(Bloomberg) -- By this weekend, the U.S. Trade Representative (USTR) may institute a new round of tariffs on wines and spirits (as well as other luxury goods and foodstuffs, such as cheese) imported from the European Union. The increase could affix as much as a 100% increase to the import price. It’s the latest escalation in Trump’s trade war with the EU, which saw a 25% tax levied this past October and has united distillers on both sides of the Atlantic as it rattles the global whiskey business.
“Assuming there is a 100% ad valorem tariff, American consumers could expect the average price of impacted spirits and wines to be approximately 60% more costly in stores, restaurants, and bars within 90 days of tariff imposition,” says David M. Jabour, president of Twin Liquors, one of Texas’s largest beverage retailers, with 80 locations.
Even your favorite cocktails may become a lot more expensive. Take the Negroni—equal parts gin, Campari, and sweet vermouth—two-thirds of which are now subject to tariffs. (Gin is currently not on the list).
Campari is especially illustrative. Its significance within the world of mixology, as a bitter backbone to many of the industry’s standard sippers, helped cement its status as the world’s top-selling Italian liqueur. After the 25% tariff was imposed, a standard bottle of Campari went from $25 to $30; another round could bump that up to $50 or more. “It’s making it more difficult to do business,” laments Derek Brown, owner of the Columbia Room, an award-winning cocktail lounge in Washington. “We rely on a lot of imported products, and we don’t want $20 Negronis. People will order it less.”
Urban retailers, which lack the benefits of larger footprints and deeper storerooms to stock up on pre-tariff prices, are bracing for an even bigger surge on popular spirits from six countries (the U.K., Ireland, France, Germany, Italy, and Spain), while wine from any EU member nation may be subject to increase. “You can almost look for pricing to double,” says Jonathan Goldstein of Park Avenue Liquor. “That $50 bottle of Champagne is now going to be $100, and consumers are going to have a fit.”
“Tariffs cause a domino effect as added costs eventually have to be passed along to wholesalers, retailers, and consumers,” explains David Ozgo, chief economist for the Distilled Spirits Council of the United States (Discus), the industry’s largest lobbying group. They recommend voicing your concern not with retailers, but instead with the White House directly for better results. “The longer [tariffs] are in place, the greater the risk to the U.S. economy.”
New figures from Discus released on Wednesday show the impact so far: “After several years of double-digit growth,” American whiskey exports to the EU fell 27%, to $514 million; globally, exports dropped 16%, to $996 million, in 2019.
To be sure, nobody yet knows how the USTR will rule. For its part, the administration argues that illegal subsidies provided by the EU (to French plane manufacturer Airbus) have yet to be remedied. The impending tariffs, it contends, constitute an earnest attempt to restore economic equity across the Atlantic.
At any rate, if you live in the U.S. and are looking to make the most of an unfortunate situation, consider investing in rare and expensive bottles of spirits now. Since the tariffs apply only to liquids as they are imported into American warehouses, ultra-luxe labels that move slower won’t rise in cost until the current stocks—already sitting on domestic shelves—are depleted. The same logic goes for European connoisseurs when it comes to premium, collectable bourbons.
Additionally, some of your favorite everyday products, such as Campari, are worth grabbing now to get through a potential period of protracted inflation. Even high-volume liquor stores typically burn through their reserves within a couple of weeks. Once the new tariffs become official, the clock will start clicking.
Spirits to Stock Up on Now
Bailey’s Irish Cream — Estimated price increase: from $20 to $38Among the most popular liqueurs imported into the U.S., Bailey’s saw sales slow after the first wave of tariffs, say retailers. The next round could inch the price of a bottle that not long ago sat at under $20 closer to $40. “People are saying that they could live without it for a little while,” says Goldstein at Park Avenue Liquor.Also consider purchasing: Magnum Cream Liqueur, Carolans
The Macallan 12-Year Double-Cask Single Malt Scotch Whisky — From $70 to $130The top-selling super premium scotch on the market flies off shelves at an average retail of around $65 per bottle. But all single malt whisky out from the U.K. is now facing a 100% increase on its import price. If enacted, this label will be fetching a triple-figure sum come spring. Also consider purchasing: The Glenlivet 12, The Balvenie 14, Longrow 13
Veuve Clicquot — From $55 to $110The ubiquitous orange-labeled bottles from the LVMH-owned Champagne house is particularly popular as an affordable luxury: $55 for premium French bubbles. “But are you going to spend over $100 for a non-vintage Champagne?” asks Goldstein. “There will be a lot of [mid-range] Champagnes like that” priced off the shelf. Also consider purchasing: G.H. Mumm, Perrier-Jouët Grand Brut, Bollinger Special Cuvée
Bushmills 21-Year Single Malt — From $225 to $400One of the more complex examples of super premium Irish whiskey on the market today, this sipping spirit spends time in both bourbon and sherry casks before a final finish in ex-Madeira barrels. It’s also a relative bargain, compared to its similarly aged Scotch counterparts. Unfortunately for fans of the Northern Irish brand, Irish single malt—Bushmills’s specialty—is square in the crosshairs of the new tariffs. Also consider purchasing: Tyrconnell 10-Year-Old Madeira Casks, Knappogue Castle 14-Year-Old Twin Wood
Graham’s 40 Year Old Tawny Port — From $180 to $360Spared from the first series of tariffs in October, wines of Portugal are likely to be hit in the impeding round. Fortified tawny port, particularly, is renowned for its lush mouthfeel and warming notes of dark fruit, walnuts, and chocolate. A delicate balance of all is showcased in this sterling example, a go-to digestif for discerning gourmands. A potential doubling in price will likely have them searching for American-based alternatives.Also consider purchasing: Taylor Fladgate 40-Year-Old Tawny, Kopke 40-Years-Old Tawny
Oban 18-Year-Old Limited Edition Single Malt Scotch Whisky — From $180 to $300This special release from the West Coast of Scotland is of particular interest to single malt enthusiasts, who relish its subtle maritime complexities. “We raised this one from $129 to $179 [after the October tariffs],” says Steve Glamuzina, owner of Georgetown Square Wine and Liquor in Buffalo, N.Y. “If it goes up to $300, the high-end market is going to readjust itself to go over to blended scotch,” which so far remains unaffected by import taxes.Also consider purchasing: Connemara 12-Year-Old Peated Irish Whisky, Talisker 18
Château Brown 2015 Bordeaux — From $30 to $60This medium-bodied red wine from the south of France is as renowned for its affordability as for its elegance. But an overnight jump from $30 to $60 would smack oenophiles with sticker shock. “People want to get the biggest bang for their buck,” says Glamuzina. “Wine sales will shift toward other parts of the world unaffected by the tariffs.”Also consider purchasing: Château Les Trois Croix, Fronsac; Château Montlandrie, Castillon
Hennessy XO Cognac — From $165 to $350Nobody moves more cognac than Hennessy. The 255-year-old brand literally created the XO (“Extra Old”) category back in 1870. It remains a top-selling premium product, typically priced at $165 a bottle. Fans in midtown Manhattan, say retailers, might even see that number creep toward $400 in the coming months.Also consider purchasing: D’Ussé XO, Rémy Martin XO Excellence
The Balvenie Single-Barrel 25-Year-Old Scotch Whisky — From $800 to $1,500This quarter-century-old release from Balvenie is a good example of a potential investment bottle. Some online retailers list it as low as $600—an entirely reasonable price for a complex, high-age statement malt. After the tariffs, such outlets as Park Avenue Liquor expect it to run as high as $1,500 per bottle.Also consider purchasing: Glendronach Grandeur, Highland Park 25
Glenfiddich 40-Year-Old Single Malt Whisky — From $4,800 to $9,000A tightly guarded allocation of these imminently collectible bottles washes ashore annually. The Scotch is the result of ‘emnant vatting’, a Solera-like process wherein hand-selected casks—laid down for a minimum of 40 years—are mingled with leftover liquid from the previous year’s blend. “I get a handful of these every year, at most,” says Park Avenue’s Goldstein. He currently prices the limited edition label at $4,800, which—to be sure—is already a big ask. With additional tariffs, it will become impossible. “I don’t think I would reorder them after I run out of the current supply, because people aren’t going to pay $9,000 for this whisky.”Also consider purchasing: Dalmore 35 in Baccarat, Glen Grant 40-Year-Old from Gordon & Macphail
To contact the author of this story: Brad Japhe in New York at Bradjaphe.com
To contact the editor responsible for this story: Justin Ocean at email@example.com
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