Are you going to stop buying European tariff affected winei

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Mark Golodetz
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Are you going to stop buying European tariff affected winei

#1 Post by Mark Golodetz » October 18th, 2019, 6:43 pm

I was going to, but was tempted and bought a case which if I bring over now. I have six months free storage, and will pay fees if the tariffs are still there.
Last edited by Mark Golodetz on October 18th, 2019, 6:44 pm, edited 1 time in total.
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Re: Are you going to stop buying wines while there is a tariff?

#2 Post by YLee » October 18th, 2019, 6:44 pm

No but I will be more selective on what I buy and where I buy it from.
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Re: Are you going to stop buying wines while there is a tariff?

#3 Post by D@vid Bu3ker » October 18th, 2019, 6:45 pm

No. I may buy less, or I may move funds toward Italian wine and Champagne, but I won’t stop buying.
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Re: Are you going to stop buying European tariff affected winei

#4 Post by Kris Patten » October 18th, 2019, 7:03 pm

There is a ton of French wine State-side to buy that landed before today.
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Re: Are you going to stop buying European tariff affected winei

#5 Post by Randy Bowman » October 18th, 2019, 7:12 pm

Doubt many will notice. If they do, they can make whatever changes they want but they will pay the tariff if they want the product. Most states have a tobacco tax. The smoke has settled and fewer people are buying product on line from other states with no or lower taxes. People who want cult wines will pay exorbitant prices. If the tariff is so high nobody is buying the wine, what do you think is going to happen? Ship it back to France or lower the prices at import to stay competitive? This too shall pass.
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Re: Are you going to stop buying European tariff affected winei

#6 Post by Robert.A.Jr. » October 18th, 2019, 7:29 pm

Kris Patten wrote:
October 18th, 2019, 7:03 pm
There is a ton of French wine State-side to buy that landed before today.
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Re: Are you going to stop buying European tariff affected winei

#7 Post by Kirk.Grant » October 18th, 2019, 7:29 pm

I don't plan to change my purchases...but then again, I often change my mind.
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Re: Are you going to stop buying European tariff affected winei

#8 Post by Mark Golodetz » October 18th, 2019, 7:40 pm

Kris Patten wrote:
October 18th, 2019, 7:03 pm
There is a ton of French wine State-side to buy that landed before today.
Depends on how long this will go on. It will take several months to satisfy the penalty, and by then that abundance will begin to run out.
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Re: Are you going to stop buying European tariff affected winei

#9 Post by GregT » October 18th, 2019, 7:44 pm

When the prices go up, I'll probably stop. But in a way that's a good thing because I really don't need any more wine.
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Re: Are you going to stop buying European tariff affected winei

#10 Post by J. Rock » October 18th, 2019, 8:32 pm

Doubt it. Riesling should still be a great value.
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Re: Are you going to stop buying European tariff affected winei

#11 Post by Chris Seiber » October 18th, 2019, 8:53 pm

I usually make my purchase decisions based on how much I want the wine versus what the cost is, so I'll continue to do that.

If prices go up, it would therefore tend to affect some purchase decisions, but I don't have any other particular reaction to the idea of there being higher tariffs per se.

I'm guessing the pricing won't go up clearly and sharply the way it looks on paper. There is a lot of flexibility in wine pricing, and it's not an essential like gasoline or electricity where people will fall in line with whatever the price is.

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Re: Are you going to stop buying European tariff affected winei

#12 Post by A. So » October 18th, 2019, 9:09 pm

No. Gotta keep my verticals.
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Re: Are you going to stop buying European tariff affected winei

#13 Post by Mattstolz » October 19th, 2019, 5:37 am

I probably will until those stateside stocks start to disappear and prices go up. hopefully this will be resolved before then, but with current political climates I don't see that happening anytime soon. no one is able to compromise and get things done anymore.

edited to add that most of my European buys have typically been Italian anyways. hard to have picked a worse time to be planning my first trip to Burgundy (along with its high likelihood of finally going over to the Burgundy dark side)

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Re: Are you going to stop buying European tariff affected winei

#14 Post by Eric Sch » October 19th, 2019, 11:31 am

I know of one importer who is working with their sources to relabel just above the cutoff of 14.1 % to avoid the tarriffs.
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Re: Are you going to stop buying European tariff affected winei

#15 Post by Howard Cooper » October 19th, 2019, 1:06 pm

How much will retail prices go up after the tariffs? Does anyone really know? Without that information, I don’t know how to answer Mark’s question.
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Re: Are you going to stop buying European tariff affected winei

#16 Post by Kris Patten » October 19th, 2019, 2:20 pm

Howard Cooper wrote:
October 19th, 2019, 1:06 pm
How much will retail prices go up after the tariffs? Does anyone really know? Without that information, I don’t know how to answer Mark’s question.
I'd hazard a guess of 25% on lower priced items, 10-15% on $50-100 and then there will be some profiteering on the allocated stuff that is blamed on the tariff.
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Re: Are you going to stop buying European tariff affected winei

#17 Post by Mattstolz » October 19th, 2019, 2:43 pm

Eric Sch wrote:
October 19th, 2019, 11:31 am
I know of one importer who is working with their sources to relabel just above the cutoff of 14.1 % to avoid the tarriffs.
I definitely expect a good amount of this. especially when it so easily falls within EU labelling laws

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Re: Are you going to stop buying European tariff affected winei

#18 Post by Sh@n A » October 19th, 2019, 4:39 pm

I have already delayed purchases. I have reached out to some stores and have asked if they will store the wine, but the response rate is weak. And the GBP has bounced back to 1.30 as well, so its a double hit in the UK (currency and need to pay storage costs).
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Re: Are you going to stop buying European tariff affected winei

#19 Post by Tom Reddick » October 19th, 2019, 11:46 pm

I am still racking up purchases in the UK on certain acquisition targets. Most are champagne- so no issues there. Off vintages of Magdelaine (to give me the most awesome verticals ever) are not that expensive- so if I end up getting hit with the 25% it won't bother me.

That said- if I were an active buyer of $200+ bottles of French wine right now, the 25% would most certainly have a strong negative impact on my buying patterns. The price run-ups have just been so huge lately- the 2016 EP jump below the first growth levels was the highest on a % basis in my lifetime. 2016 Ducru seemed a rare bird at first, but now it is turning up all over Dallas- including at a grocery store last week.

Plus auction results are softening fast. A month ago it was Italy, and now it is more widespread except in champagne which is actually on a bit of a minor tear lately.

So in the grand scheme of things I expect the tariffs will deter quite a lot of buying of newer vintages not yet imported.
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Re: Are you going to stop buying European tariff affected winei

#20 Post by Greg K » October 20th, 2019, 12:37 am

Given that the next few burgundy vintages are on the warmer/easy drinking side (especially the Cote de Nuits), this is a good excuse to pare back purchases, other than from those few producers from whom I want to maintain verticals or allocations. I don’t buy new Bordeaux anyway, and Italy and champagne are unaffected, so northern Rhône may be the only decision I need to make, and there I’ve dropped some of the most expensive producers already (no more Chave).
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Re: Are you going to stop buying European tariff affected winei

#21 Post by Paul McCourt » October 20th, 2019, 12:52 am

I don’t know yet. If it is actually meaning 25% I can’t imagine I wouldn’t be inclined to say “pass” more often. If in place for a long time it may give me the backbone to finally stick with my yearly promise to buy no more Bord futures.
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Re: Are you going to stop buying European tariff affected winei

#22 Post by Kelly Walker » October 20th, 2019, 3:09 am

Talking with a retail friend. He expects distributors will jack prices even on existing stocks due to replacement cost.
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Re: Are you going to stop buying European tariff affected winei

#23 Post by dcornutt » October 20th, 2019, 3:19 am

I think this will get solved quickly. This all has to do with Airbus subsidies not food products.
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Re: Are you going to stop buying European tariff affected winei

#24 Post by Ian S » October 20th, 2019, 5:26 am

A. So wrote:
October 18th, 2019, 9:09 pm
No. Gotta keep my verticals.
[snort.gif] Funny! And true. And sad that we're such geeks about it that we'll pony up just because we're compulsive about wine.
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Re: Are you going to stop buying European tariff affected winei

#25 Post by Mattstolz » October 20th, 2019, 6:18 am

dcornutt wrote:
October 20th, 2019, 3:19 am
I think this will get solved quickly. This all has to do with Airbus subsidies not food products.
solving issues and disagreements seems to go against everything happening in politics pretty much everywhere in the world at this point in time

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Re: Are you going to stop buying European tariff affected winei

#26 Post by D@vid Bu3ker » October 20th, 2019, 6:34 am

Mattstolz wrote:
October 19th, 2019, 2:43 pm
Eric Sch wrote:
October 19th, 2019, 11:31 am
I know of one importer who is working with their sources to relabel just above the cutoff of 14.1 % to avoid the tarriffs.
I definitely expect a good amount of this. especially when it so easily falls within EU labelling laws
And if it is discovered that under 14% wines were relabeled to deliberately avoid the tariffs there will be serious consequences from US Customs for the importer of record. Even the labeling allowances won’t protect them.
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Re: Are you going to stop buying European tariff affected winei

#27 Post by D@vid Bu3ker » October 20th, 2019, 6:36 am

dcornutt wrote:
October 20th, 2019, 3:19 am
I think this will get solved quickly. This all has to do with Airbus subsidies not food products.
If the WTO decision in the Boeing case is decided in favor of the EU, then it might get resolved...next year. If not, don’t hold your breath.
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Re: Are you going to stop buying European tariff affected winei

#28 Post by Mattstolz » October 20th, 2019, 6:43 am

D@vid Bu3ker wrote:
October 20th, 2019, 6:34 am
Mattstolz wrote:
October 19th, 2019, 2:43 pm


I definitely expect a good amount of this. especially when it so easily falls within EU labelling laws
And if it is discovered that under 14% wines were relabeled to deliberately avoid the tariffs there will be serious consequences from US Customs for the importer of record. Even the labeling allowances won’t protect them.
so if a wine is at 13.5% and labelling laws allow it to be labelled at 14.1%, then there can be repercussions for labelling as such? or is it the act of CHANGING that would be an issue?

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Re: Are you going to stop buying European tariff affected winei

#29 Post by D@vid Bu3ker » October 20th, 2019, 7:05 am

Deliberately changing it to avoid the tariffs would be the issue.
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Re: Are you going to stop buying European tariff affected winei

#30 Post by D@vid Bu3ker » October 20th, 2019, 7:07 am

p.s. US Customs does routinely request backup information/data to substantiate a product’s HTS code. If they were to ask for the data about a wine labeled 14.1% that was actually 13.5%, the tariffs would still apply regardless of labeling allowances.
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Re: Are you going to stop buying European tariff affected winei

#31 Post by Jonathan Loesberg » October 20th, 2019, 8:42 am

D@vid Bu3ker wrote:
October 20th, 2019, 7:07 am
p.s. US Customs does routinely request backup information/data to substantiate a product’s HTS code. If they were to ask for the data about a wine labeled 14.1% that was actually 13.5%, the tariffs would still apply regardless of labeling allowances.
Do you really think they are likely to go this deeply into the weeds, especially since it would be hard to find intent to defraud in a case where labeling laws allow approximate labeling? 14.1% would always be a suspicious declaration, but 14.5% is quite common and allowable for a 13.5% wine.

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Re: Are you going to stop buying European tariff affected winei

#32 Post by D@vid Bu3ker » October 20th, 2019, 8:52 am

Yes, I do. The checks are significantly more common when there are tariff changes.
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Re: Are you going to stop buying European tariff affected winei

#33 Post by Carlos Delpin » October 20th, 2019, 9:48 am

It is hard for me to penalize a grower and an importer for the temporary decision taken by a fool through no fault of their own.

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Re: Are you going to stop buying European tariff affected winei

#34 Post by D@vid Bu3ker » October 20th, 2019, 10:16 am

Yes, but let’s remember that the Airbus case with the WTO that led to these tariffs was initiated around 2004.

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Re: Are you going to stop buying European tariff affected winei

#35 Post by Neal.Mollen » October 20th, 2019, 11:04 am

Carlos Delpin wrote:
October 20th, 2019, 9:48 am
It is hard for me to penalize a grower and an importer for the temporary decision taken by a fool through no fault of their own.
I don't follow. Refusing to buy while prices are up has nothing to do with "penalizing" a grower. I'm not going to pay the tariff just because it wasn't the producer's fault

Entirely theoretical for me though. Not in the market for any of the wines that will be impacted
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Re: Are you going to stop buying European tariff affected winei

#36 Post by Joe B » October 20th, 2019, 11:05 am

Absolutely
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Re: Are you going to stop buying European tariff affected winei

#37 Post by Keith A k e r s » October 20th, 2019, 1:12 pm

Nope. It’ll be a PITA, but, at the end of the day, I enjoy the wines too much and I’m not going to start buying a lot more domestic or Aussie wines because Sancerre got more expensive

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Re: Are you going to stop buying European tariff affected winei

#38 Post by Mattstolz » October 20th, 2019, 2:01 pm

Keith A k e r s wrote:
October 20th, 2019, 1:12 pm
Nope. It’ll be a PITA, but, at the end of the day, I enjoy the wines too much and I’m not going to start buying a lot more domestic or Aussie wines because Sancerre got more expensive
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Re: Are you going to stop buying European tariff affected winei

#39 Post by Neal.Mollen » October 20th, 2019, 2:07 pm

Keith A k e r s wrote:
October 20th, 2019, 1:12 pm
Nope. It’ll be a PITA, but, at the end of the day, I enjoy the wines too much and I’m not going to start buying a lot more domestic or Aussie wines because Sancerre got more expensive
Hard to imagine a sancerre at 14.5% plus. I think you'll be ok
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Re: Are you going to stop buying European tariff affected winei

#40 Post by D@vid Bu3ker » October 20th, 2019, 2:47 pm

Neal.Mollen wrote:
October 20th, 2019, 2:07 pm
Keith A k e r s wrote:
October 20th, 2019, 1:12 pm
Nope. It’ll be a PITA, but, at the end of the day, I enjoy the wines too much and I’m not going to start buying a lot more domestic or Aussie wines because Sancerre got more expensive
Hard to imagine a sancerre at 14.5% plus. I think you'll be ok
Other way around Neal. The tariffs are on wines 14% or lower.
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Re: Are you going to stop buying European tariff affected winei

#41 Post by Neal.Mollen » October 20th, 2019, 2:50 pm

D@vid Bu3ker wrote:
October 20th, 2019, 2:47 pm
Neal.Mollen wrote:
October 20th, 2019, 2:07 pm
Keith A k e r s wrote:
October 20th, 2019, 1:12 pm
Nope. It’ll be a PITA, but, at the end of the day, I enjoy the wines too much and I’m not going to start buying a lot more domestic or Aussie wines because Sancerre got more expensive
Hard to imagine a sancerre at 14.5% plus. I think you'll be ok
Other way around Neal. The tariffs are on wines 14% or lower.
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Re: Are you going to stop buying European tariff affected winei

#42 Post by Joe B » October 20th, 2019, 2:50 pm

D@vid Bu3ker wrote:
October 20th, 2019, 2:47 pm
Neal.Mollen wrote:
October 20th, 2019, 2:07 pm
Keith A k e r s wrote:
October 20th, 2019, 1:12 pm
Nope. It’ll be a PITA, but, at the end of the day, I enjoy the wines too much and I’m not going to start buying a lot more domestic or Aussie wines because Sancerre got more expensive
Hard to imagine a sancerre at 14.5% plus. I think you'll be ok
Other way around Neal. The tariffs are on wines 14% or lower.
After the tariffs are gone and the producers realize Americans will pay more, don’t expect prices to return to normal.
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Re: Are you going to stop buying European tariff affected winei

#43 Post by lleichtman » October 20th, 2019, 4:17 pm

Jonathan Loesberg wrote:
October 20th, 2019, 8:42 am
D@vid Bu3ker wrote:
October 20th, 2019, 7:07 am
p.s. US Customs does routinely request backup information/data to substantiate a product’s HTS code. If they were to ask for the data about a wine labeled 14.1% that was actually 13.5%, the tariffs would still apply regardless of labeling allowances.
Do you really think they are likely to go this deeply into the weeds, especially since it would be hard to find intent to defraud in a case where labeling laws allow approximate labeling? 14.1% would always be a suspicious declaration, but 14.5% is quite common and allowable for a 13.5% wine.
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Re: Are you going to stop buying European tariff affected winei

#44 Post by Joe G a l e w s k i » October 20th, 2019, 4:21 pm

Chris Seiber wrote:
October 18th, 2019, 8:53 pm
I usually make my purchase decisions based on how much I want the wine versus what the cost is, so I'll continue to do that.
If prices go up, it would therefore tend to affect some purchase decisions, but I don't have any other particular reaction to the idea of there being higher tariffs per se.
I'm guessing the pricing won't go up clearly and sharply the way it looks on paper. There is a lot of flexibility in wine pricing, and it's not an essential like gasoline or electricity where people will fall in line with whatever the price is.
As usual, Chris has a very even and sensible answer.

I am cost conscious. There is no bottle I must have regardless of the cost. And this method has allowed me to amass a fairly nice collection that would allow me to ride out a 10+ year hiatus of wine purchases. I will continue to peruse the wine offered and buy when appropriate. I have no doubt that the tariffs will have some effect on my buying, but I can not hazard a guess as the actual effect. From a "not born yesterday" perspective, I suspect that I will still find a plethora of wines that I will be tempted to buy.

Or just drink champagne?

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Re: Are you going to stop buying European tariff affected winei

#45 Post by Dan Kravitz » October 20th, 2019, 4:37 pm

To say this is complicated is a huge understatement. I have a horse in this race and my ox has definitely been gored... in fact it may well be bleeding to death. And while I know more about this than most, I don't know everything and there are (in the immortal words of Donald Rumsfeld) unknown unknowns... things nobody knows.

The tariffs could last two days or two decades, or anything in between or longer. This is definitely an unknown unknown.

I have delayed shipment containers that would have docked after the tariff. My freight forwarder is now (at my expense, of course) unloading them and reloading them so that I can bring in shipments of only wines that are tariff exempt. I will probably cancel some orders for wines that are not tariff-exempt unless there is a quick resolution. Nobody (politicos, customs brokers, freight forwarders, Congressional staffers, lawyers in international practice) has told me to expect that.

to Kelly Walker: The wine market (not talking about board geeks, but about the tens of millions of consumers who care about what they drink but are not obsessive) is completely swamped, as production worldwide has increased and craft beer and spirits are often eating wine's lunch. I would be very surprised if anybody raises prices on affected wines.

to Randy Bowman, you wrote "I doubt many will notice". I really hope you're right, but when my $13 retail Bordeaux Sauvignon Blanc goes to $16 or 17, I think consumers will notice and I will be drowned in the stuff.

to Mark Golodetz: I believe the penalty is annual, I am far from sure that it will be satisfied in a few months, and if it is, it may kick in again right away. My business cannot play the 'long game' and absorb these costs in hopes that they will go away in a few months or years.

to Eric Sch: Alcohol and labeling requirements can be as subtle as theology. I am not going into details, both because I don't have the time and because despite intensive study do not know them all, but a number of French wines that have been legally labeled 14.0% will soon be legally relabeled as 14.1 - 14.5%. It's not a matter of sticking a new label on the bottle. First lab tests need to be certified, then French government approval is needed and only then possibly relabeling. None of this happens fast. And please note that you can run an alcohol test on the same bottle of the same wine several times over 24 hours, maybe once when the lab is 65 degrees F, once when the lab is 75 degrees F, or even at the same temp, and get very slightly different results.

to Don Cornutt: Obviously I hope you are right that this will be resolved quickly, but there is zero indication that it will be. You probably have heard the phrase "pawns in the game"?

to David Bueker: I think it unlikely that customs will seize on small discrepancies and be punitive, especially, as noted above, that under EU regulations it can be completely legal under many circumstances to label the same wine 14.0% or 14.1%. Of course, if it's blatant fraud (Sauvignon de Touraine at 14.5%), they may well investigate. But red Cotes du Rhone? I think and hope not.

to Joe B: Americans won't pay more. I'm not saying that American board members are not American, just that they represent a sub-microscopic percentage of the market, and I don't believe that those who represent most of the market will pay more. They will change their purchasing habits, quite possibly for the long term or permanently.

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D@vid Bu3ker
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Re: Are you going to stop buying European tariff affected winei

#46 Post by D@vid Bu3ker » October 20th, 2019, 4:50 pm

Dan,

FYI, Customs has been increasingly picky since the advent of all the new tariffs. I see a likely scenario that they are going to be picky about wine.

We shall see.
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Re: Are you going to stop buying European tariff affected winei

#47 Post by PaulMills » October 20th, 2019, 4:53 pm

Most of my foreign wine buying right now is Italian so I am not overly concerned. The French wines I buy now are mainly white burg, Spanish, and Pegau. I will adjust my buying but maintain my Pegau vert.

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Re: Are you going to stop buying European tariff affected winei

#48 Post by Dan Kravitz » October 20th, 2019, 5:06 pm

David,

Thanks for the tip. Any wines I import that are over 14% alcohol will be accompanied by test results from a laboratory certified by the French government. If Customs breaks bad, these test results should be duplicable by American labs... hopefully not at my expense!

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Re: Are you going to stop buying European tariff affected winei

#49 Post by D@vid Bu3ker » October 20th, 2019, 5:23 pm

Normally they just ask for the original test data. You should be fine.
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Re: Are you going to stop buying European tariff affected winei

#50 Post by David_K » October 20th, 2019, 5:38 pm

Like many, there are certainly prices where any given wine may no longer be worth it, or where I shift to different cuvees, producers, vintages, etc., depending how much I want the wine. But at a high-level, no, because there is no substitute for European wine.
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