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American sanctions: Burgundy wine growers have a hangover


American sanctions: Burgundy wine growers have a hangover

Pommard (France) (AFP)

Sanctions "completely unfair" for some, a "blow" for others: after the 25% tariffs announced by the United States on French wine, Burgundy viticulture has the feeling of being the collateral victim of a commercial conflict that exceeds it.

"This is a perfectly unfair taxation, because it compensates for a dispute that concerns the aeronautics and not the wine sector," says Anne Parent, a winegrower in Pommard, which makes a quarter of its turnover in export to the United States.

In the cellars of the estate she runs with her sister, a 2019 vintage "absolutely superb", according to her, is being rolled. In a room upstairs, boxes of Pommard Premier Cru 2017, destined for the United States, are in preparation.

Next week, "three or four" pallets will be shipped, some to Texas, the other to Wisconsin. "It was planned like that, (the US ads) did not change the schedule," says Parent.

The winemaker hopes that the sanctions will be "transient". In the meantime, "it is important to support our customers, to show them that we are always volunteers and that for us it is an important market."

But "we will certainly have to compensate for a decline in volume and a decline in turnover in the United States," she adds, seeing the opportunity "to go to other markets or even to strengthen our presence in France ".

Less than ten kilometers away, in the lobby of the Latour house, trader-breeder in Beaune, cartons are about to leave for New York. But other orders for the United States will not leave.

"This morning, we had three containers canceled, there is a kind of fear" from customers, said Louis-Fabrice Latour, chairman of the board and deputy chairman of the Interprofessional Office of Burgundy (BIVB).

It's a hard blow, he judges. "We are still very surprised, a little taken aback, because it's not our business, it's a conflict that goes a little beyond Boeing and Airbus."

- "Panic on board" -

His American clients have "never really believed" in the sanctions, he says. "So now it's a little panic on board."

It achieves 20% of its turnover (or 20 million euros) in the United States and is preparing to lose "a good third" of this market, on which the house Latour is present since "a century and a half" .

If Burgundy is particularly affected by these sanctions, it is because the United States is the first foreign customer, weighing nearly a quarter of exports.

In spite of everything, "it is a 25% tax, not a 100% tax." At 25% everyone can work ", philosopher M. Latour. "It's hard, it's a shame, but we can absorb the shock."

Thanks to stocks, the effects for consumers will really be felt in six months, according to him, if an agreement between Europe and the United States has not been found by then.

Burgundy, for its part, has "growth drivers" in other countries, particularly in Asia, which could "partly offset" the reduction in the US market, says Romain Taupenot, winemaker Morey Saint-Denis, who exports 80 to 90% of its production (the United States accounts for almost 20% of its turnover).

US President Donald Trump "tends to get out heavy artillery fast enough," but "we're not in a bargaining game," he wants to believe.

"Somehow it's good war from Trump: he supports where it hurts," says the winemaker, who believes that negotiations could still lead to the lifting of these sanctions before their entry into force on October 18 .

One thing is sure, for these Burgundy professionals: the great Burgundy wines will always find takers in the United States, even at a higher price. It will be more complicated for the mid-range wines, sold around 15 dollars, which have to face the Italian competition ... which escapes, it, to the sanctions.

© 2019 AFP

Source: france24

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