At the moment, the deterioration Britain's economy and the weakening of its currency have chilled French wine and spirits (eau-de-vie) exports.
The British market is a major outlet for French wines and especially Bordeaux. Indeed, in 2007 the UK was the number one importer of Bordeaux wine in terms of value and third in terms of volume.
The pound sterling, which was worth 1.50 euros eighteen months ago, fell to 1.06 euros at the end of January. In practical terms, this means that a wine sold for 2 - 3 euros ex-cellars and which was priced at between 5 - 6 euros in London stores (tax and margin included) just a few months ago, is now worth almost 7 euros. Because of the weak pound - and the reduced purchasing power of British consumers - French wine shipments have certainly seen better days and are preparing for worse.
"The effects have already been felt, " explains a merchant, " the figures are down since September."
The unfavorable exchange rate has also had an impact on the specific grand cru wine (top ranked growth) market. The golden boys of the City (which represents a quarter of the country's wealth) have less money to spend on expensive bottles. Furthemore, important quantities of wines bought over the last few years are back on the market....in Bordeaux. For example, an Englishman who purchased a 100 euro bottle eighteen months ago would have paid £74 for it. Today, if he needs quick cashflow, he can sell the same bottle for 80 euros (approximately £76) and not lose any money on it.
"All this is very bad for business, as the Bordeaux market is destablized and our stocks depreciated," cautions a merchant, who dreams of Britain adopting the euro...
Large quantities of wine are crossing the Channel back to France at the moment. In addition, pension funds, which had previously invested for speculative reasons, are now desperately selling wines at reduced prices to increase liquid assets.
French consumers should watch out for bargain prices for 2006 and even 2005 vintage wines and older during the supermarket wine fairs this September.
Author:
César Compadre
doc@sudouest.com
S.O. 03/02/09
Translated by Maxine Colas.