European Wineries Already in Crisis, and Trump's 200% Tariffs Aren't Even in Effect Yet - Bloomberg
Kyiv • UNN
European winemakers are facing problems due to falling demand and the threat of tariffs from Trump. The cessation of supplies already costs companies 100 million euros per week.
European wineries faced serious difficulties even before US President Donald Trump threatened to impose a 200% tariff on their products. This is reported by Bloomberg, writes UNN.
Details
It is reported that even before Trump announced the introduction of a 200% tariff on European wine, producers were already struggling with a long-term decline in consumption, so serious that France began paying farmers to uproot vines.
Producers are confused, not knowing how bad the tariffs will actually be, how much their costs will increase and how much of a discount they may have to offer. If there is no room in their tanks to ferment new wine, they will have to bear huge costs to transport and store some of the old wine elsewhere.
On the other hand, American buyers don't want to take risks because of tariffs that could be introduced as early as next Wednesday. According to Ignacio Sanchez Recarte, Secretary General of the European Committee of Wine Companies, known as CEEV, the cessation of supplies to the US is already costing wine companies approximately EUR 100 million (USD 107 million) per week.
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"It's already happening," said Lamberto Frescobaldi, president of the Italian association Unione Italiana Vini. - Some American importers have stated that it is necessary to stop the ships and not load the containers, because if the wine or spirits arrive in the USA after April 2, and there are most such cases, if they leave now, they will have to pay 200% taxes."
All this is happening against the backdrop of a global wine surplus, despite a drop in production to a 60-year low in 2024, with demand falling even faster. Young consumers drink less alcohol, and when they do, many prefer other types, even in France. In October, the country received EUR 120 million from the European Union to compensate farmers for destroying vineyards.
"The slowdown in the domestic market was already there, even before Trump came up with the idea of introducing tariffs," said Frédéric Saccoman, CEO of Héraclès. Now "we don't even know how to calculate the price," he pointed out.
Fearing the start of a trade war after Trump's election victory, many producers across Europe rushed to ship as much product as possible to the US. For example, Sogrape - Portugal's largest wine exporter and owner of the Mateus Rosé brand - provided its American importer with approximately six months' supply.
The US bought almost 30% of wine exports from Europe last year. So producers may have to take mitigation measures, such as converting surplus production into other spirits or disinfectants, selling wine at a discount in supermarkets, or deliberately limiting the capacity of vineyards for future seasons by removing more plants.
Reminder
On March 13, Trump threatened to impose a 200% tariff on European wines if the EU does not abolish the 50% tariff on whiskey from the USA.
Prime Minister of France, François Bayrou, called the US President's statement a provocation. And the Spanish Minister of Agriculture, Luis Planas, expressed himself in a similar vein, noting that this "announcement, like any other, comes and goes".