- Trump on Thursday threatened to place 200% tariffs on wines, champagnes and alcoholic beverages from Europe. That could mean higher prices for spirits drinkers, but the effect won’t be limited to imported wine and liquor. California’s supply of crushed grapes, used to make wine, was down 24% in 2024. It’s the latest struggle for the industry, which has been facing declining sales.
Donald Trump’s threat of a 200% tariff on wines, champagnes and alcohol products from France, Italy, and the European Union sent shares of spirits companies spiraling on Thursday, but the news could be even worse for people who enjoy a glass of wine with dinner.
The tariffs, if imposed, would send the cost of imported wines skyrocketing. But oenophiles looking for a less expensive American-made alternative might find that a little harder than they expected.
That’s because the 2024 vintage from California has come in well-below expected levels, hitting its lowest total in over two decades. The Pacific Region Grape Crush Report found the total combined red and white grape crush for 2024 was 2.844 million tons, down from 3.685 million tons in 2023. That works out to a 24% decline.
The industry had been expecting a haul of 3.2 million tons.
That, potentially, could mean higher prices for domestic wines in the coming months. California produces 80% of the wine consumed in the United States.
There is some degree of hope that domestic wines won’t see a pricing surge on par with European imports. Grape prices have been declining in recent years. The latest Silicon Valley Bank wine industry report predicted prices for both red and white varietals would drop this year.
The wine industry has seen sales decline for the past four years as younger Americans drink less. And a report last year criticized the industry for chasing the wrong customers.
“The bottom line is for every consumer over 60 who stops consuming wine; they are replaced by younger consumers with a mindshare of wine half that of their elders. Time is not on our side,” Silicon Valley Bank’s 2024 State of the US Wine Industry report read. “We must show the will to change and the creativity to evolve and adopt a new approach that retains current customers while appealing to a more diverse population.”
The problems for California growers aren’t likely to end soon. The expected wine crush totals for 2025 are even lower than this year. That’s due to a variety of factors.
Wildfires across the state in recent years have impacted several vineyards, destroying vines. And declining demand for wine has led many winemakers to remove thousands of acres of grape vines, to address oversupply.
