NAPA VALLEY (KPIX 5) — The U.S. trade war with China is drying up wine exports from Napa Valley. Some wineries reporting sales to China have hit rock bottom as a new round of tariffs are expected on June 1.
At the family-owned Honig winery, sales to Asia make up most of their export business. “Cabernet is king in China,” said Stephanie Honig, the Director of Export.
But the king is being dethroned as the Chinese government is set to impose its third tariff in just over a year in retaliation to American tariffs on Chinese goods.
“The tariffs have affected us a lot. We’re at almost at double the price that we were at a couple of years ago,” said Honig.
The silver lining in all of may be that Napa Valley has the reputation of producing some of the finest wines in the world, but it’s coming to a point where quality can no longer compete with the value of wines from other countries.
“When you look at wines from Australia and New Zealand and they have a 0% tariff. So we make the best wines, but pricing is such a disadvantage it becomes really hard,” Honig added.
For example, Honig sold one thousand cases in 2016 to China. In 2017, that number was cut in half and just last year, not a single case sold. It’s not only at Honig.
Herta Peju, owner of Peju winery said, “Zero dollars this year, zero dollars the year before.”
Peju had dreams of making Peju winery the number one brand in China in order to pass on a thriving business to her daughters. She still holds onto hope that one day it will happen.
“I’m not going to be politically correct but if we change government maybe things will get better,” Peju said.
It’s expected that China will be the second largest wine market over the next ten years. Honig and Peju are staying optimistic that over time, they can deliver their wines to Chinese consumers at a competitive price.