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U.S. wine exports continue growth trend

Earning slightly more than $560 million in 2000, U.S. wine exports, 90 percent from California, gained a modest 3 percent to reach a volume of 79 million gallons.

Wine Institute officials say that remains on track with the 14-year trend of growth by the exports. During that time they grew 16-fold from the $35 million value of the 7.3 million gallons sent abroad in 1986.

Joseph Rollo, international director for the San Francisco-based wine advocacy group, said, “Export sales were challenging in 2000 because of the strong U.S. dollar and increasing competition.

“However,” he added, “exports to our largest markets, the United Kingdom and Canada, remained strong, and the high-quality, cutting-edge image that California wine has established continues to drive sales in all markets.”

John DeLuca, president of the institute, said it is dedicated to reducing international trade barriers for California wine. Some 150 California wineries export to 165 countries and face a host of protectionist measures, such as high tariffs, distribution restrictions and foreign wine production subsidies.

The U.S. claims only a 4 percent share of the world export market, and DeLuca said the California industry intends to vigorously pursue the potential for a greater market.

The United Kingdom in 2000 was once again the top U.S. wine export market with $144 million in value. Other leading markets were Canada worth $105 million, the Netherlands $77 million, and Japan $69 million.

Institute officials say California wine, which pulled a 7 percent increase in sales in the UK despite stiff competition, is firmly established in markets there with support from trade shows, retailer promotion, and coverage in key wine trade publications.

Although interest in California wine in Europe remains strong, the U.S. dollar has slowed volume increases, and where growth had been 20 to 30 percent it averaged only 2 to 5 percent last year. Even so, California wineries, eyeing the European potential, showed the Bear Flag at major trade shows.

The industry is at work elsewhere, including exploring markets in China, pending its entry into the World Trade Organization, which would help open distribution systems for greater market access.

In the give-and-take of international trade, the U.S. is the world's second largest market for imported wines but the fourth leading producer. A new pact will hopefully set a tone for broader reciprocal trade.

Trade agreement

The Wine Institute recently announced the agreement between the U.S., Canada, Australia, and New Zealand, aimed at promoting their wine trade.

The Agreement on Mutual Acceptance of Oenological Practices allows for wine imports between the four signatories as long as the wines concerned are made in accordance with the domestic laws and technical winemaking requirements and regulations of the country of origin.

Wine Institute sources say the agreement ensures the U.S., which already allows imports if they meet another country's standards, the same conditions.

Practices vary from country to country because of local conditions, climatic variations, and traditions. These have been used in the past to prevent market access and obstruct international wine trade.

DeLuca said, “This is the beginning of a new era in world wine trade that recognizes that other countries have effective regulatory and enforcement systems in place to assure that producers comply with its country's standards.”

He added that the new agreement sets a standard for international wine commerce and he hopes the European Union and others will also sign it.

The four parties to the agreement are members of the Wine Trade Group, an informal organization of government officials and wine industry representatives formed in 1998 to expand international wine trade. The agreement sprang from government negotiations and forms binding rules on each country. The WTG plans to continue simplifying export labeling.

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