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Over the first five months of 2020, exports fell by 29% compared to the same period in 2019.*
In May 2020, the level of French alcohol exports suffered a massive drop: - 45%. A counter-performance almost similar to that of April. As a result, over the first five months of the year, the flow of wines and spirits sold outside France fell sharply, with a volume of business estimated at 4.1 billion euros, down 26% compared to the same period in 2019, according to data from the French Federation of Wine and Spirits Exporters (FEVS).
The Airbus-Boeing conflict between Europe and the USA
The first real shock came on 18 October 2019. In the context of the Airbus-Boeing conflict between Europe and the United States, the American president, Donald Trump, decided to tax a number of European products, including French wines, to the exclusion of sparkling wines. Since that date, every bottle of Bordeaux, Burgundy or Provence rosé has been taxed at a rate of 25% when entering the North American market. These sanctions were extended for six months on February 15, 2020.
We analyzed red wines listed in the wine shops of New York, USA
Covid-19 exacerbated the situation
In this very tense context, the coronavirus pandemic has further exacerbated the situation. Bars and restaurants have been closed in many countries. Air traffic has been put on hold, depriving airports and their duty-free shops of the flow of travellers. As a result, sales of French wines and spirits plummeted in their main markets. Thus, in the United States, the leading destination for French spirits, exports fell by 59% in May and by 29% over the first five months of the year, for a total of one billion euros. In China and Hong Kong, exports fell by 51% in May and by 40% since January. When the decline reached nearly 29% in the United Kingdom, the decline in China and Hong Kong was 51% in May and 40% since January.
What Donald Trump's response will be
Next step, August 12, 2020. The wine industry will then know whether or not the United States will maintain taxation on wine for another six months. A positive signal has been given on this side of the Atlantic, with the decision by the aircraft manufacturer Airbus to comply with the regulations of the World Trade Organization (WTO). The decision was formalized on Friday, July 24. A necessary precondition for a negotiated way out of the conflict. Europe, in the wake of this decision, has called on the United States to immediately lift its sanctions. It remains to be seen what Donald Trump's response will be.
Author: David Beck
Email: david@mibdmarket.com
*FEVS
