The California Association of Winegrape Growers (CAWG) has reportedly asked the US Government to examine “unfair, non-reciprocal trade practices” that it said disadvantage its wine growers in markets such as Australia.

California produces about 80% of US wine and exported about 24 million cases in 2023, according to Wine Institute data.

A report in The Australian said a submission had been made by CAWG to the Office of the U.S. Trade Representative, which noted that Australian producers benefited from rebates, grants, loans and financial assistance, while foreign imports were subject to the Wine Equalisation Tax.

“US wine exporters … must pay the full 29% tax without access to any offsets, making it more difficult to compete in the Australian market,” the submission by California wine growers reportedly said.

“This structural imbalance, combined with additional import duties and taxes, creates a significant trade barrier that unfairly disadvantages US wine producers. Australia’s wine industry benefits from government programs that distort competition.”

The association said California wine growers were also suffering due to the “influx of cheap, imported bulk wine” from overseas markets.

“Foreign bulk wine floods the US at below-market prices, allowing companies to bottle and sell it under familiar ‘American’ brands, misleading consumers and undercutting domestic farmers,” CAWG said.

“In 2024 an estimated 300,000 tons of California wine grapes went unharvested while 38 million gallons of cheap foreign bulk wine replaced California grown grapes.”

The US was Australia’s second biggest wine export market by volume in 2024, at 106 million litres. However, unpackaged wine exports to the US declined last year after a period of heightened exports.

While the submission cited by The Australian has not been made public, CAWG discussed tariffs in a media release earlier this month.

According to CAWG “amid all the noise over tariffs, an actual and very real, crisis is unfolding in California Wine Country”.

“Winegrowers and wineries are being forced to make impossible decisions; ripping out vineyards, ending family businesses, and shutting down operations,” CAWG said.

“This economic reality must be addressed if we want to ensure a sustainable future for the US wine industry.” 

CAWG President Natalie Collins said: “A tariff alone won’t create a fair market, real change requires action from policymakers, industry leaders and consumers alike.

“If we want to protect California winegrowing, we need policies that stop unfair trade practices and a commitment to buying and promoting California wine.”

The California-based Wine Institute also recently released a statement in response to the escalation of the ongoing dispute between the United States and European Union over steel and aluminum, calling for an end to reciprocal tariffs.

“For nearly 25 years, Wine Institute has steadfastly supported the ‘Wine for Wine’ principle that wine should not be targeted for retaliation in disputes unrelated to wine,” it said.

“The current dispute has never been about wine and these tariffs will only hurt the broader wine sector including farmers, vintners, distributors, retailers and the millions of people working across the extended wine supply chain.

“Wine Institute urges both governments to work towards a solution on steel and aluminum.”

Trump threatens 200% tariff on EU alcohol

Australian food and beverage manufacturers brace for tariff impact

Export-focused Australian food and beverage manufacturers are battening down the hatches ahead of the United States’ tariff according to new data released earlier this month.

The latest Manufacturing Report by inventory management software company Unleashed shows manufacturers are responding to global pressures by carefully managing stock levels.

“Aussie food and beverage manufacturers are worried about getting caught in the tariff storm without an umbrella,” said Unleashed Head of Product Jarrod Adam.

“The benefit of China removing its tariffs on Australian wine late last year may be negated by issues created by US tariffs.

“Clearly, many Australian firms realise this and have been actively working to reduce their stock levels to avoid overextending themselves, with excess inventory across all industries dropping 60% in Q4.”

The report by the  shows Australian businesses are actively reducing the amount of stock held over optimum levels, which dropped 60% in Q4 compared to the previous quarter.

In the beverage industry excess stock dropped -49.25% to an average of $29,633.

Australian drinks industry braces for US trade war