NEWS FROM THE SHOP
Geoff Worden explains how tariffs will affect our pricing
Monday, April 14
Mary Taylor Road Show Event at Audubon Zoo
SOLD OUT!
Exciting New Selections in Stock
| The tariffs are going to hurt. They are going to be painful for consumers and many businesses for some time to come. As all of you are no doubt aware, these tariffs will have an impact on much more than wine but we are only going to address the wine side of things here. Then we’ll highlight a few exciting recent additions to the store that offer terrific value. Feel free to skip to the part about wine but I think you’ll find some useful thoughts/explanations in the tariff portion of this newsletter. We will not raise prices until our costs rise. We will maintain our dedication to quality and to finding wines that offer value, as you have come to expect from us, but prices are going up. There is not a single imported wine we carry that will not be affected by tariffs. Not a single one. Some American wine will be affected as well, though the effects will be not as significant or noticeable (See Sidebar 1 below). The most significant portion of this store’s inventory comes from the European Union. As I type this, the tariff is 20%. That is a significant number that is not realistically absorbable by the supply chain. The last round of tariffs was much less sweeping and there were some loopholes and there was a defined monetary goal to ‘even things out’ from illegal subsidies paid by some EU nations to airplane manufacturer Airbus. Bringing back American manufacturing is the stated goal and that will take years. With that concept in mind and no stated monetary goal we believe everyone is approaching this round of tariffs as a cost of doing business for the foreseeable future. That likely means less willingness to absorb costs along the supply chain. We still hope for a little belt-tightening along the way but do not expect it. That means all European wines will go up approximately 20%. (See Sidebar 2 for how the 20% tariff could actually be closer to 25%). Help Us Help You This is going to sound self-serving but you should begin stocking up and doing it immediately. You know that we carry a lot of inventory already and we are working on accumulating as much pre-tariff wine as we can but money and space are not infinite. The latter is our biggest challenge and if you move some wine out of here we can put more pre-tariff wine in that space and postpone price increases for as long as possible. While there is good supply on many wines almost every buyer in Louisiana and the rest of the country is in a race to secure the same pre-tariff wine we are. Shortages loom in the short term as the potential threat of 200% tariffs on EU wine halted many orders. Fortunately, many of our suppliers stocked up in anticipation of tariffs and their stateside inventory is good for the moment. However, we are already seeing wines that are usually available year-round that are now out of stock in the United States because of the lack of ordering due to the threat of massive tariffs. Of course, we sympathize and empathize with nearly everything going up in price soon. Not everyone’s budget allows for the luxury of buying three to four times as much wine all at once as one usually purchases but if you can it will help. Our focus on wines produced in other countries is not a race to the cheapest wine available, though many do offer better value than what is produced domestically, it is due to their uniqueness. You can grow Tempranillo in America but you can’t make Rioja. Chardonnay and Pinot Noir are everywhere on the west coast but they’re not Burgundy. You can’t produce Sancerre in Sonoma and while there are some delicious Nebbiolos made in the United States none of them has the value proposition of those from Langhe. I could go on and on but you get the idea and probably didn’t need me to say anything in the first place. Read on for some new arrivals as well as two speculations at the end of this section about what could happen with the tariffs. Sidebar 1: Most of the glass used in the domestic wine business is also produced domestically and therefore not subject to tariffs. However, something like 50% of the cork used in the business comes from Portugal, subject to 20% tariffs, currently. I can not speak authoritatively about the manufacturing of screwcaps but the metal may be subject to tariff as well, to say nothing of stainless steel tanks. French oak will certainly be tariffed. I can not speak authoritatively about various farming equipment used in viticulture but they may be tariffed as a whole or as parts. Sidebar 2: We have commitments from some distributors/importers that they will handle the tariffs as a unique add-on to their cost. This means they will take the cost of the wine, let’s say $10, add on the regular, expected costs of shipping and taxes, let’s say $2 and then add their markup, let’s say 30%, and then add the cost of the tariff, in this case $2 – 20% of $10. That would result in a wholesale price of $17.60. However, some people are adding the cost of the tariffs as a regular cost of goods. This means the $10 becomes $12 with the tariff and $14 with shipping and taxes. If you then add the same percentage markup, this company’s wholesale price would be $18.20. That is about 3.5% higher than the other method of dealing with tariffs and we’re talking about an inexpensive bottle of wine. We prefer the first method, clearly, but are not in charge of how our suppliers handle their business. We will be asking and talking to everyone about this but not everyone will be transparent. Speculation 1: Although the early word was that this was not negotiation the word now is that he is “open to negotiation.” The tariffs were put in place as an executive order and may be removed, altered or increased at the executive’s whim. The optimistic speculation is that pressure from other Republicans, allies and some sort of negotiated ‘victory’ will allow some (all?) tariffs to be removed or lowered. The pessimistic speculation is next. Speculation 2: What started all the talk of 200% tariffs on European Union wines in the first place? The threat of the EU putting 45% tariffs on American Whiskey. The EU announced a pause on those tariffs until on or about April 14th to facilitate potential negotiations or at least a cooling off period. The decision about the 45% whiskey tariff is still pending and as there is no constraint on how high the tariffs could go in response we could be looking at 20% tariffs as a relative bargain if the EU goes ahead with that plan. This is not solely a problem with the European Union. If other countries engage in tariff tit for tats there is no telling how high the tariff percentage could go. Come by and stock up, we’ll probably have some wine open… Thank you and good luck. Geoff Worden |
| MARY TAYLOR ROAD SHOW |
We are very excited about the upcoming wine tasting and dinner with Mary Taylor and 26 of her European winemakers at the Audubon Zoo Swamp Exhibit! Mary Taylor is a negociant, meaning she doesn’t own vineyard land nor does she make the wines. Instead of buying large bulk production and making a few wines with her name on them as most negociants do, Mary seeks out small producers making excellent wine at good prices and puts their name on the label as well as hers.
| We are very excited about the upcoming wine tasting and dinner with Mary Taylor and 26 of her European winemakers at the Audubon Zoo Swamp Exhibit! Mary Taylor is a negociant, meaning she doesn’t own vineyard land nor does she make the wines. Instead of buying large bulk production and making a few wines with her name on them as most negociants do, Mary seeks out small producers making excellent wine at good prices and puts their name on the label as well as hers. |
| Mary’s is a fairly unique approach and most of you are well aware of some of her wines from shopping with us. A few of our store favorites are pictured above. Tickets for the Mary Taylor event at Audubon Zoo are sold out. Mary is holding a second event in New Orleans which is a tasting with the winemakers including a light fare of cheese and charcuterie (the final event of the tour!) at The Independent Caveau on April 15. A few tickets remain for that evening at the time this newsletter was mailed. |
Château de la Roche Sauvignon Blanc, Touraine 2023
Yes, we miss Mary Taylor’s Touraine Sauvignon Blanc. Yes, we will have it back in time for the tasting and dinner. In the meantime, this is a screaming deal for Loire Valley Sauvignon Blanc. Loaded with lemon and some passionfruit, this practically begs for warm weather and a porch, or even better, a porch concert because at this price you can share!
| Oysterman Muscadet 2023 It’s back! We had an interruption in supply due to a funky vintage, at least to our palates, but the new vintage is tasty. Sure, this goes wonderfully with oysters but it’s also a very friendly porch wine. Get reacquainted with an old friend! |
| Domaine des Terres Gentilles Bourgogne Pinot Noir 2022 We can’t tell you much about this wine except that it comes from the Mâconnais (the southern end of Burgundy) and it’s a bargain! This is the kind of wine you would happily order at any French bistro; its slight rusticity disappears when paired with food. We have trouble finding good Bourgogne Rouge under $25 these days, much less under $20! We thought we had just about sold out of the wine but our distributor received another 20 or so cases, so you can still get a bottle or two and then come back and load up before this disappears. Lucien Boillot Bourgogne Rouge 2021 You didn’t think we could resist putting a fancier Burgundy in this newsletter, did you? This reads as a fairly expensive Bourgogne Rouge until you try it and understand that 2/3 of this is Gevrey-Chambertin fruit and the other 1/3 is Volnay! When you consider that, this wine starts to look like a bargain. Vibrant, ruby-red color with ripe strawberries and tart cherries on the nose. Plenty of acidity keeps this wine lifted and focused with just an edge of fresh, dusty earth to remind you where the vines grow. They, by the way, were planted in 1967! This is no blockbuster but wow, it’s impressive and delicate and very old-school Burgundy. We only have a few cases, and we don’t expect it to last long. |