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European Trade War Hits American Spirits Exports

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European Trade War Hits American Spirits Exports

IndexBox has just published a new report: ‘U.S. – Spirits, Liqueurs And Other Spirituous Beverages – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The establishment of duties on alcohol trade between the U.S. and the EU has led to a sharp drop in the export of American spirits. A further increase in the EU import duty on US whiskey may facilitate this decline. Alcohol imports from the EU to the American market also dropped, but this was compensated by increasing purchases from Mexico. The temporary suspension of duties on alcohol should help boost the U.S.-EU trade. The key trends in the American spirits and liquor market include the growing popularity of ready-to-drink beverages and the increasing demand for luxury spirits and alcohol, as well as beer and flavored malt beverages.

Key Trends and Insights

Exports in spirits from the U.S. dropped significantly from $2.1B in 2018 to $1.9B in 2020 due to a decrease in demand for American alcohol to Europe after the EU introduced customs duties on U.S. spirits. From 1997 to June 2018, there were no customs duties on alcohol between the U.S. and the EU. In June 2018, the EU set a 25% import duty on American whiskey, and in 2020 it was expanded to include rum, brandy, vodka and vermouth from America.

Establishing duties led to a 53% drop in the supply of American whiskey in the UK and a 38% drop in the EU, compared to 2018 levels. Exports of American whiskey in 2020 were $845M, down 28.9% from 2018 levels. European countries account for 52% of total US whiskey exports.

A further decline in whiskey exports from the U.S. is forecasted for the coming years as a result of higher European trade tariffs. In June 2021, the EU raised the import duty on American whiskey from 25% to 50%. It’s expected that the total volume of shipments of American alcohol abroad will continue to fall, as in monetary terms, the share of shipments of whiskey accounts for about 44% of total exports of spirits from the U.S.

The import of spirits from the EU to the U.S. dropped significantly after the U.S. established retaliatory trade duties. In 2019, the U.S. imposed a 25% import duty on single malt Scotch whiskey from the EU, single malt Irish whiskey from Northern Ireland, as well as liqueurs from Germany, Ireland, Italy, Spain and the United Kingdom. As a result, imports of Scotch whiskey into the U.S. fell by 37% y-o-y in 2020, while shipments of liqueurs and cordials fell by 40% y-o-y. In 2021, cognac from the EU and other grape-based brandies from France and Germany were added to this list.

Despite the decline in EU supplies, total American alcohol imports rose thanks to a 17% y-o-y increase in purchases from Mexico. The total volume of alcohol imports in the U.S. increased from 824K tonnes in 2019 to 938K tonnes in 2020.

In March 2021, the U.S. and the EU agreed to a 4-month reciprocal suspension of trade tariffs on alcohol and spirits, excluding American whiskey, which should bolster trade between the two.

Among trends in the American market for spirits this year, the rapidly growing popularity of ready-to-drink beverages (often called RTD), an increase in the demand for beer, flavored malt beverages and high-end alcohol stand out. A rise in the number of direct-to-consumer shipments from in-state distilleries, aided by the development of e-commerce and new laws permitting such trade can also be observed.

Spirits and Liqueur Production in the U.S.

Spirits and liqueurs production in the U.S. rose to 1.9M tonnes in 2020, surging by 4.8% against the year before. The total output volume increased at an average annual rate of +4.5% over the period from 2018 to 2020.

In value terms, spirits and liqueurs production expanded modestly to $14.4B in 2020. The total output value increased at an average annual rate of +4.5% from 2018 to 2020.

Spirits and Liqueur Exports from the U.S.

After two years of growth, shipments abroad of spirits, liqueurs and other spirituous beverages decreased by -10.3% to 272K tonnes in 2020. In value terms, spirits and liqueurs exports contracted modestly to $1.9B (IndexBox estimates) in 2020.

Panama (53K tonnes) was the main destination for spirits and liqueurs exports from the U.S., with a 19% share of total exports. Moreover, spirits and liqueurs exports to Panama exceeded the volume sent to the second major destination, Australia (26K tonnes), twofold. Spain (25K tonnes) ranked third in terms of total exports with a 9.2% share.

In value terms, the largest markets for spirits and liqueurs exported from the U.S. were Panama ($361M), Canada ($325M) and the Netherlands ($169M), with a combined 44% share of total exports.

The average spirits and liqueurs export price stood at $7,102 per tonne in 2020, with an increase of 7.4% against the previous year. In 2020, the most notable rate of growth in terms of prices was recorded for supplies to Panama, while the prices for the other major destinations experienced more modest paces of growth.

Spirits and Liqueur Imports into the U.S.

Spirits and liqueurs imports into the U.S. expanded significantly to 938K tonnes in 2020, growing by 14% against the year before. The total import volume increased at an average annual rate of +12.5% from 2018 to 2020.

In value terms, spirits and liqueurs imports expanded sharply to $8.9B (IndexBox estimates) in 2020. The total import value increased at an average annual rate of +10.4% from 2018 to 2020.

Mexico (208K tonnes), Canada (158K tonnes) and France (115K tonnes) were the main suppliers of spirits and liqueurs imports to the U.S., together comprising 51% of total imports. These countries were followed by the UK, the Netherlands, Latvia, Ireland, Sweden, Poland and Italy, which together accounted for a further 38%.

In value terms, the largest spirits and liqueurs suppliers to the U.S. were Mexico ($2.7B), France ($2.5B) and the UK ($1.4B), together comprising 75% of total imports. Ireland, Canada, the Netherlands, Sweden, Latvia, Italy and Poland lagged somewhat behind, together accounting for a further 21%.

The average spirits and liqueurs import price stood at $9,492 per tonne in 2020, waning by -2.6% against the previous year. In 2020, the most notable rate of growth in terms of prices was attained by Mexico, while the prices for the other major suppliers experienced more modest paces of growth.

Source: IndexBox Platform

vodka

France is the Major Market for Premium Vodka from Poland, Purchasing $99M or 62% of Its Total Exports

IndexBox has just published a new report: ‘Poland – Vodka – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

The revenue of the vodka market in Poland amounted to $403M in 2018, lowering by -2.2% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price).

Production in Poland

In 2018, approx. 98M litres of vodka were produced in Poland; therefore, remained relatively stable against the previous year. In general, vodka production, however, continues to indicate a moderate decrease. Vodka production peaked at 109M litres in 2013; however, from 2014 to 2018, production remained at a lower figure.

Exports from Poland

Vodka exports from Poland amounted to 47M litres in 2018, an increase of 4.9% against the previous year. In value terms, exports amounted to $160M (IndexBox estimates).

Exports by Country

France (15M litres), the U.S. (13M litres) and Canada (2M litres) were the main destinations of vodka exports from Poland, with a combined 62% share of total exports. These countries were followed by Hungary, Germany, Bulgaria, Ukraine, the UK, Italy, the Czech Republic, Sweden and Slovakia, which together accounted for a further 24%.

From 2013 to 2018, the most notable rate of growth in terms of exports, amongst the main countries of destination, was attained by Bulgaria, while exports for the other leaders experienced more modest paces of growth.

In value terms, France ($99M) remains the key foreign market for vodka exports from Poland, comprising 62% of total vodka exports. The second position in the ranking was occupied by the U.S. ($21M), with a 13% share of total exports. It was followed by Canada, with a 2.8% share.

From 2013 to 2018, the average annual rate of growth in terms of value to France amounted to +3.6%. Exports to the other major destinations recorded the following average annual rates of exports growth: the U.S. (-9.2% per year) and Canada (-2.5% per year).

Export Prices by Country

The average vodka export price stood at $3.4 per litre in 2018, approximately mirroring the previous year. Over the last five-year period, it increased at an average annual rate of +1.5%. The most prominent rate of growth was recorded in 2014 when the average export price increased by 23% against the previous year. In that year, the average export prices for vodka reached their peak level of $3.8 per litre. From 2015 to 2018, the growth in terms of the average export prices for vodka remained at a somewhat lower figure.

There were significant differences in the average prices for the major foreign markets. In 2018, the country with the highest price was France ($6.8 per litre), while the average price for exports to Ukraine ($0.8 per litre) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was recorded for supplies to France, while the prices for the other major destinations experienced more modest paces of growth.

Imports into Poland

Vodka imports into Poland amounted to 17M litres in 2018, surging by 2.7% against the previous year. In value terms,  imports stood at $46M (IndexBox estimates) in 2018.

Imports by Country

Finland (7.2M litres), Lithuania (3.6M litres) and Sweden (2.6M litres) were the main suppliers of vodka imports to Poland, with a combined 78% share of total imports. Ukraine, the UK, Russia and Austria lagged somewhat behind, together accounting for a further 16%.

From 2013 to 2018, the most notable rate of growth in terms of imports, amongst the main suppliers, was attained by Austria, while imports for the other leaders experienced more modest paces of growth.

In value terms, Finland ($22M) constituted the largest supplier of vodka to Poland, comprising 47% of total vodka imports. The second position in the ranking was occupied by Lithuania ($8.1M), with a 18% share of total imports. It was followed by Sweden, with a 16% share.

Import Prices by Country

The average vodka import price stood at $2.7 per litre in 2018, surging by 4.1% against the previous year.

There were significant differences in the average prices amongst the major supplying countries. In 2018, the country with the highest price was Austria ($4.4 per litre), while the price for Russia ($1.7 per litre) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was attained by Ukraine, while the prices for the other major suppliers experienced more modest paces of growth.

Source: IndexBox AI Platform

Global Wine Market 2019 – Spain Retains Leadership in Exports Amid Buoyant Market Growth

IndexBox has just published a new report: ‘World – Wine – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The global wine market revenue amounted to $130.3B in 2018, going down by -3.3% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). The market value increased at an average annual rate of +1.4% from 2007 to 2018; the trend pattern remained consistent, with somewhat noticeable fluctuations being recorded throughout the analyzed period. The pace of growth appeared the most rapid in 2010, when the market value increased by 11% y-o-y. Global wine consumption peaked at $134.7B in 2017, and then declined slightly in the following year.

Production 2007-2018

Global wine production totaled 32B litres in 2018, surging by 2.3% against the previous year. The total output volume increased at an average annual rate of +1.4% over the period from 2007 to 2018; the trend pattern remained consistent, with only minor fluctuations being observed in certain years.

Exports 2007-2018

In 2018, the global exports of wine totaled 11B litres, going down by -4.5% against the previous year. The total export volume increased at an average annual rate of +2.1% from 2007 to 2018; the trend pattern remained relatively stable, with only minor fluctuations in certain years. In value terms, wine exports amounted to $35.5B (IndexBox estimates) in 2018.

Exports by Country

In 2018, Italy (2B litres), France (1.9B litres) and Spain (1.7B litres) represented the main exporters of wine in the world, achieving 52% of total export. Australia (815M litres) held a 7.7% share (based on tonnes) of total exports, which put it in second place, followed by Chile (6.2%). South Africa (442M litres), Germany (383M litres), the U.S. (351M litres), New Zealand (319M litres), Portugal (303M litres), Argentina (271M litres) and China (244M litres) occupied a relatively small share of total exports.

From 2007 to 2018, the most notable rate of growth in terms of exports, amongst the main exporting countries, was attained by China, while the other global leaders experienced more modest paces of growth.

In value terms, the largest wine markets worldwide were France ($11B), Italy ($7.3B) and Spain ($3.2B), with a combined 61% share of global exports. Australia, Chile, the U.S., New Zealand, Germany, Portugal, Argentina, South Africa and China lagged somewhat behind, together comprising a further 30%.

Export Prices by Country

In 2018, the average wine export price amounted to $3,332 per thousand litres, rising by 7.8% against the previous year. Overall, the wine export price continues to indicate a relatively flat trend pattern. There were significant differences in the average export prices amongst the major exporting countries. In 2018, the country with the highest export price was France ($5,740 per thousand litres), while China ($1,464 per thousand litres) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of export prices was attained by the U.S., while the other global leaders experienced more modest paces of growth.

Imports 2007-2018

In 2018, approx. 9.4B litres of wine were imported worldwide; going down by -20.1% against the previous year. The total import volume increased at an average annual rate of +1.2% from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded in certain years. In value terms, wine imports amounted to $33.7B (IndexBox estimates) in 2018.

Imports by Country

The countries with the highest levels of wine imports in 2018 were the UK (1.3B litres), the U.S. (1.2B litres), Germany (1B litres) and China (681M litres), together amounting to 44% of total import. Canada (409M litres), the Netherlands (382M litres), Belgium (327M litres), China, Hong Kong SAR (300M litres), Japan (290M litres), Russia (278M litres), France (244M litres) and Sweden (209M litres) followed a long way behind the leaders.

From 2007 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by China, Hong Kong SAR, while the other global leaders experienced more modest paces of growth.

In value terms, the largest wine importing markets worldwide were the U.S. ($5.4B), the UK ($4B) and Germany ($2.7B), together accounting for 36% of global imports. These countries were followed by China, Canada, Japan, China, Hong Kong SAR, the Netherlands, Belgium, France, Russia and Sweden, which together accounted for a further 36%.

Import Prices by Country

In 2018, the average wine import price amounted to $3,589 per thousand litres, rising by 18% against the previous year. Over the period under review, the wine import price continues to indicate a relatively flat trend pattern. There were significant differences in the average import prices amongst the major importing countries. In 2018, the country with the highest import price was Japan ($5,777 per thousand litres), while Russia ($2,497 per thousand litres) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of import prices was attained by France, while the other global leaders experienced more modest paces of growth.

Source: IndexBox AI Platform