French Wine Exports Will Decline 20%, Winemakers Say

By Ladka Bauerova - Bloomberg

French wine exports will decline at least 20 percent this year as wholesalers become reticent to restock during the recession and consumers drink less in bars and restaurants, industry executives said today.

Sales are suffering in the U.S., U.K. and Japan, Claude de Jouvencel, head of France’s Federation of Wine Exporters and chief operating officer of Grand Marnier, said after the signing of an agreement with the French customs office and the Finance Ministry to assist winemakers with obtaining
medium-term loans. Champagne makers will also see a 20 percent decline in sales by volume this year, according to Yves Dumont, the non-executive chairman of Grand Siecle producer Laurent-Perrier SA.

“High-end wines are suffering the most,” de Jouvencel said in an interview. “Next year will remain difficult, but we may see a little growth since the stock will be readjusted.”

Revenue is falling in Russia where many wholesalers, unable to get credit, have fallen behind with payments, de Jouvencel said. Growth in China has been reduced by half, while sales are stagnating in France, he added.

LVMH Moet Hennessy Louis Vuitton SA, the maker of Dom Perignon, said in April that champagne sales by volume plunged 35 percent in the first quarter as drinkers chose to economize with cheaper sparkling wines.

The customs office has pledged to provide fiscal data on individual winemakers as an additional guarantee to banks.

“Some winemakers have had trouble financing their day-to- day operations because banks would give them only one-year loans,” Jerome Fournel, the director of the French Customs Office, said in an interview. “This will help them get the financing they need against their wine stock.”

[Source] -- Bloomberg

Australian wine export data sheds some light on the industry

An Australian Wine and Brandy Corporation report released this weekend states the value of Australian wine exports declined 14% in the year ending April 2009.

The report highlights that despite overall pressure from the global financial crisis, which has strained many traditional export markets, growth in Asian markets remains robust.

The report says that more than half of the industries export decline originated from the United Kingdom. Export growth came from Hong Kong, China and Japan. China recorded the largest growth in value, with a increase of $30 million.

Another trend also highlighted in the report was a move towards lower-prices bulk wine shipments. It seems the greater market is cutting back on higher end wines in exchange for "bang for your buck."

Good news for South American and other low cost producers making quality wine which tend to struggle to break into Asian markets where consumers are VERY brand consciousness and prefer French, Italian and more recently Australian and Californian wines.

Data snips accessed from this ABC-Australia article