As the holiday season approaches, wine enthusiasts in the United States face increased prices and reduced selections at local shops. Importers are grappling with steep tariffs and a decline in demand, leading to a challenging market for both retailers and consumers.
Impact of Tariffs on Wine Prices
Bottled wine prices have surged nearly 20% over the past 25 years, with an 8% increase in the last decade, according to government data. The current tariff situation, particularly a 15% tariff on imports from the European Union, has placed additional pressure on retail prices. Daniel Mesznik, owner of McCabes Wine & Spirits in Manhattan, reported price hikes of 5% to 12% this year, attributing the rises to “tariffs, shipping, manufacturing, and labor.”
Shoppers at his store are likely to notice these changes, but Mesznik believes customers are understanding of the situation. “We’re doing our best to keep those increases to a minimum for our guests,” he said. “But, I think folks understand that this is the current reality.”
Declining Demand for Wine
The impact of these tariffs extends beyond pricing; they are also contributing to a decline in wine sales. Elenteny Imports, a logistics and distribution company serving 9,000 retailers and restaurants, reported a 13% drop in wine sales year-over-year. Between 2019 and 2024, wine consumption in the United States fell by 3%, with projections indicating a further 4% decline from 2024 to 2029, according to the IWSR, a firm specializing in alcohol data insights.
Marten Lodewijks, president of IWSR, noted a shift in consumer preferences towards spirits and ready-to-drink cocktails, which are often less expensive and offered in more convenient packaging. “We’ve seen wine volumes consistently decline year after year,” he remarked.
The outlook for 2025 remains bleak, with Elenteny data indicating that year-to-date bookings for imported wines are down nearly 30%. Alexi Cashen, CEO of Elenteny, highlighted that “absolutely the tariffs are the persecutory issue here,” as demand has decreased following a brief resurgence post-pandemic.
Shifts in Retail Strategy
Some retailers are adapting their strategies in response to the changing landscape. Mesznik’s shop, which recently reopened after a 16-month renovation, has shifted its focus from wine to other spirits, particularly tequila, which remains exempt from tariffs under the free trade agreement signed in 2018. “Tequila is in the most beautiful bottles. It’s the category in my business that everyone gravitates to right now,” he explained.
Wine used to account for roughly 70% of Mesznik’s annual sales, but that figure is expected to drop to 65% this year due to growth in categories like agave spirits. Retailers are also streamlining their wine offerings in response to declining demand, making it potentially more difficult for consumers to find specific brands.
Mike Veseth, known as the Wine Economist, remarked that many retailers have had to adapt to the current market realities. “Consumers might have to search more than usual to find a particular brand,” he noted.
As the holiday season approaches, the uncertainty surrounding tariffs and upcoming legal decisions regarding their legality continues to loom over the wine industry. These factors discourage businesses from making significant investments or altering pricing strategies.
In this evolving landscape, Mesznik emphasized the need for smarter purchasing strategies. His shop is buying from fewer wholesalers and ordering larger quantities of specific wines when they are on sale. “For example, we have a Pinot Noir from Argentina this month that’s on sale. I’m ordering more than I typically would,” he said.
With ongoing challenges facing the wine market, consumers will need to keep a close eye on pricing and availability as they prepare for their holiday celebrations.
