17 ASSOCIATIONS DEMAND END TO WINE AND SPIRITS TARIFFS

17 associations representing both the US and European wine and spirit trades have submitted comments opposing proposals for further US tariffs on wine, beer and spirits. industry bodies have submitted comments to the United States Trade Representative (USTR) after news of another tariff review last month.

In addition to existing tariffs on still wine, Scotch whisky and liqueurs, the US said it was considering further levies of up to 100% on beer, gin and vodka made in France, Germany, Spain, and the UK.

The dispute relates to EU subsidies given to aviation company Airbus over US-based rival Boeing.

In their comments, the groups cited the latest data which revealed that US imports of Scotch whisky were down by almost 33% between October 2019 and May 2020, while imports of wine fell by 44% and liqueurs and cordials by 23% during the same period.

Analysis conducted by the Distilled Spirits Council of the United States (DISCUS), one of the groups to submit comments, warned that US tariffs on UK and EU wine, distilled spirits and beer could lead to as many as 95,900 job losses, depending on the extent of the tariffs.

In a joint statement, the group said: “Our 17 US, EU and UK associations are united in strong opposition to tariffs on beverage alcohol products. We are speaking with one voice in calling for the US administration and the European Commission to remove the current tariffs on spirits and wine from the EU and UK, and American whiskeys, and to forgo imposing any additional tariffs on beverage alcohol products. We hope Friday’s announcement by Airbus and the legislation passed in Washington State in March regarding civil aviation subsidies are significant steps toward the elimination of tariffs.

“Beverage alcohol sectors on both sides of the Atlantic have suffered enough. These tariffs are exacerbating the incredible burden hospitality businesses are experiencing with the widespread closures of bars and restaurants due to Covid-19. The US and EU need to seek measures to bolster hospitality jobs, not saddle businesses with unnecessary tariffs,” they added.

In October 2019, the US has imposed tariffs on US$7.5 billion worth of EU goods – including wine, spirits and liqueurs – as result of this dispute. The country first imposed 25% tariffs on drinks including Scotch whisky and wine (not over 14% ABV) made in France, Germany, Spain and the UK. The EU has stated that it may impose retaliatory tariffs on US rum, vodka, brandy and wine.

In a separate dispute in June 2018, the EU imposed a 25% tariff on all US whiskey imports. It is scheduled to increase these tariffs to 50% in spring 2021.

In addition to DISCUS, the 16 other associations include: SpiritsEurope, the Scotch Whisky Association, American Beverage Licensees, the National Retail Federation, the American Craft Spirits Association, the American Distilled Spirits Alliance, the National Council of Chain Restaurants, Kentucky Distillers’ Association, the National Association of Beverage Importers, the National Restaurant Association, the US Wine & Trade Alliance, WineAmerica, the Wine Institute, the Wine and Spirits Shippers Association, Wines & Spirits Wholesalers of America, and the National Association of Wine Retailers.

Source:  Drinks Business

The European Union Announces “Exceptional Support Measures” for Wine Sector

The Commission adopted yesterday an additional package of exceptional measures to support the wine sector, following the coronavirus crisis and its consequences on the sector. The wine sector is among the hardest hit agri-food sectors, due to rapid changes in demand and the closure of restaurants and bars across the EU, which was not compensated by home consumption.

These new measures include the temporary authorization for operators to self-organize market measures, the increase of the European Union’s contribution for wine national support programs, and the introduction of advance payments for crisis distillation and storage.

Janusz Wojciechowski, Agriculture and Rural Development Commissioner states:“The wine sector has been among the sectors hit hardest by the coronavirus crisis and the related lockdown measures taken across the EU. The first package of market-specific measures adopted by the Commission has already provided significant support. Nonetheless, the uncertainties surrounding the scale of the crisis at EU and global level, and a close monitoring of the market has led us to propose a new package of measures for the wine sector. I am confident that these measures will provide rapidly concrete results for the EU wine sector and soon provide stability.”

The Exceptional Measures include:

  • Temporary derogation from the European Union’s competition rules: Article 222 of the Common Markets Organisation Regulation (CMO) allows the Commission to adopt temporary derogations from certain EU competition rules in situations of severe market imbalances. The Commission has now adopted such a derogation for the wine sector, allowing operators to self-organize and implement market measures at their level to stabilize their sector and in the respect of the functioning of the internal market for a maximum period of 6 months. For example, they will be allowed to plan joint promotion activities, to organize storage by private operators and to commonly plan production;
  • Increase of the European Union’s contribution: the European Union’s contribution for all measures of the national support programs will increase by 10% and reach 70%. A previous exceptional measure had already increased it from 50% to 60%. This will provide financial relief to beneficiaries;
  • Advanced payments for crisis distillation and storage: the Commission will allow Member States to provide advanced payments to operators for on-going distillation and crisis storage operations. These advances can cover up to 100% of costs and will allow Member States to fully utilize their national support program funds for this year.These measures complement the recently adopted package, which benefited the wine sector through the flexibility provided under market support programs. This included for instance an increased flexibility of tools to control production potential, the so-called green harvesting tool, and the possibility to include temporary new measures such as the opening of distillation of wine in case of crisis or an aid to crisis storage of wine.

In addition, the Commission also launched two calls for proposals for promotion that aim to support the sectors most affected by the crisis, including the wine sector. The two calls will be opened until 27 August 2020.
The commission said it is the first time that it has issued such calls. One call relates to ‘simple programs’, which can be submitted by one or more companies from the same EU country. The other relates to ‘multi programs’, which can be submitted by at least two companies from at least two EU member states, or by one or more European organizations. Janusz Wojciechowski, states that the first package of support measures had “already provided significant support”.

Pau Roca, Director General of OIV gives his overview of the 2019 global wine sector and the impact of Covid-19

Speaking from the OIV’s [International Organisation of Vine and Wine] headquarters in Paris, by web conference to over 3,000 international wine journalists, and trade, Director-General Pau Roca presented today [April 23, 2020] details of the 2019 wine production, consumption, and international trade. The impact of Covid-19 in the sector was also highlighted.

Here are the important facts and highlights of today’s Conference:

  • The surface area of the world vineyard is estimated at 7.4 mha, which has been stable since 2016;
  • World wine production is estimated at 260 mhl, a marked decrease, compared to 2018 historically high;
  • World wine consumption is estimated at 244 mhl, marking a +0.1% with respect to the previous year;
  • The world wine export market has expanded both in volume, estimated at 105.8 mhl (+1.7%), and in value with 31.8 bn EUR (+0.9%);
  • 2020 Harvest – first estimates of wine production in the Southern Hemisphere indicate low expected volumes for 2020 (with the exception of South Africa and Uruguay).

Vineyard area stabilization

In 2019 the world area under vines, corresponding to the total surface area planted with vines for all purposes, including young vines not yet in production, is estimated 7.4 mha.

Starting with the Northern Hemisphere, overall stability can be observed in the European Union (EU) vineyards, which stands for the fifth consecutive year at 3.2 mha.

Within the EU, the latest available data for 2019 indicates an increase in the area under vines in France (794 kha), Italy (708 kha), Portugal (195 kha), and Bulgaria (67 kha). The vineyard surface area in Spain (966 kha), Hungary (69 kha) and Austria (48 kha), on the other hand, slightly decreased from 2018.

In East Asia, after over 10 years of significant expansion, the growth of Chinese vineyard (855 kha), second in the world by surface area just behind Spain, seems to be slowing down.

In the United States, the vineyard has been consistently decreasing since 2014, and its estimated surface area in 2019 is 408 kha.

In South America, developments in vineyard surface area between 2018 and 2019 showed a downward trend for the fourth year in a row.

The only exception in the continent is represented by Peru that increased by 7.1 kha (+17% / 2018) its vineyard surface area reaching 48 kha.

South Africa’s vineyard surface area remained stable with respect to 2018, at 128 kha.

Australia the area under vines remained stable at 146 kha in 2019; while New Zealand the surface area grew by 1.6 % reaching a record-high of 39 kha.

Production back to the average

World wine production, excluding juices and musts, in 2019 is estimated at 260 (259,0) mhl, marking a sharp decrease of 35 mhl (-11.5%) with respect to the exceptionally high volume recorded in 2018. Overall, after two consecutive years that can be defined as extremely volatile, 2019 brings global wine production back to average levels.

Italy  (47.5  mhl), France (42.1 mhl), and Spain (33.5  mhl), which together account for 48% of world wine production in 2019, saw a sharp decrease in their wine production with respect to 2018.

Other EU countries that registered a decrease in production with respect to 2018 are Germany (9.0 mhl, -12%), Romania (5.0 mhl, -4%), Austria (2.5 mhl, -10%), Hungary (2.4 mhl, -34%) and Greece (1.9 mhl, -8%). The only EU country that, in 2019, saw an increase in its wine production is Portugal with 6.7 mhl (+10% / 2018).

In Eastern Europe, weather conditions were favourable in Russia (4.6 mhl, +7% / 2018) and Ukraine (2.1 mhl, +6% / 2018), while in Moldova the harvest was less abundant in 2019 and the vinified production was equal to 1.5 mhl (-23% / 2018).

In Asia, the new data available for China indicate an estimated vinified production of 8.3 mhl in 2019, marking a decrease of -10% with respect to the already relatively low production level of 2018.

In North America, wine production in the USA is estimated at 24.3 mhl, a decrease of 2% compared to 2018. This slight decline in 2019 does not depend on bad weather conditions or the raging fires that occurred in California (harvest was just before), but it is a response to overcome an oversupply of grapes and wine.

In South America, the overall trend for wine production in 2019 is negative with respect to 2018. However, while in Argentina (13.0 mhl) and in Chile (12.0 mhl) 2019 vinified productions are lower with respect to 2018 but overall in line or even higher than their five-year averages, Brazil (2.0 mhl) registered a sharp decrease in its wine production in 2019 of more than 1 mhl (-34% / 2018).

In South Africa, 2019 production reached 9.7 mhl. This represents an increase of +3% with respect to the low volume registered in 2018, but it is still far from the average production levels recorded before the beginning of the drought that heavily impacted the country for three years in a row (2016, 2017 and 2018).

With regard to Oceania, Australian wine production registers a decline for the second consecutive year reaching 12.0 mhl in 2019 (-6% / 2018). In New Zealand wine production was 3.0 mhl in 2019, a slight decrease of -1% with respect to 2018.

Expansion of the international trade of wine

In 2019 the world wine export market – considered here as the sum of the exports of all countries – has expanded with respect to 2018 both in volume, estimated at 105.8 mhl (+1.7%), and in value, with 31.8 bn EUR2 (+0.9%).

Strong increases can be observed in exports from Italy (+2.0 mhl), Spain (+1.3 mhl), Canada (+0.4 mhl) and Chile (+0.3 mhl). However, significant reductions in exports are recorded for Australia (-1.1 mhl), South Africa (-1.0 mhl), Ukraine (-0.4 mhl) and Hungary (-0.3 mhl).

In 2019 the global value of wine exports is on the sustained growth path started in 2010 reaching a new record high. France was still the most important world exporter in terms of value, with 9.8 bn EUR exported in 2019. There were rises in the value of exports in many large exporting countries like France (+425 m EUR), Italy (+211 m EUR), and New Zealand (+84 m EUR). The largest declines include Spain (-234 m EUR) and South Africa (-73 m EUR).

In 2019 the international trade of wine in terms of volume was mainly dominated by three European countries – Italy, Spain, and France – that together exported 57.1 mhl, accounting for 54% of the world market.

In 2019 the top three importers in terms of volumes were Germany, the UK, and the USA, which together imported 40.4 mhl, reaching 38% of world total. These three countries represent 39% of the total value of world wine imports, reaching 11.9 bn EUR.

The first importer in 2019 is still Germany with 14.6 mhl, even if its wine import volume decreases by 0.6% compared to 2018.

China for the second consecutive year saw a significant decline in its imported volumes (-11% / 2018), reaching 6.1 mhl in 2019. In terms of value, the trend is similar, with an overall downfall of -9.7% compared to 2018, reaching 2.1 bn EUR. The only category that increased both its volume (+8%) and its value (+8%) is sparkling wine, although it represents only 2% of the total imported volume.

Early estimates of the 2020 harvest in the Southern Hemisphere

First estimates of wine production in the Southern Hemisphere indicate low expected volumes for 2020 for the majority of countries, with the exception of South Africa and Uruguay.

In 2020 a decline in production volumes in all South American countries, with the exception of Uruguay, are expected. In Argentina estimated production is 11.6 mhl (-11%), in Chile 10.5 mhl (-12%) and in Brazil 2.0 mhl (-1%), while in Uruguay 0.65 mhl (+11%).

South Africa seems to continue its recovery path from the drought and expects +5% with respect to last year, reaching 10.2 mhl.

In Oceania, Australia expects a lower production level in 2020 estimated at 11.5 mhl (-4%) due to drought and bushfires while in New Zealand (2.9 mhl, -2%) expectations on wine production are by and large in line with 2019, or just below.

These are preliminary estimates and should be interpreted with caution,  given the current exceptional circumstances.

Impact of Covid-19 in the wine sector

At this early stage the information and statistical data available are insufficient to provide an accurate forecast and anticipate the scenario of the vitivinicultural sector in the future. However, due to communication with OIV members (“Member States”), the OIV has certain qualitative information at its disposal.

The feedback given by the Member States reflects a radical change or transfer between distribution channels. The expected overall balance is a decrease in consumption, a reduction in average prices, and therefore an overall decrease in total sales value, turnover, margins and finally profits of the wineries.

As far as exports are concerned, economies in recession are not a promising market to develop, and during this pandemic, the largest consuming countries have been the most affected. Trade flows may recover along with the economy, but some permanent changes could occur.

Alcohol consumption is also being debated. Messages on the positive effects of wine consumption are totally unacceptable and irresponsible.

The same applies to the issuing, under these circumstances, of general statements or biased messages that are the result of ideological concerns about wine consumption, such as abstention.

The OIV’s work follows the Strategic Plan approved by the General Assembly in October 2019 and covers a 5-year period until 2024. In the current context, the objectives and goals of the OIV go hand in hand with the needs that this crisis has highlighted.

The OIV is the intergovernmental organization of scientific and technical nature of recognized competence for its work concerning vines, wine, wine-based beverages, and other vine-based products. It is composed of 47 Member States. In the framework of its competence, the objectives of the OIV are as follows:

  • to inform its members of measures whereby the concerns of producers, consumers and other players in the vine and wine products sector may be taken into consideration;
  • to assist other international organizations, both intergovernmental and non-governmental, especially those that carry out standardization activities; and
  • to contribute to international harmonization of existing practices and standards and, as necessary, to the preparation of new international standards in order to improve the conditions for producing and marketing vine and wine products, and to help ensure that the interests of consumers are taken into account.

Exploring the Diversity of the Rheinhessen Wine Region [Part 3 of 3] — VDP “Große Lage” Seminar and Tasting

A special trade seminar was held the following morning with a specific focus on VDP “Große Lange.” The seminar was held in the beautiful Kurhaus Wiesbaden, which is unmistakable Wiesbaden’s landmark. This magnificent neoclassical building is the city’s convention center.

VDP stands for Verband Deutscher Prädikatsweingüter (or the Association of German Prädikat Wine Estates). It was founded as a regional association in the Rheingau over a hundred years ago with the goal of recognizing and encouraging quality producers of dry wines.

The VDP has selected and classified the best German vineyard sites coming from all 13 of the country’s wine-producing regions. In 2019, there are 200 members. The logo for VDP is an eagle with grapes on his chest. If you see this logo on a bottleneck, you know that it comes from one of the best vineyards in Germany and is a trustworthy guarantee for the quality within. VDP has four classifications:

VDP Gutswein –  these are often the first wines of a wine year to be bottled and sold. They must come from estate-grown grapes and the producers are given freedom here to experiment and innovate.

VDP Ortsweine – these are wines that express regionality. The grapes must come from one village and offer a sense of expression of that particular place. Only regional grape varieties are used, and many come from the higher-classified Grosse Lage or Erste Lage sites.

VDP Erste Lage – these wines are Premier Cru from first-class vineyards where there are optimal growing conditions. These wines must also be grown with a view to sustainability and tradition.

VDP Grosse Lage – these wines come from the highest quality German vineyards. They are complex, express single vineyard sites, and are known for their long-aging. These wines also must also be grown and made with a view to sustainability and tradition.

Membership is by invitation only, and with producers known for long-standing quality and a commitment to excellence.  Members must also adhere to strict rules including low yields, higher starting must weights, selective hand harvesting, and five-yearly inspections.

Promotion remains a major aspect of its activities. The VDP has developed its own quality pyramid based on the official German system,  with a specific focus on dry wines. Recently, they introduced a new classification for Sekt, German sparkling wine.

5% of Germany’s vineyards are included in the VDP classification, accounting for 7.5% of the turnover of the German wine industry.

Riesling is the most important grape among VDP producers with 55% of all VDP vineyards planted with Riesling, compared to 23% across Germany as a whole.

 

 

Other grape varieties approved for VDP Grosse Lage certification include:

Chardonnay

Weissburgunder

Spätburgunder

Grauburgunder

Frühburgunder

Traminer

Exploring the Diversity of the Rheinhessen Wine Region [Part 2 of 3]

I recently traveled with fourteen wine journalists and industry professionals to Rheinhessen Germany, one of my favorite wine regions in Germany!

We soaked up Weingut Wagner-Stempel (wine festival in Siefersheim), attended a master workshop on the “Top Terroirs of Rheinhessen”, indulged in pinot noir tasting with local producers, along with other pleasant vinous, gastronomic and cultural surprises. The five-day program also took us to wineries in and around the heart of the region.  We were in the accompaniment of Ulrike Lenhardt and Ernst Buscher of The German Wine Institute, and Romana Echensperger, MW.

The following day we attended Winzerkeller Ingelheim to attend a Pinot Noir tasting with local producers.

This historic building epitomized Ingelheim’s history as the “red wine town”. Winzerkeller Ingelheim has just finished a three-year renovation project and we were lucky to visit it, upon its completion! Winzerkeller Ingelheim is not only home to a local vinotheque of 24 Ingelheim winegrowers, it’s also a distillery, restaurant, and a tourist information center.

We participated in a Pinot Noir tasting with the following wineries:

Winzerkeller Ingelheim website: www.ingelheimer-winzerkeller.de

Next on our visit was the wine festival in Siefersheim “Tage der offenen Weinkeller”.  Here we visited local wine cellars, tasted regional culinary specialties, and sipped some wonderful Rieslings.

 

 

 

 

 

 

Where is Siefersheim?

Siefersheim is a village southwest of Bad Kreuznach, in Rheinhessen This quaint village has a population of 1,300 and it lends its name to a number of vineyards, two of which, Heerkretz and Höllberg, are highly regarded sites with VDP classifications. Of the district’s 628 hectares, 172 ha are under vine, with Riesling occupying the bulk of the vineyards.

On our next stop we visited Weingut Thörle, which is in the village of Saulheim. Saulheim is located in the north-eastern fringes of Rheinhessen. Thörle is a family-run estate since the 16th century and is regarded as one of the best producers in the region.

Now leading the winery are two brothers Christoph and Johannes. They tell us that their focus is mainly on Riesling, Silvaner, Pinot Noir and Pinot Blanc. The vineyards are managed organically, and the estate has taken a biodynamic direction. The Soils are also varied with light clay, limestone, red sandy loam with some flint and schist. In our conversation, we learn that they obtain their distinctive, sappy Riesling characteristics and delicate Pinot Noir from the calcareous limestone-soils of Saulheim’s single vineyards Hölle, Schlossberg and Probstey.

 

Their wines are full of character, possess a depth of flavor and boast a high potential for maturing. Thörle’s wines have received international acclaim by leading wine guides and critics, as well as been selected by first-class airline wine programs.

Weingut Thörle website: http://www.thoerle-wein.de

 

At the end of the day, we attended a grand tasting at Weingut Hoffmann and Weingut Willems-Willems Estate.

Weingut Hofmann is jointly led and owned by the winemaker couple Jürgen Hofmann and Carolin Hofmann. This couple have taken over their families’ wine estates, Jürgen in 1999, and Carolin in 2001. Since 2006, both wineries have come under one roof, hence the two names: Weingut Hofmann in Weingut Willems-Willems.

Weingut Hofmann was founded in 1971 in Appenheim, when Jürgen’s parents converted their mixed agricultural operation into a winery  Jürgen pushed winemaking at Weingut Hofmann to new levels, by investing into new wine cellar equipment, focusing on the best vineyards, and planting new grape varieties, as well as built an ultra-modern winery including a tasting room.mHofmann’s 14 hectares. vineyards are limestone based.

Jurgen produces Riesling as well as Sauvignon Blanc, Pinot Noir and Silvaner. His Rieslings and Sauvignons that really wowed me. The limestone dominated soils surrounding Appenheim in his Riesling burst with stony spice and minerality. Aromas of dried apricots and exotic spice dance hand in hand in a racy yet breathtakingly elegant tango.

Jurgen’s Sauvignon Blanc grapes are harvested sequentially from multiple sites (as each vineyard reaches its own optimal ripeness). Tasting notes include notes of gooseberry, elderberry, and green asparagus blend with a tropical breeze reminiscent of the variety’s origins.

Weingut Hoffmann and Weingut Willems-Willems Estate website: www.schiefer-trifft-muschelkalk.de