Why US wine industry is hoping tariffs on EU wine won’t go ahead

The US wine industry is currently reeling from the President’s decision to potentially  tax wine from Europe by 100%. In fact, some experts in the industry are saying that the threatened rise in import tax will have a similar impact on them as prohibition did more than 100 years ago.

Wine sellers in the US are hoping that the President will change his mind and drop the import tax raise. They say that their businesses will fail should the proposed taxes happen.

How would 100% EU tariffs affect the US wine industry?

Proposals to raise tax on EU imports is in retaliation for subsidies on American company Airbus. But the American wine industry is arguing that it shouldn’t take the hit for this trade battle. Representatives of wine merchants in the US argue that these proposed tariffs would hit the industry very hard.

Every year, the US imports wine worth £3.8 billion (approximately $5 billion) from European countries. In October 2019, the industry had to deal with a 25% tax on wines from Europe. This was imposed by the President after approval was granted from the World Trade Organisation (WTO) for the US to retaliate after subsidies imposed on Airbus.

This first round of tax increases was absorbed by wine sellers in the US. However, the suggestion that there will be another round of tax increases, this time at 100%, has shaken the industry once more.

Possible job losses and huge price rises

It is feared that the tariffs will lead to more retaliation and put potentially thousands of jobs on the brink. But what would the fallout be for the consumer? The National Association of Wine Retailers (NAWR), says that prices per bottle could more than double. Furthermore, some bottles will just be way too expensive to import.

The US Trade Representative has been open to comments, and according to the BBC, thousands of sellers have formally opposed the tariffs. Field Blend Solutions is a wine importer based in New York. A representative told the BBC that while the tariffs are supposed to cause problems for the countries of origin in Europe, “… instead, they are having a calamitous impact on American small businesses, American workers and American consumers.”

The president of the National Association of Beverage Importers (NABI) warns that the “impact on jobs” and “the impact on the US marketplace” are concerning.

Industry braces for impact of wine tariffs

This tariff was announced in December 2019 by the US Government, which says that the 100% increase is necessary. This, they say, is because of a “lack of progress” between the EU and the US in resolving the subsidy battle over Airbus.

President Trump says that Americans should drink home-grown wine instead. However, industry experts say that consumers may well turn to wines from the New World instead of the US.

Whether the 100% tariff on wine imports goes ahead remains to be seen. However, it’s likely that even if it doesn’t, some tariffs will remain for the US wine industry. It’s possible, for example, that Champagne will come under fire in a separate trade dispute over French taxes on tech companies. Whatever happens, collectors of fine wines and everyday consumers will be watching closely on both sides of the Atlantic.

The growing popularity of Eastern Mediterranean wine

Wine from the Eastern Mediterranean isn’t always at the forefront of consumers’ minds. However, the region that goes from Lebanon to Croatia is home to many different types of wine. And it’s becoming more popular, thanks to new coverage in the World Atlas of Wine, the most recent edition of which has devoted pages to wine from Israel, Lebanon and Cyprus for the first time.

How is Eastern Mediterranean wine selling internationally?

Greece sells more internationally than the other countries from the region. For example, there has been an upsurge in popularity of wines from Santorini. In 2019, approximately two million hectolitres (each hectolitre = 100 litres) of wine was made in Greece.

From this volume, approximately 90% comes from the 200 grapes indigenous to the country. Around 13% of the total wine volume produced in Greece is exported internationally, and it’s worth about £71 million (82.6 million Euros).

Santorini wines are finally shifting into the fine wine bracket with prices equivalent to those of high-quality white Burgundy. This burgeoning interest in wines from Santorini is likely to have a knock-on effect for collectors and sommeliers.

Georgian wine is exporting more than ever before

Georgia, located at the apex of Europe and Asia is also increasing wine exports. In the second half of 2019, UK based importer Berkmann Wine Cellars began listing wine from a Georgian producer called Tbilvino.

According to data from the Wine Agency of Georgia, in the 12 months leading up to October 2019, Georgian wine exports increased by 20% in value and 11% in volume. It is exported to 50 different countries, with recently opened markets including Sweden, Germany, the UK, the US and Japan. Georgia exports the highest volume of wine to the Ukraine and Russia, with China in third. Interest from Scandinavia, the UK and the US is also increasing the growth of wine from this region.

Turkish wines, while traditionally not particularly successful in international markets, are also kickstarting growth plans. Varieties such as Narince made from an aromatic white grape, and Papakarasi, which makes soft fruity reds have potential for export markets.

Romanian and Israeli wines

There is also an untapped export market for Romanian wine. Philip Cox is the commercial director for Cramele Recas, the largest wine producer in the country. He says that Romania has huge potential thanks to its lengthy history of wine making, and fascinating local varieties. He also says that the country’s ‘flexible legislation’ allows wine producers to pick and choose from a vast range of varieties. Add this to relatively cheap land, low living costs and you have the ingredients for a very successful export market.

Philip says: “[Romania] now has one of the most modern wine industries in Europe, with more than 200 new wineries built in the past decade.” The producer exports to 23 countries, and is nationally distributed in Myanmar, South Korea and Japan.

Over in Israel there is no official wine group pushing for exports. However, there is an unofficial group of wine producers working together to export increasing amounts to the UK wine market.


The group is led by Morris Herzogf from Kedem Europe, a specialist in Israeli wine. He believes the biggest challenge is to change people’s perceptions of wine from Israel. He points out that recently sommeliers and wine aficionados are discovering that there are many high-quality wines from the region.


Various London restaurants have become buyers for Israeli wine, and professionals are increasingly using it to match the cuisine from the region as it becomes more popular. Winemaker Faouzi Issa heads up the oldest commercial winery in Lebanon, which is called Domaine des Tourelles. He says that the UK is their main market and that: “… consumers [in the UK] are very open to discovering new wines, particularly those with an interesting story.”


His wines now reach 25 countries, and over the last ten years his export volumes have increased eight times. However, despite the undoubted increase in exports for wines from the Eastern Mediterranean, it’s likely that they will remain niche for the meantime, and won’t be named on any 2020 wine trends lists. For now, only wines from Georgia, Hungary, Romania and Greece are included on the International Organisation for Vin and Wine (OIV)’s list of countries that make more than one million hectolitres a year.

What are the biggest wine trends for 2020?


It’s not always possible to accurately predict the future for any business sector, and the wine industry is no exception. However, as we enter 2020, there are a number of likely changes to the industry. These include changing consumer tastes and demands, as well as wider economic and political issues affecting the market.


Look out for these nine wine trends for 2020


1. Fusing rosé and Prosecco

These two hugely popular trends are looking set to come together in 2020. In Italy, wine producers have been attempting to get official approval for Prosecco rosé for a number of years. And in the Bibendum wine trends 2020 report, the UK supplier predicts that the first shipment could reach the shelves before the end of the year.

Wine producers looking to take advantage of this new trend would have to use up to 15% Pinot Noir with Glera grapes to make official Prosecco DOC rosé.


2. Rosé continues its ‘serious wine’ trend

Rosé has been gaining traction as a serious wine for a while, and there will be continued exposure to high end versions. This is borne out by various high-profile acquisitions, including Moet Hennessey buying the maker of Whispering Angel rose (Chateua d’Esclans).


3. The rise in appassimento wines will continue

Sales of appassimento wines have doubled in the UK, according to major sellers such as Majestic Wines. These Italian wines are taking market share from previously popular Malbec easy drinkers.

Appassimento is a specific wine making technique used mostly in traditional Italian regions. The grapes are dried before fermentation takes place, leading to wines with concentrated, rich flavours.


4. Austrian wines are becoming more popular

Bibendum’s report also highlights indigenous Austrian grapes becoming more popular. These include Saint Laurent, Zweigelt and Blaufrankisch.


5. Vegan wines continue to grow as a new sector

Many wine sellers are increasing the number of vegan products, due to growing consumer demand. Expect to see more wines labelled vegan during 2020, following the growth of the market in 2019.


6. Natural wines will go mainstream

While it’s not easy to get official figures on natural wines, as there is no one definition, there is a definite shift to sulphite-free wines. This part of the wine industry continues to divide wine lovers and wine makers and remains a small sector. However, it’s likely to continue to gain exposure and consumers can expect to see more ‘natural’ labelling used by wine retailers and in restaurants during 2020.


7. Changes in the fine wine market

Fine wine continues to be a fascinating part of the industry, for consumers and collectors alike. During the 2010s there was a distinct shift in the market as wine collectors began reaching out to a wider range of regions. This led to an increase in specialist fine wine retailers, including Ideal Wine. And while some analysts suggest that the fine wine market could slide slightly, collectors should be on the lookout for a resurgence for Bordeaux 2010.


8. Economic and political changes

These factors affect the fine wine market as tariffs and trade wars are ongoing. However, it also affects the accessibility of wine to consumers in general terms. For example, following the UK’s exit from the EU on 31 January 2020, trade negotiations will begin. This could lead to changes in the value of the pound versus the Euro, and if the UK and EU cannot agree new trade agreements, then a ‘no deal’ Brexit is back on the table.

Over in the US, the president is entering the election year. Recent US tariffs on wine still stand, and it’s unclear as to whether these will be rescinded or increased. US officials plan to agree on raising tariffs by the end of January across a number of wines from the EU, including Barolo and Champagne.


9. The biggest threat of all – climate change

In 2019, Spanish wine producer Miguel Torres urged the world’s wine industry to work faster to combat climate change. Having set up a thinktank in 2011, Torres told Decanter that just 20 wine producers in Spain had joined. There have been a number of reports during 2019 showing the likely effects of the continuing threat of climate change on wine producing regions.

This is, of course, a long-term issue, but we can expect to see more conversation, more research and more changes within the global wine industry to respond to climate change in 2020.

Confused about fine wine terminology? Read on…

You don’t need to be a sommelier or fine wine collector to be interested in all things vine related. But have you ever felt confused by some of the fine wine terminology used by wine sellers, makers and enthusiasts? Here’s a rundown on some of the fine wine terminology we think needs debunking.


Debunking fine wine terminology

Many of these phrases will be familiar to a wine industry professional, or to a fine wine collector. And lots of them will be well-known to a wine enthusiast or beginner, but their actual meanings aren’t always clear. Here’s what some common (and not so common) wine terms mean.


  • Complexity – the complexity of a wine is about all of the different aromas and flavours it has. It also covers how these aromas and flavours interact with each other. And the better they interact, the higher the quality of the wine. For example, if when tasting a wine, you can pick up a whole raft of flavours and they all blend well on the palate, then that wine has a complexity that ups its quality and value.


  • Cork tainted – a common misconception is that ‘corked’ means that a wine has bits of cork physically floating around in it. This isn’t the case. Rather, ‘corked’ is used to describe a fault in the wine causing it to smell a certain way. Instead of whatever floral or fruity flavours the wine should have, if it is corked, it tends to smell like damp paper or mildew. The most significant chemical that causes this ‘off’ smell is TCA, which is transferred to the wine from the cork. TCA stands for ‘2,4,6-trichloroanisole’, an incredibly powerful chemical that can cause ‘corked’ or ‘cork-tainted’ aromas and flavours in wine even in tiny amounts.


  • Full-bodied – you’ll often read this term in articles about wine, or hear it thrown around by a wine expert, but there is rarely an explanation as to what it really means. This is partly because it’s quite difficult to fully define. The ‘body’ of a wine refers to how to how it feels on the palate and in the mouth. An easy way to think of it is to consider water as ‘light bodied’ and heavy cream ‘full bodied’, and to compare the way a wine feels in your mouth to these. A typically light bodied wine has a high acidity, such as Pinot Noir or Sauvignon Blanc, while deep reds such as Cabernet Sauvignon are generally described as ‘full-bodied’ wines.


  • First growth – refers to Bordeaux, specifically the Bordeaux Classification back in 1855. Wine brokers ranked Chateaux based on price and reputation, in categories known as growths or ‘crus’. For example, in the Medoc sub-region, ‘first growth’ means one of the top five chateaux. These wines are also referred to as ‘Premier Cru’, which refers to the land rather than the wine itself.


  • Grand vin – you’ll see this French wine term on bottle labels. It indicates that the producer thinks that it’s the best of their wines. However, because it’s a subjective term, it’s unregulated. In other words, it’s no guarantee that the particular wine producer’s ‘grand vin’ is excellent, or even OK. But it does tend to bump the price up anyway.


  • Natural wine – another commonly used term with no regulated definition, it’s usually used to describe wines that are produced using few or no man-made chemicals. Natural wine vineyards will normally be sustainable, biodynamic and organic. They tend to use natural fertilisers and treatments and harvest their grapes by hand. Wines are fermented using wild yeast, with hardly any sulphur dioxide or additives. Natural wines are usually lightly filtered before they reach the bottle.


  • Tannin – this is the chemical you find in tea. It’s what gives black tea the bitter flavour. Tannins in wine come from the skin of the grapes used. How much tannin ends up in your wine depends on the amount of contact the wine skins had in the process of making it. Tannins give wine that dry, bitter flavour.


  • Terroir – this is a complicated term used in wine making. It encompasses many factors and refers to the natural environment in which the grapes have been grown. It covers everything that makes the site unique, from its soil and topography to the climate. All of these factors play important roles in determining the ultimate flavour and quality of the final product.


For more on fine wines, head to Ideal Wine Company’s blog where you’ll find industry, product and regional information.


What you need to know about fine wine investment

When it comes to fine wine investment, there’s one golden rule – don’t drink your collection! It’s one of the few asset classes that can’t be used in some way. Even with fine art collecting, you can generally look at your purchases. But serious fine wine investors store their wine in bonded warehouses.


Fine wine investment and bonded warehouses

Bonded warehouses are licensed by the Government, and the wine stored in them is therefore exempt from VAT (value added tax). Wine stored in bond means the bottles are stored safely in a controlled environment, and any wines not aimed at the UK market avoid customs duty.

Wine collectors who choose to sell ‘in bond’ is usually sold in the standard 12 bottle case. However, there are exceptions to this. Collectors with wine stored in bonded warehouse accounts can also get condition reports for a fee. The fee is usually relatively small, and certainly makes sense if you have a collection worth thousands of pounds.

There are, of course, fees and insurance costs when you choose to store wine in bonded warehouses. And, should you choose to drink it after all, you can arrange for bonded delivery. This will mean that you will have to pay VAT and customs duty. The VAT will be charged at a rate based on the original price of the wine rather than its current value.


Follow the global marketplace listing for trading wine

Of course, the idea of fine wine investment is to ensure your assets are increasing in value. You’re not looking to enjoy drinking the wine but making as much money as possible on your chosen asset class.

The global marketplace for wine trading is called Liv-ex. Following this regularly will help you keep on top of the wines that are hot right now. According to the Liv-ex Fine Wine 1000 wine index, the top one thousand bottles have increased in value by 48.35% since 2014. While that sounds very encouraging, it’s worth noting that the index has only gone up by 0.11% during 2019.


Which wine regions should you invest in?

Traditionally, Burgundy and Bordeaux have been popular regions for fine wine investors and collectors. The Liv-ex Burgundy 150 index shows that Burgundy has gained by 94.9% over the five years. And in 2018, a bottle of burgundy made a record smashing £434,850 ($558,000) at Sotheby’s. The bottle of 1945 Romanee-Conti wasn’t alone, with another bottle selling at the same auction for almost as much (£386,533/ $496,000).

After such highs, perhaps it’s not surprising that the French fine wine market is showing signs of fatigue. In the 12 months up to the end of June 2019, the index dropped by 6.2%.


Head for Italy for Tuscan and Piedmont wines

As for wines that are worth investing in right now, Italian wine is always a good bed. There is evidence to show that wine has been made in Italy for at least six thousand years. But when it comes to the investment market, Italy is relatively new. Just like France, the Italian wine market is dominated by two regions – Piedmont and Tuscany.

Examples of wines known as ‘super Tuscans’ include Sassicaia. The most coveted wines from Piedmont are probably Barbaresco and Barolo. In terms of the Liv-ex indexes, the Italy 100 was the highest performing. It gained 3% and while it’s not the best yet, it is definitely worth considering for wine investors.