New wine, cheese tariffs are a small business concern

FAN Editor

A new round of tariffs took affect on Friday, but they have nothing to do with China or North Korea.

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These tariffs imposed by the United States are on products that many Americans enjoy.

The Trump administration imposed duties on wine, liquor and cheese from Europe and they couldn’t come at a worse time for small retailers with the approaching holiday season.

Its a time when many retailers make their money for the year.

No one expects consumers to completely abandon Bordeaux and other wines from France, Scotch whisky or cheeses like Parmesan or Roquefort when the 25 percent tariffs take effect Friday.

Wine retailers, distributors and importers already expect some customers to seek reds and whites from countries whose products aren’t being taxed. And any signs that customers are balking at higher prices will force retailers to absorb their increased costs.

The tariffs are mostly on food and alcoholic beverage products such as cheese from Britain, Switzerland and Italy; olive oil from Spain; Scotch whisky and French, Spanish and German wines.They’re also being imposed on equipment from kitchen knives to large aircraft.

The administration is imposing them in retaliation for the European Union’s subsidies of aircraft maker Airbus, the competitor to the U.S. producer Boeing.

The tariffs will be slapped on goods that arrive in the U.S. from Friday onward. One bit of good news is that much of the food and beverages to be sold during the holiday season are now in the country and headed to store shelves, so retailers generally won’t have to suddenly come up with extra cash to pay for holiday merchandise.

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It is the long-term impact of the tariffs that are a concern.

Retailers are hoping for trade talks between the U.S. and EU and that the Trump administration will withdraw the tariffs as it recently did with some imposed on Chinese goods.

Price-sensitive customers are aware they have many other choices when it comes to purchases like wine and cheese, so owners may need to change the products that they stock.

Shoppers may opt for buy wine from a country like South Africa or Chile whose products are not subject to tariffs, or they may switch from a single-malt Scotch to a cheaper blend or domestically made bourbon. Instead of Stilton, they may choose an artisanal cheese from Vermont.

Perhaps a bigger concern is what will happen after the holidays. People in the wine business are concerned that if the tariffs are still in effect, sales of popular French rose wines will fall next summer. Those wines are scheduled to be shipped to the U.S. early in 2020.

Retailers have less pricing leeway in states where alcoholic beverage control agencies regulate wine, liquor and beer prices and the timing of price increases.

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Retailers of products like wine and cheese do have some advantages over, for example, companies that need to import steel and aluminum from the EU that’s also being taxed.It’s not easy to find metal and metal products without tariffs, but food and alcohol purveyors have many options.

The Associated Press contributed to this article.

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