There is very little margin for making a profit in the wine business.

Personal experience importing excellent Slovenian wines nearly 20 years ago still conjures uneasy memories of the process. Nevertheless, the opportunity was both instructive and humbling. I marvel at those who continue to undertake those risks.

Importing, distribution, and sales of wine and spirits is difficult in the best of circumstances. When the industry faces both a pandemic and extraordinary tariffs the task becomes virtually impossible. Welcome to 2020-21.

Tariffs are by their nature punitive. They are generally imposed as a punishment for a nation’s economic decisions that create an imbalance in the world of international trade. They may also be imposed for the purpose of protecting a domestic industry against nations who could flood a nation’s domestic market with inexpensively produced items or materials. For example, Air Jordan’s (almost always the example) cost approximately $16 to produce (materials and labor). A pair can cost you over $150 at Foot Locker. Nike and Foot Locker are responsible for some of the difference, but the bulk of that $134 difference is tariffs. The tariffs are designed to protect American shoemakers (good luck finding one), and to discourage the use of unfair or abusive labor practices. How does this apply to wine?

The United States imports many bottles and much bulk wine and spirits. The United States also exports many bottles of wines and spirits. There are numerous international organizations whose function is to act as trade arbiters seeking balance and fairness amongst the world’s trading partners.

Sometimes people cheat.

In 2004 France provided subsidies and a competitive advantage to the aircraft manufacturer Airbus. The World Trade Organization determined that the subsidies provided Airbus an unfair advantage. The U.S. imposed tariffs following the 2004 incident, and then renewed them in October of 2019. Interestingly, those tariffs imposed a 25% duty on the wines of France, Spain, and Germany with an ABV under 14%. In early January, wines from those three countries with ABV 14% and higher will be subject to the same tariff.

Tariffs on wine exports impact a broader portion of a nation’s population than does aircraft manufacture. Effectively, the goal of tariffs is to “hit them where it hurts”.

The Europeans responding by imposing duties on orange juice and, interestingly, ketchup.

The impact of the tariff on French wine imports to the U.S. has been dramatic…a 37% decline in the first nine months of 2020. The impact is largely on this side of the Atlantic. More on this later.

The most recent round of tariffs was particularly damaging. They were imposed without warning, and they carried no exemption for ‘goods on the water’. Importers will have to pay increased tariffs when the wines arrive in port. Importers will increase the price of those wines sold to distributors; distributors will increase the price of those wines to retailers, bars, and restaurants; those entities will increase the price to you. Ultimately, all tariffs are paid by the consumer. Tariffs are reflected in the price of your shoes, your airline ticket, and your wine. Economists suggest that for every dollar of tariff the price of a product is increased by $4 to the U.S. consumer. Smaller concerns, such as Grassroots Wine of Charleston, which imports from France, Spain, and Germany will pay $12,000 in additional tariffs, while New York’s Vintus, already suffering from a 40% reduction in sales, will pay an additional $1.3 million on products ordered last year. Expect your favorite French, Spanish and German wines to be more expensive as 2021 dawns.

Earlier wine tariffs were in part absorbed by importers and distributors to protect their markets. However, even with the effort to manage the impact, the damage to the U.S. restaurant industry has been significant.

Restaurateurs rely on the markup charged for lower cost imports to compensate for the very small margin on food. The tariffs have seriously affected an industry already as risk as a result of the pandemic. Some estimates suggest that more than 100,000 restaurants have closed in the past ten months. The increasing cost of wine will likely close still more.

Reuters reports that Ben Aneff of New York’s Tribeca Wine Merchants, said that “the tariffs on European wines were expected to cost some $10 billion in lost revenue and 78,000 job losses, hitting the nation’s 47,000 wine retailers and more than 6,500 importers and distributors disproportionately hard”. Additionally, states and localities will lose $100 million in taxes on alcohol sales.

The impact on European producers has been less than in the United States. They have simply shifted their sales emphasis to other markets…notably Asia. Economists suggest that the monetary impact will be four times greater in the U.S. than in Europe.

It is likely that the new administration will act to roll back the tariffs. However, it will not happen immediately. President Biden’s nominee for U.S. trade Representative, Katherine Tai is “well-versed in the issues that tariffs on wine cause businesses in the United States”. And tariffs are reviewed regularly. The wine tariffs are due for review in mid-February. Unfortunately, Tai may not have been confirmed by the Senate by that time. With so many issues facing the United States, wine tariffs are not likely to of immediate concern.

Interestingly, airplane parts (Airbus has a manufacturing facility in Mobile, Alabama) face only a 15% tariff. However, it will have an impact. This tariff will likely make Airbus products manufactured in the Mobile, Alabama, noncompetitive. Further, recent the World Trade Organization ruled that the U.S. had provided subsidies to its domestic air industry, and other nations have imposed retaliatory tariffs on the United States.

However, our focus is wine.

American wine tastes are fickle. Price is certainly a factor that helps inform taste. The importers of European wines understand that price drives consumer’s decisions, and that once a consumer decides that decision is rarely revisited.

Those at the greatest financial risk have responded. A new organization of chefs, The Coalition to Stop Restaurant Tariffs, has joined with The U.S. Wine Trade Alliance (USTWA) to request that the new administration move quickly to repeal the tariffs.

We can only hope that they are successful, and I will keep you posted on their efforts.

Next post…back to the positive side of wines and spirits.

This post is about a challenge for your palate.

Unfortunately, we rarely discuss white wines in this blog. However, Joy and I recently enjoyed a bottle of Ciro Picariello Irpinia Fiano that needed to be shared. In the process, we were reminded of the many excellent white wines that are not one of the ‘noble white grapes’ (originally Chardonnay, Sauvignon Blanc, and Riesling), and assumed to be less ‘worthy’. The classification of grapes (both worldwide and in the U.S.), and the impact on attitudes regarding white wines, is certainly a topic for conversation in a future post.

Fiano originates, and is primarily found, in the Campania region of Southern Italy There are also very modest acres planted with the grape in both Australia and the United States. Fiano has likely been around for a very long time. Pliny the Elder, the ancient Roman author, statesman and military leader, and considered to be the first wine critic, is thought to have identified Fiano as a viti apiane, or fruit with juice that attracted bees. The bees suggest the presence of sufficient sugar for fermentation. There is some dispute regarding Pliny’s identification of the Fiano grape, but the ancient reference is too good and requires sharing.

Fiano was identified by name in the 13^th century, became a regional favorite, and was then effectively lost due as a result of the 19th century phylloxera crisis. For the next century Fiano largely fell off the wine map both in Campania and its neighborhood. However, late in the 20^th the Mastroberardino family, long dedicated to introducing the world to Campania’s grapes/wines, ‘rediscovered’ Fiano. This ‘discovery’ was fortuitous.

The Mastroberardino family has ten generations of winemaking experience and are so intrinsically linked to the region’s culture that they were selected by the Italian government to preserve and manage the viticulture of Pompeii. They are excellent ambassadors for the region’s history, culture, and wines.

The Mastroberardinos are particularly noted for their work with widely distributed versions of Aglianico (a deeply colored and rich red wine). Aglianico has been long revered in Campania and is gaining popularity elsewhere. However, the family recognized the distribution potential of Fiano, embraced the grape, and are now bottling multiple styles of the wine.

Terroir is particularly critical to Fiano. The volcanic soil of the Apennine Mountains and the Mediterranean climate, which often produces ‘flabby’ wines produce wines that are surprisingly fresh.  A broader conversation about terroir is still another topic for future posts.

Despite the risk of higher alcohol resulting in ‘flabbiness’, Fiano vines produce small and thick-skinned grapes with relatively low yields. These modest yields have resulted in wines that defy the common perceptions of most Mediterranean climate products. Regional winemakers have created a style that offers excellent balance between acid and fruit.

Look for a well-structured Fiano to be a dry wine that is medium to full bodied with a hint of crisp acidity. Even though the fermentation process is done through stainless steel tanks with a few months of bottle aging, the Fiano can spend a few years in your cellar. As the wine ages, it introduces a honeyed element on the palate that will often extend through a medium finish. There is an excellent balance between acid and fruit.

You will find bottles labeled with both Fiano and Fiano di Avellino. The Fiano di Avellino is a DOCG, vinified following rigorous government standards, and represents the best that Italian vineyards can offer.

However, do not shy away from bottles also simply labeled Fiano. These are generally ‘declassified’ versions of the Fiano di Avellino. A wine that is declassified is often considered by the winemaker to be produced of ‘inferior’ grapes from a respected region.  A declassified Burgundy would likely be labeled as a village or regional wine rather than by its vineyard. These are generally excellent. The price is lower, the vintner losses some money, but the consumer can enjoy an excellent wine at a price that will not challenge the wallet.

The same is true of Fiano. A $60 bottle of Fiano di Avellino is not at all unusual. However, you can secure excellent Fiano for a third of that. There are many excellent Fiano bottlings available nationwide for less than $20. Check with your local retailer for their recommendations.

Enjoy this versatile wine with hard cheese, pasta with a white sauce, and white meat meals. That modest acidity and marked freshness makes this a wonderful wine to enjoy on a warm afternoon or sitting by the fireplace on a cooler day. Purchase, chill slightly, and enjoy…this wine can certainly be consumed young.

If you like dry whites (for instance, Chardonnay) …consider a Fiano for a change of pace. And I pledge to post about white wines far more regularly.

Joy and I had the opportunity to enjoy a socially distanced tasting of sparkling wines at Accent on Wine in Summerville as we headed into the recent holiday season. Vinny Wedderspoon organized a program that took a meandering, fascinating, and unique ‘sparkling’ route to traditional champagne. His goal was to offer an experience that allowed participants to realize that knowledge of sparkling wine needs to extend beyond Prosecco, Cava, and those wines originating in the Champagne region. Vinny succeeded.

One of the stars of the tasting was The Chook Sparkling Shiraz from Australia’s Black Chook.

Black Chook (Australian for chicken) is part of McLaren Vale’s Galvanized Wine Group. Founded and owned by McLaren Vale native Tony Parkinson, and managed since 2013 by well-regarded winemaker Alexia Roberts, the group began its existence in 1991 with 80 acres of Shiraz. Shiraz, of course, is the McLaren Vale signature grape. All Galvanized Wine Group reds are estate grown.

Parkinson’s parents owned an almond orchard in McLaren Vale. Parkinson did not join the almond business (made his fortune in advertising), he and wife, Susie, chose to relocate their family from Adelaide to Penny’s Hill located in McLaren Vale. Penny’s Hill, Black Chook and Thomas Goss are all owned by Parkinson and managed by Alexia Roberts. The Goss wines are named for one of the McLaren Vale’s largest landholders, some of which is now owned by Tony Parkinson. Both Penny’s Hill and Thomas Goss wines have limited U.S. distribution.

McLaren Vale, located in South Australia, with ideal soils, and noted for a Mediterranean climate, has been producing wines since the mid-18^th century.

The history origins of Shiraz (Syrah in the Rhone) are murky. However, it is known that James Busby, a Scotsman, transported the first Shiraz cuttings to Australia in the late 1830s. We know that the was first Shiraz was planted in South Australia in the mid-19th century, and we know that Shiraz now constitutes more than 50% of the grapes harvested in the region.

The Chook version was first introduced to the U.S. market in 2004 with a Shiraz/Viognier blend. You can find the Shiraz/Viognier nationwide for around $20. The Chook Sparkling Shiraz soon followed.

Sparkling wine can be vinified from virtually every grape varietal.

Lambrusco, the most well-known of non-Champagne sparkling wines, is produced in Northern Italy’s Emilia-Romagna (Parma and Modena) region from four grape varietals that all begin with the term Lambrusco. We are most familiar with the sweeter version Lambrusco (11.5% ABV). However,  there are also dry versions of the wine.

The often sweeter Lambrusco is known to pair well with desert. The Chook (at 13% ABV) offers a far broader range of food pairings.

Black Chook’s Sparkling Shiraz is produced from wines aged from 3-5 years in French Oak thus offering depth and length, as well as some younger juice that, as the winemaker suggests, “adds lush and juicy fruit to the palate”.

Sparkling Shiraz is made in the same manner as Champagne. They are bottled fermented, aged on lees, and allowed to ferment in bottle.

James Suckling awarded The Chook 90 points suggesting that you will find “lots of licorice and tea leaf with meat and blackberry aromas”. He is right. You will also find nice body and a ‘velvet’ mouthfeel.

Think about pairing this one with red sauce pizza and BBQ. Serve it slightly chilled…not cold. Do not cellar these wines. They are ready to drink.

The Chook is distributed nationwide for around $20.

If you are looking for something different that will work with comfort food I would suggest trying a Sparkling Shiraz. The Chook would be an excellent choice.