Is there hope for French wine exports?

There has been a decrease in French wine exports of late…but markets such as China remain highly promising for the viticultural industry. And iDealwine is enjoying a healthy international sales rate. Our International development manager, Alix, breaks down the figures for us.

French wine exports drop

Let’s sketch out some of the biggest influences on the downward trend in French wine exports. 2020 has seen the US tax on wine definitively established, this being a +20% tax on still wines below 14% alcohol. A measure initially brought in by the now outgoing president Donald Trump, it is too soon to say whether the White House’s changing of colour will see the tax revised. Secondly, as we head towards the deadline for a Brexit trade deal, it is clear that uncertainty has had an impact on the attitudes of UK clients, some of the biggest consumers of French wine. Finally, and most significantly, the global pandemic has brought the catering and hospitality industry to its knees, making it incredibly difficult for businesses across the world to continue selling French wine.

In concrete terms, the sector experienced an 18% decrease in exports between January and August 2020. This is the first significant drop since the economic crisis of 2008 and 2009. Further number-crunching shows us that:

  • Sparkling wines, from champagnes to crémants, have been most heavily affected, with a 22% drop in volume exported and -28% in value
  • Exportation of still wine has dropped by 6% in volume and 13% in value.

So, what has been done to ease this strain? Fortunately, the government has chosen to support the sector by providing storage aids that will already have been paid. 40 million euros have been set aside from national (35M) and European (5M) funds. Looking further into the details, this relief should be 4 cents per hectolitre and will be available from 100 stored hectolitres so that more modestly sized producers can also benefit.

Alongside this, the Federation of French wine and spirits exporters (FEVS) has called for the government to bring an end to the dispute between the US and France over its aeronautical disagreement. This is the issue that brought about the hefty tax now weighing heavily on the industry when it comes to US exports.

A glimmer of hope from China?

Whilst the wine industry is sounding alarm bells, a glimmer of hope seems to shine out from the gloom over in China, where prospects are looking more positive. It has already been noted that an increasing number of Chinese women are finding an interest in wine, and young people are consuming less of the local spirit, Baiju. But the arrival of the Covid-19 pandemic seems to have brought about an acceleration in wine-buying. Already widely used by younger generations, digital sales have become a real focus for the government who wish to develop this commercial channel, with older consumers being gradually drawn in, too. International Wine and Spirit Research is projecting a 15.8% increase in online wine purchases in China from 2019 to 2024. Some reasons for this are improved payment systems, more ergonomic sites that work with smartphones, as well as innovative approaches by business giants Alibaba and Tencent.

iDealwine’s international sales

So how are the international figures looking for iDealwine? Alix gave us the lowdown on the Asian, European and American markets.

“In Asia, after a difficult start to the year, the positive trend seen in Hong Kong since the summer has been established and is growing. This goes for both private and professional buyers.

Europe has proven to be especially dynamic (+30% since January 2020), headed up by Italy with Germany, Switzerland, Luxembourg, the Czech Republic, and Sweden not far behind. In fact, our turnover from Sweden has doubled.

In the US, our client base has grown by 96%, thus raising our turnover. This is clearly a very dynamic area with private clients looking for the best place to buy foreign wine since the tax was introduced.”

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