Whether it’s champagne, Cognac, or wine, French alcohol has become one of the country’s biggest export earners. But last year, sales of these tipples fell from a post-COVID-19 peak as inflation clipped consumer demand and distributors in the lucrative U.S. market cleared existing stocks, industry group FEVS said.
Last year’s exports totaled 11.9 billion euros, up 1.2 percent in value from 2021 but down by 3.8 percent in volume, FEVS data showed. The figures show the industry remains resilient despite a challenging international context, including rising inflation and uncertainty over the future of the European Union after Britain decides to leave the bloc.
Last year, the United States remained the driving force behind French wine and spirits exports, accounting for over a quarter of export revenue in value and volume. It was a remarkable performance for the world’s second-biggest wine producer. It was also a record for champagne sales, with the bubbly’s prestigious status and prices far higher than its mass-produced rivals, helping it set a new value high of 4.2 billion euros.
Other wines in strong demand were Bordeaux, Burgundy, and Provence, with the Rhone and Languedoc-Roussillon regions of France also recording high export revenues. Spirits, led by Cognac and rum, saw exports rise almost a fifth in value to 6.7 billion euros, with the latter’s price premium helping it to beat its rivals.
The decline in exports was partly due to trade tensions between the United States and Europe, which led to the imposition of new duties on several E.U. products, including French wine, in July last year as part of Washington’s response to illegal E.U. aircraft subsidies. FEVS’s Giron said this “had a severe impact” on sales in the U.S.
It was also a concern for some production areas, particularly Bordeaux, which has suffered from falling domestic consumption as the economy slows and people switch to cheaper alternatives like beer. That has contributed to recent protests by local farmers worried about their income.
French wine and spirits producers rely on foreign sales as domestic consumption has stagnated, with the only significant growth coming from China, where restrictions linked to the COVID-19 pandemic have dampened sales. But Giron expects a rebound in 2023 as travel to the country resumes and China relaxes its curbs on imports. The resumption of travel should help boost duty-free sales, too, he added.