The European wine and spirits sector finds itself at the centre of a global trade war: China's retaliation against European tariffs on electric vehicles has directly targeted the sector, while US President Donald Trump's all-out trade war has offered no respite.
The sector is an export giant. The European Union exports nearly €30 billion worth of alcoholic beverages each year, accounting for almost half of the EU's €63.4 billion agri-food trade surplus in 2024.
The downside is that when rival powers aim to hit Europe where it hurts, the wine and spirits sector is often the first target. In July, China imposed anti-dumping duties of up to 34.9% and set minimum prices on certain Cognac brands, following an investigation launched shortly after the EU announced its tariffs on electric vehicles.
In the United States, the European wine and spirits industry was not exempt from customs duties, falling under the general 15% tariff regime unilaterally imposed by the American president. While some may welcome this in the face of threats of 20% or even 30% tariffs, when combined with the impact of a weak dollar, the bill remains steep for a sector where 30% of exports depend on the US market.
Faced with such pressure, the wine and spirits sector deserves the EU's economic support as a major economic player and a component of European culture, particularly in the southern regions where vines shape landscapes and economies.
EU trade policy should avoid strategies that make a flagship export sector the main victim. There is little point in including American wines and spirits, particularly Bourbons, in the list of European countermeasures when our trade surplus for this sector exceeds €8 billion. We do not live in a world where President Trump would specifically target European digital platforms because the world champions in that sector are American. By taking this approach, the EU is shooting itself in the foot.
Supporting an industry in transition
A new level of heightened uncertainty has pushed stress to its peak for wine and spirits companies of all sizes, which were already under pressure before the escalation of the trade war. Global wine consumption is declining, particularly for red wine. At the same time, winegrowers are affected by the pressures of climate change, including a rise in grapevine diseases, such as flavescence dorée.
The Common Agricultural Policy (CAP) has helped the sector tackle overcapacity, both through structural measures, such as grubbing-up aid, and urgent measures, like crisis distillation. Geographical indications, which cover more than 80% of European wines (91% in France), provide a guarantee of quality that has supported the sector's growth over the past half century.
In March, the Commission proposed a new legislative package on wine, for which I will be the Socialists and Democrats’ (S&D) rapporteur. The proposal represents a step in the right direction by reinstating grubbing-up aid (the replacement of unprofitable vines with other crops) in the CAP toolbox after its abolition in 2008. However, we must go further by limiting the obligation for member states to increase their vineyard area by 1% per year.
Increasing financial resources for promotion and granting greater economic leeway to producer groups that manage geographical indications is also essential, as this would allow them to formulate price recommendations for grapes and manage supply.
Vines shape both the landscapes and the economy of many European regions. The excellence of European wines is recognised worldwide. While combating overconsumption, wines and spirits retain an important place in conviviality and social interaction. The EU must now defend wines and spirits as a key element of European culture.
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