BYOB: complexity without payoff
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The study also documents systematic tariff avoidance. The initial tariffs only applied to wines at or below 14 percent ABV and the researchers document a systematic shift in new product offerings toward higher alcohol content products that were exempt from these tariffs, as well as engineering of existing wines to modify the listed alcohol content for exemption from the tariffs. In France, for example, the share of label approvals for products switching from 14 percent or less ABV to more than 14 percent ABV jumped by nearly 10 percentage points in the months directly following the 2019 tariffs. This compositional shift created biases in implied pass-through rates based on aggregate trade statistics, suggesting lower pass-through than actually occurred at the product level.
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