SACRAMENTO, CA – A California congressman has urged the Trump administration to expand access to India’s market for California wine, as US winegrape growers face declining domestic consumption, reduced access to Canada and federal regulations they say disadvantage American producers.
Congressman James Gallagher (R-CA)has asked US Trade Representative Jamieson Greer to prioritize India and Vietnam as potential export markets while addressing domestic policies that growers say favor imported products over American-grown grapes.
In a letter released October 8, Gallagher said California’s wine industry was facing mounting pressure from weakening demand and uncertainty over international trade.
“Industry leaders have identified countries such as India and Vietnam as promising high-growth markets, but the barrier to entry is still high due to ongoing tariff negotiations,” Gallagher wrote.
He urged the US Trade Representative’s office to prioritize opening these markets while working to restore access to Canada, where opportunities for American wine producers have been severely reduced.
“North State growers produce some of the best wine grapes in the world, but right now they are competing in a market where federal policy can actually make it easier to use foreign products than grapes grown here at home,” Gallagher said.
“We need to make sure our trade policies are working for American growers while opening new markets where California wine can compete and win.”
Gallagher also called for changes to US wine-labelling rules that allow products marketed as American wines to contain imported ingredients.
Under existing rules administered by the Alcohol and Tobacco Tax and Trade Bureau, wine labelled “United States” or “American” must contain at least 75 per cent American-grown agricultural products and be fully finished in the United States. The remaining 25 per cent can come from foreign-grown products without their origin being disclosed on the label.
Gallagher said growers believe the provision weakens demand for California grapes, puts downward pressure on prices and makes it harder for consumers to distinguish wines made entirely from American agricultural products from those containing imported ingredients.
He asked the US Trade Representative’s office to work with the Treasury Department and the Alcohol and Tobacco Tax and Trade Bureau to review the regulation.
The congressman also raised concerns about federal duty drawback provisions affecting imported bulk wine. Under certain circumstances, excise taxes paid on imported wine can be refunded when substitute wine is exported, even if the exported product did not carry an equivalent excise-tax burden.
Gallagher said the arrangement could make imported bulk wine more economically attractive than buying domestically produced wine or California-grown grapes. He urged the US Trade Representative’s office to support a review by US Customs and Border Protection of the arrangement and its impact on American producers.
The letter also called for scrutiny of bulk products imported from Canada that do not meet the US definition of wine but receive customs and tax treatment applicable to wine.
Natalie Collins, president of the California Association of Winegrape Growers, welcomed Gallagher’s intervention.
“California winegrape growers are facing an incredibly difficult market, and federal policies should not make it harder for American-grown grapes to compete,” Collins said.
“California growers don’t need Washington making a tough market even tougher,” Gallagher said.
“We should be looking for ways to give them a fair shot here at home and more opportunities to sell American wine around the world.” (IANS)
