Italian wineries not immune to “tariff pain” while French wine sales “plummet”

“[Bordeaux] exports plummeted 46 percent in value and 24 percent in volume in November [2019] alone,” according to an excellent free-for-all post by Suzanne Mustacich published on the Wine Spectator website on Monday.

The French are feeling the “tariff pain,” she wrote, “with reports of falling exports and winery bankruptcies.”

French winemakers have been subject to a 25 percent tariff since October of last year. Newly available fourth quarter financial sales numbers reveal that November and December were especially challenging for EU producers in general and for the French in particular.

“‘In six months, the American market will be dead for us,’ said Bernard Farges, president of the leading Bordeaux trade group CIVB,” reports Mustacich.

Although Italy hasn’t yet been subject to the new round of U.S. tariffs, Italian wine producers are also feeling the effects of the trade war.

According to figures published last week by Wine Monitor, the Italian wine industry’s subscription-based “market watch” association, “Italy experienced a drop of 7 percent in sales [in November and December of 2019] with respect to the previous year, with a 12 percent drop for still wines.”

“EU producers continue to tread water,” write the authors of the report, “with France seeing its sales of still wine drop by 36 percent and Spain experiencing a 9 percent drop in the last two months” of 2019. At the same time, “sales of New World wines are soaring, with a 40 percent increase for New Zealand and a 53 percent increase for Chile.”

(The data were reported by Italpress, an Italian news agency. Translation mine.)

Across the U.S. wine trade and wine-focused media this week, rumors have circulated that the U.S. Trade Representative will be making an announcement on tariffs on Monday, February 17. But reports of a pending policy statement haven’t been verified — at least not to my knowledge.

According to a statement issued by the U.S. Wine Trade Alliance, an activist Facebook group formed in December 2019 in response to U.S. tariffs, “the only people getting hurt [by U.S. wine tariffs] are American business owners and consumers.”

That is due partly to the fact that “75-85% of the selling price of a bottle of wine is profit or taxes taken by American entities,” say Harry Root, founder of the group, and Ben Aneff, a member of the National Association of Wine Retailers (NAWR).

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