Will tariffs kill your favorite weeknight wine?
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The threat of tariffs has been keeping Lou Amdur up at night. As the owner of Lou Wine Shop, a small neighborhood retail establishment tucked into a strip mall in Los Feliz, his is the place where neighbors, groceries in hand, stop by before arriving home to pick up a bottle for the evening meal. Amdur is known for peering into that grocery bag, inquiring what’s in there, and helping select a wine that will pair with what’s for dinner.
It’s a shop with a comfort zone, where the median price of the weeknight wine hovers around $30. After 10 years in business, Lou’s median is a known quantity. Customers are comfortable spending $30 for a good bottle; $40, however, not so much.
“We don’t work with really anything that’s super bougie here,” says Amdur, whose former wine bar Lou’s opened in Hollywood in 2005 and kick-started the natural wine movement in Los Angeles. “I mean, we do have a couple of fancier Burgundies that are not inexpensive. But beyond that, an $80 bottle is kind of a higher-end wine for us.”
A tariff on global wines
What keeps Amdur up at night is that tariffs are going to decimate his sweet spot. “Wines that we are currently are selling for $30 and might be doable for a weeknight, for some people it will no longer be doable at $40. Wines that people would grab unthinkingly at price X, now that there’s a 20% tariff, suddenly it’s no longer unthinkable,” he says.
President Trump’s tariffs are expected to be levied on all global wine imports as well as thousands of other goods from China to Tonga. Wine tariffs are being added not only to European wine-producing countries, but to all of the world’s vinous offerings: wines from Argentina, Chile, Australia, South Africa and New Zealand will all be affected.
President Trump said he was considering additional tariffs on China after the country said it would retaliate against U.S. tariffs announced last week.
It’s not the first time that tariffs have been levied on wine in a Trump presidency. In 2018 President Trump announced tariffs on Europe’s wine and whiskey, responding to subsidies the European Union and Britain were granting Airbus, which Trump deemed unfair.
“It’s both similar and different than last time,” says Amdur. “Last time all of the wines that I work with were tariffed, essentially, except for Champagne and a couple of higher alcohol-by-volume wines. But for most of the wines that I worked with, they were all under a 20% tariff.”
Importers, and in some cases, producers eased the pain. “Some importers were able to work with their growers and negotiate a little thinner margin,” he says, “and then the importer would take a thinner margin and so ultimately they’re not passing on the entire 20% to the retailer.”
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That was a time of robust sales, brought on in part by the pandemic. This time, sales of wine in general are flat or in decline, as younger drinkers branch out on their alcohol options, whether that’s whiskey or White Claw.
Others are drinking less, or abstaining altogether. As a result both domestic wineries and import companies will have less wine in the pipeline, and will likely have to raise prices to cover their overhead, in a market that has already been impacted by inflation.
Moreover these tariffs, occurring less than 100 days into Trump’s second term, are not contingent on other countries making concessions; at present, there is no mechanism for them to be lifted. While nothing is predictable in a Trump presidency, the concern is that the administration’s tariffs might affect retailers and restaurateurs across the country for the foreseeable future, possibly for years.
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“The thought of this being sustainable for three and a half more years doesn’t seem really likely,” says Amdur. “My margins are very thin to begin with. I’m not making bank. I just want to be able to make a living and support my customers and pay my bills. So there’s not a lot of leeway, in other words, to keep prices as low as they could be.”
Inevitably, Amdur will be obliged to buy a larger segment of less expensive wines. “There are value wines,” he says, “good wines, inexpensive, well-made liters, that are reasonably priced and still well made. I suspect I’ll be seeing a lot more of those on my shelves.” While a lower price doesn’t always mean lower quality, it does all but ensure fewer choices.
Tariffs will hit domestic wines
Some have said that wine lovers can turn to domestic wines. Amdur insists that’s a false equivalency. “I love all these glib Monday morning quarterbacks who just say, you know, ‘Just switch to California wine.’ I do carry a fair amount of California wine, and I sometimes have New York wine, but they don’t really understand the economics of the wine. It’s not like there’s going to be a one-to-one replacement.”
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 $30 wine from the U.S.
In addition, there’s the labyrinthine way in which wine is distributed, through a three-tier system separating producers, retailers and distributors. The logistics of the distribution network — where imported and domestic wines are often stored and transported and even owned by one company — will be impacted by import tariffs. The health of the distribution network is inevitably affected by rising prices.
“Warehouses want full trucks,” adds Amdur. “If there’s a decline overall in wine being sold, there won’t be full trucks, so warehouses are going to raise their prices. That’s going to directly impact the price of California wine. And so domestic wines are going to be more expensive, that’s the grim reality.”
Amdur thought of stockpiling an inventory, but wine needs temperature-controlled storage, and the logistics of that alone, for a small shop, is formidable.
“I could store some wine,” he says. “But then, you know, honestly, the thought of putting 30 cases in my Prius three times a week and delivering to myself — it’s already hard enough to keep things organized at the shop.”
And of course, stockpiles run out eventually.
“It would only help me to a certain point,” says Amdur. “And so what do you do after that? You fall off a cliff.”
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