France is going to be 'pushed into a corner' by the US, Spain and Italy if they don't deal with the threat of international competition, the main export organisation has warned.

Up to now France was only in danger of losing out in the UK market – but competition in the US and Germany has become increasingly worrying, Louis Régis Affre of France’s Fédération des Exportateurs de Vins et Spiritueux (FEVS) said.

‘If France doesn’t react we are going to be pushed into a corner by the New World and also by the Italians and Spanish,’ he said as FEVS published its annual report.

In the first nine months of 2002, French wines lost ground in six of their eight major overseas markets, continuing a two-year downward trend in global sales. Market share fell 4%, with only Belgium and Japanese markets remaining buoyant.

In the US, Australian wine sales surpassed French wines in volume terms for the first time. Australian wines already outsell French in UK restaurants and on the high street.

But nervousness among distributors may be as much to blame as any drop in the consumption of French wines, Affre says. A ‘just-in-time’ cycle of operation by distributors, who are massively destocking in the face of the economic crises, is making the problem worse, he suggested, at the same time insisting consumption of French wines around the world hadn’t wavered.

Changes in exchange rates between the euro and the dollar in 2003 are also going to have an impact on export performance, Affre said. North America currently accounts for around 25% of French exports.

But the news isn’t all bad. Global sales of French alcoholic beverages rose 6.4% in 2002 to €7.7bn thanks to dynamic growth in Champagne, liqueurs and brandies.

Written by Liz Hughes6 March 2003