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Financial information11/09/2020
The first six months of 2020 have seen Bourgogne wines well represented across markets, despite volumes from the 2019 vintage being lower than those from 2018.
This stability is, however, under threat from a global socio-economic context linked to COVID-19, and by new trading conditions.
Transactions for 2019-2020: A dip caused by the 2019 vintage is cushioned by the 2018 vintage
In 2019, the total harvest volume of some 1.2 million hectoliters was below average and followed on from an historic harvest in 2018 of 1.8 million hectoliters. The quality was excellent, but the low yield naturally translated into fewer transactions, although this was helped somewhat by the excellent yield from the previous year.
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Exports: Bourgogne wines holding firm in a context of great uncertainty
The socio-economic effects of the pandemic which emerged in early 2020 amplified and accelerated market shifts that were already taking shape beforehand, with a trend towards drinking less wine, the growth of eCommerce, and changing market access, and so on.
Access to the biggest markets for Bourgogne wine is undergoing a major transformation. The UK is currently redefining its import regulations and those governing exchanges with external markets (re-exports). Meanwhile, exports of French wines to the USA have been slowed right down thanks to the additional duties introduced as a result of the Airbus/Boeing dispute.
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In June, exports of Bourgogne wines showed clear signs of recovery (see the full report), and this was confirmed further in July. These figures will help limit the slump observed since January:
- Down 2% by volume
- Down 7% in terms of revenue (over the first seven months of 2019, which was a record year)
Compared to the five-year average between 2015 and 2019, the first seven months of 2020 were up 6% by volume and up 9% in terms of revenue.
July confirmed this trend. The slowdown observed this year is now clearly linked to the leading export market for Bourgogne wines, the USA, which was down 17% by volume and down 24% in terms of revenue. This is largely due to the 25% ad valorem levy imposed by the Trump administration because of the Boeing/Airbus dispute.
The Chinese market, which includes Hong Kong, also remains on a downward trend (down 36%), as does Australia (down 42%), and Germany (down 21%).
Fortunately, there was good news farther north, with the UK up 16%, Sweden up 18%, the Netherlands up 49%, Ireland up 27%, and Denmark up 12%. Canada was up 10%, holding on to its third place on the podium, just ahead of Japan which remains stable.
White Bourgogne wines are, in general, preserving some kind of balance, up 0.3% by volume, thanks to a hike in sales of Régionale Mâcon whites (up 16%), while the situation was improving a little for Crémant de Bourgogne wines by the end of July, down 1% by volume.
Only red wines remained on a negative trend, down 8%, with Village and Grand Crus worst hit.
--> In global terms, exports of French wines dropped 9% by volume and 20% in terms of revenue over the first seven months of 2020.
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Check all details and figures in the PDF press release