⁄Policy Brief⁄ BY ANDREW FORTGANG SOMETIMES I JOKE that running a restaurant and serving people food is the world’s second-oldest profession. We are not building rocket ships, but what we do is important, as we are making people’s lives a little brighter one meal at a time. What happens in a restaurant is very tactile and immediate. So much happens within our dining rooms and kitchens that it is easy for us to lose sight of decisions being made far away that don’t seem to be made with us in mind, but that can affect us greatly. Tariffs are a hot topic these days, and while the details of their implementation remain uncertain, it is increasingly likely that tariffs will be a reality under the new administration’s trade policy. How broad or targeted they will be is a question, but one thing we learned in 2019 is that tariffs on wine stand out. They could disproportionately harm the American economy, particularly small, independently owned restaurants and wine shops. As a restaurateur and wine-shop owner in Portland, I’ve experienced firsthand how interconnected the restaurant and wine industries are. I’ve been part of the restaurant world since my first teenage job and have called Portland home for nearly 20 years. Today I’m the co-owner and wine director of Le Pigeon and Canard (with another location in Oregon City), and I also co-own Flor Wines, a boutique wine shop in Portland. These businesses are labors of love, supported by a community that values culinary creativity and discovery. It is common knowledge that restaurants, while being very rewarding endeavors, are not easy businesses to be in. Restaurants —especially small, local, independently owned ones — operate on razor-thin margins. The last few years have been especially challenging, from the pandemic to inflation to concerns regarding crime and safety. Portland is getting back on its feet, and inflation is leveling out (we hope), but things are still difficult out there. The specter of tariffs increasing the costs on one of the most important revenue and profit centers for restaurants is deeply concerning. Each new hardship compounds the pressure on businesses like ours. At Le Pigeon and Canard, our wine lists are tools of hospitality. They are there to add to the culinary experience and weave their way into the fabric of the meal. They’re deeply personal, leaning French and to complement our menus, but they also feature outstanding wines from our own backyard. Many of our guests visit specifically for the chance to explore these wines. They want a glass of Burgundy or a bottle of Sancerre when they dine with us, in the same way they want a bottle of Barolo or Verdicchio when they dine at their favorite Italian restaurants. When our costs go up on those bottles, one of two things happens: We raise our prices and risk losing the sale, or we make a smaller margin on those bottles. After the inflationary pressures of the last few years, restaurants have little room to increase prices. We know that when prices get too high, fewer people come in, and fewer items — in this case bottles of wine — are ordered. Restaurants rely on the sale of imported wine to bolster their revenue so we can absorb the cost of other expenses. The wine industry operates in a uniquely intricate way in the United States. Unlike other imported goods, wine is subject to the complex three-tier system established after Prohibition. In this system, wine must pass through American importers, then American distributors, before finally reaching restaurants and retailers. Direct sales from wineries, foreign or domestic, to restaurants and wine shops in other states is prohibited in most cases. Wine tariffs would destabilize this delicate system, creating a ripple effect that would hit small businesses the hardest. For every dollar European producers lose to tariffs, U.S. businesses lose over $4 — an especially dire situation for local restaurants and wine shops already operating on tight margins. It’s a common misconception that tariffs on imported wines would benefit U.S. wineries by reducing competition. That’s not the case. U.S. wineries also rely on the three-tier system to distribute their wines to restaurants and retailers. If tariffs raise costs on imported wines, distributors — who represent both domestic and imported wines — would face financial strain, leading to job cuts or reduced portfolios. This would harm local wineries, as distributors may scale back their offerings to stay afloat. A healthy distribution system is essential for Oregon’s wine industry, which is a vital part of our state’s economy. After years of economic strain, we’re finally seeing inflation ease slightly. New tariffs would reverse that progress, driving up costs across the board. For restaurants, labor is the biggest expense and one of the few things we can control. If we can’t control the rising costs of wine and food, the only area left to adjust is labor — which means jobs are at risk. So, what can consumers do? Restaurants and wine shops aren’t just places to eat or buy a bottle; they’re cornerstones of our communities and vital contributors to Oregon’s economy. Support your favorite local restaurants. Shop at the neighborhood wine store. Also, let your elected leaders know you are against tariffs on imported wine because of how they will harm Oregon’s food and wine industries. These simple actions make a tangible difference for businesses trying to survive and thrive in uncertain times. Andrew Fortgang is co-owner of restaurants Le Pigeon and Canard and co-owns Flor Wines, a boutique wine shop. What Potential Wine Tariffs Mean for Local Oregon Restaurants and Wine Shops The owner of Le Pigeon and Canard in Portland describes how wine tariffs would impact and reshape Oregon’s dining scene. Andrew Fortgang 64
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