If you’re one of the many Americans whose palate has grown to appreciate a wide range of imported gourmet foods, you might be worried about whether you’ll be able to afford that bottle of fine French wine or creamy wedge of truffled Brie on your Thanksgiving table this year.
Don’t panic just yet. Yes, the new 25 percent tariff imposed Friday on a wide variety specialty foods imported from the European Union – such as wines and cheeses from France, pastas from Italy and olives from Spain – is extremely worrying to importers, distributors and retailers. But, at least initially, the effect on consumers is expected to be minimal as the increased costs are spread among all the industry players before the products reach store shelves.
“It will be noticeable, but it won’t be sticker shock,” said Vincent Maniaci, co-owner of The Cheese Iron in Scarborough.
The retaliatory tariffs were approved by the World Trade Organization as compensation for illegal EU subsidies to the aviation giant Airbus. The Trump administration is targeting $7.5 billion worth of European agricultural products.
Mary Taylor, a wine distributor who just launched her own Gorham-based company with business partner Nicole Keiley, said that even though her suppliers offered a hefty discount on her latest shipment of French wines to compensate for some of the tariff hike, “I’m still looking at a bill for a brand new, unexpected expense upwards of $7,800, just because of the tariff.”
Taylor said she won’t raise her prices because she wants to remain competitive, “so I’m just not going to be able to hire that next person. I’m going to have to slow down the business until I can catch up on these new bills. This is an assault on small businesses.”
Taylor also believes the tariffs will undermine the food renaissance that’s going on in lots of small American cities, where pockets of gourmet food stores and independent restaurants are reviving local economies.
She is so angry about the situation that she and several other local businesses are banding together to form a new trade organization called the Maine Gourmet Business Alliance, hoping that they will have more clout as a group. Among the businesses that have signed onto the group are The Cheese Iron, The Cheese Shop of Portland, Devenish Wines in Portland and Crush Distributors in Yarmouth.
Carrie Blakeman, manager of the Rogers Collection in Yarmouth, a well-known importer of artisanal foods from Europe, the Middle East and Africa, said her company has entered an agreement with producers and distributors to offer a discount on products through 2019 to absorb the extra costs, a process that she says has been “painful.”
“Everybody is really sacrificing,” she said, “but we want to minimize (price increases) as much as possible so we don’t lose (our share of the) marketplace.”
Blakeman said the group will revisit the situation at the end of the year to see if there have been any policy reversals, changes in deadlines, or exemptions, and then make a new plan for 2020.
Everyone agrees that the tariffs couldn’t come at a worse time. This is the time of year when retailers and distributors are preparing for the holidays. Foods destined for the Thanksgiving table likely reached the East Coast before the tariffs hit, Maniaci said. Consumers probably won’t notice any price increases until December, he said.
“There’s going to be some creative, variable pricing in cheese shops,” Maniaci said. “What that means is to offset some of the price increases in some holiday items, we’ll have to raise prices on some ordinary, everyday products.”
The price of truffled Brie from the Burgundy region of France – a holiday favorite at The Cheese Iron – would rise from $20 per quarter pound to $25 per quarter pound under the new tariff, Maniaci said, but he will try to bring that down to $22 by shifting some of the cost somewhere else.
Consumers won’t see price increases on firm and semi-firm cheeses, which have a longer shelf life than soft-ripened cheese like Brie, because he and other cheesemongers are buying them ahead in bulk, Maniaci said. “We’ll hold onto that until we can put those on the shelf for December,” he said. “Those are the aged sheep’s milk cheese, the aged goat cheeses.”
Maniaci said that his customers might expect to spend $10 to $20 extra this year on their December holiday spreads of festive leaf-wrapped cheeses from the Piedmont.
For Will and Mary Sissle, owners of The Cheese Shop of Portland, the timing of the tariff is even worse because they are just about to expand their young business on Washington Avenue. But they already have decided that they will absorb the increased costs in one way or another, and hope the situation is temporary.
Will Sissle said they’ve had numerous customers ask if their prices will be 25 percent higher. The Sissles have been reassuring them that – for now, anyway – they will see “zero price increases.”
“We have customers that trust us,” he said, “and we don’t want to let them down when they come back to get the same thing they’ve been buying and all of a sudden it costs $4 more per pound.”
Sissle said they stocked up on products wherever they could, but avoided placing orders that would arrive after the tariff went into effect. Eighty percent of the pasta in his store is imported.
“We stocked up a lot on pastas and a few antipasti items that are going to be affected,” he said.
Mary Sissle said they have submitted multiple letters to government officials explaining the impact the tariff hike will have on small businesses and consumers, and on “the ability of small businesses to hire and grow and contribute to the economy.” She also plans to reach out to U.S. Sens. Angus King and Susan Collins of Maine.
Maniaci sees the tariff situation as an opportunity to introduce his customers to new products. He plans on expanding his Swiss cheese offerings, adding, for example, soft-ripened Swiss cheese to his inventory. “There’s myriad Swiss cheeses that people haven’t even seen before that will hit the shores because they’re not part of the tariff,” he said. “What we’ll also see is a lot of artisan American offerings.”
But American producers won’t be able to satisfy the high demand for gourmet wines and cheeses, he said. And products like American-made Parmesan, cheesemongers say, are just not the same as a wheel of aged Italian Parmigiano Reggiano.
Mary Taylor agrees, adding that “American wineries cannot make the same level of quality for the money. They just cannot. There’s a reason why having 2,000 years of making a product makes you more efficient.”
She scoffs at people who simply urge consumers to eat and drink more products grown on American soil.
“Don’t tell me what to drink,” she said. “That’s not American.”
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