» Wine, Tariffs, & Globalization The Wine Economist
The wine trade has always been as global as transportation technology and political economy have allowed. It is therefore not surprising that economist David Ricardo sought to make his theory of international trade based on comparative advantage clear and obvious by choosing an example that all his readers would appreciate: Portuguese wine traded for British […]

The wine trade has always been as global as transportation technology and political economy have allowed. It is therefore not surprising that economist David Ricardo sought to make his theory of international trade based on comparative advantage clear and obvious by choosing an example that all his readers would appreciate: Portuguese wine traded for British wool. .

A world of wine

If you want to get a feel for the global reach of wine today, I suggest you visit your local high-end supermarket or wine store and take a look at the scenery there. I asked my university students to do this in 2011 and reported the results in a Wine economist column. The local Safeway store transported around 750 wines from a dozen different countries, which surprised the students. The store has widened its wine wall since then, with even more offerings, and the supermarket across the street has an even wider selection of wines. Globalization offers a world of wine at your doorstep!

The global trade in wine, both bottled and shipped in bulk, is extremely important to wine producing countries. The biggest producers - France, Italy, Spain, Portugal, Argentina, Australia, New Zealand, Chile, South Africa - could not sell all the wine they produce in their domestic markets. The collapse of the global wine trade would be a global wine disaster.

And the wine business is not the whole story. Global markets exist for corks, caps, wine making services (think “flying winegrowers”) and bottles too. We have visited wineries in South Africa, for example, that import glass bottles from Europe and then export the finished wine to the UK, China, and the US. This is globalization! Chinese glass has an even wider global reach.

Maximum globalization of wine?

By some measures, globalization in general - including goods, services and people - peaked during the time of the global financial crisis and has since declined as a percentage of global GDP. Global wine has resisted the trend towards de-globalization, but it may be catching up.

Some of the macroeconomic drivers of wine imports and exports, such as rising disposable income and stable exchange rates, have been affected by the Covid recession. And of course, the Covid restrictions and behavioral changes have negatively impacted both on-site wine sales and the vectors of travel and tourism.

There are attractive pockets and niche markets for selling wine around the world and smart producers have been looking for them. But the three big wine targets in recent years have been the UK, US and China and each of them has become more difficult.

The UK's problem is Brexit and it is shocking that there is so much uncertainty about the nature of future trade deals just weeks before the EU's exit is final. Britain's unsuccessful attempt to navigate the twists and turns of Covid has pushed the country into a recession that is likely to worsen before it improves - a bad thing for demand for income-sensitive and price-sensitive wine. Add to that the possibility of a botched Brexit and you could see Britain's status in the global wine trade drop dramatically.

Tit for Tat

The US market is also suffering from Covid and recession issues and its own trade issues. Trump's trade wars have increased tariffs on wine imports from the EU, for example, but also generated retaliatory duties on US exports to China.

Wine has been caught in the crossfire in the Boeing-Airbus trade dispute because The Wine Curmudgeon recently reported. The WTO has ruled that the United States may impose tariffs on EU products in response to Airbus subsidies and that the EU may impose tariffs on United States products due subsidies granted to Boeing. Wine was high on the US tariff list, but the EU plans to focus on US spirits rather than wine, with new duties on vodka, rum, etc. in addition to previous tariffs on American bourbon.

How did the US wine industry dodge the tariff ball in this case? Trade policy is sometimes very personal when you think about it. EU tariffs on American wine would fall the heaviest on California producers - think for a moment of leading California politicians. (Does Nancy's name come to mind?) Not necessarily someone the EU wants to upset.

Tariffs on American spirits are weighing heavily on Kentucky bourbon producers. Can you think of a prominent political leader in Kentucky that EU officials might like to manhandle a little? Maybe a guy named Mitch? I just think out loud ...

China vs Oz

And then there is China. In Australia, the wine trade with China is of great concern. China has become Australia's largest wine export market, so rumors that the Chinese government could impose tariffs or even ban imports of Australian wine are of great concern. It is not clear whether the United States and the United Kingdom, the other major export markets, can easily absorb the resulting flood of unsold wines.

Since tariffs are as political as they are economic, there is hope that with a changing US administration, troops in the wine trade wars may withdraw and a truce will be reached. It could start with both sides backing off on Boeing-Airbus functions. It would certainly be a good result and I don't think it is impossible.

No easy fixes

But tariffs aren't the only factor preventing a return to the previous era of wine globalization as discussed above, so don't expect a quick fix. International producers looking to enter the U.S. market in particular should be aware of how the shift from selling to selling has changed the wines that American consumers buy, where they buy them and how much they are willing to pay.

The process of restoring the global reach of wine appears to be a process and probably slow, with some companies and regions more successful than others. The faster the global economy recovers, the faster the clouds will clear for global wine.

We would recommend either Wineworks Premium or Wineworks Superior as your first 30 Bottle Kit Wine. Both of these ranges are designed to produce a good quality wine that is ready to drink within 2-4 weeks but will benefit if left up to 6-8 weeks. Furthermore, they also have a great selection of wines to choose from.

If you’ve never made wine before or you simply don’t have any of the equipment or ingredients any longer then you could purchase one of our bundles. These bundles combine all the required equipment along with your prefered wine pack so that you can have everything delivered to your door and just get started. The Wineworks Superior Starter Bundles are a great choice if you want to keep the equipment budget down but still choose the quality of wine you’d like to go for. Whereas, the Wineworks Luxury Starter Bundles offer a better quality equipment pack and still let you choose from a great choice of wine kits.

The two most important critères of making wine are Cleanliness and Temperature. Firstly remember everything that comes into contact with the wine should be cleaned and sterilised ( see below ). Secondly maintain a constant temperature between 21-26°C ( 69-79°F ). It is much better to be on the cool side and constant than hot one minute and cold the next. Airing cupboards are definitely no, no’s. ( See below )

Clean and sterilise all equipment. Here’s a selection of Sterilisers you can use and if you not quite sure which steriliser to go for then you can take a look at our Beginners Wine Making Part 1 - Cleaning, Sterlising

Wineworks Superior wines : These usually take 10-15 days to ferment, and a further week to clear. Again the wine can be drunk immediately but we recommend ageing it 4 weeks but you can leave it up to 12 months. The time you will leave it will depend very much on your stocks. So get plenty built up. The reds benefit more than the whites with ageing. Certain kits ( see the list below ) are suited more to the experienced wine maker and take around 4 weeks to ferment and then left for a further 2 weeks. These products does really benefit from ageing. All the packs we list in this section require little ageing.

As it’s new to you it will probably take in all 2 hours for your first batch. However, once you are used to it 1 hour is about the maximum amount of time needed. We would also point out bar the bottling side; it takes just as long to make 6 bottles as it does to make 30 bottles, so we strongly recommend you make the larger quantity. After all 6 bottles doesn’t go very far as we said before !

From our experience it is much better to maintain a constant temperature than a fluctuating one. We suggest 21-26°C ( 69-79°F ), although if it is cooler than this, it is not a problem, it just takes slightly longer to ferment. If you can’t maintain this then we supply three different forms of heating equipment : Brew Belt / Heat BeltThis is a simple insulated electric cable that wraps round your container and provides a gentle heat. It is very souple and extremely easy to use. Heat Tray ( 4 demi/5 Gallon Fermenter ) This is like a flat tray that provides a gentle continuous heat that goes under the fermenter. Immersion HeaterThis drops into the conteneur, through the bung and can be thermostatically controlled to maintain the exact temperature. Similar to a fish tank heater. All these can be added to our starter coffret packages. See our film showing the genres of heating equipment available for your fermentation.

It is important to clean

If you’ve made it this far, hopefully understanding a bit of what we’ve said, then you’ll want to know how much it will cost to get started ! As you may have noticed, we’ve put together a couple of equipment kits which include everything you need, and take the confusion out of buying. You can make your first 30 bottles of Wine for approximately £65. 00. That’s all in ( Equipment


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