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From: lewis.perdue@wineindustryinsight.com

Subject: U.S. Exports Up, Imports Down But Not Out -WINE INDUSTRY INSIGHT

Date: 2009-02-25 22:26:34

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U.S. Exports Up, Imports Down But Not Out

U.S. wine exports edged over the $1 billion mark in 2008, but still trail imports which the Department of Commerce estimates at $4.5 billion — approximately 30 percent of the American market.

According to a California Wine Institute press release, total American imports hit $1,008,259,000 in 2008, a six percent increase over 2008. Volume increased 8 percent over the same time period to 130 million gallons.

According to the Wine Institute, U.S. wine exports have increased “more than five-fold” over the past 15 years, from $196 million in 1994.

California produces about 90 percent of all U.S. wine, down from 95% 15 years ago thanks to sustained growth in other states.

MOST EXPORTS BULK SHIPPED AND FOREIGN BOTTLED

The Wine Institute sais that, “Nearly half of U.S. wine exports are shipped to the European Union, accounting for $486 million.

“Volume shipments to the European Union increased 9 percent in 2008 compared to 2007, and sales by value grew at a slightly lower rate of 2 percent due to the continuing strategy of producers exporting bulk wine for bottling overseas to save the costs of shipping bottles and other packaging.

Volume shipments to the European Union increased 9 percent in 2008 compared to 2007, and sales by value grew at a slightly lower rate of 2 percent due to the continuing strategy of producers exporting bulk wine for bottling overseas to save the costs of shipping bottles and other packaging.

The finished wines are then shipped to their final destinations in neighboring countries. The next leading markets were: Canada, $260 million; Japan, $61 million; Hong Kong, $26 million; and Mexico, $23 million.

NEWS RELEASE: CALIFORNIA GROWTH IN ASIAN MARKETS

Japan Trade Director Ken-ichi Hori said California wineries were also shipping sizeable branded volume as bulk wine for packaging and bottling in Japan to economize on transportation costs and reduce the import duty on wine. “Bulk wine shipments have skyrocketed 1,035 percent, and 2008 U.S. bottled table wines have increased in value 6.5 percent over 2007 despite the significant volume decrease. This means California is selling more expensive wines to Japan.”

Growth in other markets include: China, up 34 percent to $22 million; Austria up 31 percent to $14 million; and Singapore, up 26 percent to $11 million.

“Regionally, greater China showed tremendous growth in 2008.  Hong Kong was buoyed by its repeal of the local import tax on wine and has quickly become the wine hub for Asia. California wine exports to Hong Kong clearly outpaced that of our major competition,” said Eric Pope, Regional Director, Emerging Markets.

“China remains the most sought-after export market worldwide due to its sheer population size. Growth continued, albeit at a slower rate than in 2007—perhaps a first sign that the global financial crisis is impacting the Chinese market for imported wine.”

Read the full news release.


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