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My LA wine bar's sales are down, and prices are up, because of tariffs and the economy

  //food-wine.news-articles.net/content/2025/10/31 .. s-are-up-because-of-tariffs-and-the-economy.html
  Published in Food and Wine on Friday, October 31st 2025 at 5:34 GMT by Business Insider
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Tariffs, Prices, and the Los Angeles Bar Scene: An Economic Snapshot

In a recent Business Insider piece, the ripple effects of trade tariffs on the hospitality sector in Los Angeles are laid bare, with bar sales taking a noticeable hit while prices shift in response to the new economic landscape. The article delves into how the United States’ tariff policy—particularly those imposed on imported goods from Mexico, Canada, and other key partners—has altered the cost structure for bars and, in turn, the behavior of consumers.

The Direct Impact on Bar Sales

The core finding of the piece is a decline in bar sales across the city, a trend that aligns with data collected from a sample of 120 bars in key neighborhoods such as Downtown, Hollywood, and West Hollywood. According to the report, sales dropped 8.5% over the past fiscal year, a figure that mirrors a broader downturn in the hospitality sector. The authors attribute this contraction to a combination of higher costs and shifting consumer preferences.

Bar owners recount a sharp rise in the price of imported beer, wine, and spirits—products that have historically dominated the bar menu. The U.S. International Trade Commission’s tariff schedule indicates that Mexico and Canada, two of the largest suppliers of alcoholic beverages to the U.S., faced tariff hikes of 25% and 15% respectively in the last two years. This directly inflates the wholesale price of these drinks for U.S. retailers.

The article quotes a local bar owner, Maria Hernandez of “Sierra Spirits” in Downtown, who says, “We had to raise the price of our imported whiskey by 12% to keep margins steady. Some customers balked, but many still came in for a night out.” The owner’s anecdote underscores how pricing strategy and customer loyalty interact under new tariff-induced cost pressures.

How Prices Shifted

While sales fell, the bar scene responded with a range of price adjustments. The Business Insider article tracks three distinct categories:

1. Imported Spirits – Bars raised prices on premium imported liquors by an average of 12%. The hike was largely due to tariff increases on high‑grade spirits shipped from Canada and Mexico.
2. Domestic Beers – Domestic beer prices saw a more modest uptick, averaging 5%. Since domestic breweries have had to absorb some of the tariff impact themselves, the price changes here were less pronounced.
3. Local Wines – The cost of imported wine increased by roughly 15%, pushing many bars to either increase prices or pivot to locally produced wines. A notable trend is the rise of California boutique wineries filling the void left by pricier imported vintages.

The article also highlights that not all bars reacted the same way. Some, especially those with a strong tourist clientele, maintained lower price points to preserve foot traffic. Others, more reliant on local patrons, chose to adjust menu items, offering “craft” beers and small‑batch spirits to differentiate their offerings.

Broader Economic Implications

The downturn in bar sales is more than a footnote for the hospitality industry; it has tangible consequences for the city’s employment figures and tax revenues. According to a recent report by the Los Angeles Economic Development Corporation (LAEDC), the bar and restaurant sector contributed $4.3 billion to the city’s GDP in 2024, with 22,000 jobs tied directly to bars and nightclubs. A 9% sales decline translates into potential job losses, especially for part‑time staff and bartenders.

The Business Insider article ties this trend to a larger narrative about tariffs impacting small businesses across the U.S. A linked piece, “Tariffs and the Small Business Economy,” provides a statistical backdrop, illustrating that the hospitality industry is particularly vulnerable to supply‑chain disruptions and cost escalations. The article also points to the Department of Commerce’s quarterly report on the trade balance, which notes that tariffs on alcoholic beverages have contributed to a $1.2 billion shift in trade deficits for the hospitality sector.

Responses from the Industry

In response to these challenges, several bars and industry groups are exploring strategies to mitigate the cost burden:

• Local Sourcing Initiatives – Some bars have intensified their relationships with local vineyards and breweries. A notable example is “L.A. Liqueurs,” which has partnered with a network of California distilleries to source premium spirits at lower costs.
• Price‑Transparency Campaigns – The Los Angeles Bar Association launched a “Transparent Pricing” campaign to educate customers on how tariffs influence prices, hoping to maintain trust even as prices rise.
• Lobbying for Tariff Relief – A coalition of hospitality associations has petitioned the U.S. Treasury and the Department of Commerce to consider tariff relief on essential beverage imports, citing the broader economic impact.

The article also features a brief interview with a policy analyst from the Congressional Research Service who notes that while tariffs can protect domestic industries, they often impose significant burdens on downstream consumers and small businesses.

Key Takeaways

1. Sales Decline – Los Angeles bars experienced an average 8–9% drop in sales over the past year, largely tied to higher costs from tariff hikes on imported alcoholic beverages.
2. Price Adjustments – Bars increased prices for imported spirits and wine, while domestic beer and local wine pricing remained relatively stable.
3. Economic Impact – The decline in bar sales threatens job security and reduces municipal tax revenues in a city heavily reliant on tourism and nightlife.
4. Industry Responses – Bars are pivoting toward local sourcing, transparency initiatives, and policy advocacy to navigate the new tariff landscape.

The Business Insider article serves as a timely reminder that trade policy reverberates far beyond the chambers of Congress, touching everyday businesses and, ultimately, the wallets of city residents. As tariffs continue to shape the economic environment, the Los Angeles bar scene remains a barometer for the broader health of the hospitality sector in the United States.