about the price X, now that there is a tariff of 20%, suddenly it is no longer unthinkable,” he says.
President Trump's tariffs are expected to be collected all Global wines imports, as well as thousands of other products from China to Tonga. Wine tariffs are added not only to the European countries producing wine, but to all the wine offers of the world: the wines of Argentina, Chile, Australia, South Africa and New Zealand will be affected.
It is not the first time that tariffs have been imposed on wine in a Trump presidency. In 2018, President Trump announced tariffs on Europe's wine and whiskey, responding to the subsidies that the European Union and Great Britain were granting to Airbus, which Trump considered unfair.
“It's similar and different from the last time,” says Amdur. “The last time that all the wines with which I work were tariff, essentially, except for champagne and a pair of higher wines of alcohol by volume. But for most of the wines I worked with, everyone was below a 20%tariff.”
Importers, and in some cases, producers relieved pain. “Some importers were able to work with their producers and negotiate a slightly thinner margin,” he says, “and then the importer would take a thinner margin and, therefore, are not transmitting all 20% to the retailer.”
That was a moment of solid sales, brought in part by the pandemic. This time, wine sales in general are flat or in decline, since younger drinkers branch into their alcohol options, whether whiskey or white claw.
Others drink less or abstract completely. As a result, both national wineries and import companies will have less wine in process, and will probably have to increase prices to cover their general expenses, in a market that has already been affected by inflation.
In addition, these rates, which occur less than 100 days in Trump's second term, do not depend on other countries making concessions; At present, there is no mechanism for them to be raised. While nothing is predictable in a Trump presidency, the concern is that administration tariffs could affect retailers and restaurateurs throughout the country in the predictable future, possibly for years.
“The idea that this is sustainable for three and a half years does not seem very likely,” says Amdur. “To start, my margins are very thin. I am not doing a bank. I just want to make a living and support my customers and pay my invoices. Therefore, there is not much margin, in other words, to keep the prices the lowest that they can be.”
Inevitably, Amdur will be obliged to buy a larger segment of less expensive wines. “There are value wines,” he says, “good wines, economic and well -made liters, which have a reasonable price and are still well done. I suspect that I will see many more of my shelves.” While a lower price does not always mean lower quality, it does not guarantee less options.
Tariffs will hit national wines
Some have said that wine lovers can resort to domestic wines. Amdur insists that it is a false equivalence. “I love all these field marshal on Monday morning that simply say, you know,” just change to California wine. “I have a good amount of California wine, sometimes I have New York wine, but they really don't understand the wine economy.
California wines, after all, are more expensive to produce because everything in California is more expensive to produce: a $ 30 wine from France is inherently a better value than a wine of $ 30 from the United States.
In addition, there is the labyrinthine form in which the wine is distributed, through a three -level system that separates producers, retailers and distributors. The logistics of the distribution network, where imported and national wines are often stored and transported and are even owned by a company, will be affected by import rates. The health of the distribution network is inevitably affected by the increase in prices.
“Warehouses want full trucks,” Amdur adds. “If a decrease in wine is sold, there will be no complete trucks, so warehouses will increase their prices. That will directly affect the price of California wine. And thus, national wines will be more expensive, that is the gloomy reality.”
Amdur thought of storing an inventory, but the wine needs storage with controlled temperature, and the logistics of that alone, for a small store, is formidable.
“I could store some wine,” he says. “But then, you know, honestly, the idea of putting 30 cases in my PRI three times a week and surrendering to myself, it is already difficult enough to keep things organized in the store.”
And, of course, reserves are exhausted eventually.
“It would only help me to some extent,” says Amdur. “And then, what are you doing after that? You fall from a cliff.”
