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‘Deceptive’ record for French wine exports as tariffs bite

US tariffs have hit French wine exports hard in recent months, making overall figures for 2019 misleading, say industry leaders who have called for a €300m compensation fund.

Official figures show that French wine exports rose by 4.4% in 2019, to €9.3bn. If spirits are included, total exports hit €14bn, up by 5.9% versus 2018.

But there is a good deal of anxiety beneath the surface following the onset of 25% US import tariffs on French still wines at 14%abv and below.

‘The 2019 positive result must not be misinterpreted,’ said Antoine Leccia, president of the French Association of Wines and Spirits Exporters (FEVS). 

‘[The] international political environment and trade tensions had a severe effect on French wines and spirits exports, suggesting 2020 will be a challenging year.’

Merchants in the US tried to stockpile wines before tariffs were implemented on 18 October, which led to a 16% increase in French wine and spirits exports to the US for 2019, to €3.7bn. 

However, FEVS said official figures for 2019 were ‘deceptive’. It said shipments of bottled still wines dropped by 17.5% in the final quarter of the year, leading to €40m in lost sales for French wineries, from Burgundy to Bordeaux.

There have been stories within the trade of French wine containers being called back mid-way through shipping to the US, once it became clear that tariffs were going ahead.

Champagne, which is so far unaffected by US tariffs, performed better than still wines in 2019, with exports rising by 7.5% to €3.1bn, show FEVS figures released this week.

Several trade sources believe that fine wine lovers and collectors have also become more interested in Italy, after wineries there avoided the initial round of US tariffs.

Leccia called for France’s government to create a €300m emergency compensation fund to help French wine businesses affected by the tariffs, which also apply to Spanish, German and UK still wines. 

Levies could yet be expanded to more EU countries, and may rise to up to 100%, as part of US retaliation for illegal subsidies paid to European aerospace group Airbus. 

However, both the European Commission and the US government have said they would prefer a negotiated settlement.

Leccia said French wine and spirits makers were facing ‘high-risk’ situations ‘across our top three markets’; he highlighted Brexit and also signs of an economic slowdown in China, following political tension in Hong Kong for much of 2019. 

The US, UK and China ‘account alone for 50% of our overall sales’, said Leccia.


See also: 

Panic over 100% wine tariff threat in the US

Champagne tariffs on ice? Trump and Macron call truce


 

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