Trade in wine and spirits between the United States and Europe have not changed for 20 years but are now in the sights of Donald Trump, after Emmanuel Macron, the current President of France has adopted a tax on the digital giants. The American President now threatens to attack French wine and therefore European as customs import taxes applied on wine and spirits are set “at European level”
Here are four interrogations on these very symbolic exchanges.
What are the tariffs on wine in the United States? in Europe?
On bottled wine, customs duties are low, but not as high in the United States as in the European Union. In the United States, they vary in the range of about 5 to 15 cents per bottle, depending on the nature of the wine and the degree of alcohol, according to the US International Trade Commission. In Europe, they range from 10 to 30 cents, according to the French Federation of Wine and Spirits Exporters (FEVS). FEVS.
On the other hand, bulk wine, which accounts for a quarter of the value of US wines imported into the EU, is higher on the US side than on the European side. Thus, a liter of wine in bulk at 14.5 degrees supports a customs duty of 12 cents on the Old Continent and 22 cents on the other side of the Atlantic.
Who exports what?
The United States exported 3.5 million hectoliters of wine worldwide in 2018, a stable figure compared to 2017, according to the Paris-based International Wine Organization (OIV). But the value of wines exported by the United States declined slightly to 1.22 billion euros against 1.3 billion in 2017.
The three main world wine exporters, Spain, Italy and France, have exported 54.8 million hectoliters of wine to each other in 2018 (Spain 21 Mhl, Italy 19.7 Mhl, France 14.1 Mhl) against 59.4 million hectoliters in 2017 (Spain 23 Mhl, Italy 21.5 Mhl, France 14.9 Mhl). This historical decline of nearly 8% of the volumes of wine exported by Europe last year is due to the low harvest of grapes in 2017 after spring frosts, which led to a very low volume of wine in 2018.
Despite this decline, the leading European wine trio (Spain, Italy, France) managed to increase the total value of its exports in 2018 to 18.4 billion euros against 17.9 billion in 2017. Of the three, France is the country that best value its wines, with an export value estimated at 9.3 billion euros last year, against 6.1 billion for Italy and 2.9 billion for Spain.
How is the access of American wines to the EU market?
External tariffs are common for all EU countries, be it France, Sweden, the UK, Italy … And access to the market is done under the same conditions for suppliers as for most other non-EU suppliers, whether Australia or Argentina, for example, according to WTO rules, according to FEVS. The European Union is the world’s largest importer of American wines. Over the 2008-2018 period, the value of US wines imported into the EU increased by 33%.
How is European wine access to the US market?
While customs duties are lower in the United States than in Europe, the regulatory access system is more complicated than in the EU, since the period of prohibition. It is forbidden for any exporter to sell directly to American consumers. The United States has introduced a mandatory three-tier system, requiring them to go through a distributor who will have direct access to the retailers themselves.
These distributors, generally organized by state, make margins between 20% and 30%, which significantly raises the price of wine for consumers, says the FEVS.