Trump tariff hits wine industry: 'US importers already telling SA suppliers orders are cancelled'
The 30% tariff Donald Trump announced for South African imports is higher than those for some competing wine-producing countries.
The Money Show's Stephen Grootes interviews wine expert Anthony Fridjhon (Wine Wizard) and fine wine importer Bartholomew Broadbent (Broadbent Solutions) - from 3:42 in audio below
The shock 'liberation day' tariffs announced by US President Donald Trump are going to hit many industries around the world, including our own local wine industry.
Trump is slapping all goods imported into the US from South Africa with a 30% tariff, lower than for some competing countries in the wine export business.
In conversation with Stephen Grootes, wine expert Anthony Fridjhon (founder of Wine Wizard) points out that around two thirds of Cape wines are exported to the US in bulk.
"That is really a very price-sensitive market; and a 30% tariff when Chile, Australia and Argentina are at a 10% tariff and the European Union at 20%, effectively puts us out of the game."
Anthony Fridjhon, Founder - Wine Wizard
With this affecting an approximate 16-17 million litres of bulk wine, it will be hard to find another market for without job losses, Fridjhon says.
When it comes to the bottled wine market, US importers also cannot risk the impact of these tariffs on the price sensitivity of Cape wine, he adds.
"We're already hearing stories of US importers telling their SA suppliers that any orders in the pipeline are simply cancelled."
Anthony Fridjhon, Founder - Wine Wizard
While there's an opportunity now for our BRICS partners to step in to help fill the void, Fridjhon is skeptical about this happening.
Grootes also talks to Bartholomew Broadbent, whose Broadbent Selections imports South African fine wine into the US.
Echoing Fridjhon's remarks, Broadbent says their biggest customers have already cancelled all orders from Europe, and South Africa presents an even bigger problem.
"10% on tariffs from some countries is manageable, 20% for Europe is pretty difficult... but 30% for South Africa is impossible."
Bartholomew Broadbent, Owner - Broadbent Selections
And that 30% actually ends up closer to 45-50% when the markups of all the parties in the distribution chain are added before a restaurant customer for instance buys it, Broadbent says.
"We work with the top wineries in South Africa... and this is going to kill the market for many of them."
Bartholomew Broadbent, Owner - Broadbent Selections
Listen to the interviews in the audio at the top of the article (skip to 3:42 for wine discussion)