2 min read.Updated: 15 Nov 2018, 06:33 PM ISTBloomberg
The US suffers from a significant wine trade deficit with the EUUS imports of European wine totaled $4.5 billion in 2017, compared with $553 million exported from the US to the EU
Customers at Les Bacchantes, a Paris wine bar, were taken aback by the question: Why, among the dozens of offerings, is there not a single US red, white or rose on the list?
“America makes some good wines, but we have everything we need here in France," said one woman who asked to be identified by her first name, Colette.
President Donald Trump, in a multipronged Twitter tirade against his French counterpart Emmanuel Macron, complained this week that the country “makes it very hard for the US to sell its wines into France," because of higher tariffs.
Trump is right that import duties on wine are higher in France— and across the European Union, of which the country is a member. Rates range from about 11 cents to 29 cents per bottle, depending on the alcohol content. US tariffs are less than half that, from 5 cents to 14 cents.
The US suffers from “a significant wine trade deficit" with the EU, said Robert Koch, chief executive officer of the Wine Institute, a US-based trade association. The group says US imports of European wine totaled $4.5 billion in 2017, compared with $553 million exported from the US to the EU.
But tariffs aren’t the whole story. Wine consumption in the US exceeds domestic production by about 30%, which reduces the pressure to find export markets. By contrast, Europe’s three largest producers— Italy, France and Spain— all make far more than they can sell domestically.
American exporters are taking aim at the high end of the French market, where tariffs of less than 30 cents per bottle don’t have much impact, said Cyrille Jomand, CEO of iDealWine, a Paris-based online seller and auctioneer. The US accounts for only 1% of French wine imports by volume— but 10% by value, according to agricultural agency France AgriMer.
The US produces “some excellent bottles, and our wine lovers are eager to try them," Jomand said. “If you compare a Meursault with a very good California chardonnay, the chardonnay might be 10% more expensive, but that doesn’t stop them," he said. Jomand recently auctioned a 2014 vintage Screaming Eagle from Napa Valley for 2,170 euros ($2440).
Since California’s Stag’s Leap topped famed wines like Chateau Haut-Brion in a 1976 tasting that became known as the Judgment of Paris, American wines have shown that they can hold their own against France’s best. But the halo effect of France’s famed wine regions, including Bordeaux, Burgundy and Champagne, extends down the range to the 3-euro bottles of red and white that line France’s supermarket shelves.
In France, more than 70% of the volume sold last year was domestically produced, according to the Paris-based International Organization of Vine and Wine. In the US, American production has a market share of about two-thirds.
At the lowest end of the market, Spanish wines sold in plastic-lined boxes have made inroads in France in recent years, drawing the ire of the country’s vignerons. The growers, who complain that the imports are sold under misleading labels that pass them off as French, have hijacked trucks bringing wine across the border and emptied the contents.
Even if a bottle of French wine costs a few cents more, “It’s not the price that makes the difference," said Dominique, another customer at Les Bacchantes. “We prefer our French wine."
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
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