WASHINGTON, D.C., 01/07/2020 – Wine & Spirits Wholesalers of America (WSWA) today announced its strong opposition to the inclusion of champagne and sparkling wine from France on a list of proposed retaliatory tariffs being considered by the Office of United States Trade Representative (USTR) in response to the recent French Digital Services Tax (DST). Barkley Stuart, executive vice president of Southern Glazer’s Wine & Spirits, testified at a public hearing held by USTR on behalf of WSWA, urging the administration not to adopt tariffs on French champagne and sparkling wine and avoid the numerous unintended consequences these duties would have on U.S. businesses, consumers and jobs.
“Our industry provides consumers with the most diverse selection of products in the world and supports hundreds of thousands of jobs across the country in an array of related industries,” said WSWA President and CEO Michelle Korsmo. “Our members offer products for every taste, budget and occasion and are already being negatively impacted by the imposition of retaliatory tariffs by China and the European Union on U.S-origin distilled spirits and wines – these tariffs will only increase that burden.”
In 2018 alone, champagne and sparkling wine from France accounted for 12.14 percent of total U.S. wine imports and 2.76 percent of the entire U.S. wine market. Evenly distributed across the entire U.S. market, the proposed 100 percent tariff on French sparkling wines would lead to an overall price increase on wine by 2.5 percent and demand models developed by WSWA estimate a reduction of 1.84 percent in overall U.S. wine sales that will ultimately lead to a total of 17, 000 lost jobs and more than $750 million in lost wages. Additionally, the model predicts a total cost to the American economy of more than $2 billion.
“We strongly urge the U.S. and France to reach a negotiated settlement in this dispute and avoid the implementation of new tariffs,” said Stuart, WSWA’s immediate past chairman in testimony before the Section 301 Committee. “At a minimum, in order to avoid the negative economic impact and allow wine and spirits wholesalers to continue to respond to consumer demand, USTR should remove champagne and French sparkling wines from the final list of French-origin products that may be subject to additional tariffs in this dispute.”
Today, WSWA also joined a coalition of beverage alcohol industry leaders representing importers, producers, exporters, distributors and retailers sending a letter to USTR detailing the disproportionate negative economic impact increased duties on French champagne and sparkling wine would cause to U.S. jobs, consumers and small to medium businesses, including nearly all WSWA members.
The full text of the coalition letter can be found here.
A full transcript of Stuart’s testimony can be found here.
About Wine & Spirits Wholesalers of America
WSWA is the national trade association representing the distribution tier of the wine and spirits industry, dedicated to advancing the interests and independence of distributors and brokers of wine and spirits. Founded in 1943, WSWA has more than 380 member companies in 50 states and the District of Columbia, and its members distribute more than 80 percent of all wine and spirits sold at wholesale in the United States.