Around this time last year, Trump’s tariffs were a frightening threat. Now, however, businesses would almost prefer the tariffs to be confirmed, because there is nothing worse than uncertainty. This was the message sent out yesterday by Federvini, the association of producers and exporters of wines, vinegars and spirits. A key sector of Italian manufacturing – and not just within the food industry – with a turnover of over €16 billion, more than 50% of which is generated in foreign markets.
The 10% tariffs expire on 24 July, uncertainty over what happens next
“Since 25 July, we have not known whether the tariffs will be confirmed, scrapped or reintroduced in a different form,” said Federvini president Giacomo Ponti in his report. Added to this uncertainty is the crisis in the Strait of Hormuz which, aside from the humanitarian tragedy currently unfolding, is a key hub for fuel supplies. Indeed, we are seeing costs rise both at the pump and throughout the logistics chain. Not to mention another consequence of the Hormuz crisis: the risk of shortages of certain fertilisers used in agriculture. The hope, of course, is that all this will end very soon, because this uncertainty does not help the economy, which instead needs a more stable outlook in the medium term.” The figures point to a sector that is holding its own but also facing some difficulties.
Wine exports down 13.3% in the first quarter
In the first quarter of the year, Italian wine exports saw a 13.3 per cent drop in value. Admittedly, this is compared with the first quarter of last year, a period that saw a surge in purchases in the US prior to the introduction of American tariffs. However, a double-digit loss is always a serious wake-up call. “It is perhaps too early to draw conclusions and make assessments,” added Ponti, “but my feeling is that to get a complete picture of the situation and figures that are truly comparable, we will need to wait at least until the first nine months of the year.” “It is now essential,” continued Ponti, “that the ratification of the EU-US agreement is finalised, given that the current 10% tariff regime remains in force until 24 July, and from the 25th we do not know what scenario we will be facing.”
The US market is irreplaceable for Italian wine
On the other hand, the US market is not replaceable, nor has it been replaced by Italian wine. According to data from the Federvini-Nomisma Observatory, American consumers have in fact remained loyal to Italian wines despite price rises of over 20 per cent.
Domestic sales remain steady
As for the domestic market, and in particular the large-scale retail sector, Federvini Observatory data for the first three months of the year show that sales by value increased for both wines (+2.2%) and sparkling wines (+8.7%). In addition to wine and sparkling wine, spirits also made gains (+2.9% by volume), driven by alcoholic aperitifs and mixed drinks; gin is also growing, whilst grappa remains in negative territory. On a positive note, however, vinegars are up both in value (+2.4%) and volume (+1%), driven by apple cider vinegar and the stability of Balsamic Vinegar of Modena PGI.
Dining and Cooking