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TAKING AWAY CONSUMER CHOICE
In retaliation against subsidies the European Union has granted Airbus, our administration has proposed tariffs that could double the prices on 16% of the wines and spirits that American consumers now purchase. This action would have an obviously disastrous impact on the wine and spirits industry in the United States, causing significant job and revenue losses. It would also create a limitation of choice to the 85 million Americans who drink wine and the many millions who choose to drink spirits. Ultimately, because of the way in which alcohol is sold in the United States, even greater consequences would follow, affecting employment in related industries and further harming consumers.
SEVERELY IMPACTING THE WINE AND SPIRITS INDUSTRY AS A WHOLE
The national network of importers, distributors, retailers and restaurants by and large works with wines and spirits from across the globe. Importers and distributors will without question cut jobs, with many specialists shuttering, causing the 200,000 wholesale workforce to be impacted far more than the 16% share of wines and spirits that Europe represents.
The retailers that employ 160,000 Americans will not be able to simply substitute wines from other countries to make up for lost sales, nor do they have easy options to change their businesses to sell other products. The restaurant industry that employs 13,500,000 Americans typically depends on alcohol for 30% of its total sales (many individual restaurants depend on more), and the vast majority of restaurants work on extremely tight margins. With their offers limited, the supply chain in flux, and a drop in sales as customers choose not to replace the wines and spirits that are affected by tariffs, both retailers and restaurants will suffer.
A MISGUIDED APPROACH TO CHANGING POLICY IN AN ENTIRELY UNRELATED INDUSTRY
European wines and spirits were placed on the tariff list because it was thought the importance to their home countries would pressure the E.U. to stop subsidizing Airbus. Unfortunately, E.U. producers will turn to other markets, and an enormously intertwined American food and beverage industry will suffer massive job and revenue losses, while a third of Americans will suffer from less choice, increasing prices and ultimately less availability due to the massively negative impact on the industry.
YOU HAVE A SAY – AND A RESPONSIBILITY
If you are in the trade, it’s critical that you submit your comments to the United States Trade Representative before January 13th by clicking here.
YOUR COMMENTS AND LETTER
The following is a template for your comments to the USTR and Congress:
Please note that the USTR does not accept duplicate entries, so it is best to adjust the language to include a personal anecdote.
As a member of the wine and spirits trade, I can say unequivocally that the proposed tariffs against European Union wines and spirits due to the dispute around Airbus subsidies would cause job and revenue losses at my company and the companies of our partners in the industry. It is also hard to understand how this approach would do anything but negatively affect U.S. consumer choice, with 85 million American wine drinkers increasingly limited in their choices, and faced with higher prices. These circumstances would all result from a trade dispute in which the wine and spirits industry plays no part.
As the supply chain of importers, distributors, wine retailers and restaurants is hurt, consumers will only increasingly suffer as their local wine shops and restaurants are impacted and begin to close. The wine and spirits and the hospitality industries are filled with all types of people — for some it’s a first job waiting tables; others are global leaders in their fields; most everyone, however, is passionate, focused on service, and above all works hard to provide for themselves and their family.
I can see how the proposed tariff was aimed at harming countries who were ruled as having violated international trade laws. The reach of the wine and spirits industry, however, goes far beyond the paying of duties when products enter the country. Our industry is embedded in the fabric of our communities and the freedom of our choices.
I thank you for your consideration.