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Wine Spectator: Tariffs Dramatically Impacting French Wines In The U.S.

February 11, 2020

American wine merchants, importers, distributors, restaurateurs, and consumers are fighting a two-front war when it comes to the trade battle between the United States and the European Union over airplane manufacturing subsidies. On one front, they are desperately lobbying the Trump Administration not to impose 100% tariffs on all European wines. A decision could come later this week.

On the other front, they’re already struggling with the 25% tariffs the U.S. imposed on still wines lower than 14% abv from France, Spain, and Germany last October. Sales are down and some wines are not being restocked. “In six months, the American market will be dead for us,” said Bernard Farges, president of the leading Bordeaux trade group CIVB.

When the tariffs were announced in October, many French wineries and their American importer partners scrambled to contain the damage, swallowing some of the cost of the tariffs. But many could not afford to do so. And the impact was immediate.

Wine exports to the U.S. have plummeted 33% since the tariffs were imposed, according to the French federation of wine and spirit exporters (FEVS). Cédric Coubris, vice president of the national syndicate of independent vignerons, said 600 of their members had reported losses totaling nearly $22 million by the end of 2019. They have 7,000 members. “We anticipate a loss of [$110 million] in 2020,” he said.

Prior to the tariffs, Bordeaux’s business in America was booming, enjoying its best performance in 30 years. From November 2018 to November 2019, Bordeaux exported 2.2 million cases worth $325 million. That’s 30% in value and 21% in volume of all French appellation wine sent to the U.S.

But exports plummeted 46% in value and 24% in volume in November alone. Négociant Georges Haushalter says the losses are colossal. “The situation is very critical,” he said. “The U.S. market is the second-largest export market for Bordeaux wines. Our business has stopped. We have containers ready to leave and clients are telling us to delay the shipment.” Wine Spectator has a full report.—Suzanne Mustacich

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