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Govt considers 25% tariff on US wine imports

Published:  28 July, 2021

Trade Secretary Liz Truss is considering introducing a 25% tariff on US wine imports as part of an ongoing trade conflict caused by Donald Trump imposing a 25% tariff on US steel imports in 2018.

Wine Drinkers UK (WDUK) has warned some of Britain’s most popular grapes, including Zinfandel Rosé and Grenache Rosé, could disappear if such tariffs are imposed, forecasting a disappearance of US wines from supermarkets and venues altogether.

“With around 32% of UK households purchasing wine from the US, no other wine producing nation could substitute its volume, limiting consumer choice,” said WDUK.  

Moreover, it highlighted that the under 44s make up 40% of those that enjoy wines from the US, meaning that a tariff would disproportionately impact younger UK wine consumers.

Ed Baker, MD, Kingsland Drinks, added: “It is likely if the government introduces this tariff, it will make these popular US wines unfeasible in the UK. Simply put, they will disappear from supermarket shelves and pubs.”

A YouGov survey conducted for WDUK found that one in three (32%) of UK adults who drink alcohol say wine is their favourite alcoholic drink, beating beer (25%) and spirits (25%) into second and third place respectively. 

However, since 2010, duty on wine has increased significantly more (+39%) than on beer (+16%), cider (+27%) and spirits (+27%).

“Wine drinkers are already disproportionally disadvantaged compared to some of their alcoholic counterparts when it comes to custom tariffs. Adding a 25% tariff on US wines will continue to unfairly penalise these consumers. It is time that the government ensures that wine is treated fairly when it comes to tax,” said Baker. 

The UK government believes tariffs on wine will put pressure on key Democratic politicians, such as vice president Kamala Harris and speaker Nancy Pelosi, who have wine producers in their states.

A spokesperson for the Department for International Trade said: “We want to make it easier for people and businesses in the UK to access top-quality, international produce by removing barriers to trade. 

“We are reviewing responses to our consultation on tariffs against the US, as part of the ongoing dispute around steel and aluminium tariffs. We want to draw a line under this dispute so we can move forward and find a permanent solution to this issue.”

Wine from the US make up around one in 10 bottles sold in the UK market (WSTA submission to HMT 2021), including best-selling rosés, with more than 100 million bottles sold in supermarkets and off licences last year.

Since June 2018, Bourbon and US whiskies have been subject to an additional tariff of 25%, ending 25 years of tariff-free trade in whiskies between the UK and the US.  

Earlier this month, The Wine and Spirit Trade Association submitted a response to the government’s consultation on the damaging tariffs, calling for the swift removal of tariffs on US whiskies and for a return to the historic ‘zero for zero’ agreement between the US and EU that began in the mid-90s.