Mexican Import Tax Scare Overblown

FILED JANUARY 27, 2017

Yesterday President Trump's press secretary Sean Spicer triggered a virtual meltdown when he told the White House press pool the president supports an idea that, at the time, sounded a lot like a 20% tariff on Mexican imports.

The political press immediately ran with claims that the Trump Administration was planning a 20% tariff on Mexican imports to pay for the anti-immigration border wall they're planning to build between the US and Mexico.

A 20% tariff on Mexican goods would be devastating for many small tequila, mezcal and beer importers. It would also negatively impact the ailing restaurant industry, which gets so much of its produce from Mexico.

The rumor caused Constellation Brand's stock price to drop from a high of $154 per share earlier this week to around $148 this morning. The fleeting tariff hubbub also led South Carolina Rep. Lindsey Graham to tweet: "Simply put, any policy proposal which drives up costs of Corona, tequila, or margaritas is a big-time bad idea. Mucho Sad."

But let's all take a deep breath before we make big decisions based on this potential proposal. Spicer walked his statement back later in the day claiming the import tax was not a policy proposal, just one possibility.

Here are his follow up statements, as recorded by Politico: "And the idea is to show that generating revenue for the wall is not as difficult as some might have suggested."

"It could be a multitude of things. Right? It could be, instead of 20 percent it could be 18 it could be 5," he added. "We could go in another direction, we could talk about tariffs, we could talk about, y'know, other, custom-user fees, or a hundred other things."

So our Mexican imports are safe for now, but we will report on any legitimate changes in policy as the story of the US-Mexico border wall develops. If Trump's first week in the White House has taught us anything, it's that we should all wait at least 24 hours after an inflammatory comment or news story to determine the veracity of the claims.

AVERAGE PRICE FOR BOTTLE OF WINE SURPASSES $10

Continuing our coverage of the annual Unified Wine & Grape Symposium this week, one of the most promising revelations was that 31% of consumers say wine is their current beverage of choice, and its the No. 1 category among females, according to Nielsen's alcohol guru Danny Brager. In fact, half of those aforementioned consumers have converted from a beer and/or spirits preference within the last ten years.

Craft beer's impact on the wine category has been a popular discussion topic in recent years [see WSD 02-01-2016]. Danny claims that so far craft beer drinkers are not significantly impacting the wine category's performance. Nielsen recently asked regular craft beer drinkers about their wine consumption habits and nearly 80% of them said they were drinking either the same amount or more wine than in the previous year.


Another positive revelation from Danny's presentation was that the average price of a 750 ml bottle of wine surpassed $10 in 2016. Though, he said we shouldn't give up on under $8 category. The under $8 wine category still accounts for nearly 60% of glass volume and roughly 33% of dollars. "It's kind of in poor health. But it's not dead, it's just way too big."

But the wine category continues to fragment--Nielsen tracks over 12,000 table wine brands--spreading its market share through the end of the "long tail" of the category. "Large brands are not selling as much as they once were," he said. As it stands, the top 100 wine brands represent 67% of sales and the top 250 represent 81% of dollars.

Stay tuned for more symposium coverage in later issues of WSD.

WSD BRIEFS:

TERLATO DEBUTS NEW MAXVILLE WINE. Terlato Wines has partnered with Napa Valley's Maxville Lake property to launch four new wines: a cabernet sauvignon, petite sirah and a cabernet franc (srps $55-$66) and a Sauvignon Blanc at a suggested retail price of $33. Maxville was first planted to grapevines in 1974, and today has over 100 acres of vineyard, growing sauvignon blanc, cabernet Sauvignon, merlot, malbec, cabernet franc, petit verdot, and petite sirah. The Maxville wines were made by Bordeaux-born winemaker Camille Benitah in a new winery on the Maxville Lake property.

CAMPARI RED DIARIES SUPPLANTS TRADITIONAL CALENDAR. In lieu of its popular, star-studded brand calendar, this year, Campari is launching a campaign in the spirit of the calendar called Campari Red Diaries. The campaign features a "mini film noir" called Killer in Red starring actor Clive Owen. In addition, there are 12 more short films that focus on "the ethos that 'every cocktail tells a story.'" Gruppo Campari chief Bob Kunze-Concewitz explains further: "Using film as a vehicle for the campaign has allowed us to depict the multifaceted artistry of cocktail making as well as continuously challenging ourselves to drive our iconic status as a world-renowned contemporary global brand. This year†s campaign takes on a new medium without severing ties with our past Campari Calendars which is exactly our approach to the brand - to innovate without ever forgetting our heritage."

RIBOLI DEBUTS CENTENNIAL BLEND. Riboli Family Wine Estates is celebrating its 100th anniversary in 2017, and to mark the occasion, they created a 2014 Centennial Blend. The blend is made up of 36% Cabernet Sauvignon, 28% Malbec, 21% Petit Verdot, 11% Petite Sirah and 4% Syrah, aged in French oak barrels for the past 24 months. It is available at all three tasting rooms in Los Angeles, Ontario, and Paso Robles, retailing for approximately $85.

Until Monday,
Your Editors

Emily Pennington - emily@winespiritsdaily.com
Sarah Barrett - sarah@winespiritsdaily.com

"Having a dream is what keeps you alive. Overcoming the challenges makes life worth living." -- Mary Tyler Moore

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