For a long time now, the export market for French wine and spirits has been stable. Until now, whilst imports to some countries wavered, this never lasted very long, allowing different stakeholders to avoid being caught off guard.
Yet, since 2019, upsets to the global market have been coming thick and fast. The conflict between Airbus and the US, the European Union’s GAFA tax, Brexit, the political crisis in Hong Kong and then the arrival of the coronavirus…whilst these events don’t seem at first to be directly linked to the French viticultural sector, in reality they all have far-reaching implications.
French exports up by 5.9% (in value)
When we look at the export figures for 2019, they are nevertheless very encouraging, counting for €14 billion, an increase of 5.9%, with wine and spirits still the second industry behind the aeronautical industry. A strong increase of 8.8% was recorded for spirit exports (€4.7 billion) whilst the wine market saw an increase of 4.4% (€9.3 billion). In terms of volume exported, this has remained more or less the same, with a slight increase of 0.7%. The United States, top importer of French wines and spirits (€3.7 billion) has observed a strong increase of 16% in value and 5.5% in volume thanks to a notably successful first half. The United Kingdom also saw an increase, this time 4.4% to reach €1.4 billion exchanged.
A market under pressure, growth partly due to anticipatory orders
Behind these figures lies a different reality. Importers have been ordering more in anticipation of taxes due to be introduced. On this subject, since the 18th October 2019, French wines with an ABV of less than 14% have been taxed at 25%, and there are threats looming from the other side of the Atlantic for this to increase further. The same goes for Brexit which, due to trade agreements to come, could lead to an increase in British tax on French products, including wine and spirits. China and Hong Kong are also experiencing difficulties that have slowed the growth seen in recent years. Their imports have dropped by 6.4%, though the €1.4 billion figure is not a disaster. These three markets represent 50% of our exports, and thus there are sure to be losses in 2020, with some already talking about a €300mil decrease for the sector.
There are still some reasons to eb cheerful. The European Union continues to ‘drink French’, increasing its consumption by 3.8% and reaching a figure of €4.7 billion. The Japanese market, also proving to be dynamic, has brought a total of €600k in imports, an increase of almost 10%. Some good news, therefore, to relay to our exporters, all of whom we hope will emerge relatively unscathed from this anxious period.
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