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Tariffs Bring Domestic and European Glass Suppliers into Focus
October 17, 2018
While statistics show people in the US and China are drinking more wine than ever, and the craft distilling industry continues its strong growth over the past three years in sales, exports, and volumes, the trade war with China is likely to put a significant dent in these trends. “ Due to the harsh tariffs the Feds have applied to the wine and spirits industries of 25% on imports on bottles, cardboard, and other packaging materials, this will deleteriously affect winery and distillery cost of goods in a competitive global market” says Erica Harrop, CEO and founder of Global Package LLC. “This will impact supply, not only from China, but from other glass producers, since demand could quickly deplete supply.”
Harrop has been in the business long enough to remember what it was like before China imports took hold, when US factories were the juggernaut of the glass suppliers back in the early 2000s, filling the needs of most of the industry. When glass shortages hit in 2007, distributors had to find new sources.
“Those new sources, like China, saved the wine industry at the time, she notes, “but that disruption blurred the lines between glassmakers’ quality levels. Customers became accustomed to lower prices at the expense of uneven quality and a lack of creativity.”
Harrop points out that domestic and European glass have many advantages, including well-tested production standards that ensure high quality, dependable supply chains for efficient delivery, and high-end design capabilities, from classical glass styles to innovative, eye-catching shapes, colors, and packaging.
Pricing, of course, remains important. But glass quality and creative design have proven to be of equal value in today’s marketplace. A recent article in Wines & Vines points out that “consumers are not only spending more on wine in total, they are also exhibiting a willingness to spend more per bottle,” which would include ultra-premium, high-end fancy bottles, and bottles heavier than 650 grams. (Read the full article here: https://bit.ly/2OxLPAs).
Given this trend, Harrop advises customers to take a closer look at imports from Europe. The exchange rate is good and European glass has a long and storied history of high-end quality glass that reflects each individual country’s local culture.
Premium bottles of about 500-650 grams are also now being made in North America, some of better quality than others, so buyer beware. For instance, if performance on the bottling line is important to you, you should look for qualified distributors who have been working for years with glass producers to know the intricacies of bottling line performance.
It’s also important to remember that domestic glass suppliers are good choices for varietals, which must fight for shelf attention. Harrop estimates that the world of domestic glass suppliers accounts for approximately 70% of the glass supplied to our industry, and availability is generally predictable. But Harrop advises customers to plan ahead, certainly in the short term, until the tariff issue is settled.
In conclusion, there may be a silver lining in this trade war, long-term. If it brings us back to focusing on distinctive design and quality production, we’ll all be better for it.
Endnote: For decades Global Package has provided stock and custom bottles for the premium and ultra-premium markets, creating new opportunities for wineries to build existing and new brands with adherence to the highest quality standards. We have a wide selection of domestic bottles in stock, and we specialize in European bottles, with the ability to source higher-end bottles at very good pricing.
Call and see what we can offer as the glass world continues to change. Contact firstname.lastname@example.org or 707-224-5670. Global Package is located at 2793 Napa Valley Corporate Drive, Napa, CA 94558.