Economics of Wine Import Duty and Excise Tax Drawbacks

Sumner, Daniel A., James T. Lapsley, and John Thomas Rosen-Molina

from ARE Update Vol. 15, No. 4, Apr/May, 2012

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Abstract

The wine drawback program allows a refund of 99% of import duties and excise taxes on wine for which the importer has matching exports of commercially "interchangeable" wine. Because per-unit import duty and excise tax rates are substantial compared to the price of bulk wine, use of the program is high for bulk wine imports, which compete with wine from low-price Central Valley grapes. Bulk wine exports dominated imports until 2009 and the program stimulated import growth. Now, with imports and exports roughly in balance, the program stimulates both exports and imports—leaving net trade in bulk wine roughly in balance.

Keywords

Duty rates, excise tac, wine imports, exports

Citation

Sumner, Daniel A., James T. Lapsley, and John Thomas Rosen-Molina. "Economics of Wine Import Duty and Excise Tax Drawbacks." ARE Update 15(4)(2012):1-4. University of California Giannini Foundation of Agricultural Economics.
https://giannini.ucop.edu/publications/are-update/issues/2012/15/4/economics-wine-import-dut/