Wine Industry Faces Challenges Over Tariffs and Distribution Rules
The U.S. wine industry is grappling with challenges stemming from international tariffs and complex distribution laws, both of which impact the market for domestic and imported wines.
Ben Aneff, President of the U.S. Wine Trade Alliance, explains that the unique U.S. “three-tier” distribution system, a structure stemming from Prohibition’s end, mandates that wine is sold through separate importers, distributors, and retailers. This setup restricts direct international sales, ensuring that most profits from imported wine benefit American companies.
Unlike other industries where companies can directly import and sell goods, wine sellers cannot bypass this chain. The three-tier system aims to prevent monopolies and ensure regulatory oversight, but it also adds layers of complexity and cost to the wine trade. For instance, a restaurant or retailer in the U.S. must purchase wine from a licensed distributor rather than directly from international wineries, restricting access and driving up prices. This structure keeps most profits from imported wine sales within U.S. businesses, but some argue that it limits flexibility and increases vulnerability to tariffs, ultimately affecting the availability and pricing of wine for American consumers.
Aneff also highlights the impact of tariffs on the U.S. wine industry, particularly focusing on policies enacted in 2019. Tariffs on imported wine present significant challenges for the U.S. wine industry, impacting both international and domestic players. The 2019 tariffs on European wines, introduced by then-President Trump as part of a trade dispute over Airbus subsidies, added a 25% duty to many imported wines, straining American distributors who rely on these products. These tariffs make it harder for businesses like restaurants and wine shops to afford European wines, which are essential to their beverage programs and profit margins. Moreover, because domestic wineries depend on the same distribution networks, financial pressures on distributors can reduce access to markets for smaller U.S. wine producers.
“During the last round of tariffs in 2019, we saw 25% duties put on most still wines from Europe, which was a huge scare for U.S. businesses that rely on these products. These wines aren’t interchangeable—you can’t just swap them out. If you’re an Italian restaurant, you depend on Italian wine. If you’re a French restaurant, you depend on French wine,” Aneff said. “Moreover, our domestic producers actually need healthy distributors to access markets. So, tariffs that hit distributors hard end up hurting American wineries as well. We’re all part of an ecosystem here: when it’s healthy, everyone flourishes, and when it’s not, everyone suffers for it.”
Industry leaders warn that tariffs disrupt the “ecosystem” of the wine trade, where healthy partnerships between domestic and imported brands benefit all. Tariffs can also limit consumer choice, as higher prices discourage imports, reducing the selection of wines available to American buyers.
Many in the wine industry, including organizations like Wine America, oppose tariffs on imported wine, fearing they harm both domestic and international producers. Aneff encouraged consumers to support local wine stores and restaurants while also suggesting they contact their representatives to express support for tariff-free wine trade.
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