If you have an appreciation for tequila, your ears would have pricked up at the news over the last few weeks. Probably for more than one reason, however, let’s focus on the United States Import Tariff news for now and how that may impact the world of Tequila.  

Higher Prices, Fewer Margaritas?

With tariffs driving up the cost of tequila imports, U.S. consumers might soon feel the pinch at their favorite bars and liquor stores. Industry experts predict that premium tequila brands will need to adjust prices to offset the additional costs, potentially leading to a slowdown in sales.

Some of the Strategies

Distillers are looking at several strategies to soften the impact of tariffs, including:

• Stockpiling tequila while tariffs have been paused. Short term logic here, but nevertheless, a strategy for some.
• Diversifying supply chains to reduce dependency on the U.S. market, which could mean improved accessibility for countries like Australia!? Yes please.
• Exploring price adjustments while maintaining competitive positioning. We could see some movement in popularity of certain brands, depending on who is able to absorb what.
• Boosting international sales, particularly in Europe and Asia, to make up for potential U.S. losses. Champagne vs Tequila?

The Rise of Alternative Agave Products

With tequila prices set to rise, U.S. consumers may turn to alternative agave spirits like non-Mexican agave-based liquors. Some distilleries are already experimenting with agave spirits made outside of Mexico and specific Tequila producing states, and while purists will argue they just don’t have that authentic touch, they may change their tune when their favourite Reposado goes up by 25%.

The Australian Agave Project

Australia has stepped up with the country’s first large-scale agave spirit distillery, based in Queensland. While it can’t legally be called tequila (because it’s not made in Mexico), the project has started creating high-quality agave spirits that could offer an alternative if tequila prices continue to rise.

The Ripple Effect: From Tacos to Tequila

The tariff’s impact isn’t confined to the bottle. Mexican restaurants in the U.S. are feeling the heat as well. In the Bay Area, establishments like Tacolicious are tweaking their menus, introducing items like chickpea-avocado guacamole, humorously dubbed “beso del presidente,” to navigate the rising costs of staples such as avocados and limes. Read more about that here.

What Now?

While the tariff-induced turbulence has left both producers and consumers a little dizzy, no need to panic just yet. Let’s consider the space disrupted and hope for blanco linings.

In the meantime, wouldn’t hurt to stock up if you live in the States.