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Tariffs Take A Toll On Imported Wine Shipments, But Retail Growth Stays Strong

August 21, 2020

Tariffs and pandemic-related disruptions caused imported table wine shipments to fall 8% during the first half of 2020, down to 46.8 million 9-liter cases, according to recent data from the U.S. Commerce Department. Import volumes from top-ranked Italy were basically flat year-to-date, while French imports—laboring under a 25% tariff—fell 31% by volume. New Zealand shipments continued to build on their strong U.S. momentum, rising 8% year-to-date, and Chile enjoyed a 12.5% increase, although much of the latter’s growth was attributable to bulk shipments. With bulk factored out, Chile was up 2%.

Shipments from all the major wine-growing regions in France have fallen year-to-date, according to BusinessFrance, a French government agency, with import value down 31% to €937 million ($1.1b). Even Provence, which has surged dramatically in the U.S. in recent years, posted a 15% volume decline and a 27% value decrease year-to-date. Similarly, imports of Champagne fell 28% by volume and 31% by value. Bottled table wine shipments from France to the U.S. had recorded 10 consecutive years of volume growth prior to this year, according to Impact Databank.

The first-half decline in imported wine shipments was likely exacerbated by the fact that many importers elected to bulk up their inventories late in 2019, when the U.S. Trade Representative was threatening up to 100% tariffs on all European Union wines and spirits. While that dire scenario has yet to come to pass, the numbers make clear that the impact of the current 25% tariffs on French, German, and Spanish wines—as well as single malt Scotch whiskies—is being felt across the U.S. drinks business.

On a brighter note, imported wines continue to fare well at the retail level, with total volume up 20% to 28 million cases in Nielsen channels in the 26 weeks through July 11, generating dollar sales up 25% to $3.1 billion. Many key brands showed double-digit increases in IRI data in the 26 weeks through July 12. From France, Impact “Hot Brands” La Vieille Ferme (+21%), Gerard Bertrand (+29%), and Chateau d’Esclans (+43%) continued to soar in IRI channels over the period, as did Spain’s Campo Viejo (+53%), another Hot Brand.—Juan Banaag & Daniel Marsteller

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