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France seeks to boost wine sales at Vinexpo as exports to US plummet in wake of tariffs

Bottles of Château Latour on sale in a winery in West Hollywood , Los Angeles.
Bottles of Château Latour on sale in a winery in West Hollywood , Los Angeles. George Wilhelm/Los Angeles Times via Getty Images

The annual Vinexpo trade fair opens in Paris today and France is desperate to claw back market share since its wine exports to the U.S. slumped following the introduction of hefty import duties.

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2,000 winemakers and wine merchants and some 30,000 visitors are expected during the three-day Vinexpo trade fair in Paris.

This year the stakes are particularly high.

"Faced with the difficulties we're encountering with Trump's taxes, Brexit and the slowdown in China, we must find new markets in third countries by focusing on French excellence," said Agriculture Minister Didier Guillaume inaugurating the fair on Monday morning.

The U.S. is the second-biggest export market for French wines, after Germany and ahead of Britain and China. 

But since President Donald Trump imposed 25 percent tariffs on a range of European delicacies, U.S. imports of French wine have plummeted. 

"We saw a 44 percent drop in exports of French wine to the U.S. at the end of last year," said Deputy Foreign Minister Jean-Baptiste Lemoyne on Friday.

This follows the import penalty levied by the U.S. in response to subsidies to planemaker Airbus and which took effect on 18 October 2019.

Lemoyne called the slump a “shock” for growers and promised help in the form of increased promotion for French wine in other markets, a doubling of the budget of Food and Drink communication group Sopexa, and additional operations for Business France.

The French government has also called on the European Union to intervene.

“France has asked the European Union to provide compensation for [winegrowers'] losses. It will be a precious tool to help the wine sector during these complicated times,” Lemoyne said, adding they hoped to have a response in the coming weeks or months.

Everyone doing their part

Lemoyne did not provide overall figures for wine exports, but the US Census Bureau data for January showed that American imports of French wines plunged to just €51.8 million in November from €119 million the month before, when tariffs kicked in.

“Everybody is doing their part to offset the import penalty:  producers, merchants and importers are all cutting their margins so that American clients don’t see a price increase of more than five percent,” Gilles Fèvre, a producer in the Chablis region of Burgundy, told AFP.

The tariffs have hit producers at the lower ends of the market the worst: a 25 percent price increase can turn an affordable bottle into a once-in-a-while treat.

Some winegrowers report losses in turnover of 10 percent, but sales of Bordeaux have slumped by up to 46 percent.

Solid government backing

The annual Vinexpo is traditionally held in Bordeaux, and this year’s move to the capital and the fact it is being held under the patronage of the French President himself is a marker of how high the stakes are. 

Emmanuel Macron has made no secret of his love of wine, declaring at the annual Agricultural Show in February 2018: "I drink wine at lunchtime and in the evening". He added that so long as he was in charge, there would be no attempts to tighten the country's contentious alcohol-regulating Evin Law. 

He did not offer government support for plans by groups fighting alcoholism to introduce a "Dry January".

The French Prime Minister, Edouard Philippe, has also championed the French wine industry: "Like the French President, like millions of French people, I love wine.”

Only the Minister of Solidarity and Health, Agnès Buzyn, has dared to openly swim against the tide.

"While the wine industry would have us believe wine is a different kind of alcohol," she said in Feburary 2018, "when it comes to public health concerns, drinking wine is exactly the same as drinking beer, vodka or whisky.”
 

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