No, that’s not a Wine Curmudgeon joke – it’s a proposal by the man whose company makes Kendall Jackson chardonnay
No, this isn’t a Wine Curmudgeon April Fool’s post. It’s as true as it is unbelievable: A top U.S. wine executive wants to tax wine so that most of us can’t afford to buy it.
Rick Tigner, the CEO of Jackson Family Wines (home to the legendary Kendall Jackson chardonnay), told a wine industry meeting last week that California can no longer afford to produce cheap wine. Hence, the federal government should tax wine imports because “we need a better, higher pricing structure.” In other words, $10 European, Australian, New Zealand, and South American wine should cost as much as California wine — because, of course, California wine.
Yes, that was my reaction, too. Wine consumption is flat and young people don’t seem particularly interested in it. So the man who runs one of the most important wine companies in the country wants to make wine even more expensive? That makes tremendous economic sense, doesn’t it? Let’s price wine out of the reach of most consumers, and our business will be even more successful.
The story was so incredulous that I almost called the reporter who wrote it to ask him if something had happened during Tigner’s speech. Was Tigner struck by a bolt of lighting? Was there an invasion of body snatchers? Does he have one of those evil soap opera twins?
I wasn’t the only one who was dumbfounded. A European wine analyst told me she was surprised a leading wine company official would say something like that. A Napa wine marketer said it was just one more example of California arrogance — because, of course, California.
Tigner overlooked two things (besides the most basic laws of supply and demand):
First, 95 percent of U.S. consumers won’t pay more than $20 for a bottle of wine – perhaps my favorite wine statistic, courtesy of the Wine Market Council. So who is going to buy all the expensive wine that tariffs will give us?
Second, Tigner can complain that other countries tax California wine unfairly as much as he wants, but that’s irrelevant. U.S. wine exports measured by cases (mostly from California) are insignificant – barely more than 10 percent of what we produce each year. That’s because we drink almost all the wine made here, so there isn’t much left to sell to the French (assuming they would want it). In fact, U.S. wine exports are so trivial that two of our biggest markets are Nigeria and the Dominican Republic, countries not usually associated with wine culture.
So, no, taxing my $10 Gascon white blends, Spanish cava, and Italian red blends won’t save the California wine industry from itself. The only ones who can do that are part of the California wine industry, which tells us everything we need to know about how that will turn out.