Despite concerns over the impact of Brexit, and the impact of US tariffs, exports of French wine and spirits reached a record high in 2019. Exporters from all over the country recorded an increase in overseas sales of spirits and wine to a record $15.3 billion. This is an increase of 5.9% on figures from 2019, according to the Federation of French Wines and Spirits Exporters (FWSE).
US and UK biggest markets for French wine exports
The United States is the biggest export market for French wine and spirits, and this increased to $3.9 billion in 2019. The industry group says that this 16% increase in exports to the US was because of heightened trade tensions. A 25% tariff was imposed on a swathe of European products, including French still wine by the US Government. This was in response to subsidies in the aviation industry.
Following the imposition of the 25% tariff, the wine industry began to prepare for the threat of another round of duties, this time because of French taxes on digital services. These haven’t yet happened, but there is still the chance that they might, which increases pressure on the sector. US tariffs led to a decrease in French still wine exports during Q4 2019 or 17.5%. This equates to a 40 million Euro loss in turnover.
And US tariffs aren’t the only geopolitical uncertainty to cause problems for the French wine industry. Brexit negotiations also affected exports to the UK, with sales rising by 4.4% to about $1.5 billion. The UK is the second biggest export market for French wine and spirits.
Export increase must be taken in context says trade body
Despite these increases in 2019, due as they are to geopolitical uncertainty, the president of the FESW warns that 2020 could be a difficult year for the sector. In the report Antoine Leccia warns that the higher figures from last year should be interpreted against the backdrop of trade tensions and international political wrangling. He calls the sanctions ‘arbitrary’ and warns that they will have a “heavy impact on exporting companies and, more broadly, on the 500,000 players in the wine sector.”
The Champagne region, which remains one of the most popular and successful French wine regions, recorded a drop in exports during 2019. Exports dropped from 301.9 million bottles of Champagne in 2018 to 297.5 million in 2019, say the latest figures published by the Comite Champagne.
This trade group says that the economic complications in both the US and the UK has affected export numbers. As these are the two biggest export markets for Champagne, any geopolitical and macroeconomic issues affect the sector. Despite this drop in exports, the region sold $5.4 billion worth of Champagne in 2019.