Covid-19 and the sting of Trump’s punitive tariffs on French wines are souring the taste of Bourgogne wines in export markets, as the latest figures released by Vins de Bourgogne (BIVB) show.
With a smaller harvest in 2019, sales of Bourgogne wines were growing till the end of 2019 but its exports in the first half of the year are hit hard by the coronavirus pandemic, down by 4.7% by volume and 11.9% by value compared to the same period in 2019, according to the trade association.
Lockdown in China from February 2020 in reaction to the pandemic – a first for the modern world – were soon repeated across the world, slowing down or even stopping global trading. The effects of this were soon felt, and from March to May 2020, exports of Bourgogne wines nosedived, down 11.8% by volume and 21% in terms of revenue over the same period last year.
Exports to China excluding Hong Kong slid for about 40% by value and 50% in volume, while exports to Hong Kong were down by about 20% in volume and 15% in value from January to June this year.
The “cause for concern” as BIVB says is Burgundy’s biggest export market, the US. The 25% punitive tariffs on still French wines with alcohol level below 14% imposed by the Trump administration shaved off 19.3% export volume, equivalent to 1.7 million bottles. Value was down 29% or €32 million during the six-month period year on year, as a result.
The negative effects of this tax are amplified by the uncertainty that crops up every six months about whether it will be reduced, maintained, or reassessed, while coronavirus is still raging in the country, with the highest infection numbers in the world.
“This market is the cause of great concern and the American presidential elections are now a focal point regarding what happens next,” the association warns.
Nonetheless, there’s good news for Bourgogne wines in the UK. The country, which had been losing momentum since the 2008 recession and which some thought would be lost forever because of Brexit, is back up to speed in terms of Bourgogne wine imports, according to the association.
Over the first six months of 2020, the UK market has grown 15.3% by volume and 2.6% in terms of revenue compared to the same period in 2019. This has seen it retake the top spot by volume and revenue for exports of Bourgogne wines in May and June 2020.
The surprising high riser for Bourgogne wines this year turned out to be Sweden, where the country never imposed compulsory lockdown. It entered the top five leading importers of Bourgogne wines for the first time, in fifth spot by volume, with growth of 20.3% by volume and up 8.4% in terms of revenue compared to the same period in 2019.
Canada remains in third place in terms of export volumes over the first six months of 2020, with growth up 2.4% by volume and up 2.5% in terms of revenue compared to the same period in 2019.
After a drop during the first six months of 2019, Japan was back on track for the same period in 2020, up 3.4% by volume and up 1.7% in terms of revenue compared to a year earlier, thanks to the Chablis and Petit Chablis AOCs, red Régionale Bourgogne. It remains in third place in terms of revenue and fourth place by volume.
Despite the drops in exports, Burgundy still fared better compared with the rest of French AOC appellations. The 12 months to the end of June 2020, the Bourgogne region remains one of the only French AOC wine regions that still showed some growth, up 4% by volume over the previous year, says BIVB.