French winemakers, shunned by some Americans last year over France’s opposition to the Iraq war, face a new problem in 2004: the rise in the euro.
Industry leaders said on Thursday the currency’s surge to new highs against the dollar could make French wine seem too expensive to U.S. consumers also being offered keenly priced New World rivals from Australia and elsewhere.
“Buyers of fine wines are not overly sensitive to price variations,” Michel Pons, head of promotion at the national Onivins agency, said of the euro’s 40 percent gain since 2002 to a record $1.29 earlier this month. It is now around $1.25.
“But the impact is greater among the less prestigious wines selling for around $10 a bottle — and it is there that the competition is the hottest,” he told Reuters.
As some American consumers and businesses shunned French wine, U.S. exports fell 11 percent in the first 10 months of last year, the French Board of Foreign Trade (CFCE) said.
French wines at the cheaper end of the market — from the Cote de Provence or the Languedoc Roussillon regions — fared worst, with individual slumps of up to 37 percent.0