YOUNGSTOWN, Ohio – Connoisseurs of imported wines and spirits should be prepared to shell out more cash for their favorite bottle of Bordeaux or scotch as the holiday season approaches – that is, if those prices haven’t already made their way through the market.

Global trade machinations over the past year, a weaker dollar and an overall decline in alcohol consumption have impacted sales of imported wine and liquor, affecting distributors and retailers in the Mahoning Valley.

“It seems like things have gone up over the past four to five months,” says Al Franceschelli, owner of A&C Beverage in Youngstown. Wines from Italy, Cognac from France, whiskey from Ireland – all have experienced various degrees of price increases since the U.S. government began levying higher tariffs on imported goods from Europe and other countries.

“We used to have 15 bottles of Hennessey [Cognac] for sale,” Franceschelli says. “Now, we have three or four. Sales have gone down drastically.  If you want area-specific products, you’ve got to pay the piper.”

In August, the Trump administration’s 15% tariff on products shipped from the European Union to the United States took effect and is especially at play in this sector.  In response, a group of 57 alcohol industry groups – representing both the EU and U.S. producers – dispatched a letter to President Donald Trump emphasizing the tariffs could impact sales by nearly $2 billion, placing approximately 25,000 jobs in the United States at risk.  Earlier this year, the Trump administration threatened tariffs as high as 200% on these products.

These jobs represent those in the restaurant, wholesale, distribution and retail sectors, the coalition said – impacting everything from major international producers to small corner shops.

Franceschelli says that his store carries high-end imported products as well as more conventional domestic brands.  Under the current trade environment, the price of liquors such as Armagnac, a brandy produced in southwest France, has risen between 40% and 50%, he says.

“It goes all the way down the line,” he says. “We lose commission on high-end stuff and lose money.”  

Franceschelli says that in the past, the free market dictated supply and demand, and prices would adapt accordingly.  “It wasn’t a good idea to tariff anything. I hope they do away with it,” he says.  “When you take the market out of your costs, it can’t be good.”

Prices for other products are also on the rise.  “Wines have gone up – especially Italian wines,” he says. Yet wine enthusiasts have the option of buying from domestic producers in California or Oregon.  “But if you are drinking a Bordeaux from France, you’re going to have to pay more, considerably more.”

Sour Grapes

Still, international wine sales have decreased steadily over the past several years, a trend that is influenced by several factors – not just tariffs.

“The timing of the tariffs came as a kick when the industry was already down,” says Mark Cerimele, owner of RARM Imports, a Cleveland-based wine distributor whose market includes the Mahoning Valley. “Imports are the majority of my business, and costs have increased all around for sure.”

Cerimele says that between 85% and 90% of his imported wine is sourced from Italian producers, some of which can weather major price disruptions and increases. “They are some of Italy’s most sought-after producers, where demand will always exceed supply.  So, it’s not impacting them,” he says.

Other European vineyards aren’t as fortunate. During a recent tasting event, Cerimele relates that he spoke with a colleague who travels to the Bordeaux region often.  “He said that the producers there are not selling their wine now,” he says.  “They have excess wine they cannot sell because not everybody is willing to take on a 40% increase in cost.”

Cerimele says this year he’s had to raise prices on imports approximately 20%, the first time he has done so in five years.  

While these price increases at present are largely driven by tariffs, other factors have contributed to higher costs as well, Cerimele says.  “There are so many variables,” he says.

For example, the U.S. dollar today is the weakest it’s been in years against the Euro.  “In March, the dollar was nearly one-to-one with the Euro. Now it’s about 20% weaker,” he says. When you factor these costs on top of a 15% tariff, hikes can reach as high as 35% or 40% for imported wines.  Furthermore, the price of wine was already on the increase in the wake of the Covid-19 epidemic.

“There were price increases across the board that weren’t tariff related,” Cerimele says.  As material costs decreased, the price of the product did not change.

The biggest season for wine sales occur as cooler weather sets in – October, November and December, Cerimele says. Therefore, it might be several months before a full assessment on how global trade issues have impacted the wine industry.  

Adding to the complexities of the market is that wine sales in general have decreased over the past several years, as the younger generation is not consuming as much alcohol compared to previous generations, Cerimele says.  “They’re just not drinking. And they’re certainly not drinking wine.”

Still, Cerimele says he’s been fortunate with his producers, who have helped by absorbing some of the costs associated with the trade.  “It’s hard for producers, and they try to help as much as they can, but they can only help so much,” he says.

No Impact – Yet

Some wine shops have yet to feel the full brunt of price increases, possibly because of larger quantities of wine that distributors purchased before tariffs became effective in August.  These products may still be cycling their way through inventories at local shops.

“On the retail end, we’re not seeing much of an impact at this point,” says Nick Uroseva, the owner of Cork and Cap Bottle Shop and Tasting Room in Warren.  He says some of the wines in his shop could have been warehoused months earlier. 

Should prices escalate on certain wines or varietals, importers may shy away from these brands and decide not to carry them anymore.  “If a $15 bottle all of a sudden goes up to $30 a bottle, they won’t even try to pass that along because it’s not going to move right now.”

Most of Uroseva’s most popular imports come from Italy, France and South America. 

On a second front, domestic wineries in California, Oregon and Washington, for example, are having a difficult time selling their wine overseas in the current tariff environment.  Countries subject to U.S. tariff penalties have countered with duties of their own, or in the case of some Canadian regions, have opted not to carry U.S. alcohol products.

“They’re taking a beating right now because there are a lot of California wines that are consumed in China and Canada, and they’re not exporting there now,” he says.  “There are a lot of wineries that are going to go out of business. There’s a lot of excess wine that is not being shipped overseas.”

For now, prices have remained stable and reasonable as the wine season hits full stride. 

“We’re coming off a slow, slow summer,” Uroseva says.  “This will be telling over the next couple of months.”

Pictured at top: Al Franceschelli, owner of A&C Beverage in Youngstown.