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Central Coast wine industry braces for potential China trade war

www.keyt.com by Keith Carls28/03/2018  

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SANTA MARIA, Calif. - The Central Coast wine industry is caught in the middle of a brewing trade war between the United States and China which is considered one of the fastest growing wine markets in the world.

Central Coast wines have grown in prestige and popularity around the country and the world.

While Europe and Canada remain the largest export markets for U.S. wines, exports to China and Hong Kong were up 10% in 2017 to nearly $200 million, and up some 450% over the past decade, according to the Wine Institute.

China has threatened retaliatory tariffs on exports of California wine, nuts and fruit in response to the Trump Administration's current protectionist trade agenda.

"We don't export a lot to China ourselves personally but we work with a lot of customers who do, who we grow grapes for, or we make wine for", said Nicholas Miller, Vice President of Sales and Marketing for The Thornhill Companies in Santa Maria, "looking at it from an industry perspective, we feel a comradery certainly within the industry, I think the wine industry in general really feels that we're in this together as far as making California wine and being ambassadors for the world."

Miller and his family started Central Coast Wine Services in Santa Maria, a sprawling facility where local winemakers process their grapes and then barrel, bottle and ship wines around the country and the world.

"The issue here isn't wine, wine would become the victim of a trade war", Miller said, "what happens as an industry has a trickle-down effect to really affect us all, whether it's first hand or whether it's as an industry, but wine as a consumer product is a global product and a lot of people look at it as a commodity that is interchangeable."

The concern among those in the local wine industry is a China-U.S. trade war would open the door to overseas competitors.

"As much as we like Santa Maria Valley Pinot Noir, for a place like China where all the sudden the costs go up like 40 percent or whatever it is, that can easily be substituted out with a New Zealand Pinot Noir", Miller said, "the tenor of what's happening here to me seems to have the potential of having similar repercussions with trade in other areas as well."

"The California wine industry is absolutely reliant on exporting our product, we do not have the internal market to consume all of the product we are producing", Miller said, "to start attacking that export market really would set this industry upside down."