SACRAMENTO, Calif. — It’s not something Joan Kautz of Kautz Wines said she had anticipated to see, her wine along with many other producers from California, being pulled from shelves in Canada.
This is a result of the new tariff tit for tat between the U.S. and Canada.
“Just taking it day by day," Kautz said. "I mean, that's all you can do. We're fortunate in that the California Wine Institute is doing a lot of work, and really helping everyone and helping all the wineries navigate it. Canada, Mexico are very important markets to us.”
At least three Canadian provinces have pulled U.S. wine, and a 25% tariff remains in place despite the suspension of most U.S. tariffs on Canadian goods.
Canada is the top importer of U.S. wine, according to the state department of agriculture, and Kautz said for Kautz Wine, they export roughly 150,000 cases annually around the world, and that Canada is an important international revenue source.
“In terms of international sales, Canada tends to be higher margins for sure,” Kautz said.
Kautz Wine has vineyards in Lodi, which its wine commission said produces over 20% of California wine.
Stuart Spencer is the executive director and said the tariff tit for tat with international countries is hitting the wine industry in multiple ways.
“When you look at countries like Mexico, a lot of our glass comes from Mexico and a lot of glass comes from China," Spencer said. "And so that's going to increase the cost for our producers, all producers, whether they're exporting or not, depending on where they're sourcing their glass.”
Spencer said because of the already precarious situation the wine industry is in, new tariffs only compound things.
“We've seen three years of negative sales and nobody's in a position to raise their prices, even though our costs have come up considerably over that time," Spencer said. "If you raise your prices, you're likely to lose accounts or likely to lose the sales. And so it's a very delicate situation when it comes to adjusting prices.”
Kautz said it’s another reason why diversifying their sales and new markets is important.
“We are focusing on the eastern European markets," Kautz said. "We're focusing on some African markets as well. It's a very interesting new area for us.”
But she said as exciting as they may be, she hopes soon it will be business as usual with Canada.
