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California wine sales hit record amid tariff fears

Shipments of California wine hit a new record of 268.6m cases in 2014 thanks to increasing sales in the US, show new figures, but there is concern over the potential fallout from a trade dispute.

US wine drinkers in particular are buying more expensive bottles, but cheaper wines are being impacted by increasing competition from rival drinks categories, California’s Wine Institute said.

Its figures show total wine shipments from California rose 3.7% to 268.6m cases, with US shipments rising 4.4% to just under 225m cases and exports flat at 43.7m cases, excluding bulk wine.

Increased shipments of premium wines in the US pushed value up 6.7% to US$24.6bn, while US exports (90% from California) reached US$1.5bn in winery revenue terms from volumes of 49.3m cases, including bulk wine.

The European Union accounted for $518m in exports, followed by Canada at $487m, Japan at $101m and China at $71m.

‘The premium wine segment [in the US] – $10 and above – is strong with excellent prospects for continued growth over the next few years,’ said wine industry consultant Jon Fredrikson of Gomberg, Fredrikson & Associates.

‘The value-priced wine segment has been shrinking because consumers are buying more expensive wine and because of competition from the increasing number of alcohol beverage offerings.’

He added that, while premium wines accounted for only 25% of California wine volumes, they brought in almost half (47%) of all revenues.

Meanwhile, the Wine Institute has warned that exports to Canada and Mexico could be impacted by retaliatory duty tariffs in response to a WTO ruling that the US is violating its rules with its Country of Origin Labelling (COOL) on meat products.

Retaliation could cause ‘irreparable harm’ to US wine exports to Canada, the country’s leading single export market, Institute president and CEO Bobby Koch warned.

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Written by Richard Woodard

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