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U.S. Wine Imports Hit by Tariffs, Pandemic, But Retail Growth Stays Strong

November 13, 2020

While American wines were spared further retaliation from the European Union when the bloc raised levies on spirits in recent days, tariffs and pandemic-related disruptions caused imported table wine shipments in the U.S. to fall nearly 6% during the first three quarters of 2020, down to 69.4 million 9-liter cases, according to recent data from the U.S. Commerce Department. Import volumes from top-ranked Italy were up almost 2% year-to-date, while French imports—laboring under a 25% tariff—fell 37% by volume. New Zealand shipments continued to build on their strong U.S. momentum, rising nearly 5% year-to-date, while Portugal enjoyed a 19.5% gain, building on a run of 16 consecutive annual gains.

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 29% to €922 million ($1.1b) through August. Even Provence, which had surged dramatically in the U.S. in recent years, posted a 13% volume decline and a 24% value decline year-to-date. 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. Similarly, imports of Champagne fell 32% by volume and 36% by value year-to-date.

The nine-month decline in imported wine shipments was likely exacerbated by the fact that many importers elected to bulk up 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 not yet 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. Aside from France, imported table wine shipments from Spain and Germany also declined at double-digit rates through the first three quarters of 2020.

On a brighter note, table wine imports continue to fare well at the retail level, with total volume up 11% to 45.2 million cases in Nielsen channels in the 52-week period ending October 3, generating dollar sales of $4.5 billion, up 15%. In addition, many key brands showed strong double-digit gains in IRI channels in the year-to-date period ending October 4, including Impact “Hot Brands” Stella Rosa (+91% by value) and 19 Crimes (+36%). New Zealand’s Kim Crawford (+32%) also posted impressive growth year-to-date, while the market’s largest-selling import, Yellow Tail (+6%) had a more modest gain.—Juan Banaag

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