Recession leaves French wine & spirits exports on the rocks, but vodka demand still stiff

By Greg Keller, AP
Thursday, February 18, 2010

French wine and spirits exports in record drop

PARIS — France, the world’s largest exporter of wines and spirits, saw sales of its high-end Champagne and cognacs suffer a record drop last year as recession in the U.S. and Britain, its biggest foreign markets, pushed consumers to drink less and more cheaply.

France’s exports of wine and spirits fell 17 percent to euro7.74 billion ($10.5 billion) last year, according to figures released Thursday by the Federation of French Wine and Spirits Exporters.

It marked the largest ever one-year drop in French wine and spirits exports and was the first annual decline since 2004, said Renaud Gaillard, a spokesman for the industry group.

The biggest drops were in pricey bottles of Champagne and cognac. Exports of Champagne fell 28 percent to euro1.6 billion last year, the federation said. That represented a drop in volume of nearly 22 percent, to 8.87 million 12-bottle cases.

Cognac sales also suffered from the economic malaise, sliding 15.6 percent to euro1.4 billion last year.

U.S. imports of French wine and sprits tumbled 22.7 percent last year to euro1.34 billion, while sales fell 20.2 percent in Britain, France’s second-largest market for its wines and spirits.

“Falling global demand and consumers’ switching to entry-level brands weighed on our results last year,” said Claude de Jouvencel, the federation’s president.

De Jouvencel was slightly more optimistic for this year, saying that “2010 will not be as bad as 2009 and could return to slight growth, 5 percent at best.”

Vodka, not a drink typically associated with France, was oddly enough the single bright spot in France’s drinks industry last year. Sales of French vodka, accounted for almost exclusively by the Bacardi-owned Grey Goose vodka brand, rose 13.7 percent to euro238 million last year.

U.S. demand for the premium vodka drove the increase in sales, Gaillard said, as the country accounts for 70 percent of French vodka exports.

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