French exports of wine and spirits fell last year from a post-COVID peak as inflation clipped consumer demand and distributors in the lucrative US market cleared existing stocks, industry group FEVS said.
Wine and spirits are one of France's biggest export earners. The sector has become increasingly reliant on foreign sales as declining domestic consumption has hit some production areas such as Bordeaux, contributing to recent protests by farmers.
Total French exports of wine and spirits reached €16.2 billion ($17.5 billion) last year, down almost 6% from a record level in 2022, the Federation of French Wine and Spirits Exporters (FEVS) said in an annual update.
The 2023 sales nonetheless represented the second-highest on record in what FEVS called a 'soft landing' after a surge in demand following the COVID-19 pandemic.
French exports fell more sharply in volume terms last year, with a decline of more than 10%, FEVS said.
In the United States, by far the largest export market for French wine and spirits, de-stocking by distributors contributed to a 22% drop in imports from France to €3.6 billion.
"Most of the fall in export value in 2023 versus 2022 is from the American market," FEVS chairperson Gabriel Picard told Reuters.
Faltering Economy
In China, a faltering economy dampened hopes of a surge in overall demand after the country wound down COVID-related restrictions, with imports from France down more than 6% at 1.2 billion euros.
But the reopening of venues such as bars and restaurants did support a slight increase in spirits sales in China, notably cognac, FEVS said.
"Expectations exceeded reality but the reality was similar to 2022," Picard said of China.
For 2024, wine and spirits faced economic and political uncertainty like other sectors, but the ending of the de-stocking phase in the US market was a cause for optimism, Picard said.
China's launch last month of an anti-dumping investigation into European Union brandy was a risk while the industry was mindful of the possibility of Donald Trump, who previously imposed taxes on European wines, returning as US President, he said.
"More than ever, we need the support of our authorities, who must not think that the good export performances of wine and spirits are a perpetual achievement," he said of trade issues.
