U.S. Wine Industry Prepping For Steep Tariffs from Canada After Congress Votes To Repeal Meat Labeling Law.
America’s bustling wine market took a slight hit in the wake following a Congressional vote to repeal a law requiring country-of-origin labels on packages of beef, pork and poultry. Country of Origin Labeling, or “COOL,” is a law requiring retailers to indicate the country of origin on a cut of meat. In 2009, Canada challenged the American implementation of this law at the World Trade Organization (WTO). The WTO ruled in Canada’s favor and has continued to do so in all subsequent appeals. With today’s final ruling, Canada and Mexico will be able to levy tariffs against American products.
Okay, so you may be asking yourself: “That’s terrible! But what does that have to do with wine?”
Well, it just happens that wine is on the preliminary “hit list” made public by Canadians
Tariffs against American wine will be a huge hit to our industry. Canada is the largest foreign market for American wine. Last year U.S wine exports to Canada reached $487 million, a 7% increase from 2013. Retail sales for American wine in Canada now eclipse $1 billion. In 2013 the U.S. was the second largest exporter of wine to Canada, with a 16% market share among wine imports sold in Canada.
The preliminary Canadian plan would place a tariff on wine based on the value of the product entering the country. For example, a wine with a $10 import value would be hit with a $10 tariff, doubling the cost of the wine sent into the country. Apart from the immediate financial loss, the American wine industry could face long term effects. Raising the price of a bottle of a US wine will hinder competition with other wine regions, notably South Africa and Australia. The United States could lose shelf space that would take years to regain.
Luckily this tariff will not affect wineries in New Jersey such as Laurita, but the bureaucrats in Washington might want to consider the long-term ramifications, as opposed to their own reelections.