The European Union is the world’s largest producer of wine, with an annual production of about 167 million hectoliters. The union accounts for 65% of global wine production, 45% of wine-growing farms, and 70% of wine exports. Liberalization of international trade has helped develop and accelerate exports, but the increase has not been steady. Exports have experienced periods of rapid growth, interned with negative or slow growth. As expected, Italy is the largest producer of wine in the European Union, with an annual production of about (48.5 million) hectoliters followed by France (46.4 million) and Spain (40.9 million). The three countries jointly account for about 80% of the European union’s total production. The European Union exports about $25.1 billion worth of wine annually. Italy is the largest producer, but France exports the most wine. The United Kingdom is the largest importer of wine within the European Union and is expected to be the second-largest outside the organization once it entirely leaves the EU. Germany, Netherlands, and France are also major importers within the union.
The Biggest Market For Wine Exports
The United States imports about $6.5 billion of wine, of which $4.2 billion comes from the European Union. France is the top exporter of wine to the United States, with a total of about $2.16 billion, representing a 39% increase from 2014. Italy exports $2.1 billion, while Spain exports $384 million. The United States and the European Union traded amicably until 2019 when economic ties broke down as a result of increased tariffs and unfriendly business practices. In late 2019, the Donald Trump administration announced plans to introduce a 100% tariff on wine imports as a retaliation for the “market-distorting subsidies” the union pays to Airbus. The move threatens the hospitality industry as most of the wine is acquired from Europe. The United States is the European Union’s largest market, accounting for about 28% of exports. The move is less likely to hurt the European Union as the United States imports only 5% of the wine produced.
China imports about $1.6 billion worth of wine from 22 countries within the European Union. The country is developing a taste for wine, and its large population presents a potential market for more imports. China’s consumption has nearly doubled in two decades, from 10.9 million hectoliters in 2000 to 19.3 million in 2017. Consumer preference is also changing as more people seek quality rather than quantity. Although consumption dropped by 10% in 2018, the value rose by over 2%. France is the largest exporter of wine to China, with over $1.2 billion. Spain and Italy both export $170 million each. The three countries have reported over 50% increase in the value of wine exported to China over the past five years.
Russia is the 9th largest market for wine in the world and the 11th largest producer. In 2018, the country imported 2.24 million hectoliters from the European Union to supplement its production and exports to other countries. Despite being a significant producer, Russians have a taste for European wine, probably due to quality and a weakened euro. Spain is the largest exporter of wine to Russia, accounting for about 50.5%. Russia’s per capita consumption is about 10 liters, which translates to about 1 billion liters annually. The figure is expected to rise to about 1.1 billion liters by the end of 2020.
Canada is among the ten largest wine consuming countries. In 2018, it imported over $2 billion worth of wine, most of which was imported from the United States and the European Union. Canada imports about 2 million hectoliters of wine from the European Union annually. The wine industry in Canada is too small to satisfy the demand, and whenever a Canadian raises a wine glass, it is probably imported. The market is expected to grow as the younger generation shifts from beer to wine at a faster rate.
Switzerland imports about 160 million hectoliters from the European Union worth approximately $1.2 billion. Switzerland is a popular tourist destination and therefore imports a lot of wine to satisfy demand. Though not a member, it enjoys a lot of benefits enjoyed by member states such as withdrawal of tariffs on agricultural products, including wine.