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Sometimes even the most logical thinking has little connection with reality.

This appears the case regarding President Donald Trump’s imposition of tariffs on French wines and what the real-world impact on the wine industry will be. Logic tells us one thing: California wineries will reap rewards from wine lovers changing loyalties to save money.

But in the real world, things are far different than any simplistic answer. As is almost always the case regarding complicated financial issues, the devil’s in the details.

So any so-called analysis by a mainstream media outlet that fails to take into consideration the many other factors involved here is bound to be faulty, if not completely inaccurate.

Look at this from Fox Business (Dec. 5, 2019):

“Headline: Proposed tariffs on French goods could boost US wine sales.

“Text: “Americans will soon be drinking more wine that’s made in the U.S.

“French wine could be faced with tariffs as high as 100%, and as a result, U.S. winemakers will see a boost in business, with prices on some cases of Bordeaux increasing as much as $1,000, wine buyers and restaurateurs say.” (The phrases “as high as” and “as much as” are journalistic red flags.)

Several other news outlets have drawn similar conclusions, but few of the reports go into the gritty details of an aspect of the industry (sales and distribution) that almost no one in the general news media knows the slightest thing about.

However, the quoted statements above seem so logical that disputing them easily or simply isn’t likely to occur. Most people read headlines, perhaps the first paragraph or two, and assume their accuracy.

Ignoring for a moment the unjournalistic nature of the way the above article was written (i.e., the word “will” in the first paragraph should have been “may”), what the reporter completely missed was the real story.

It is possible that the tariffs will have a minor (trivial?) impact on wine sales and distribution in the coming few months, but the impact will be negligible.

Previously, I saw the wine tariff issue as a non-story, as far as 99% of wine consumers are concerned. But the poor reporting I’ve seen prompts this response.

Fact No. 1: The wine tariff issue probably won’t last more than a year. The industry knows this. Before long, saner ideas will be proposed and implemented. Until then, we do NOT have a Tylenol crisis.

Fact. No. 2: French wines of the caliber most people think of (expensive) are already in warehouses here, and they came into the United States unscathed by new tariffs.

Fact. No. 3: Most wines that are already here are under the control of importers or wholesale houses, and not one such entity would dare raise prices immediately. It’s already difficult to sell expensive wine here, a country that still has a weak consumer economy, at least in relationship to fine wine.

Fact No 4: Large wholesalers have contingency plans in place when such issues arise. No one is panicking.

Fact No. 5: Wholesalers know that most wines are already priced a bit higher than they ought to be, and in previous crises, such as wine shortages, they knew they had to adjust prices to keep sales going. Every wholesaler I know is always willing to take a bit less on certain items for a limited time until solutions are arrived at. They must defend marketplace loyalty. Defections must be avoided.

The article above quoted an Albany retailer that the tariffs have already affected some prices and that “…a popular 2016 bottle of Laffite-Rothschild (sic) went up to $1,000 a case…” (FYI, it’s Lafite.)

The average national price for a case of 2016 Château Lafite-Rothschild is $10,700. How many people would be scared off if that was now $11,700?

Beyond that, people seriously interested in a case of Lafite 2016, and have the money to buy it, aren’t profligate or stupid. Back to my earlier comment that most wine is priced too high, a potential 2016 Lafite buyer likely would go to Fine Wines International in San Francisco, which would be happy to accept $8,700 for case.

So what about less expensive French wines? One of my favorite whites is a Muscadet that sells for $11.50. If that went up to $15, I’d look around. To see what’s out there, last week I did. And I found a Muscadet that was nearly as good for $6.99!

Real-world wine buyers, especially millennials, are usually savvy enough to shop around for alternatives (until the tariffs collapse of their own inconsequentiality). Until then, we have more excellent wines at fair prices than ever before in history.

So perhaps the only segment of the wine industry to fret over is the luxury market. Such as Dom Perignon, the ultimate image in Champagne, not to mention a superb wine.

Cynics might suggest that the tariffs could hurt Champagne more than any other wine because of its already high pricing.

The 2009 vintage of Dom Perignon has a national average price of $172 per bottle. That’s a lot, sure, but the only people willing to pay that may not be deterred by a price of, say, $185 a bottle. It is, after all, one of France’s great treasures and one of Champagne’s most prestigious properties.

Trump may not have considered the emoluments issues when he included Champagne on his list of tariffs, but a cynic could point out that this tariff poses a political pitfall.

Perhaps the entire idea was to push the price of Dom Perignon up so high that wealthy wine lovers will conclude:

“Hey, maybe Dom is too expensive. Maybe I should impress my Super Bowl guests not with Dom, but with Don — bottles of Trump Blanc de Blanc* from his Virginia Winery. Yeah, that’s the ticket. That’ll impress them.”

So will the tariffs increase sales of U.S. wine? Maybe a bit. But one of my brothers has an in-law, born and reared in France who now lives on the East Coast. He cannot stomach California wine. If offered a glass, he’d rather have water. Or pay a bit more for his favorite grand cru.

One side note from the Fox article:

A Boston-based French restaurant, Deuxave, said it had been paying $23.33 per bottle for a moderately priced French Burgundy. On its wine list, Deuxave was charging patrons $68 for it, or 2.91 times cost.

“But with the tariffs,” said the article, “chef and owner Chris Coombs says the (restaurant) price will increase to $85.”

But that’s an even higher 3.26 margin. Had the restaurant raised its price to $76, the margin would have remained 2.91 times cost. So are the Trump tariffs simply giving restaurateurs a justification for wine list price increases?

It appears France is paying as much for the wine tariffs as Mexico is for the wall.

Wine of the Week: 2017 Mettler Old Vine Zinfandel, Lodi, “Epicenter” ($25): Very ripe, raspberry jam aromas with hints of dried plums and a light spice note from barrel aging. Very rich mid-palate and a load of fruit in the finish. Nice intensity and good balance. Often discounted to $19 or so.

(*Editor’s note: Blanc de Blanc is the way it is spelled on the Trump sparkling wine, although in France, it is “blanc de blancs.”

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Dan Berger lives in Sonoma County, where he publishes “Vintage Experiences,” a subscription-only wine newsletter. Write to him at winenut@gmail.com. He is also co-host of California Wine Country with Steve Jaxon on KSRO Radio, 1350 AM.

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