Champagne sales in the Sunshine State are looking cloudy!

Given the US administrations recent threat to target French products in trade, the state of Florida, with its already nationwide high taxation on champagne, is considering to increase its existing champagne tax. Florida's current tax is $3.00 per unit and they are considering to raise that to $4.00a $1/unit increase. If this spreads to other states, our US sales could really be impacted. Thus, we are looking for lobbying angles to push back on the proposed tax increase.

I would like you to study the Miami market to see what impact this will likely have on consumers, retailers, and government revenue. Then based on your analysis, we will see if there is an angle to leverage one of the impacted stakeholders.

For example, currently there are 300 bottles of Moet & Chandon sold per month in Miami on average and the Miami municipal government is credited $900 per month from the state's champagne tax ($10,800 per year). The city is anticipating a credit of $1,200 per month ($14,400 per year) once the tax increases by $1.

I think with the $1 increase in tax, the consumers are going to switch to other spirits after the price increase on champagne, and there is no way that 300 bottles will be sold. I am expecting a noticeable drop in sales given the large tax increase. This is going to really threaten the city's expected tax revenue increase. Let me know if your analysis agrees with my initial thoughts. Also, in addition to changes in tax revenues, please look at changes in consumer surplus (currently $4,500) and producer surplus (currently $3,000) to see if there is an angle to leverage there as well.

A preliminary analysis by our research team indicates that current monthly demand and supply in the Miami market is Q^d = 700 - 10P and Q^s = 15P - 300 (note that this supply already includes the existing $3 tax).

Based on your analysis, I am eager to find out which stakeholder is impacted the most.