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Wine exporters are stockpiling their product in warehouses in the United States to beat possible tariffs next month.
US President Donald Trump is due to announce reciprocal tariffs on the more than 200 countries the US trades with on April 2.
A recent study by Yale University researchers estimated reciprocal tariffs on imports from NZ could be as high as 16%.
The US is NZ’s largest wine market, buying $800 million of NZ wine last year.
West Auckland-based Babich Wines is one of more than 100 NZ wine producers that export to the US.
Chief executive David Babich said shipping deadlines mean orders received after the middle of February would not have made it to the US in time to beat the April 2 announcement date.
He said uncertainty over Trump’s intended tariff targets and customers’ desire to keep inventories to a minimum had meant there had been no large increase in direct orders to meet that deadline.
“The main response has been business as usual.
“We have put an extra loading of stock into our own US-based warehouse, however.”
Babich said the company keeps warehouse space in the US to “supply customers not large enough to order direct from NZ”.
“We hold about three months’ stock but have moved this up to five months in case we get increased demand due to the imposition of tariffs.”
NZ Winegrowers chief executive Philip Gregan said strong US demand during the covid pandemic had been followed by a period of weak sales.
“Some of the apparent increase in consumption around covid from 2022 onwards was driven by supply chain uncertainty and building up stocks so that retailers could guarantee that they had product available to sell.
“Now it is clear that the supply chain in the US was carrying excess stock and they are now rapidly de-stocking.”
Babich expected “mixed” results from negotiations with importers over who would carry the cost of any tariff.
“Some will absorb what they can while others will leave it to the importer to pay the tariff.
“We have had some recent benefit for exporters from the depreciating NZ dollar, so that does support a mixed approach where the supplier contributes to some of the tariff cost.”
Asked what strategies he could deploy should NZ wine be hit with tariffs, Babich said he was considering two things.
“Can our wine stand being at a higher price point if tariffs are applied and, second, what other markets should we focus our efforts on to mitigate a reduction in demand due to higher shelf prices in the US.”