A 20% tariff on wine sounds simple.
But in the U.S., wine moves through a system designed to multiply cost:
Producer ā Importer ā Distributor ā Retailer ā You
Each layer adds its margin.
So when the base price goes up, the whole chain compounds it.
Hereās how imported wine moves through the system:
ā Producer sells the wine for $10
ā Importer adds 35% ā $13.50
ā Distributor adds 30% ā $17.55
ā Retailer adds 40% ā $24.57
Thatās how a $10 bottle becomes $25ābefore any tariff.
Thatās just the system.
Now letās add a 20% tariff to that $10 bottle:
ā Producer + tariff = $12
ā Importer markup ā $16.20
ā Distributor markup ā $21.06
ā Retailer markup ā $29.48
The price didnāt rise by just $2.
It rose almost $5ābecause each step adds margin to a higher base.
Thatās the multiplier effect.
This system what put in place after Prohibition.
The government banned direct sales to control alcohol.
They split the chain into tiers to make it easier to tax and track.
Itās not efficient. But it is law.
And thatās just the sales chain.
Even American wine relies on foreign parts.
Most bottles come from China.
Most corks come from Portugal.
Many barrels come from France.
So tariffs raise production costs here too.
A $10 bottle doesnāt become $30 because of a tariff.
It becomes $30 because of the system.
Tariffs just amplify the effect.
If this helped explain wine pricing in America,
please like or repost to help spread the word.
Tomorrow: how we ended up relying on foreign glass.
