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French exports of wines and spirits fell last year from their post-COVID peak, as inflation eroded demand and distributors in the US market liquidated their stocks, the balance sheet showed on Tuesday. the Federation of French Wine and Spirits Exporters (FEVS).
Wines and spirits are one of France’s main export sources and the sector has become increasingly dependent on sales abroad, with the decline in domestic consumption having hit some production areas such as Bordeaux, contributing thus to the discontent of farmers.
Total French exports of wines and spirits brought in 16.2 billion euros in turnover last year, down 5.9% compared to the record level of 2022, the FEVS said in its annual report .
The industrial group, however, believes that this is a “soft landing” because sales in 2023 showed the second best historical performance in the export sector.
The drop in exported volumes is, however, more marked, with a decline of 10.4% to 174.5 million boxes last year.
In the United States, by far the leading export market for French wines and spirits, distributor clearances contributed to a 22% drop in imports from France, to 3.6 billion euros.
“Most of the decline in export value in 2023 compared to 2022 comes from the American zone,” FEVS president Gabriel Picard told Reuters.
In China, where the faltering economy dampened hopes of a rise in overall demand after the end of COVID-19 restrictions, French imports fell more than 6.3% to 1.2 billion euros.
But the reopening of places such as bars and restaurants has favored a slight increase in sales of spirits in the country, particularly cognac.
“Expectations were higher than reality but the reality was equivalent to 2022,” commented Gabriel Picard, speaking of China.
For 2024, wines and spirits are faced, like other sectors, with economic and political uncertainty but the end of the destocking phase on the American market is a source of optimism, he added.
China’s launch last month of an anti-competitive investigation into wine spirits, such as cognac, imported from the European Union, however, constitutes a risk. As well as a potential return to the head of the United States of Donald Trump, who had previously imposed taxes on European wines.
“More than ever, we need the support of public authorities, who must not consider good export results for wines and spirits as an immutable achievement.”
(Reporting Gus Trompiz; French version Kate Entringer, editing by Zhifan Liu)