French wine growers are feeling the impact of US sanctions

French exports of wines and spirits reached a level of 12.1 billion euros last year. That was 13.9 percent lower than the previous year. This is stated in a report by Fédération des Exportateurs de Vins & Spiritueux (FEVS), the Federation of French Wine and Spirits Exporters. The union believes that an important reason for the decline is the import duties imposed by the United States on French wine.

These import duties make French wines more expensive for American consumers. In addition, there is also the negative impact of the Corona crisis, which has led to the closure of many duty-free restaurants, cafes and stores around the world.

Constant conflict

In the past year, the income of French wine and spirits exported by one billion euros. This has a huge impact on the entire French economy. After all, the sale of wine and spirits abroad is France’s most important export sector after aviation and aerospace.

“We expect activity to pick up this year,” the exporters say. “We hope that the vaccination campaigns will provide a glimpse of the end of the tunnel.”

The United States is of particular interest to French producers of wines and spirits. After all, US sales represent the sector’s most important foreign sales market. After all, a quarter of French wine and spirits exports go to the United States.

But sales last year fell 18 percent to 3.1 billion euros. However, it should not be forgotten that exports registered a strong increase two years ago. After all, many US importers built up a larger stock at that time to be able to partially absorb the impact of the tariffs.

The US government imposed additional taxes on a number of products from the European Union, including French wine. These sanctions are part of a protracted dispute – which has now been going on for seventeen years – with the European Union over subsidies to aircraft manufacturers.

China

Sales in China also decreased by 15 percent. French wine producers point out that “the global epidemic has spread to China”. “It happened on the eve of the Chinese New Year, which led to a complete collapse of Chinese consumption during that festive period.”

Sales in Singapore and Hong Kong were down 31% and 6% respectively in the past year. Exports to other European Union member states also decreased by 6.9 percent. Exports to the UK fell 6.5 per cent.

Global exports of champagne and cognac, the two most popular exports of the French beverage industry, lost sales of more than 20 percent last year. In the Netherlands there was an increase in consumption, but this could not compensate for the decrease in exports.

The federation says it hopes to achieve better results this year, provided the Corona pandemic recedes. “In some countries, some positive signs can already be observed during the last quarter of last year,” the producers said.