NWR: Euro at $1.26 vs dollar today.

Something very strange is happening: European wine is becoming cheaper in Europe than in the US!

For several years the Euro has been rising against the Dollar, so for several years I got used to the strange phenomenon of buying European wine in NY for less than I would have paid in Europe. There are a few non-exchange rate reasons for this - including low US import taxes, low US consumption taxes, higher EEC consumption taxes, more competitive US wine store pricing - but probably the most significant was the fact that US prices reflected exchange rates of, say, a year before (when the Dollar was stronger), while European prices (as quoted on Wine Searcher) instantly reflected the lower Dollar.

Now that the Dollar is rising, the opposite is happening: US wine store prices are reflecting exchange rates of X time ago (when the Dollar was weaker), while European prices instantly reflect today's strong Dollar.

I hadn't understood, prior to this, what must be the biggest reason why US individuals are not allowed to import wine, perhaps even more than the remnants of Prohibition: if individuals could do so, whenever the Dollar is falling, they would buy from American stores (as they do now) and benefit from outdated exchange rates; whenever the Dollar is rising, they would have the option of buying from European stores and have the wine flown over. US importers and stores, who are mostly forced to pass on exchange rate benefits because the US market is so competitive, would get hurt during rising Dollar moments (like now) because their prices are "sticky" while European prices are perfectly "elastic."
 
I'm not sure what you mean by saying that individuals are not allowed to import wine. There are numbers of ways of buying wine abroad and bringing it into the US, ranging from checking some into baggage on a plane, through buying and having it shipped by companies who take care of the regulations, to working with someone with an importer's license. I have personally done 1 and 3 and know people who have done 2.
 
originally posted by Oswaldo Costa:
Thought of the DaySomething very strange is happening: European wine is becoming cheaper in Europe than in the US!

For several years the Euro has been rising against the Dollar, so for several years I got used to the strange phenomenon of buying European wine in NY for less than I would have paid in Europe. There are a few non-exchange rate reasons for this - including low US import taxes, low US consumption taxes, higher EEC consumption taxes, more competitive US wine store pricing - but probably the most significant was the fact that US prices reflected exchange rates of, say, a year before (when the Dollar was stronger), while European prices (as quoted on Wine Searcher) instantly reflected the lower Dollar.

Now that the Dollar is rising, the opposite is happening: US wine store prices are reflecting exchange rates of X time ago (when the Dollar was weaker), while European prices instantly reflect today's strong Dollar.

I hadn't understood, prior to this, what must be the biggest reason why US individuals are not allowed to import wine, perhaps even more than the remnants of Prohibition: if individuals could do so, whenever the Dollar is falling, they would buy from American stores (as they do now) and benefit from outdated exchange rates; whenever the Dollar is rising, they would have the option of buying from European stores and have the wine flown over. US importers and stores, who are mostly forced to pass on exchange rate benefits because the US market is so competitive, would get hurt during rising Dollar moments (like now) because their prices are "sticky" while European prices are perfectly "elastic."
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Your reasoning reflects a lack of understanding of the regulation of US alcohol sales/distribution. This a country that had Prohibition 90 years ago. There are also dry Counties and Municipalities in the US.
Control of alcoholic beverages is paramount, many states don't allow interstate shipping. Moving a personal cellar from one state to another can require a permit from the new state.
As far as the economics of personal importation, you're ignoring shipping costs.
 
originally posted by Jonathan Loesberg:
I'm not sure what you mean by saying that individuals are not allowed to import wine. There are numbers of ways of buying wine abroad and bringing it into the US, ranging from checking some into baggage on a plane, through buying and having it shipped by companies who take care of the regulations, to working with someone with an importer's license. I have personally done 1 and 3 and know people who have done 2.
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I thought Oswaldo was implying import in some sort of volume. Flying back one or two cases is feasible when visiting. When I bring back wine it has more to do with picking up what's not available in the US.
 
originally posted by Tom Glasgow:
originally posted by Jonathan Loesberg:
I'm not sure what you mean by saying that individuals are not allowed to import wine. There are numbers of ways of buying wine abroad and bringing it into the US, ranging from checking some into baggage on a plane, through buying and having it shipped by companies who take care of the regulations, to working with someone with an importer's license. I have personally done 1 and 3 and know people who have done 2.
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I thought Oswaldo was implying import in some sort of volume. Flying back one or two cases is feasible when visiting. When I bring back wine it has more to do with picking up what's not available in the US.
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Yes, I meant ordering from a wine store in Europe and having it flown over. It can't be done unless the wine is declared as olive oil, a famously risky gambit.

But, Tom, shipping costs didn't prevent European wine from being cheaper in NY for a long time and are not that high in the general scheme of things. When we went to Beaune two years ago, I compared prices on my laptop at the hotel and only brought with me what I couldn't find in the US (like you) because stuff like Lafarge etc. was cheaper at CSW that in any store in Beaune. Perhaps I underestimated Prohibition in what I wrote, but even without Prohibition it would be difficult for US wine stores to survive if people could order freely from Europe at times like this.
 
originally posted by Oswaldo Costa:
originally posted by Tom Glasgow:
originally posted by Jonathan Loesberg:
I'm not sure what you mean by saying that individuals are not allowed to import wine. There are numbers of ways of buying wine abroad and bringing it into the US, ranging from checking some into baggage on a plane, through buying and having it shipped by companies who take care of the regulations, to working with someone with an importer's license. I have personally done 1 and 3 and know people who have done 2.
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I thought Oswaldo was implying import in some sort of volume. Flying back one or two cases is feasible when visiting. When I bring back wine it has more to do with picking up what's not available in the US.
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Yes, I meant ordering from a wine store in Europe and having it flown over. It can't be done unless the wine is declared as olive oil, a famously risky gambit.

But, Tom, shipping costs didn't prevent European wine from being cheaper in NY for a long time and are not that high in the general scheme of things. When we went to Beaune two years ago, I compared prices on my laptop at the hotel and only brought with me what I couldn't find in the US (like you) because stuff like Lafarge etc. was cheaper at CSW that in any store in Beaune. Perhaps I underestimated Prohibition in what I wrote, but even without Prohibition it would be difficult for US wine stores to survive if people could order freely from Europe at times like this.
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My reference to shipping costs is about the cost of air freight/excess baggage fees. Shipping by sea, which I presume is how the wine at shopsis shipped, is much cheaper. This all depends on what price wine you're talking about, for higher prices air shipping costs lessen in importance.
 
Jonathan's #2 costs something in the $10-15/bottle range, so not really
Useful for arbitraging your Muscadet purchases.

Of course, if you can get Sharon Bowman to mule for you, costs can be lower.
 
Number 3 takes your presence at various points in the transaction. Otherwise, the total cost when I did it was something under $3 a bottle for somewhere between 50 and 60 cases of wine. I see no reason why one couldn't do a like thing with wine bought from wine stores instead of domaines, though I've never tried that. But there are no laws preventing the bringing back of wine. The obstacles are entirely related to the difficulty of doing it.
 
If anyone has access to an importer, bless 'em, but for ordinary souls, it remains forbidden to have wine shipped over from a European wine merchant.
 
originally posted by Oswaldo Costa:
If anyone has access to an importer, bless 'em, but for ordinary souls, it remains forbidden to have wine shipped over from a European wine merchant.
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There are importers who will find a way, but they charge heavily and you are seldom their most important account.
 
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