Here is a link to the hearing this morning:
EU wine, spirits to face 15% US tariff from August 1, EU says
A senior diplomat said that talks on wine and spirits tariffs would continue after the joint statement. “(This will take place) probably in the autumn,” the diplomat said.
https://www.reuters.com/business/eu-wine-spirits-face-15-us-tariff-august-1-eu-says-2025-07-31/
I would think the tariff 15% is on what the importer paid for the product. If the retail price is up 15%, then other fingers in the pie bumped 15% also and that shouldn’t happen.
If everyone applies their normal margins the 15% just passes straight through to the end customer.
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This doesn’t make sense. Below is reality assuming constant freight and tax + 30% distributor and 30% retailer margin if 100% of tariff at 15% is passed on. (This is simplistic as tax is usually calculated off FOB + Tariff in many States so wouldn’t be a constant)
12/750ML
FOB: $100
FREIGHT & TAX: $5.00
~$17.99 MSRP
FOB: $100 + $15 tariff
FREIGHT & TAX: $5.00
~$20.99 NEW MSRP or 17% price increase
gosh, i cant possibly believe shops in america are taking advantage of the situation to pad their profit margins.
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I think Sommpicks functions as an importer.
This is the correct answer
It’s 17% instead of 15% because of the rounding up to $20.99. At 15% it would be $20.69. Some retailers may choose to sell for $19.99
Of course, but it would certainly be nice to separate that out and not gouge . . .
There are definite reasons not to separate it out these days.
Just saying.
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Maybe Total Wine or Publix and only on a TPR, but most shops round up not down.
15% until they get to wine/spirits for exclusions is super annoying. No word about in transit, and now we get to deal with containers landing only weeks apart having tariffs, then no tariffs.
Per last night’s Wine Trade Alliance e-mail:
Products loaded onto a vessel within the next seven days and arriving in the U.S. before 12:01 a.m. EDT on October 5, 2025 will not be subject to the newly increased duties.
These shipments will instead remain subject to the previously imposed rates under Executive Order 14257 (as amended).
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So are you exempt from the tariffs?
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No, I’m not American
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Dave’s comment was just if everyone keeps same margins. You’re hypothesizing they don’t. The reality is there are a variety of factors that determine how much of the tariff gets passed through to the consumer
- the seller (foreign) may lower prices somewhat because of reduced demand
- the various middlemen may add the same margin or more or less depending on various factors like keeping prices lower short term or wanting higher margin to account for risk
- Retailers using pricing strategies that aren’t exact pass-through, either taking a small reduction to keep sales up or using the opportunity to increase margins.
Other than the first factor I’m guessing prices will go up very much in line with the amount% of the relevant tariff
I am very aware of tariff impact and supply chain reaction to tariff impact across the tiers in the US, in particular for BevAlc.
My hypothesis for BevAlc is a single example, not indicative of BevAlc as a whole, based on 25 years ITB…and if you read up the reactions by category or price segment are most relevant and will be along with reaction producer, importer, and distributor in that order as one in chain will impact the next in line.
I saw that, thanks for posting, the issue moves to can I actually get a can moving in 7 days and even if I do it has to land AND get thru customs in US where the “lines” are going to be DMV style long.
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