15 November 28 - December 4, 2024 dallasobserver.com DALLAS OBSERVER Classified | MusiC | dish | Culture | unfair Park | Contents Another Round Dallas bars and restaurants could soon see the effects of Trump’s promised tariffs, something the industry has seen before. By Lauren Drewes Daniels R ecently, I called a Dallas-area bar owner to discuss drinking trends leading into 2025. I was looking for something like an increase in a certain kind of li- quor or cocktail: mezcal or carajillo, per- haps. Is vegan fat washing actually a thing (it is), and is gin really mak- ing a comeback (also true)? What about the so- ber movement? But instead of any of those things, the longtime barkeep, who wants to re- main anonymous given the divisive political cli- mate, is worried about something completely different: tariffs and how they’ll increase the cost of a night out in Dallas. “We’ve seen this movie before,” they said, referring to tariffs posed during the first Donald Trump admin- istration. There are two big ones that impacted liquor sales: In 2019, Trump slapped a 25% tariff on French, Spanish, German and UK wines in retaliation for a deal the European Union made with aircraft manufacturer Airbus. The “Airbus tax,” as it was called, caused French wine exports to drop by 14% at the time, triggering a ripple effect of increased prices. And a year prior to that, Trump imposed a 10% tariff on all alumi- num imports and 25% on steel products, leading the European Union to slap a retaliatory tariff on Amer- ican whiskeys (likely a jab at then-Senate Majority Leader Mitch Mc- Connell’s home state of Kentucky, the center of the bourbon industry). The Distilled Spirits Council estimates that from 2018 to 2022, when Biden lifted the tariffs, American whiskey exports to the EU fell by 20%, at a loss of more than $110 million for U.S. distillers. Some smaller dis- tilleries never recovered as other countries and sellers swooped in to fill the void. In 2020, Trump also threatened up to a 100% tax on all French sparkling wine over France’s “tech tax” levied on American com- panies (which is still a thing). The Tipping Point While on the campaign trail, Trump told Bloomberg News the most beautiful word in the dictionary is “tariff.” This fixation doesn’t apply only to wine or whiskey; these are merely two examples from his previous administration that had an impact on Amer- ican businesses. At a campaign rally in August, Trump pledged, “We’re going to have 10-to-20% tariffs on foreign countries that have been ripping us off for years.” Brooks Anderson has made a career in the wine business in Dallas as the founder of Veritas Wine Room and the restaurants Boulevardier and Rapscallion. “First, we have to dispel the ridiculous no- tion that the foreign producer or foreign gov- ernment pays the tariffs,” Anderson says. “American businesses and American con- sumers will pay the tariffs. That’s ECON 101.” The tariffs will roll downhill, and the costs will be passed to the consumers, bar, restaurant, or wine shop, Anderson says. Ben Aneff is the president of the Wine Trade Alliance and managing partner of Tribeca Wine Merchants in New York. He understands tariffs are intended to hurt foreign companies but points out that the vast majority of the revenue from imported wine in the U.S. stays with small businesses in the U.S. “The biggest profit percentages are from restaurants,” Aneff says. “But it’s not a lux- ury that they make profits on their bever- age program. It’s the only way they stay in business.” Add to that, the economy is a different beast now than it was in 2019, and absorbing higher-priced wines, which distributors were able to do then, might not be possible now with already increased food prices. Doug Shaw, the president of M.S. Walker, a wine and spirits importer and dis- tributor, told the beverage business news outlet Sev- enFifty Daily that the high cost of business now, namely inflation, will shift the tax burden to customers. TouchBistro, an all-in- one, point-of-sale-and- management system for restaurants, surveyed 600 full-service U.S. restau- rants in major cities, in- cluding Dallas. Restaurants reported spending 34% more on food this year compared to last year. And even though people are eating out more often this year compared to last, accord- ing to OpenTable, these increased costs, along with labor costs, eat into profits. Nearly every op- erator (99%) told Touch- Bistro they’ve spent more on labor this year com- pared to last, but they also reported that “despite the financial strain, reducing headcount was the least common strategy used to reduce labor costs.” Dino Santonicola, chef and owner of the local Italian restaurant Partenope, has an almost hands-in-the-air response to the question of higher tariffs. “Honestly, everything has been increas- ing in the last 4 years,” Santonicola says. “Our labor today is 25% more than it used to be, so I guess we will adapt like we have been doing.” Another long-time Dallas operator with more than three decades of experience in both the small restaurant business and re- tail, who also wants to remain anonymous because of tensions surrounding Illustration by Sarah Schumacher | CITY OF ATE | t Dish >> p16
