Puerto Rico

When Laura Madera welcomes guests to Pío Pío, the restaurant and wine bar she co-owns with her husband, Chef Ciarán Elliott, in Old San Juan, Puerto Rico, the first thing she discusses is the wine list. The 25-seat space serves more than 90 wines, including bottles from Spain and California, plus an array of natural wines. “The natural wine market is growing,” says Madera. “People are learning of it and how good it is, eliminating paradigms that natural wine is just funky and cloudy.” Pío Pío is part of that paradigm shift. Madera pairs natural wines with small plates that highlight local ingredients, like lionfish with carambola ceviche, or greens in an herbaceous silken tofu dressing. But wine lists in Puerto Rico haven’t always been so diverse. Over the last decade, natural wine gained popularity across Europe and in cities like New York in the continental U.S., but, like all imported products, the natural wine market faces numerous challenges in Puerto Rico. Chief among them is the century-old Jones Act. Also known as the Merchant Marine Act, and imposed by the U.S. government in 1920, this law requires that goods are shipped from the mainland to Puerto Rico via American-owned and -staffed boats. While the intention of the policy was to establish and develop support for the Merchant Marines, in effect, it elevates the cost of non-local goods in places like Hawaii, Alaska and Puerto Rico. That’s because it’s often more expensive to operate U.S. vessels than many foreign ones, so the products these boats carry must be priced accordingly. For example, shipping goods from the East Coast of the continental U.S. to Puerto Rico costs $3,063, but shipping the same container to Kingston, Jamaica, costs only $1,687. This gives less flexibility to wine distributors and sellers. While all imports are negatively affected under the Jones Act, restrictions are especially challenging for small-scale producers. Large conventional wine companies may be able to lower prices on certain bottles in certain markets, whereas independent producers behind natural wines have fewer logistical options. “The Jones Act will always create a lack of free competition,” says Rolando Lucca. He and his brother co-own Hermanos Lucca, a wholesaler, and a wine bar, Singular, at Convento in Old San Juan. Lucca imports natural wines from Jenny & François Selections, AR Wines and Ariana Rolich, a producer and importer of natural wines from Spain. “We buy directly from producers and also with the importer who has been the first link or mediator,” says Lucca. He adds that he feels “fortunate” to represent Jenny & François and AR Wines in Puerto Rico. The archipelago represents a considerable market for the global wine industry. Residents consumed 2,626 gallons of wine in 2020, and Puerto Rico imports more than 10,000 different labels by year. According to the Economic and Commercial Office of the Embassy of Spain in San Juan, red wine has approximately 43% of the market share, followed by white wine with 15.7%. Most of these wines are from Spain and U.S., followed by 10% from Chile and Argentina. “The Jones Act will always create a lack of free competition.” —Rolando Lucca, co-owner, Hermanos Lucca and Singular Stephen Hoppe, owner of Bar La Penultima in San Juan, recently launched a wine shop, Scuola di Vino, that imports wines directly from Italy in partnership with owner Giovanni Pagano. Pagano believes the situation in Puerto Rico is nuanced. "Shipping a 40-foot container from Italy to Puerto Rico is actually cheaper than to New York City or Oakland," he says. The problem lies in the local excise tax that must be paid at the port beforehand, he says, as well as the local sales tax, Impuesto sobre Ventas y Uso, or IVU. "It costs about $400 in excise taxes to bring a container to the U.S., while I had to pay $48,000 at the port of San Juan." The latter was comprised of $36,000 excise tax and $12,000 IVU. In addition, the necessary import license costs what Pagano calls "an absurd" $4,000, and infrastructural issues like regular power outages require some business owner to take on additional costs like purchasing and maintaining generators. Wine professionals in Puerto Rico say the pandemic has worsened the situation. “A crate of wine shipped to Puerto Rico used to cost between $10,000 to $12,000 but now, it is $18,000 to $20,000,” says Michelle Negrón, cofounder of Flash: Wine for Light, a natural rosé made in Terra Alta, Spain. Lucca agrees. “At the end of the day, it is an expensive system and all this inflates the value of the products,” he says. “To all this, add that the tax for alcoholic beverages in general are very high, so basically it is double taxation.” Since 1898, Puerto Rico has been an unincorporated territory of the United States. Residents have been U.S. citizens since 1917 but do not have voting power in Congress, nor for U.S. president. This makes change slow and difficult. In January, newly elected President Joe Biden signed an executive order to strengthen and enforce Jones Act provisions. Despite the pitfalls, the natural wine market continues to grow. “The market is changing and evolving thanks to wine platforms that educate,” says Gina Micheli, sommelier at Vianda, and founder of Mixx and Somm. Residents of Puerto Rico who’ve enjoyed natural wine in places like Brooklyn “want to have that same experience here, [so they are] pushing distributors to bring more diversity to the market, and more young people are getting involved.” Puerto Rico relies on imports for 85% of its food, but a younger demographic expresses interest in local agroecological farming and are concerned with how their food and drinks are grown and produced. “The natural wine market is growing.” — Laura Madena, co-owner, Pío Pío This mindset changes what many residents buy and consume. Nowadays, when you walk into Bar La Penúltima, the entire crowd isn’t downing cans of Schaefer beer and shots of Don Q rum. Instead, you see bottles of natural wine, in the center of patio tables, being shared and discussed among friends. “People are looking for quality, organic products, which were not harvested with chemicals, fertilizers, and pesticides,” says Negrón. Pagano agrees, noting the popularity of "raw wines that are wild, unpredictable and extremely drinkable." The lack of additives and reliance on wild yeast and other biodiverse efforts makes natural wine appealing for these drinkers. "Wine is an experience,” says Madera. “The notes, the aroma, the pairing and being natural makes it more unique since they are unique producers with small batches, making the experience and the market more special.” Editor's note: This piece was updated on October 25, 2021.