00:00 Speaker A
The American wine industry is facing an array of challenges where wine producers and drinkers are feeling the effects of uncertain trade policy, inflation and changing drinking habits in modern society. Let me bring in now Ben Aneff who joins me in studio. He is president of the US Wine Trade Alliance and also managing partner of Tribeca Wine Merchants right here in New York.
00:23 Ben Aneff
The reality for the wine business in the US, we are an ecosystem. And when we’re all doing well, we all do well. But when we all face challenges, it’s felt all across the three-tier system.
00:46 Ben Aneff
And, you know, the way wine is imported or sold in the United States is really different than effectively any other product. We have to sell through the three-tier and that means a producer sells to an importer, who sells to a distributor, who sells to retailers and restaurants. This isn’t really true of any other product. I I sort of call it the Dom Perignon wine store problem.
01:14 Ben Aneff
You know, if you put a tariff on French wine and you say, oh gosh, this is going to hurt Dom Perignon. Well, we buy Dom Perignon, but the reality is Dom doesn’t sell it in the United States. Dom sells it to a US-owned wine importer. They sell it to a US-owned wine distributor. And those wine distributors sell it to restaurants and retailers all over the United States.
01:41 Ben Aneff
I mean, we buy about 4 billion dollars worth of wine from the European Union every year, but that equals 22 billion dollars worth of sales here in the United States. And those sales power 47,000 independently owned US wine retail stores. They they power four to 5,000 small distributors and hundreds of thousands of small restaurants. Uh we employ hundreds of thousands of people and we really depend on that economic surplus that the United States has from the sale of wines from Europe.
02:14 Speaker A
A lot of people might assume though, Ben, they might say, well, isn’t this good news for domestic wine producers, American wine producers. Aren’t they benefiting? Walk me through that.
02:26 Ben Aneff
Wine isn’t fungible. You know, when a customer comes in and they want a Chianti from Italy, they really don’t substitute it with a Cabernet from California. I mean, California, Oregon, Washington, Virginia, even my home state of Texas, we make great wine, but it’s a different wine for a different occasion. And consumers now have they have a real power of choice.
02:55 Speaker A
As a wine store owner yourself, I’m just curious though, how are you actually navigating this Ben? Like are you raising prices? Are you cutting selection? What are you doing?
03:04 Ben Aneff
You know, I think for most people in my position, how we’re dealing with it, unfortunately, is it means we it’s harder for us to invest in new growth. And it means that staff member that you wouldn’t have hired uh or that you were thinking about hiring, you might not hire today. That extra line of business you were considering, you’re not doing. And you’re really seeing the same thing with restaurants. Uh restaurant margins are are being absolutely destroyed. You know,
03:29 Ben Aneff
a huge percentage of the the actual profits from a restaurant in the United States come from wine sales. and when you sort of sweep the legs out from underneath them, you see the problems that you’re sort sort of starting to have in the restaurant industry.
Dining and Cooking