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Strong euro is seriously hampering wine exports

(First appeared in La Journée Vinicole, Edition 215, April 26 2010) Independent wine growers in France have asked for a national debate on the true value of the euro, as they face declining exports caused, at least in part, by the appreciation of the euro against major world currencies. A study conducted by the Federation of Independent Wine Growers, which was presented on April 14 in Paris, has revealed that the strength of the euro has in many cases scuppered attempts by the wine industry to put the recession behind it. One of the report’s findings is that the 33% drop in volumes of entry-level table wines exported to the UK since 2000 is directly linked to an upward trend in the value of the euro against the pound. It also finds that a fall of nearly 40% in exports of red Bordeaux to the UK since the end of 2007 is correlated with a marked appreciation of the euro, entailing a loss of 125 million euros. Wines such as Beaujolais, Côtes du Rhône and Vins de Pays d’Oc have suffered significantly from the rise in the euro, although as a rule, the intensity of the correlation between the two varies greatly from one region and product category to another. The federation highlights the lack of solutions available to growers not only because they have no influence over exchange rates but because pricing policies are related to long-term strategies and cannot be reversed easily. The federation also believes economic intelligence is not made readily available to growers, rendering them incapable of anticipating monetary changes and adapting their sales strategies in accordance with them. It has therefore called for a national debate on the issue and is hoping to rally other export sectors to its cause.

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