Trump Tariffs: Why I’m Waiting for Godot

February 17, 2026 By in Uncategorized 5 Comments

Sometimes I feel like one of the characters in “Waiting for Godot,” Samuel Beckett’s famous play where nothing much happens and yet suspense somehow builds until … nothing happens again. Whoever Godot is, he never makes an appearance. The wait goes on and on.

It’s a little like waiting for shoes to drop. One … one … one … when will that second shoe hit the floor?

When is a Tax not a Tax?

The object of my frustration is the Trump tariff case that is being considered by the U.S. Supreme Court. The tariffs apply to and distort trade for thousands of products, including wine.

The basic issue is whether the tariffs of 2025 were legally implemented. Tariffs are a tax on imports that discourage imports and raise revenue (about $30 billion per month during the last half of 2025). The Constitution requires that revenue acts must originate in the House of Representatives and therefore cannot be imposed by edict from above. The architects of the Constitution had understandable concerns about taxation without representation, as you may remember from your history classes.

Congress has given the President power to “regulate” international trade in some circumstances, but tariffs are not specifically mentioned in this regard. The law is more commonly applied to trade embargoes, which prohibit trade, but don’t generate revenue of any sort.

Do the tariffs tax or do they regulate? The Administration argues for regulate, but President Trump inconveniently brags about the revenue haul. Experts speculate that the Supreme Court will strike down some but not all of the tariffs on the basis of the regulate/revenue distinction. Stay tuned.

When Will The Supreme Court Rule?

This is the Godot question because we have already been waiting for a while for an answer. The ruling may be released later this week (the date February 20 is often mentioned), but there is no set timetable. The wait could extend into the spring.

How will the Trump Administration respond?

If the Supreme Court rules against some of the tariffs, Administration officials have suggested that they will act quickly to re-impose them under different laws with different justifications. Such action is likely to result in legal action, of course.

This means that the final status of the tariffs could be tied up in the courts for a long time, extending the Godot problem into 2027 or beyond. So February 20, if that turns out to be the Supreme Court decision day, may not be the end of the play but merely the start of the next act.

Follow the Money

If a tax is improperly levied it should be refunded. I’m not a constitutional scholar, but that seems a reasonable principle. So even if improperly imposed tariffs are replaced by new proper ones (if that happens), it seems like the previous payments should be refunded. Do you agree? Or is this some sort of “finders keepers” situation where the government keeps the revenue it should not have collected in the first place?

Making those who bore the burden of the taxes whole is not necessarily an easy task, since costs were often passed on through the value chain. In economic terms, it is a difference between legal incidence of the tax (who wrote the check to the government) and economic incidence (who paid the ultimate cost). If you paid more for a car because of tariffs on steel, aluminum, or imported parts for it, or if you had your hours cut at a factory because of declining profits or sales due to higher costs, then you suffered the economic incidence. Don’t hold your breath waiting for a tariff refund check.

The problem is made more complicated by the vast sums involved. If the government is forced to issue bonds to borrow the refund money, the impact on interest rates and credit availability could be jaw-dropping. I expect the refunds, if there are any, will be tied up in court, too.

Who Really Paid the Tariffs?

Some of the people who favor the tariffs act as though they are a tax on foreign producers or governments, but in fact the tariffs are mainly collected from U.S. firms who then attempt to pass them on to clients and customers or bear them as higher costs. There is only a foreign burden if imposing the tax drives down world prices, spreading the impact abroad.

Last week the New York Federal Reserve Bank research department released a study that found that 90 percent of the tariff burden fell on domestic consumers in the form of higher prices and on domestic firms in the form of higher costs. This is actually a bit lower than previous studies that put the figure at 96 percent.

Much of the burden of the tariffs, however, takes the form of what didn’t happen, not what did, because taxes both raise price and reduce quantity exchanged. Thus a full accounting of the burden must include the lost utility of the final goods that were not imported because of the tariff costs and the lost value of U.S. exports that didn’t happen because imported parts and raw materials were too costly or not available. One reason that the inflation impact of the tariffs so far is so modest is that inflation only measures what did happen while much of the real burden is related to what didn’t happen.

So what’s not happening is important. That’s a real Waiting for Godot situation.

Tit for Tat

But we won’t really know the score until we see how foreign governments and consumers decide how to react to the evolving tariff situation. Checkers is one of the first board games that children learn to play and they quickly learn about tit for tat and the need to think several moves ahead. How will gains and losses be distributed when the dust finally settles?

So there is a long road ahead of us before we know what will happen about tariffs. I hope the insiders are right and that the Supreme Court will get the process started on February 20.

Until then I’ll be here … waiting for Godot.

Five Things We Learned at the 2026 Unified Symposium

February 10, 2026 By in Unified Wine & Grape Symposium, wine, wine markets Leave a comment

Sue and I have recently returned from the Unified Wine & Grape Symposium in Sacramento. The Unified is North America’s largest wine industry gathering. It is a big conference, so we employ a divide-and-conquer strategy. Sue focuses on the big trade show, I see what’s going on at the sessions, and we both talk with everyone we can in the hallways and receptions.

We don’t have a polished report to present, but here is a collection of field notes that capture the essence of our experience this year.

  1. Stress Test

Just about all of the 1000+ people who attended the State of the Industry session seemed to have one of these 5-inch flexible “stress bottles,” which they squeezed for relief during tense moments. Kudos to sponsor Vintage Crop for helping us recognize that we are in difficult times and we need to find positive ways to channel our anxiety and move forward.

Attendance was somewhat lower this year — understandable given the economic situation — but the overall mood was more positive than you might expect. No one fooled themselves into thinking that good times are around the corner, but the data seem to suggest that the market may stabilize in 2027 or early 2028. What’s it going to look like then? What can we do now to prepare for what lies ahead? Those questions dominated the discussion.

Squeezing the stress bottles might have helped everyone concentrate a bit better on the parts of the situation that they can control, even if there is still much uncertainty.

2. Ask Your Doctor

The Tuesday Keynote Luncheon featured a conversation about wine and health between Drinks Insider’s Felicity Carter and Laura Catena, head of Argentina’s Catena winery and, significantly, also a medical doctor. Catena somehow managed for many years to be both a winemaker in Mendoza and an emergency room physician in San Francisco. I wish I had half her energy, discipline, and focus.

There is a lot of information, misinformation, and controversy about the health effects of wine. Many in the wine business complain about a tilted playing field because they are not permitted to make positive health statements about wine while, on the other side of the debate, anti-alcohol proponents can say just about anything.

The Carter and Catena presentation was packed full of facts and analysis. The large luncheon audience is certainly much better informed now about the risks, trade-offs, and benefits of moderate wine consumption.

But is there a good way to get the message out to the broader consumer market? Of course, according to Sue. Dr. Catena advised consumers to consult with their doctors instead of the internet. There are people with particular medical circumstances or family histories who really shouldn’t drink any alcohol at all. For the rest of us — well, it depends on a lot of things including what we drink, how, and how much. A medical professional who knows the facts and the personal circumstances is best positioned to advise on this as with other health matters.

They also suggested looking beyond scary headlines. Good medical studies are complex, and require the reader to dive deeply into the methodology,  the assumptions and biases that may be present, and the results.

3. It’s a Wine World After All

You hear lots of international languages and accents at the Unified. Spanish, of course (see below), French, Italian, Portuguese, British, Australian, New Zealand, South African, and more. Wine is a global industry and the Unified is the largest industry gathering in the western hemisphere. The world comes to Sacramento every year for this big event.

Sue loves to walk the trade show floor connecting with old friends and looking for the new and surprising. Two new booths stood out this year. What was ITA (the Italian Trade Agency) doing at the Unified? We often work with the ITA when they are promoting exports from Italian wineries and regions, but the Unified trade show isn’t where you go to sell wine to consumers; it’s where you go to sell equipment and services to winegrowers and wine makers. And that’s why the ITA was there. Italy is an important wine technology center (as we learned when we attended SIMEI a few years ago), and the ITA was there to support those businesses.

Sue was also surprised when she stopped to inspect some of the most beautiful wine labels she’s ever seen and then discovered they came from China. They are the work of CIR Label, a custom label creator for global brands. The business was founded by designers who had trouble locating label makers who could realize their visions and now it focuses on making clients’ visions come to life. CIR stands for Creativity Into Reality and the creativity was clearly on display. You can see some sample labels here, but the photos don’t really do them justice because the textures of the final product don’t come through very well.

They say they can deliver labels about a week after final approval. Amazing.

The Unified was a bold investment for CIR Label. Sue asked if they had any existing U.S. clients and the answer was no. The booth was pretty busy when we were there, which is a good sign. I hope they come back next year and we can see how their U.S. business has developed.

4. Spanish Spoken Here

You won’t be surprised to know that the U.S. wine industry is multilingual. Spanish is an important language in the vineyards and cellars  — and really at every stage and level of the industry. Since the Unified is by and for the entire industry, the development of Spanish-language programming has been a high priority.

The Spanish programming is concentrated on Thursday morning and we heard that there was some anxiety about the gatherings because of the possibility of ICE activity around the convention center. These are tense times. Would people stay away? Fortunately, we are told, participation was very strong and the programs were successful. That’s a good thing because the future of wine needs all the help it can get from all the talented people it can attract and foster. Spanish (and many other languages) spoken here for sure.

5. Heard on the Trade Show Floor

The trade show covers every aspect of the wine industry, from the ground up to the finished product. Attendance here seemed to be lower than in previous years; an organization that sent 20 representatives in the past may have sent only ten to 15 this year. The enthusiasm for the show, however, was in full force.

Robotics, computer systems, and other technologies for both the vineyard and wine production continue to be large presence. Like other agri-businesses, the wine sector is facing worker shortages and increasing labor costs, plus on-going concerns about environmental impacts and water consumption (among a gazillion other topics). Whatever you might need, someone at the trade show will have a technology for it.

In recent years, a few trade show  exhibitors included technology for non-alcoholic and low-alcohol wines; not so much this year. Maybe it is still too early to know what lies ahead for NA and LA wines.

And in a year when vineyard owners are pulling up vines, there were several purveyors of plants doing business, an indication that growers are thinking about the future even in difficult times.

This article only scratches the surface of the 2026 Unified Symposium. Reading about it isn’t enough. If you are seriously interested in the U.S. wine industry, you’ve simply got to go and experience it yourself. Mark your calendar for January 26-28, 2027.

Vinho Verde and the White Wine Resurgence

February 3, 2026 By in Portuguese wine, wine, wine markets 2 Comments

We seem to be in the midst of a white wine resurgence. There has been a shift to white from red in many markets around the world. Certainly, it is happening here in the U.S. The French market has seen sales momentum move from red to pink to white. Even in Asia, I am told, the old orthodoxy that wine’s first duty is to be red is changing. Aromatic white wines (which seem so well suited to some of the cuisines) are getting attention.

There are certainly many reasons for the “red shift” to white. Affordability is probably part of the answer, since white wines are often cheaper than reds. Recent NIQ data published in Wine Business Monthly, for example, puts the average price of white wines sold through U.S. market channels at $8.48 per bottle. The average price for red wine is almost 25 percent more at $10.54.

Case Study: Vinho Verde

Recently Sue and I have been taking a closer look at Vinho Verde, the popular Portuguese white wine, and we think it might provide some insights into the white wine situation. Vinho Verde isn’t a grape variety (although a lot of people probably think that); it is a region in northern Portugal that has produced crisp white wine for hundreds of years.

Vinho Verde is a wine with many faces, which is part of its appeal. It can be an inexpensive daily drink. The Broadbent NV Vinho Verde, for example, has been a popular brand in the U.S. for nearly 20  years. It is both good (Decanter 91 points) and, with a retail price hovering around $10 per bottle, a very good value. No wonder it shows up frequently on both “best” and “best buy” lists. You can usually find a bottle in The Wine Economist wine fridge, especially in the warmer months.

But there is more to Vinho Verde than good value, as we learned a few years ago on a trip to Lisbon. A friend guided us to Cervejaria Ramiro, the popular seafood restaurant, and recommended a particular Vinho Verde made from the Alvarinho grape variety. It might have been the grape or the maker or the ridiculously delicious Ramiro food, but the result was an elevated experience that told us there was more to learn about “green wine.”

Take the Next Step

Now some producers are taking the next step by focusing on single-variety Vinho Verde wines from native grapes. The idea is to show another face of Vinho Verde, with distinct characteristics and greater complexity.

We recently tried two wines that convinced us that this is a promising path to follow. The first was the Casa da Tojeira – Tojeira Arinto 2023, which is made entirely from the native Arinto grape variety (it is more common to find blends of Loureiro, Avesso, Azal, Arinto, and other grapes). The wine was well balanced and developed nicely in the glass as it warmed up. An excellent introduction to this style. Casa da Tojeira makes a full line of white wines that explore every aspect of Vinho Verde. I hope we have an opportunity to explore more of their wines in the future.

Next came a bottle of Márcio Lopes – Pequenos Rebentos Vinhas Velhas Loureiro 2022, made from the Loureiro grape variety. The wine was intense  with complex aromas and flavors. I am not sure I would have guessed Vinho Verde if I didn’t already know it. It was completely different from anything I can remember tasting before. Now I want to taste more wines like this.

Loureiro is Portuguese for “laurel” according to my reference materials, and if you think of the aroma of a laurel hedge and then add in orange and acacia blossoms and maybe some peach or pear, you begin to sense the nature of this wine. It can be so intense, in fact, that it is often blended with other grapes to tone it down a bit. Quite an experience.

The thing about these next level wines is that the price premium to move up is relatively small. High-end Vinho Verde like these sell in the $20 to $25 range. This fact is perhaps another reason for the shift to white wines. Red wines in this price range often don’t deliver the complexity and distinctiveness that these white wines provide.

I don’t know if the “red shift” to white wines will last, but it seems like a good idea to take advantage of the opportunities to try new wines.

The Greatest Wine in the World?

We cannot write a column featuring Vinho Verde without telling a story about the “greatest wine in the world.” Sue and I were in Evora, Portugal, for a conference presentation and we were having dinner with a group that included many producers. We were enjoying some Vinho Verde and I congratulated the winemaker on his delicious wine.

He shook my hand enthusiastically and proclaimed that Vinho Verde was the greatest wine in the world. It was good to drink, he told me, and good to grow and make because vineyard yields were relatively high, which generated profitable margins, too. It was green wine in the economic sense. He loved it.

Who am I to disagree? Maybe Vinho Verde really is the greatest wine in the world!

Who’s Gaining Ground in the U.S. Wine Market? Georgia, Naturally

January 27, 2026 By in emerging wine regions, wine, wine history 2 Comments

The opening scene of season eight episode one of the insanely popular Netflix series “Somebody Feed Phil” finds our hero, Phil Rosenthal, breaking a sweat in a Georgian vineyard, trying (and failing) to keep up with the women who are working around him.

Although much of the action takes place away from the vineyards in Tbilisi, the Georgian capital, wine is never far below the surface and it often takes center stage. No surprise. Georgia’s traditional amber qvevri wines symbolize the qualities of Georgian people and culture, rooted in tradition, drawing on deep reserves of resilience and determination. Somebody Feed Phil is really a show about family (don’t you agree?) and wine is integral to Georgia’s family life.

You might be surprised to find Georgian wine on Netflix. If so, you would probably be even more surprised to learn that many of the show’s viewers probably reacted by saying, Georgian wine? I’ve tried that. And I like it.

Georgia, Naturally

Georgian wine is on the rise here in the U.S. market, albeit starting from a relatively small base. Wines of Georgia reports that Georgian exports to the U.S. have increased at a 15.5 percent compound annual growth rate from 2021 to 2024. That’s impressive growth under any circumstances, but especially noteworthy given the overall decline in the U.S. market. What’s behind this phenomenon?

Part of the answer is that Wines of Georgia and its partners are working very hard to tell the story of Georgia, with its 8000 years of wine history. The current campaign, “Georgia, Naturally” draws inspiration from Georgia’s reputation for natural wines (made in the traditional qvervi clay vessels). It does not hurt that images of Georgia highlight the qualities that make it a popular nature and adventure tourism destination.

Wines of Georgia is investing heavily in education programs in the U.S., working to bring Georgian wines and their stories to dozens of events across the country. That’s why I think that many Netflix viewers won’t be discovering Georgian wines for the first time.

Hurdles and Headwinds

Distribution is a major hurdle for imported wines and that is perhaps especially true for small-production wines from unexpected places made with unfamiliar grape varieties. Some Georgian producers have apparently addressed this dilemma by forging partnerships with Total Wine & More through its Winery Direct program.

Our local Total Wine store lists 41 different Georgian wines (most are Winery Direct products) in its inventory. Isn’t that amazing? There is a particular aisle in our local store that features wines from off-the-beaten-path areas and Sue jokes that it has become the Georgia aisle in recent months. Being on the wine wall doesn’t guarantee success, but it is hard to sell what isn’t there.

Sue and I visited Georgia a few years ago for a United Nations wine tourism conference. We arrived full of questions and with a few doubts, but we came away persuaded (you can read about our adventures here). We were impressed with many of the qvevri wines because of the tension we sensed in each glass. They really tasted alive.

But we also learned that there is much more to Georgian wines than we expected, both in terms of style and the many (hundreds!) of indigenous  grape varieties that, like Georgia itself, have survived through the centuries. Resilience is an important Georgian quality.

Bubbles, Amber, Red

Sue and I recently hosted a Georgia-inspired dinner for friends who have a particular love for and appreciation of these wines. We tasted three wines. We started with a Mtsvane Estate Pét-Nat from Kakheti, a bright sparkling white wine. This is the second Georgian sparkling wine we’ve sampled (both from Mtsvane Estate) and both were delicious.

Next came the 2023 Vazisubani Estate 3 Qvevri, a blend of the indigenous Rkatsiteli, Mtsvane, and Kisi grape varieties. Fermented and aged in qvevri, this “white” wine is really amber from the extended skin contact and a bit of a trickster. The color suggests strong flavors but the wine is quite subtle in the glass.

The hit of the evening was the 2021 Vazisubani Estate Saperavi Qvevri. Saperavi is the Georgian grape that is probably best known here in the U.S. market (thanks in part to Finger Lakes pioneer Dr. Konstantin Frank, who introduced the  Saperavi grape to the U.S. many years ago). This wine was the perfect complement to our meal and, because Vazisubani Estate is part of Total Wine’s Winery Direct program, it is widely available. (Our particular local store, however, was “sold out” when we last checked.)

Saperavi is a good place to start, but the amber qvevri wines might be where you want to finish because these seem to be the wines that Georgians drink most of all (as you can see in this video trailer for a film called “Our Blood is Wine.“)

 

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But wait. There’s even more!

Georgia was the focus of season six, episode three of  the popular video series “V is for Vino.”  You can view the episode here or on the V is for Vino YouTube channel.

Dark Clouds and Silver Linings

January 20, 2026 By in Unified Wine & Grape Symposium, wine, wine history, wine markets Leave a comment

I have been busy getting ready for next week’s “State of the Industry” session at the Unified Wine & Grape Symposium in Sacramento. The theme of the Unified in 2026 is “Reframe the Narrative.”  There was a lot of bad news about the wine business in 2025. Where are we headed in 2026 and beyond? How can we get out of this rut?

This is my 15th consecutive year on this panel and I thought it would be interesting to look back at my first presentation, which was in 2012. It took some fiddling to find the files, but here are the slides I presented back then along with my unedited and very rough presentation notes.

If you take a few minutes to read through this material, you’ll notice that while the wine business environment was very different back in 2012 in terms of the headlines, many of the detailed concerns were similar to today. Margins were tight then, for example, and tight now, too, but for very different reasons.

Economics is called the dismal science, so I suppose that dark clouds and silver linings are always on the cards. The more things change the more they stay the same in that regard. I think my final point (Boulding’s Law) has held up pretty well, don’t you? Here’s my 2012 report.

The State of the Wine Industry 2012: A Global Perspective

I study globalization and wine so I am here today to start off this session with a global perspective on the state of the industry.

Wine has always been a global industry, or as global as trade barriers and transportation costs allowed.

It is not an accident that when David Ricardo wrote his economics textbook almost 300 years ago, the example he used to illustrate international trade was the wine trade.

It has always been important to have a global perspective on wine but now more than ever. The wine world has become a tight little world where international and global effects cannot be ignored.

Today’s session will have a good deal of good news — a lot more than in some recent years. As an economist, however, it is my job to channel Alan Greenspan back when he warned about the dangers of “irrational exuberance.”

Silver linings do not always come wrapped in dark clouds, but sometimes they do. And it is important to understand them and to think strategically about them.

A Dangerous Phase

One silver lining is growth. The US economy should continue to grow in 2012, although perhaps more slowly than in 2011. And the wine market should continue to recover.

But the dark cloud that surrounds this is the global economy, which has entered a “Dangerous Phase” according to the International Monetary Fund. The global economy will grow this year but more slowly than before and with the largest single economic area — the European Union — likely falling into recession.

GLOBAL GROWTH SQUEEZE

And so economic leaders will be desperately looking for growth … and where will they find it? Consumers do not seem able to carry the load, especially with the housing crisis still unresolved.

Business investment is also inadequate due to poor future expectations and tight credit market conditions.

Government is handcuffed by its own debt and politically gridlocked as well.

So this leaves exports and we can expect nations to push for every competitive advantage for their products to try to grab the growth they need.

EXCHANGE RATES

This explains why exchange rates will be especially volatile in 2012. The US has successfully run a secret “weak dollar” policy for the past few years and now other countries are following suit. Competitive depreciations or currency wars are likely as more countries try to use exchange rates to grasp the growth they desperately require.

WILD CARDS

There are many wild cards that could turn dark clouds into silver linings or vice versa. The most troubling wild cards are the US and the European Union. Will US growth stall? And how will the election affect economic policy?

The questions are even more serious for Europe. How deep will the recession be and will Germany be part of it? And, of course, will the Euro survive in its present form? Big questions.

A Tight Squeeze for Wine

This combination of silver linings and dark clouds will create a Tight Squeeze for the wine industry. Let me explain how these pieces fit together.

A TIGHT SQUEEZE FOR WINE

These global economic factors in combination with the particular dynamic of the wine industry produce the conditions for what I am calling a Tight Squeeze for wine.

INCREASING COMPETITION

Competition is increasing all along the supply chain. There is more competition for wine grapes and bulk wine and more competition as well for those markets and market segments high decent margins.

THE BIG SQUEEZE

Wine maker margins will feel A Big Squeeze.

You will hear a lot today about the competition for wine grapes and bulk wine. Short market conditions are pushing up prices in many key market segments.

Wine producers naturally want to pass along higher costs to consumers but this is problematic in many market segments. Slow economic growth combined with buyers who see discounted prices as the new normal means that some producers will be squeezed out of some markets because of shrinking or even negative margins.

The squeeze will put increased emphasis on lower cost alternative sources of grapes and bulk wines and on those brands and market segments where margins can be maintained or perhaps even increased.

CURRENCY SHIFTS

The exchange rate shifts I talked about a minute ago will impact the Big Squeeze in several ways, creating both silver linings in the form of lower import costs and also dark clouds due to greater import competition.

The dollar is likely to continue to increase in value, but exchange rates are the most difficult thing to predict in economics and it is impossible to tell for sure how individual currency values will be affected. There will be silver linings for some, I’m sure, and clouds for others.

WILD CARDS: CHINA

There are many wild cards in the Big Squeeze scenario, but the biggest is certainly China. Economic growth will slow this year in China, but how much? The worst case scenario would be for Europe’s recession to be deeper than expected and the US recovery to stall. In this case China’s growth could fall dramatically.

How would this affect wine? Well, the direct effects would be rather small I think – slower growth in an otherwise rapidly growing market.

But the indirect effects would be significant. If China’s industrial production slows so would its raw material purchases, which would hit the Chilean Peso, Australian dollar and perhaps the South African rand particularly hard.

What’s the Best Way to Prepare for the Future?

And finally I suggest for your consideration Boulding’s Law, named for Kenneth Boulding, the great economist. Boulding once conducted a study of the history of the future — he looked back in history to see what people thought would happen in the future and then he fast forwarded to find out if they were right.

His conclusion. When the future finally came around, people were generally surprised — even when it was exactly what they expected.

Hence Boulding’s Law: the best way to prepare for the future is to prepare to be surprised!

The Deion Sanders Theory of Wine Markets

January 13, 2026 By in Supply and Demand, wine, wine markets 10 Comments

Cyclical or structural? That was one of the most-asked questions in the wine business when everyone gathered for the Unified Wine & Grape Symposium in Sacramento last year.

Was the decline in sales due to a structural change? There were a lot of structural shift theories including generational change (bye-bye, boomers), heightened health awareness, affordability (a hot term right now), and more.

Other analysts, however, viewed the problem more in cyclical terms. The wine industry experiences periodic booms and busts. And consumers go through life-cycles, drinking less wine when young, more as they mature, and then less again when they start to “age out” of the market. Maybe we are just caught in the down-cycle and things will turn up if we give them time.

The Deion Sanders Theory: Both

A year later the answer looks clear to me. Structural or cyclical? The answer, which I am stealing from a 1995 Pizza Hut television commercial starring Deion Sanders and Dallas Cowboys owner Jerry Jones, is simple: Both. [Click on Deion’s image above to see the video.]

This looks to be the most serious global wine industry crisis in at least a generation, so maybe it is no surprise that it isn’t the result of a single force, but the “perfect storm” phenomenon. Certainly all of the structural shift concerns are at work and warrant attention and I’m not sure we have fully figured them out yet.

But this year attention has turned to the cycle problem in part because we can see it happening right in front of our eyes. But can we do anything about it? The problem is that the existence of large inventories has discouraged wineries from buying grapes and making wine. Vines are being grubbed up in California and around the world in response to the production decline.  Inventory cycles may even result in a shortage of wine grapes in a few years, which will be a strange sight after the recent surplus. A shortage? Read on.

Econ 101 and All That

The role of inventories in the phenomenon of business cycles was part of the syllabus when I first studied macroeconomics. The logic went like this:  Suppose there is an exogenous shock that reduced overall demand (see structural shift above). This leaves businesses holding unplanned excess inventories. They respond by reducing new orders (which deepens the decrease in demand) until stocks are depleted.

One characteristic of decentralized markets, and the factor that tends to make cycles repeat themselves, is the phenomenon of overshooting. When firms draw down inventories, they tend to wait too long to stop, creating a shortage. And when they build up inventories again they overshoot on the up side, too. This isn’t a strategy. It’s just what happens when you have to guess where the bottom and the top of the cycle are. And that’s a serious concern now, that today’s surplus could turn into a shortage in a few years.

Stocks and Flows

Right now we have large inventories in many parts of the wine market. Some wine producers have so much unsold inventory from previous vintages that they made very little (and sometimes none at all) in 2025. They won’t fully return to the grape markets until those surplus stocks either sell out or “age out.”

And, to be honest, some wine consumers have accumulated pretty big inventories, too, and don’t really need to buy a lot of wine in the short run. Wine production (which economists call a flow variable) won’t start to rise until inventories (a stock variable) have fallen for consumers, retailers, distributors, and producers. When that will happen is hard to predict, but it is the biggest question confronting the industry today.

The impact of high inventories and relatively low sales is a wine problem, but not just a wine problem. Jim Beam, the famous Bourbon producer, recently announced that it was pausing production for a year (a year!) to allow time for excess  inventories to decline to a sustainable level. And apparently there is a glut of Scotch whisky, too.

What Would Deion Do?

What will the market look like when stocks and flows are back in equilibrium? Not like it did before. That’s because of the structural shifts that have taken place. The U.S. wine market will be smaller and different, but it will still be there.

So what should we do? Focus on the structural elements as many did last year? Or try to guess how the cycle will play out and develop strategies accordingly? I don’t know what you are going to do, but I think I can guess how Deion would answer that question.

Both.

2026: The Year to Change the Narrative about Wine

January 6, 2026 By in wine, wine markets 3 Comments

Welcome to 2026. It promises to be a year filled with both celebration and anxiety. Anxiety is understandable given the many unpredictable political and economic forces at work both here in the United States and around the world.

2026 is a bit like this illustration from the Economist newspaper’s annual review, The World Ahead 2026. The ball’s in play and anything could happen: war, peace, boom, bust, success, failure. It’s (almost) enough to drive you to drink something stronger than wine.

A Year to Celebrate?

Anxiety is easy to understand. But what about the celebrations? Well, several important anniversaries will be celebrated in 2026, some with more enthusiasm than others. Economists like me, for example, will celebrate the 250th anniversary of the publication of Adam Smith’s book An Inquiry Into the Nature and Causes of the Wealth of Nations. Smith’s Invisible Hand has inspired many to embrace the power of markets and provoked others to oppose them, but its influence is difficult to deny.

2026 is also the 250th anniversary of the signing of the Declaration of Independence in Philadelphia, an act that gave birth to both the United States of America and to a set of ideas with global implications.

1776 was quite a year. Wealth of Nations and the Declaration of Independence fundamentally reframed how we saw the world.  We are still feeling the aftershocks of those events today.

Reframing the Narrative of American Wine

2026 is the 50th anniversary of an event that sent shocks through the world of wine: the 1976 Judgment of Paris, which has been documented in George M. Taber’s famous 2005 book and popularized in a fictionalized 2008 film called Bottle Shock.

Taber, a Paris-based reporter for Time magazine, got wind of an unusual event. A panel of French wine experts was going to compare flights of California red and white wines with roughly similar French wines. The judging would be blind and the result was sure to be a triumph for the French. But if even one California wine did pretty well, there might be a story in it. So California-born Taber got the editorial OK to check it out.

The result, as you probably know, was indeed newsworthy (Taber got the scoop because he was the only journalist there). The top red wine and the top white wine were both from California. What a scandal!

If you analyze the data of the judging closely, as economists like me are prone to do (see “Wine by the Numbers”), the victory of Team California over Team France is not completely clear. But this much is very clear. The Judgment of Paris changed the narrative about California versus France and New World versus Old World.

Fresh Thinking Spreads

The biggest change was in how Americans thought about their own wines. How could the French be wrong about wine? Maybe the critics who had been promoting California wines (with limited success) were right? Interest in California wine, already on the rise, was magnified and accelerated.

The French were also impressed. Maybe not the average French wine drinker, but certainly some people at the top of the industry. Investment by French winemakers in California vineyards and winemaking facilities, already on the rise (Domaine Chandon was founded in 1974), was magnified and accelerated.

As Taber explains in Judgment of Paris, new thinking spread to wine regions all around the world. If California wines are actually very good, maybe we can learn something from them to make our wines world-class, too. The rise of quality winemaking, already under way in many regions, was also magnified and accelerated.

Time to Reframe the Question Today?

It is never easy to change the way people think about the world, but the situation today is more difficult in some ways than ever before. When Taber wrote his Judgment of Paris story (and when Morley Safer made his TV report on the French Paradox) mass communications were much simpler. There were a few magazines that millions of people read every week (Time and Newsweek) and a few TV programs that pulled in viewers every week (60 Minutes).  Do you think a magazine article or television program would have the same effect today?

The news cycle was slower in the past, too. An idea might be talked about and turned over in discussion for days or weeks (or more). Ideas today are chewed up and spit out pretty fast. I’m not saying that it is impossible to make a lasting impact, but it is an upstream swim all the way.

It may be hard to change the narrative about wine, but that’s not a reason to give up on the idea. “Reframing the Narrative” is the theme of the 2026 Unified Wine & Grape Symposium, North America’s largest wine industry meeting. I hope everyone who comes to Sacramento at the end of the month is ready to pitch in.

Three Wine Economics Questions for 2026

December 30, 2025 By in Economic impact, wine, wine markets 3 Comments

The year is almost over so it is natural to start looking ahead to 2026. Here are three questions relevant to the wine industry to keep in mind as you pull corks to celebrate the new year.

Question One: Are We There Yet?

It is no secret that 2025 has been a tough year for the wine business both here in the U.S. and around the world. There are bright spots, of course, but the thousands of acres of wine grapes that went unharvested this year are a clear sign of trouble as is the continuing removal of vines and conversion of vineyards to other uses.

Some wineries had enough wine in inventory to cover sales and made little or no wine in 2025. The conventional wisdom is that the industry is not going to begin recovery until that inventory of unsold wine is drawn down (or ages out and becomes unsaleable).  Will we reach that point in 2026? Or will this be another bitter vintage for growers, especially those without firm contracts?

It is not something we talk about much in the U.S., but it would speed things along a bit if the government were to consider temporary crisis distillation programs or other policies to help reduce the overhang and bring the wine market into balance. Yes, you can go too far with programs like this and encourage “zombie” vineyards and wineries that exist only because of government support. No one wants that. But there is a useful short-term adjustment role for such programs, too, and it would help draw a line under the current situation and allow the industry to move forward.

Question Two: Will They or Won’t They?

The Supreme Court will soon rule on President Trump’s “Liberation Day” tariff regime. Will they declare them a valid exercise of presidential power? Or will they rule that many of the tariffs violate constitutional provisions and must be rescinded?

This question has importance that goes well beyond the wine industry, but wine certainly has a dog in the fight. The full impact of the tariffs will start to be felt in 2026 through higher costs and disrupted supply chains, but some of the biggest impacts are already here, transmitted through the political system, not markets. I’m talking about the loss of our largest wine export market, Canada, in response to U.S. tariffs on Canadian products. Tariffs are often a tit-for-tat situation and U.S. wine is suffering from the retaliation effect.

There are many follow-on questions here, of course. If the SCOTUS rules against the tariffs, will the ruling stick? Or will new tariffs appear to replace the old ones to keep the legal limbo going? Will the tariff tax revenues have to be repaid? If so, where will that money come from? The list goes on, but it starts with the Supreme Court’s decision.  Stay tuned.

Question Three: What Next?

The U.S. economy is something of a puzzle as we bid 2025 adieu. Is growth booming, as the most recent GDP figures seem to suggest? Or is it slowing down and maybe struggling as jobs data indicate? Is inflation pretty much under control? If so, why is “affordability” the year’s hottest word (and not in a good way)?

There are many different ways to answer these questions and economics nerds like me add one more to the list: who will lead the Federal Reserve in 2026 and how will they react to economic news as the year unfolds? The public focus will be on interest rates. Up or down? But the bigger question is how we will navigate the traps and trade-offs of a complex, highly indebted, rapidly evolving economy.

I think this is a wine economics question because I believe that affordability is a significant explanation for the current malaise in wine sales. It’s not the only issue, but it matters. If you think of affordability as roughly the cost of living divided by disposable income, then what the Federal Reserve does is important because it can affect both the numerator and the denominator in many ways. There’s a lot at stake.

What’s next for the wine economy? And what unexpected events (unknown unknowns in the Donald Rumsfeld taxonomy) will appear? 2026 will be many things, but it won’t be boring!

Wine and the Ghosts of Christmas Past

December 23, 2025 By in Oregon wine, wine, Wine Competitions, wine history Leave a comment

I was trying to think what Sue and I could give to Wine Economist readers for Christmas. We decided to re-tell this story about a completely different Christmas gift from many years ago. I’m not sure why, but I think it makes sense.  We hope you enjoy it.

Grape Transformations: Oregon Origins

The Wine Economist / November 8, 2011

I had a hidden agenda when I visited McMinnville, Oregon a few weeks ago. Ostensibly I was there to talk about my new book at Linfield College and to the local Rotary Club. Those events were great but I would not have been happy if I hadn’t done one more thing: return a minor piece of Oregon’s  wine history to its rightful home.

“To Nick, Cheers for all the years — past & future. David Lett, Christmas 1989.”

That is the inscription I found in a second-hand bookstore copy of Vintage Timelines, a neglected classic book that Jancis Robinson wrote over twenty years ago. The idea of the book was to select a group of the world’s greatest wines and examine how different vintages have evolved (and would be expected to continue to evolve) over time.  The research required Jancis to taste trough verticals of each great wine (research is such a drag!) and compare notes from previous years to create complex and quite fascinating graphical timelines.

Darn few American wines were good enough (in terms of their ageing potential) to make the cut and only one wine outside of California — the Eyrie Pinot Noir Reserve made by David Lett. Lett planted the first Pinot Noir vines in the Willamette Valley and he, along with the group they call “the Pioneers,” set Oregon wine on its present course.

Nick’s Back Room

The Nick in the inscription is almost certainly Nick Peirano of Nick’s Italian Cafe. Lett’s audacious egg was incubated and eventually hatched by the Pioneers and others over countless discussions in Nick’s back room. I’ve loved owning the book, but felt it didn’t belong to me. I needed to take it home and give it back. But to whom?

My first thought was my friend Scott Chambers, a professor at Linfield College and a friend of both Nick and the Lett family. He’d love to have the book, I thought, but it didn’t really belong to him any more than me. Maybe Jason Lett, David’s winemaking son who is carrying on the Eyrie tradition and building upon it? Yes, that would make sense.

But then I learned about the Oregon Wine History Project at Linfield College and that sealed the deal. They were pleased to add our copy of Vintage Timelines to their archive as a document chronicling the Eyrie Reserve’s early international recognition as well as the role of Nick’s back room in the region’s early development. Jeff Peterson, Director of the Linfield Center for the Northwest, accepted the book and both Scott and Jason supported the decision.

A Remarkable Story: David Lett (and the Pioneers)

David Lett is one of my heros and I am including him in my “Grape Transformations” list of people who have changed the way people think about wine or wine regions. He was certainly instrumental in the transformation of Oregon from a place known for fruit and nuts rather than grapes to a region frequently mentioned in the same breath with Burgundy.

Lett’s story is remarkable. Trained at UC/Davis, he came north looking for terroir where he could make Pinot in the Burgundian style. The first Pinot vines were planted in 1965; 1970 was the first Eyrie Pinot vintage.  After one or two false starts he hit paydirt. Great wine.

But from Oregon? Rainy old Oregon probably seemed like the last place on earth to make world class wine in the 1970s.

Olympic Gold

Then came the Wine Olympics of 1979. This was a competition, sponsored by  the French food and wine magazine Gault Millau, that featured 330 wines from 33 countries tasted blind by 62 judges. The 1975 Eyrie Pinot Noir Reserve attracted attention by placing 10th among Pinots. A stunning achievement for a wine from a previously unknown wine region.

Robert Drouhin of Maison Joseph Drouhin, a Burgundy negociant and producer, was fascinated and sponsored a further competition where the Eyrie wine came close second behind Drouhin’s own 1959 Chambolle-Musigny. Thus was Eyrie’s reputation set (and Oregon’s, too). It wasn’t long before Domaine Drouhin Oregon (DDO) was built in the same Dundee Hills as Eyrie’s vineyards — a strong endorsement of the terroir and recognition of the achievement.

The Pioneers founded the Oregon wine industry, but now the torch has been passed to a group that you might call the Sons [and Daughters] of the Pioneers. Some of them appear in the video at the top of this post (don’t be discouraged by the poor audio at the start — it gets better quickly). I’ll have something to say about this group in an upcoming post.

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Special thanks to Scott Chambers and Jason Lett for their hospitality during our stay in McMinnville.

Book Reviews: Sacred Wine, Stikky Wine, Kinda Like Wine

December 16, 2025 By in book reviews, wine, wine education, wine history Leave a comment

A lot of the wine books we receive fall into a few familiar categories. Here are brief reviews of two “category buster” wine books (plus one about Sake) that give a new spin on tried, true formats.

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Emily Stimpson Chapman, Sacred Wine: The Holy History and Heritage of Catholic Vintners. Marian Press, 2025.

The history of wine and the history of the Catholic church are deeply intertwined. Sacred Wine wants you to understand and appreciate this history and learn a few lessons along the way.

The lure (if wine isn’t enough) is the collection of beautiful photographs that makes this a book that’s probably going to start off on the coffee table. But the stories, which are well told, are so interesting that it is likely to move to your nightstand or reading chair before too long.

Twelve wineries scattered over France, Italy, and Spain provide twelve opportunities to explore church and wine history. All of the wineries have been molded in some way by the Catholic faith, often starting as monasteries, but in other respects they are quite different. Some are famous (Burgundy’s Chateau de Vougeot). Some make wines that are nearly impossible to taste unless you visit the winery, but others (Abbazia di Novacella) are widely distributed. Some of the wineries are very old indeed while others are unexpecxtedly modern. All are beautiful, as these photos demonstrate. Each tells a different story about God, wine, and history.

The Marian Press is the imprint of the Marians of the Immaculate Conception and they intend with this book to inform about wine and the church and to encourage readers to perhaps visit these wineries and to sample their wines or ones like them.

It is kind of inspiring to think, as Sacred Wine encourages you to do, that the liquid in your glass means something more; that it connects you somehow to something altogether more important. Not your typical coffee table wine book.

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Andrea Reibel, Stikky Wine. Laurence Holt Books, 2025.

There are a lot of variations on the “introduction to wine” book genre, but Stikky Wine is a new twist. Or new to me, in any case.

The idea is not to teach novice wine drinkers everything they need to know about wine. It is to give them a few basic tools that they use to each themselves. It is part of a small series of “stikky” books on different topics that focus on information that “sticks” and not the stuff you read and forget.

The concept reminds me of Father Guido Sarducci’s famous Five Minute University, which promised to provide a complete college education in five minutes time. How? By only teaching the stuff that sticks; the things you still remember after five years.  As a recovering professor I have mixed emotions about the Five Minute University, but I find the idea of Stikky Wine very appealing.

Stikky Wine introduces the idea of wine tasting through wine’s aromas, initially focusing on fruit aromas that most readers will be familiar with. There are some aromas closely associated with white wines and other for red wines. These aroma ideas are then applied to three red wines (Pinot Noir, Merlot, Cabernet Sauvignon) and three white wines (Riesling, Sauvignon Blanc, Chardonnay).  The simple framework permits a number of variations and applications so that the reader has some idea of how wines differ and why. Significantly, readers are encouraged to set their book down and do wine instead of just thinking wine.

The second section builds on this by adding sensory concepts like body, acidity, tannins, and other types of aromas (including those associated with wine faults). Six aroma families, three sensory elements. Pretty basic tools, but important ones. An epilogue ties things together followed by Next Steps with more detailed information and references designed to propel the reader forward.

The format is user-friendly. It is almsot a flip book, with lots of illustrations, minimal text, quizzers, reviews, and so forth. It reminds me a bit of the sort of flash cards you might use to study a foreign language except the focus is on doing, not just memorizing.

Stikky Books says its products are tested thoroughly and really do help readers get from zero to sixty in wine understanding in about an hour. I can’t vouch for that because I’m not a beginner making new discoveries, but it seems like a plausible claim.

The thing to do would be to give the book to someone starting out and see what happens. It might be an excellent $12 investment, don’t  you think?

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Eric C. Rath, Kampai: The History of Sake. Reaktion Books, 2025.

Sake isn’t wine. It isn’t rice wine either, although I have heard it explained that way. Sake is Sake.

Sake is one thing, but it is also many things and that’s what makes it kinda like wine (as this article’s heading suggests). Some people are drawn to the complexity and variety. Others are turned off (or even freaked out) by the myriad variations. Wine is the same in many ways. How do we invite the intimidated into the tent without scaring them away? It’s a problem.

Eric C. Rath’s new book opens the door with history, told is an approachable way. Readers get drawn into the story and pretty soon the complications start to make sense. It doesn’t hurt that the heavy coated stocks makes the beautifuyl illustrations pop of the page.

Rath is a professor of premodern Japanese history of the University of Kansas. I’ll bet he is an excellent teacher because his book is clear and interesting and taught me a lot I didn’t know about Sake and about Japan. Rath uses history very effectively to teach about Sake and, I suppose, Sake to teach about history. Sacred Wine (see above) uses wine to teach about history and faith. Glad to welcome both these books to the wine (and kinda like wine) bookshelf.

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