2020 won’t be synonymous with growth in the wine and spirits sector. The figures are in, and it’s official: the FEVS (Fédération des Exportateurs de Vins et Spiritueux en France) has announced a 13.9% drop in French wine and spirits exports, with a 5% decline in the volume of Bordeaux wines sold. Though this isn’t looking so great, there is hope for 2021.
A 13.9% drop for French wine and spirits exports
The numbers have been crunched, and it’s clear to see that France’s wine and spirits exports in 2020 were not spectacular. The overall figure of 12.1 billion euros, equivalent to that of 2016, represents a drop of 13.9%. This is what the FEVS revealed in their press release on the 11th February. The reasons for this result are unsurprising, with the Covid crisis and consequent closure of restaurants and bars, on top of the import taxes that persist in the US. Wine and spirits exports to the US decreased by 18%, representing 670 million euros. Since October 2019, French wines under 14% alcohol level are taxed at 25% upon entering US territory, and this was worsened at the beginning of this year, now including alcohols over 14% such as cognac and armagnac. The FEVS has thus called to the European Commission to act as quickly as possible in resolving this issue, which came as a result of the dispute between Airbus and Boeing. Hopes have been placed on the new American president to take action.
Looking into the details, we can see that some regions have been more heavily affected than others. This is particularly the case for Champagne, impacted by a 17% drop in volume and 20.5% in value (2.47 billion euros) and for cognac, with an 11.6% drop in volume and 21.4% in value (2.47 billion euros).
Despite this, the wine and spirits sector still remains France’s second industry in terms of export, after aeronautics. These negative indicators can be somewhat offset by the welcoming of a new president and the arrival of the Covid vaccine.
Bordeaux Wine Sales in 2020: Three years of decline
5%. That’s the drop this time round for Bordeaux. It represents the decrease in volume of wine sold from the region, its third consecutive year in decline. The CIVB, the (Conseil Interprofessionnel des Vins de Bordeaux or Bordeaux wine trade association) published a press release on Friday 12th February indicating the 2020 figures for the region: in volume, 3.92 million hectolitres of wine was sold, i.e., the equivalent of 522 million bottles.
Just like most things in 2020, the Covid-19 pandemic is much to blame for this fall in sales, but increased US taxes, Brexit, and the political situation in Hong Kong have not helped either. According to the CIVB, there has been a move away from Bordeaux appellation wines in France. Without festive occasions due to Covid, the French have opted for lower value wines outside Bordeaux. Some problems are more structural than cultural or political in nature: the continued weakening of the Chinese market for Bordeaux, for example there is a consumer growing consumer trend for white wine (84% of Bordeaux wines are red). Studies also show consumers are buying less in large supermarkets, choosing smaller special wine retailers instead, disproportionally effecting Bordeaux.
Despite the bleak picture painted here, the CIVB has seen more positive trends emerging in the final months of 2020, giving producers hope for the year to come, with potentially some recovery from the Chinese market. Looking to the USA, sales have already increased since the beginning of the Biden administration.
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