EU Wine Industry Faces €1B Loss as U.S. Tariffs Bite
The European wine industry is grappling with a significant challenge due to a 15 percent tariff on exports to the U.S., their largest market. This has led to an estimated loss of €800 million to €1 billion over the next year. Winemakers and importers alike are feeling the pinch, with some facing price increases and others struggling to maintain their export volumes.
Werner Michlits, an Austrian winemaker, finds himself in a tough spot. He exports more than a third of his wine to the U.S., but with the new tariffs, some importers are asking him to lower prices. However, Michlits finds this impossible due to the increased costs. Similarly, Lamberto Frescobaldi, a large Italian producer, has seen a 10 percent drop in the average price of his U.S.-bound wine over the past three months.
The U.S. is a crucial market for European winemakers. In 2024, they exported €4.88 billion worth of wine there. However, the current tariffs and a declining dollar are causing twin crises. American wine groups have warned of a potential $2 billion reduction in American alcohol sales and 25,000 job losses. Ben Aneff, president of the U.S. Wine Trade Alliance, predicts a 35 percent price increase by next year.
While the short-term impact of tariffs is clear, the wine world also faces long-term threats. Climate change is affecting vineyards, and declining consumption in some markets is a cause for concern.
The European wine industry is navigating immediate challenges due to U.S. tariffs and a weakening dollar. Despite efforts to exclude wine from these tariffs, European exporters have not received an exemption. As the industry looks ahead, it must also contend with long-term issues like climate change and shifting consumer trends. The impact of these challenges on the industry and its workers remains to be seen.
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