The ongoing uncertainty surrounding the tariffs imposed by the Trump administration are affecting all sides of the hospitality industry, including distribution.
We asked Vonda Freeman, Wine Director at The Indigo Road Hospitality Group, for her perspective on how proposed and already implemented tariffs will affect the distribution side of the industry.
Here's what she had to say:
"There are three scenarios that we’re seeing on the distribution side:
- Some importers have worked with wineries and distilleries to absorb the tariff increases. While this is great news for restaurants and consumers, it will affect the profitability of the producer’s business and may not be sustainable in the long run.
- Most commonly, distributors are offering products that were already stateside prior to when the tariffs took effect, with no change in price. For restaurants and retailers that are able, they can buy a large amount of product to hold the price for their guests. But, again, this is only a temporary fix.
- There are a few smaller distributors that have implemented price increases across the board, knowing it is inevitable. While it may seem a little premature, I compare it to ripping off a Band-Aid. It’s going to happen eventually; they’re just choosing not to drag it out.
The biggest impact we’re seeing is in the by-the-glass category. Glass-pour wine prices were already at an all-time high. The range used to be from $11-$16 a glass, but it’s now common to see it at $15-$25 a glass or higher. If a wine goes up $1-$3, it will either be priced out of the category, or the price increase gets passed down to the guest. While there are still value wines on the market, they’re not as abundant as they once were.
Ultimately, the consumer is going to pay more, whether it’s today or in a few weeks."
Interested in learning more about this topic? Check out our recent articles on tariffs:
- The Effects of Tariffs on the Bar & Restaurant Industry
- Tariffs Are Set to Change Consumers' Dining Out Habits
- DISCUS Explains How Tariffs May Affect the Bar & Restaurant Industry
- Diversification is a Possible Solution to Tariffs
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