USA | New taxes on French wines

Last week, the USA announced its decision to impose an additional 25% tariff on French wines, the result of a long-running dispute with the EU over airplane subsidies.  

The trade dispute between the United States and Europe escalated last week, with sanctions announced that would affect a series of French product. Wine will be most impacted, with 25% tax ad valorem. The news is very worrying for many professionals in the sector, iDealwine included.

In a press release, president of the FEVS (Federation of Exporters of Wines and Spirits) Antoine Leccia stated, “this is very bad news for the industry and its businesses. We regret this decision that will do a great deal of damage to business between the two countries.” He went on to highlight the strong relationship between France and the US, and its dynamic trading up until now. Given that the conflict is foreign to the wine sector, the Federation has requested that the authorities reconsider their position.

At iDealwine, although for now the USA only represents a small portion of current turnover (<5% in 2018), this market is one of the most dynamic and constitutes on of our main areas of focus for international growth in the 5 years to come. The American market is in fact perfectly adapted to the rare fine wines sold on iDealwine. ““The market is mature and highly knowledgeable. Americans were among our first non-French customers to buy wines such as Clos Rougeard, natural wines, wines from the Jura… Given the constraints that already exist when it comes to importing, we’ve made progress on this market slowly but surely; it has shown itself to be very reactive and dynamic. Our turnover increased by 62% between 2018 and 2019 (January-September). This success has led us to dedicate a development project entirely to the area, with increased physical presence. For example, we will be participating in the New York wine show Matter of Taste organized by The Wine Advocate (Robert Parker). The next step would be to open an office in New York, just like we did in Hong Kong in 2013 – which then went on to become our top buying country after France. We had planned to make various investments and recruitments to develop the market. This supplementary tax of 25% for wines headed to the US forces us to seriously question these projects. We are waiting to hear the reactions of our American customers. We sincerely hope that the French government will support us by continuing negotiations with the United States, so as to reestablish normal trading circumstances.”, Cyrille Jomand, CEO of iDealwine, explained.

A further tax of 25% represents a significant psychologic barrier for many consumers, and we are not the only professionals in the sector to be concerned: Louis-Fabrice Latour of Maison Latour explained that “it’s a sword of Damocles hanging over our heads as the USA is the main export market for Burgundy”. If no solution is found between the EU and America before the 18th October, these tariffs will be established, and many businesses will suffer the consequences: we therefore request that public authorities do all in their power to limit the effects on the wine industry.

We’ll keep you posted as we hear more.

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