Impact of wine tariffs directly affecting small business across U.S.

Above: small businesses like Blue Streak Wines & Spirits in New York City are having trouble restocking European wines because of tariffs imposed last year says Rob Bralow, a wine buyer there.

“Not sure who else is feeling this,” wrote New York-based wine buyer Rob Bralow on Facebook yesterday. “But it’s now at the retail level where I’m having a hard time finding stock to put on my shelves in NYC. This is the third wine in the last two days that I was told stock is not expected in for at least a month if not more. Everything from France is in a holding pattern. I’m expecting many others European wines to begin to be hard to stock as well.”

He was referring to what has been called “a logjam of activity from Europe to the U.S.” caused by the 25 percent wine tariffs imposed by the U.S. starting in October of last year.

Orders from the U.S. have been on hold as importers fear that new and possibly higher tariffs will implemented while their “wine is on the water,” as they say in trade parlance. Importers are forced to pay the duty on the products they ship even if the orders are places before the duties are put into effect.

The New York retailer’s words were echoed in an article published yesterday in the business section of the Austin American-Statesman, “Trump threat could make it harder to get your favorite wine in Austin.”

But John Roenigk, the owner of the Austin Wine Merchant, a legacy wine retailer in the state’s capital, is also facing another issue: the increased price of wines, due to the October tariffs, is drastically impacting sales in his shop.

“The disappointment on the faces of our clients for these wines was palpable,” he told the reporter for the city’s paper of record. “Some bought the wines anyway. Some took less than they would have. Others declined altogether. We still have wine from this producer months later when the wines are normally sold out in advance of arrival.”

(Full disclosure: John Roenigk and Nat Davis, the other wine professional quoted in the Austin American-Statesman piece, are both good friends of mine.)

Anecdotally, I’m hearing reports from across the U.S. that distributors are seeing sharp drops in sales because of the price increase for French and Spanish wines, especially in the “by the glass” category (under $15 retail) where the higher pricing puts them out of reach for many restaurant wine programs.

The U.S. Trade Representative has given no clear indication of when the tariffs will be lifted or what it will take to resolve the U.S.-European Union trade war. But most industry observers expect the 25 percent tariffs to remain active until 2021. And there’s no guarantee that the tariffs won’t be increased or expanded to other countries like Italy, which has remained outside of the wine duties’ reach so far (although cheeses like Parmigiano Reggiano and Pecorino have subject to 25 percent tariffs since October).

As the immediate impact of the tariffs is starting to come into sharp focus, many trade members speculate that the long-term affects of the trade war could be devastating for the U.S. wine trade. Many small businesses like those above won’t be able to weather the increased pricing and its fallout.

See this excellent post on the popular trade-focused wine blog SevenFifty, “How to Stay Informed About Tariffs and How to Take Action.”

Taste with me this month in Houston, Dallas, Tulsa, and Boulder (me and Paolo’s EPIC ROAD TRIP Feb. 18-22)

Paolo Cantele (above, right) is one of my best friends in the wine business in the world.

I’ll never forget the first time we met more than 10 years ago in Texas. I asked him if he liked the writings of Pier Paolo Pasolini. He had me at “yes, I love Pasolini!” and our bromance was born.

I’m super psyched for our Epic Road Trip the week after next when we’ll be driving (and pouring) from Houston to Boulder over the course of five days (we decided to drive because both love road trips and are geeked to see northern Texas, Oklahoma, and more of Colorado).

If you’ve never heard the song that I wrote and recorded about and for Paolo, “Smooth” (from the Parzen Family Singers’ 2016 album “I Believe in You and Me”) check it out here.

Please come out and taste and hang with us in the following cities on the following dates. I’m especially psyched to visit Tulsa for the first time. Rolling Stone is saying that it could be the “next Austin” and the people I’ve connected with there are super cool. This is going to be a lot fun… please join us!

Vinology (Houston)
Tuesday, February 18
6:30 p.m.

Paolo and I will be taking over the bar for a few hours, pouring his family’s wines and schmoozing. Houston folks: hit me up!

Undisclosed Location (Dallas)
Wednesday, February 19
dusk

This wine dinner is so sold-out that the owner made me promise not to post anything about it. Let me know if you want to attend and I’ll see what I can do to get you in. And I’m sure that Paolo and will be hosting an afterparty somewhere so let me know if you want to join.

Vintage Wine Bar (Tulsa)
Thursday, February 20
5:30 p.m.

Paolo’s wines aren’t in the state yet so we’re just going to buy a couple of bottles and share with whomever wants to come out and hang. I’m super psyched about going to Tulsa, a city I’ve been dying to visit. And I’ve loved connecting with the folks at Vintage Wine Bar.

Boulder Wine Merchant (Boulder, obviously)
Saturday, February 22
5:30 p.m.

Paolo and I will be doing an in-store. I do a lot of work with Boulder Wine Merchant because I’m the official blogger for the Boulder Burgundy Festival that they organize. Such great, lovely people. Over the years, I’ve become friends with a lot of their clients. It’s always a fun time. We’ll be pouring four wines.


Continue reading

Wine tariffs update: importers employ “mitigation” strategies to counteract fallout as threat to Italian wine grows

“Sorry, but wine tariffs are still a HUGE problem,” wrote leading American wine blogger Alder Yarrow on his blog Vinography last week.

And he’s right: even though French president Macron tweeted that he and Trump had an “excellent discussion” on trade in the days leading up to the World Economic Forum in Davos last month, there was no formal agreement announced nor has there been any confirmation by the U.S. Trade Representative that tariffs are officially off the table.

Regardless of progress that may (or may not) have been made toward ending the trade war between the U.S. and European Union, 25 percent tariffs on European wines and food products — including still wine from France and cheeses from Italy, among many other products — have been in place since October, 2019 and they continue to be active with no relief in sight.

(See background on the U.S.-European trade war and tariffs here.)

There are “rumors and hearsay” that further tariffs won’t be imposed, said Boston-based international trade lawyer Matthew Bock in a phone interview yesterday. “But there’s still a background threat of a 100 percent tariff on everything that was covered by the original Airbus tax. That has not gone away.”

And there is also a growing likelihood that the U.S. will impose new duties on Italian products.

According to a report published by the Wall Street Journal last month, “Italy and Britain will face U.S. tariffs if they proceed with a tax on digital companies such as Alphabet Inc.’s Google and Facebook Inc., U.S. Treasury Secretary Steven Mnuchin warned […] at an event on the sidelines of the World Economic Forum.”

Italy’s digital tax — the “web tax” as it called in Italian — went into effect at the beginning of 2020.

The “truce” with France, said Mnuchin, referring to talks with Macron, is just “the beginning of a solution.”

In the meantime, the U.S. wine trade continue to deal with the impact of active tariffs.

One of the ways that importers can counteract the fallout of the current duties is through “tariff mitigation,” said Bock whose firm Middleton Shrull & Bock is currently helping importers to navigate byzantine trade regulations.

Wines “are special because of their origin,” he said. “You can’t take a French [or Italian] wine and make it something else. So the only play left, at least from an importation stage tariff mitigation perspective, is to reduce the value as much as possible. And so that’s what we’ve been focused on with U.S. importers.”

The price of a bottle also includes professional services, he explained, like marketing support, sales support, licensing, and royalties, etc. They can be “disassociated from the bottle price” by realigning agreements with producers.

“All of that has been traditionally built into the price of a bottle,” he noted. But “a lot of that can be shaved off into separate agreements that are not related to per bottle import volume.”

Importers can achieve this by creating separate agreements for services. As a result, the value of the wine itself can be reduced significantly.

But U.S. wine trade members have to be extremely careful, he said, because U.S. customs officials can impose severe fines if they determine importers have acted improperly or negligently.

While rumors have circulated that the U.S. Trade Representative will make an announcement regarding tariffs by Monday, February 17, there’s no firm date for a decision or clarification. It’s likely that the 25 percent tariffs will remain in place at least until the U.S. presidential election in November, Bock said. But he’s cautiously optimistic that 100 percent tariffs won’t be imposed this year.

In other European wine tariff news…

European Commissioner for Economy Paolo Gentiloni, former Italian prime minister, has responded to a Change.org petition supporting Italian winemakers that was launched by Slow Food University professor of food and wine law Michele Fino (my colleague).

“Together with agriculture commissioner Janusz Wojciechowski,” he writes, “we will continue to carefully monitor the situation in an effort to evaluate the impact of the tariffs and determine whether or not it’s necessary to respond with proportionate measures” (translation mine).

*****

Piedmontese winery Cascina Iuli has launched “I am a farmer,” an EU-focused letter writing campaign, including emails for leading EU agriculture officials.

“We European farmers have 14 days,” writes American wine importer Summer Wolff (my friend) who is based in Italy, “to make as much noise as possible on this side of the pond to try and get the attention of the powers that be.”

Dario Prinčič 2015 Pinot Grigio, a wine for a love affair…

On Friday afternoon, Tracie and I checked into our favorite Houston hotel for a staycation-10th-wedding-anniversary celebration (her parents had come into Houston to pick up the girls at school and spend the evening with them).

Around 5 p.m., we turned on CNN (a treat for us since we cut our cable nearly a year ago), opened a bag of our favorite potato chips, and lounged on our hotel room’s dark brown leather-bound armchairs as we sipped cellar-temperature Dario Prinčič 2015 Venezia Giulia IGT Pinot Grigio, unfiltered, 13 percent alcohol.

As Senate Republicans ceremoniously reveled in their sycophancy for our imperious president, tabling one by one their Democrat colleagues’ Maginot Lines in the sand, Tracie and I were lost in our own world. We remembered fondly how we drank Joly Coulée de Serrant and ate chips at that same hotel in 2009, less than a year before we were married, when the world seemed a different place brimming with hope and promise.

The wine — five-year-old Pinot Grigio from one of our favorite growers — was bright and lithe in the glass, like that first year of our courtship. If you didn’t know any better, you’d have thought the wine was from a more recent vintage. Its fruit was so vibrant and pure and its nose so fresh, you could hardly believe it was harvested before the current era of uncertainty and perturbation.

Yet it was, just like our love affair.

We drank it with gusto, one of our perennial favorites.

Later that evening we sat for dinner at one of our city’s most in-demand tables, the oddly named Rosie Canonball, where the texture of Chef Felipe Riccio’s superb cavatelli reminded us of a trip to Puglia when our oldest was just a babe.

By noon the next day, we were sitting with Tracie’s parents and our daughters at Wasfi’s Grill and Hookah, a new favorite recommended by my friend Ahmad. The falafel was moreish, the grilled lamb excellent.

It was a beautiful day in Houston, with clear blue skies and a gentle breeze.

There are many challenges that lay ahead but our hearts are renewed and refilled, teeming once again with hope and promise.

I love you, Tracie P… You are my life, my love, my lover and muse.

“Ten years gone & you’re still turning me on.” HAPPY 10th ANNIVERSARY TRACIE P!

Scroll down for the song I wrote for Tracie for our 10th wedding anniversary: “Ten Years Gone (and You’re Still Turning Me On).”

Tracie and I were married 10 years ago today in La Jolla, California where I grew up.

Our first kiss and first dance happened back in August of 2008 in Austin, Texas (at the Continental Club, where else?) after we’d already been in touch through our blogs for many months and many emails and texts had been sent back and forth.

By February of 2009, we were engaged. I had asked her to marry me after my band played a show in LA. We drank Bruno Paillard in our hotel room that night.

On January 31, 2010, we got hitched. Tracie’s dad, the Reverend Branch, officiated.

We drank Bollinger rosé all night that night at our reception at Jaynes Gastropub, one of our favorite restaurants, owned by our close friends, in San Diego.

After our honeymoon in Italy (where else?), we settled into a little house we rented in Austin. Both of our girls were born in Austin (Georgia in 2011, Lila Jane in 2013) and we brought both of them home to that little house on the corner of Gro[o]ver and Alegria (streets have never been so aptly named!).

In early 2014, we moved to Houston where we rented and still live in a bigger house in a neighborhood that we love and a community where we have put down roots.

Georgia’s eight years old now and Lila Jane’s 6. Our house is always filled with lots of music and now a couple of chihuahuas, too.

We’re still as broke as the day we met (well, maybe not quite that broke) and we still struggle to get by. But we’re all happy, healthy, and doing things we love and enjoy.
Continue reading

Tasting 2015 Barbaresco with the new Langa generation

When we sat down to taste his family’s 2015 Barbaresco last night in Houston, Riccardo Sobrino of Cascina delle Rose reminded me that the first time we met — exactly 10 years ago, almost to the day — he was just a kid, the son of one of the appellation’s most beloved (however under the radar) producers.

Today, he and his brother Davide are running the family winery while parents Giovanna and Italo are enjoying retirement at their new “tiny but really nice” condo on the French riviera where Giovanna moors her sailboat.

“She’s always been a skipper,” he said in his slightly accented but masterful English.

The fact that he speaks my native language so well wasn’t lost on me: he’s part of the new Langa generation for whom English is a rite of passage, a skill set that not everyone possessed 20 years ago in the land of Barbaresco and Barolo.

We were joined by another new Langa generation winemaker, Matteo Rocca, the grandson of Luigi Giordano and another new face on America’s Nebbiolo circuit.

Matteo family’s wines are super old school, vinified with extended maceration time. They tend more toward earth and tar. We tasted his Cavanna, Montestefano, and Asili. And they all showed great, although the Montestefano and Asili are still very tight (to be expected). I thought the Asili was outstanding even though all the wines will be great in time.

Riccardo’s family’s Nebbiolo is always more expressive in its youth and the floral and fruit notes were already beginning to emerge on the Rio Sordo (their flagship cru) and Tre Stelle. The 2015 vegetative cycle in Langa was a warm, arguably more “modern” vintage as most winemakers agree (see this wonderful round-up of technical notes from Barolo producers here). Not an easy vintage, both Riccardo and Matteo conceded, but one that will deliver approachable wines earlier on.

Both Riccardo and Matteo (and Matteo’s SO, Gloria, who is visiting the U.S. for the first time!) are on their way to New York where they will be presenting their wines at the first-ever Barolo Barbaresco World Opening next Tuesday (click link for registration details; I’m not sure what “World Opening” means but it’s got to be good).

I haven’t seen the entire line-up of producers but there is no doubt in my mind: the new Langa generation has arrived!

Thanks Riccardo and Matteo for coming to Texas. I’ll look forward to see you guys this June when I’m back in Piedmont for UniSG.

Kistler Pinot Noir reminds me (again) of how wrong I’ve been about California

In late 2019, at the outset of the short window of when you can ship wine to Texas without worrying about heat damage, a very generous soul sent me a bottle of 2016 Kistler Laguna Ridge Pinot Noir.

Said friend was inspired, I believe, by something I’ve written repeatedly about my relationship to California viticulture in recent years: my beloved California, I was wrong about you and your wines, please forgive me.

When the new wave of European wine began to hit American shores in the late 1990s (20+ years ago now), I was one of countless wine lovers who wrongly turned their backs to my native state of California. Our pivot was prompted by the erroneous belief — a prejudice, really — that all California wines were “too hot” (in alcohol), “overly extracted,” “too fruit forward” (the notorious “fruit bomb” trend), “lacking in acidity,” and adverse to food pairing (not “food friendly” in the newly established parlance of the time).

But over the last three years and numerous tasting trips to California wine country north and south, I’ve discovered just how wrong I was. Looking back now on those years prior — those decades, really — when I snubbed California wine, I see clearly how my nose and palate had been blinded (how’s that for a true synaesthesia?) by the entirely misguided bias that sheer peer pressure can produce.

The Kistler Pinot Noir was lithe and nimble in our glasses, with elegant balance between its acidity and alcohol, brilliant red and black fruit flavors with a touch of earth, and an ethereal texture that almost made it feel like its fruit was dissolving in your mouth.

Thank you, friend, and thank you, Kistler, for showing me the light and turning me on to what I should have known all along.

“It’s all just arbitrary”: tariff threat continues to impact U.S. wine industry

“If people want to just arbitrarily put taxes on our digital companies,” said Treasury Secretary Steven Mnuchin earlier this week in Davos, Switzerland, “we will consider arbitrarily putting taxes on car companies.”

The quote comes via a Washington Post opinion piece published today, “Trump’s Treasury secretary just admitted the tariff rationale is hogwash.”

Even though there seems to have been a deescalation in the European Union-U.S. trade war (at least temporarily according to tweet, below, by French president Macro; see this Bloomberg report “Macron, Trump May Have Tariff Truce in 2020 Digital Tax Spat”), the threat of 100 percent “arbitrary” tariffs on EU wines and food products still looms broadly over the U.S. wine industry. Despite the semblance of a rapprochement between the two countries, there is no guarantee that the frequently unpredictable Trump administration won’t impose such severe and debilitating duties.

 

The acute pungency of Mnuchin’s words sting this morning as I recall my conversation with a wine bar owner in Tulsa, Oklahoma yesterday via telephone. As for so many of my colleagues and peers in the wine trade, the uncertainty caused by the “arbitrary” nature of the trade dispute continues to send ripples of disruption through our industry.

Working in an emerging market like theirs, where progressive wine tastes and trends are just beginning to take shape, they depend on small-scale importers and distributors for the by-the-glass allocations that keep their business model humming. And suppliers like those are on hold: fearful that excessive duties could still be imposed, they are not placing their normal January orders and they are less inclined to share their highly allocated wines in markets like Tulsa, opting instead to focus on top markets where the wines will be more lucrative both in terms of volume and wholesale prices.

His troubles were echoed in an email from a New York-based freelance marketing consultant (whose business parallels mine).

“This tariff things is a real [expletive] pain in the ass,” they wrote. “I can barely get anyone to respond relative to my consulting projects. ugh.”

There may be light at the end of the tunnel in the tariff wars. But the Trump administration’s “arbitrary” strategy continues to sow confusion. And the lack of certainty continues to impact a large swath of the U.S. wine trade at a delicate time of the year when deals are made and wines are allocated. The long-term implications could be disastrous, especially for trade members like my colleagues above — and people like me.

Barolo and seafood pair well at Il Grecale in Novello (Barolo)

Above: Chef Alessandro Neri of Il Grecale in Novello (Barolo) called this dish of fried Panko-dusted shrimp, served with salsa rosa (mayonnaise, ketchup, Worcestershire, mustard, and brandy), a throw back to the 1980s.

“The following rules should be observed for the proper accordance of wines with meats; with fish white wines; with meat the fuller red wines; at the end of the repast the oldest red wines; and the end of dessert the liqueurs and sparkling white wines.” The Inner Man: Good Things to Eat and Drink and where to Get Them by Daniel O’Connell, 1891.

“The Red Dinner [meat based]… is best served without fish, since the Red Wines seldom accord with fish to most palates… [For] the White Dinner [fish based]… all Red Wines should be excluded.” The Gentleman’s Table Guide: Being Practical Recipes for Wine Cups, American Drinks, Punches, Cordials, Summer & Winter Beverages, by E. Ricket, C. Thomas, 1871.

Above: breaded and fried uncured anchovy “tacos” filled with Jerusalem artichoke paste.

Last week in Barolo, my host and dinner companion Alberto Cordero broke the “cardinal rule” of wine pairing when he treated me and another colleague to dinner at the wonderful Il Grecale in Novello, a hamlet of Barolo village in Piedmont.

The seemingly age-old white wine with fish, red wine with meat chestnut can pose a challenge in places like Piedmont (and Tuscany, for that matter) where the old folks still pair red wine with everything they eat.

But Alberto, whose winery I’m profiling for his U.S. importer, proved the otherwise timeless truism dead wrong by pairing his family’s wonderful Nebbiolos with Chef Alessandro Neri’s superb seafood-focused cooking.

Above: pinch, peel, and suck shrimp served over Ligurian-style corzetti pasta medallions tossed with the crustaceans’ stock and wilted spinach. This dish was extraordinary.

Of course, Alberto’s elegant wines are lithe and nimble in the glass, even in their youth (something that he ascribes in part to the extra bottle aging they undergo before release).

Just a few weeks into 2020, the evening will surely be remembered as one of the best meals of the year.

I loved Chef Neri’s cooking. And in a region where beef is the pièce de résistance around which nearly all meals are centered and composed, it’s great to know that there are piscivore options.

Chef Neri (who, btw, lists all of his suppliers on his website) has white wine on his list as well. But it was wonderful to explore the gastronomic possibilities of rich red wine with lighter-style, playful dishes like his.

Above: too few Americans know the gorgeous, classic-styled wines of Cordero, one of Langa’s oldest winemaking families and owners of one of Barolo’s top growing sites. I love the wines and was thrilled to get to connect with Alberto professionally. Even in its youth, this 2016 made for an excellent dance partner with the food. It was such a great “accordance,” as wine pairing used to be called.

I can’t recommend the restaurant and the pairing highly enough.

The term Grecale denotes the northeastern “spoke” of the wind rose, what we call the Bora in English (Bora can also be used in Italian). In antiquity, sailors believed it originated in Greece (Grecia in Italian), hence the name.

Thank you again, Alberto, for an unforgettable dinner and for sharing your family’s wonderful wines!

Attention Italy-bound travelers: car rental companies now may require international driving permits

Although international driving permits for foreigners have been required by Italian authorities for decades, rental car agencies have rarely, if ever, insisted that drivers present a permit before renting a car there.

But that seems to have changed: two weeks ago, for the first time in my 30+ years renting cars and driving in Italy, the agent at the Hertz counter at Malpensa airport asked me to present my permit before she would give me the keys to a car.

When I asked her why she had asked me to show her my permit before she would release a car, she told me that her company has begun to check drivers’ permit status after Italian police had impounded vehicles driven by foreigners who lacked a permit.

Since the first time I rented a car in Italy back in the late 80s, I had read and been told that not having an international driving permit (IDP) could lead to stiff fines. And even though I have always obtained and renewed my IDP before traveling there, I had never been asked to present it — not by authorities or rental car agencies. I’ve been pulled over on a handful of occasions for random police controls (although I have never received a ticket or fine). When that happened, the police never asked me for my IDP. (I have been fined for speeding after receiving a ticket generated by a speed camera; see my post on my experience here.)

On its website, the Italian ministry for infrastructure and transportation clearly states that an IDP is required to drive in Italy. But, again, I had never heard of the law being enforced.

According to the U.S. Federal Trade Commission, “an international driving permit (IDP) translates your government-issued driver’s license into 10 languages. Although your U.S. driver’s license lets you drive in many foreign countries, the translations in the IDP are intended to minimize language barriers when you drive in countries where English is not widely spoken or understood.”

Only two agencies are authorized to issue IDPs in the U.S.: the American Automobile Association (AAA) or the American Automobile Touring Alliance (AATA). On its website, the commission also warns against “IDP scams.”

If, like me and countless other wine professionals, you’ll be headed to Italy this year and plan to rent a car, it’s worth the negligible fee and hassle for an IDP (I get mine at my local AAA office).