“A 30% tariff is unsustainable – but it’s consumers who will pay the most.” Francesco Giovannini of Mezzacorona issues warning

It will be end consumers in the United States who suffer the most from the impact of a possible 30% tariff on imports from the European Union, especially in retail sales. This is the belief of Francesco Giovannini, General Manager of Mezzacorona, a cooperative wine group that exports around a quarter of its total revenue to the US. In 2024, according to company balance sheet data, Mezzacorona exceeded €212 million in turnover. “The amount of the tariffs announced by President Trump in his letter to the EU last Saturday,” Giovannini told Gambero Rosso, “is far higher than expected. We were hoping for a 10% tariff or even an exemption, given the ongoing negotiations with Europe over goods like pharmaceuticals or spirits. Instead, it came as a shock.”

Expected drop in volumes

Mezzacorona, which exports over 80% of its production and sells wine in all 50 US states, considers the US market “strategic”, and particularly vulnerable should the proposed tariff increase take effect from 1 August, as President Trump has announced. Giovannini emphasises this: “It is our primary market, accounting for about 25% of our total revenue: the most important and strategic for our Group.”

According to the Mezzacorona manager, it was already unrealistic to absorb the cost of a 10% tariff entirely from the Italian side by lowering wine prices. With a 30% tariff, the figures are simply too high to ensure any margin of profit. The risk is that a rise in prices — both in modern retail and in the HoReCa channel — will lead to a sharp contraction in wine volumes sold. “Moreover,” adds Giovannini, “the euro/dollar exchange rate is not helping us. There has been a devaluation of over 10%, and that too will push up prices of European goods for American importers.”

The advantage of having a US importer

In the United States — also Italy’s top market for wine — Mezzacorona has operated for decades through its subsidiary, Prestige Wine Imports Corporation. This could partially cushion the market difficulties: “The structure of the supply chain doesn’t change,” Giovannini explains, “but being able to share with the importer how to manage the inevitable price increases is certainly an advantage compared to those without a US importer. They can absorb part of the margin loss. However, I still believe the overwhelming majority of the effects of the tariffs will unfortunately fall on the final consumer.”

Mezzacorona – linea Rotari

Room for diplomacy

According to Mezzacorona’s General Manager, regardless of whether the EU adopts a soft or hard stance (as Matteo Lunelli has argued), there is still time to negotiate — but the coming weeks will be crucial. “The hope of all entrepreneurs,” concludes the Trentino group’s director, “is that diplomacy will do its job and reach an agreement to keep the tariff at 10%. Even though I see that as unlikely, anything could still happen — we have no certainties. What’s clear is that a 10% tariff is just about manageable, though with some consequences, while a 30% tariff would not be sustainable at all.”