Your next glass of wine might be more expensive

Credit: Courtesy of Bridget Elliott Brady

Credit: Courtesy of Bridget Elliott Brady

Unpacking boxes while working the register at her small wine shop gracing Tucker’s Main Street, Bridget Brady smiled at customers perusing the shelves, despite her unease about the future of her business. As President Donald Trump has launched global tariffs, then delayed the worst of them for many of the country’s trading partners, the threats have cast a shadow on Wine & Whimseys.

Brady, who has been in the wine and spirits business for more than 25 years, said 70% of her wine inventory is from outside the United States. “This takes away from what we’ve been trying to accomplish the last few years,” she said regarding her ability to stock international wines at reasonable prices. Her store opened in November 2022, with bottle sales averaging $15-$21.

What it means for consumers

The impact goes beyond paying extra for your favorite wine.

Tariffs are likely to stifle travel and relationship-building between U.S. importers and international winemakers, said Tim Willard, partner and beverage director of newly opened Madeira Park wine bar in Poncey-Highland. There will be a diminished selection of wines at higher prices. “The biggest effect will be not having access to the quality we want to show with our guests at the price point that even makes it acceptable by the glass,” said Willard.

“I was managing a portfolio of 50 producers in eight different countries,” said Willard of his former role for importer European Cellars. “We had wine from Macedonia, Switzerland, Georgia (the country), places that don’t have a lot of wine and don’t export a lot of wine. Consumers are going to get the worst end of it, paying the same or more for wines of lesser quality.”

The impact would extend to the prices of meals, too.

“When boxed cooking wine goes up in a restaurant (due to tariffs), it’s significant,” said Ryan Mullins, a wine specialist with Winebow, a leading importer and distributor who works with 60 independent restaurants and retailers across the U.S., including Atlanta. “That red wine reduction on short ribs will cost more.”

Credit: Courtesy of Ryan Mullins

Credit: Courtesy of Ryan Mullins

Say goodbye to some fancy wines?

While tariffs are intended to target European wine companies, the brunt of the impact will be felt by American businesses as well as consumers, said Mullins. He noted that the prospect of tariffs has already disrupted the industry, halting shipments because of the immediate financial hit to importers.

“The service that we provide is handling logistics. We warehouse wine in America, so we are our own importers, meaning we pay 100% of the tariffs when the wine is received at the dock,” Mullins said. “The cost jumps at each tier of the system, so when our cost base goes up, then the cost base of people we sell to goes up — it’s compounded.”

With already-thin importer net margins of less than 10%, Mullins said a 20% tariff would translate to substantial losses, forcing hesitation in purchasing and risking the permanent loss of highly sought after international wines to other markets. “The most allocated wines in the world will find a home in Switzerland … in Montreal,” he said. “Georgia’s No. 2 revenue for the state behind income tax is alcohol tax. If we lose these allocations to other world markets, we lose some of them forever. It’s not just the revenue for the next three months.”

Before opening her wine shop, Brady handled importation of wines from various countries. She was working with both large U.S. companies that owned the majority of wine brands she dealt with, as well as collaborating directly with smaller independent wineries to introduce their wines to the American market, Brady said, briefly touching on alcohol’s multitiered system. The legally mandated structure established after Prohibition regulates alcoholic beverage sales by separating the industry into three tiers: producers/importers, distributors/wholesalers and retailers (including stores, restaurants and bars).

“Wine, like anything else that moves overseas, is really a logistics and inventory management business at the end of the day,” said Willard.

Credit: AP

Credit: AP

‘Cycle is completely disrupted’

The imposition of tariffs throws carefully laid plans into chaos, forcing difficult decisions, Willard said. Small distributors, who champion unique and small production wines, face existential threats having to make hard decisions. Willard knows this well as a previous portfolio manager for importer European Cellars. “For businesses like this, they are planning six months out, making decisions before wine is bottled, palletized, trucked to port, put on containers and shipped,” he said. “This cycle is completely disrupted.”

The chain reaction disrupts everything with a ripple effect. The U.S. imports most glass bottles from China, Germany, Italy, France and Mexico. Corks come by way of Portugal and Spain.

“People who run small businesses put so much time and effort into planning because you have to,” said Willard, who added the current system has just been completely upended.

“For a new small business like me, it’s going to be extra challenging because you must have a lot of residual cash in your business to purchase and stock up on wines,” Brady said.

“If we see 20%-30% increases, I don’t think my business will survive,” Brady said. “The big-box stores will be OK, but smaller shops like mine will be in trouble. I would be surprised if we can sustain it without seriously changing our model.”

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