French wine exports perform (exceptionally) well since US taxes were lifted

Monday June 21 2021 by Vitisphere

 Among appellation wine regions, Bordeaux has witnessed a sharp increase in shipments since the lifting of taxes, to 24,900 hectolitres and €36.3 million in April 2021. Among appellation wine regions, Bordeaux has witnessed a sharp increase in shipments since the lifting of taxes, to 24,900 hectolitres and €36.3 million in April 2021. - Photo credit : White House (Air Force One)

In April 2021, the United States recovered its position as France’s leading import market for wine. Now that transatlantic negotiations have effectively lifted for the next five years the punitive customs duties levied starting October 2019, the sales momentum is not expected to decline. The suspension of the 25% US taxes on French wines since 11 March 2021 had an immediate effect on shipments. In April 2021, France exported 221,000 hectolitres of wine worth 208 million euros, which equates to a staggering 90 % volume and 131 % value increase compared to April 2020. This is according to Adrien Boussard, wines and spirits representative at Business France, who goes on to stress, however, that the shipments in March-April 2020 were skewed by the onset of the Covid-19 pandemic.

With increases of 16% by value and 25% by volume compared to April 2019 (before the taxes and the Covid crisis), performance in April 2021 stems as much from a return to normal values due to the increase in the average selling price, as from a real boom with shipments exceeding pre-crisis levels. Fiscal year 2020 showed a sharp decline of 10% in volume and 23% in value. Soaring imports may well have been prompted by the fear that customs duties were only lifted temporarily as negotiations at the time only covered four months, from 11 March to 11 July 2021. But at the same time, growth was also limited by the global congestion in maritime freight, with surging costs and shipping times to North America. The real effect of the tax removal can be seen when compared to the performance of the months preceding the suspension, with total shipments in the range of 100,000 hl worth €100 million.

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