Before I get to global news, I want to encourage you to go read the series of profiles we’re publishing on individuals who were shortlisted for this year’s Barca-Velha Golden Vines MW Scholarships, administered by the Gérard Basset Foundation. The shortlisted applicants represent some of the most talented and ambitious individuals in our industry from a wide array of backgrounds.
Harvest starts in France
France’s first grapes were picked today in Fitou within the Languedoc. The estate kicking off harvest was Champ des Soeurs and they were picking Muscat Blanc à Petits Grains for a fresh, early-drinking white wine with a potential alcohol of around 11% designated as Vin de France. More producers from this area are slated to begin harvest on Monday.
US tariffs update
On Sunday 27 July, Donald Trump and Ursula von der Leyen, president of the European Commission, announced that they had struck a trade deal ahead of the 1 August deadline. If no deal had been reached, tariffs on EU goods exported to the US would have increased to 30%. Instead, a tariff of 15% will be levied on 70% of the EU’s exports to the US. Despite the wine and spirits industry’s hope that they would be placed on a list of products exempt from tariffs, as of today that is not the case.
The lack of clarity regarding the ongoing negotiations to try to get wine on the zero-for-zero list has resulted in an outcry from French and Italian wine producers. Jean-Marie Fabre, president of the Independent Winegrowers of France, has already proposed requesting €200 million in aid from the European Commission to put towards grubbing up vines and distilling excess wine. The Italian Wine Union estimates that if tariffs on wine are kept at 15%, it will cost their industry €317 million in the next 12 months. They estimate that the US companies who import and distribute their wine will experience a loss in revenue of $1.7 billion.
More than 70% of US wine imports come from the EU. These imports are brought in, distributed and sold by US companies. These companies will be the ones paying the tariffs, reducing their offerings and laying off employees. US trucking companies will be the ones losing contracts. US restaurants will be the ones losing sales. In total the Italian Wine Union estimates that a 15% tariff on European wine (not just Italian wine) will result in $25 billion in damages to the US economy.
While the 15% tariff on EU wines will have the largest impact on the US industry, there are other impacts. South Africa submitted a trade deal in May, revised it in June, and were unable to reach the Trump administration until 30July – when they were advised to resubmit … tariffs on South African imports spiked to 30% today. New Zealand, which was not afforded negotiations with the Trump administration, found out today that their tariff rate had been raised to 15%. The US is the largest export market for wine from New Zealand.
Meanwhile, yesterday, 31 July, the US Court of Appeals heard the Liberty Justice Center’s legal challenge to Trump’s ‘Liberation Day’ tariffs. The LJC lawsuit, challenging Trump’s authority to impose sweeping tariffs, was filed back in April on behalf of five businesses – one of which is New York wine importer VOS Selections. On Wednesday 28 May, the US Court of International Trade ruled that the US Constitution gave Congress exclusive authority to regulate trade with other countries and that Trump had overstepped his authority, and ordered that tariffs be lifted. The Justice Department appealed, and tariffs were left in place. When I watched the appeal yesterday, it seemed as if the 11 judges hearing the case were incredibly sceptical of the legality of Trump’s imposed tariffs. One pointed out that nowhere in the International Emergency Economic Powers Act which Trump used to justify tariffs is the word ‘tariffs’ actually mentioned. Another implied that if all Trump had to do to rewrite tariff law was to declare that a steadily building trade deficit constituted an emergency, it would spell the death of the Constitution. Multiple judges pointed out that Trump is well within his rights to impose tariffs; he just needs the approval of Congress. The US Court of Appeals will announce their decision sometime this month. However, this case is likely to be headed to the Supreme Court either way.
Another E & J Gallo winery to close
On 25 July it was announced E & J Gallo, the largest wine company in the US, would be closing their 300,000 square-foot winery in San Miguel in San Luis Obispo County, in California’s Central Coast, and laying off 47 employees. The facility will close on 1 December and employees will be laid off in two rounds, one in September and the other in January. Last year the company sold their Edna Valley Vineyard facility and Wild Horse winery – also in San Luis Obispo County.
Wine Australia export report
On 29 July Wine Australia released its latest annual export report. The report shows that Australian wine exports have increased 13% in value to AU$2.48 billion and 3% in volume to 639 million litres. This increase is almost entirely due to the reopening of the Chinese market in March 2024. After an initial restocking phase, Chinese imports have stabilised. Exports to the rest of the world declined by 11% in value and 6% in volume. Exports to the US dropped to the lowest value in two decades. For a first-hand look at the state of the Australian industry, you might want to read Max Allen’s recent essay on our site; I’ll link to it in the transcript.
UK wine industry report
WineGB’s latest industry report offers good news for the UK wine industry, citing 3% overall sales growth in 2024. Still-wine sales grew by 10% and exports grew by 35% year on year. Sam Linter, WineGB’s chair, writes, ‘WineGB has played a key role in supporting the industry’s success and has developed a three-year strategy to promote the sector as it enters its next phase of growth’. And the UK industry certainly has set themselves up to require sales growth. The UK currently has 982 ha (2,427 acres) of vines that have not yet come into production … that is 20% of their total planted area. The market will need to expand rapidly to accommodate the new vineyards coming online.
That’s all for this episode of the wine news. If you enjoy this newscast and would like to see it continue, please become a member of JancisRobinson.com. And if you have breaking news in your area, please email news@jancisrobinson.com.
This is a transcript of our weekly five-minute news broadcast, which you can watch below. You can also listen to it on The Wine News in 5 Podcast. If you enjoy this content and would like to see more like it, please become a member of our site and subscribe to our weekly newsletter.
Photo at top courtesy Chapel Down.
