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Trade Trends News
18-02-2024
French wine and spirits exports fell last year from a post-New Crown epidemic
peak as inflation weakened consumer demand and distributors in the lucrative
U.S. market cleared out existing stocks, industry group FEVS said.
Wine and spirits are one of France's biggest export earners. The industry has become increasingly reliant on foreign sales as a drop in domestic consumption has affected some regions such as Bordeaux, sparking recent protests by farmers.
French wine and spirits exports totaled €16.2 billion ($17.5 billion) last year, down nearly 6 percent from record levels in 2022, the French Wine and Spirits Exporters Federation (FEVS) said in its annual update.
Nevertheless, sales in 2023 were the second highest on record, in what the FEVS called a "soft landing" that followed a surge in demand following the COVID-19 pandemic.
French exports fell even more sharply last year, by more than 10 percent, FEVS said.
Distributor destocking in the US, by far the largest export market for French wines and spirits, led to a 22% fall in French imports to €3.6 billion.
Gabriel Picard, chairman of FEVS, told Reuters, "Most of the decline in exports in 2023 compared to 2022 comes from the U.S. market."
In China, imports from France fell more than 6 percent to 1.2 billion euros as the economy stumbled and hopes for a surge in overall demand were dashed following the easing of restrictions linked to the New Crown outbreak.
But FEVS said the reopening of venues such as bars and restaurants did support a modest increase in Chinese spirits sales, particularly cognac brandy.
"Expectations exceeded reality, but the reality is similar to 2022," Piccard said of China.
In 2024, wines and spirits face the same economic and political uncertainty as other industries, but the end of the de-stocking phase in the U.S. market is a reason for optimism, Piccard said.
China's launch of an anti-dumping investigation into EU brandy last month is a risk, he said, and the industry is mindful of the possibility of Donald Trump, who previously taxed European wines, returning to the U.S. presidency.
"More than ever, we need the support of the authorities, who must not assume that the good export performance of wines and spirits is a permanent achievement," he said of trade issues.
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