Tariffs are coming for your holiday wine

NEW YORK – Choosing the right wine to pair with your Thanksgiving meal can be as stressful as cooking the turkey. And this year, it’s going to be even more challenging. Shoppers can expect higher prices and possibly slimmer selections at their local wine shops, as importers face steep tariffs and shopkeepers grapple with declining demand.

Bottled wine prices have risen nearly 20% over the past 25 years and 8% over the past decade, according to the latest government data. Several factors are driving these increases, including climate change, inflation, and rising production costs.

At McCabes Wine & Spirits in Manhattan, wine prices are between 5% to 12% higher this year. Owner Daniel Mesznik attributes this rise to tariffs, shipping, manufacturing, and labor costs. “It’s the reality of the tariffs, shipping, manufacturing, and labor,” he told CNN.

Like many other shops across the United States, McCabes is trying to strike a delicate balance. They face higher upfront costs due to a complex array of tariffs established during President Donald Trump’s administration—most notably, a 15% tariff on European Union imports—while attempting to keep price increases to a minimum for customers.

“We’re doing our best to keep those increases to a minimum for our guests,” Mesznik said. “But I think folks understand that this is the current reality and they’re receptive to it and understanding of it.”

### Tariffs Impacting Importers and Sales Decline

Tariffs are hitting importers’ bottom lines even harder. Elenteny Imports, a logistics and distribution company that works with 9,000 retailers and restaurants, reported wine sales are down 13% year over year.

Wine consumption volume in the United States dropped 3% between 2019 and 2024, and it’s expected to decline another 4% from 2024 to 2029, according to IWSR, an alcohol data insights firm.

“For casual drinking occasions, wine has often been the choice for drinkers who prefer not to drink beer. But wine can be expensive and only comes in larger bottles,” said Marten Lodewijks, president of IWSR.

Over the past few years, drinkers have been shifting preferences to spirits and canned cocktails. “We’ve seen wine volumes consistently decline year after year, while ready-to-drink beverages, which are less expensive, come in convenient sizes and packs and benefit from continual flavor innovations, are growing rapidly,” he told CNN.

### Looking Ahead to 2025

Unfortunately, 2025 doesn’t look promising either. Data from Elenteny shows year-to-date bookings for imported wines are down nearly 30%. Demand has subsided following a “post-pandemic frothiness,” Elenteny CEO Alexi Cashen explained, adding, “Absolutely, tariffs are the persecutory issue here.”

Domestic wines, which the tariffs were originally intended to help, are not seeing improved sales this year either, she noted.

### Shifting Focus to Tequila and Mezcal

After a 16-month renovation, Mesznik’s shop has shifted some of its focus from wine to tequila. He has added 40% more brands and varieties, moving them to the front of the store.

Notably, tequila and mezcal are exempt from tariffs as both fall under the 2018 free trade agreement that President Trump signed with Mexico. “Tequila is in the most beautiful bottles. It’s the category in my business that everyone gravitates to right now, and I want that to be front and center,” Mesznik said.

Wine used to account for roughly 70% of his annual sales but is expected to drop to 65% this year due to growth in other categories like agave spirits.

### Smaller Selections on Store Shelves?

With overseas orders drastically reduced—including a 50% drop from France and a 66% decline from Italy, according to Elenteny’s data—shoppers may notice these changes reflected on store shelves.

“Many retailers, distributors, and restaurants have streamlined their wine offerings in response to the falling overall demand for alcoholic beverages, including wine,” said Mike Veseth, known as the Wine Economist, in an interview with CNN. “Consumers might have to search more than usual to find a particular brand.”

Adding to the uncertainty is an upcoming Supreme Court decision concerning the legality of tariffs, which Veseth says discourages wine businesses from making investments or taking decisive action on pricing.

In particular, Cashen pointed out that mid-priced wines between $40 and $50 “struggle the most,” while low-end bottles and premium wines are selling well. This pattern further underscores the “K-shaped” economy.

### Smarter Ordering Strategies

To adapt, Mesznik’s shop is ordering “smarter” than in past years, purchasing from fewer wholesalers that offer discounts for buying larger quantities.

“For example, we have a Pinot Noir from Argentina this month that’s on sale. Whereas I may usually buy one or three cases of that, I’m ordering five or ten cases,” he shared.

As consumers prepare for holiday celebrations, the evolving wine market means being flexible and open to exploring new options may pay off this Thanksgiving season.
https://abc7.com/post/tariffs-are-coming-holiday-wine/18162317/

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