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New Tariffs on French and German Wines In Effect

Effective January 12, 2021, certain wines and other alcoholic beverages imported into the United States from France and Germany are subject to a 25% import duty.  In its ongoing trade feud with the European Union over aircraft manufacturing subsidies, the United States has been periodically adding tariffs to many food and alcoholic-beverage products imported from European Union member states.

On October 6, 2019, the Office of the U.S. Trade Representative (“USTR”) in a Federal Register notice initially added a 25% duty to a handful of wines, liqueurs and cordials imported from France, Germany, Ireland, Spain, and the United Kingdom.  Following a period of public comment, on January 6, 2021, the USTR in another Federal Register notice expanded the list of products subject to this duty.

The expanded products now subject to the 25% duty include the following alcoholic beverages from France and Germany:

  • Spirits obtained by distilling grape wine or grape marc (grape brandy), other than Pisco and Singani, in containers each holding not over 4 liters, valued over $38 per proof liter
  • Effervescent grape wine, in containers holding 2 liters or less
  • Tokay wine (not carbonated) not over 14% alcohol, in containers not over 2 liters
  • Marsala wine, over 14% ABV, in containers holding 2 liters or less
  • Grape wine, other than Marsala, not sparkling or effervescent, over 14% ABV, in containers holding 2 liters or less
  • Wine of fresh grapes, other than sparkling wine, in containers holding over 2 liters
  • Grape must, nesoi, in fermentation or with fermentation arrested otherwise than by addition of alcohol

During the first round of tariffs in October 2019, the New York State Liquor Authority (“SLA”) offered a reprieve to licensees required by statute to post their inventory prices.  Specifically, licensed importers and wholesalers were at risk of not being able to pass the cost of the unexpected tariffs onto their wholesale and retail buyers because of time limits imposed by the Alcoholic Beverage Control Law’s price-posting provisions.  Counsel’s office for the SLA permitted these licensees to add the actual cost of the tariffs to their price postings.  Thus, licensees forced to import and sell at higher costs could pass those costs onto their buyers.

It is yet to be known whether the SLA or other state alcoholic-beverage regulators will provide similar relief in this next round.

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