The European Commission has approved a \u20ac5bn ($5.6bn) French re-insurance scheme to support the export of wines and spirits to the US.<\/p>\n
In a statement published on 8 May, the Commission said the temporary measure, which falls under the existing Cap Francexport regime, was cleared under EU state aid rules.<\/p>\n
The re-insurance mechanism offers short-term guarantees to French companies that provide insurance against \u201ccommercial and\/or political risks\u201d associated with payment obligations in export transactions.<\/p>\n
The measure, applicable from 8 May to 8 July, will help businesses exporting products to the US prior to Washington’s new wave of tariffs taking effect.<\/p>\n
On 2 April, the US announced a new wave of tariffs on a broad range of goods imported from the EU.<\/p>\n
These include 20% tariffs on products such as agri-food, and beverages, including wine and spirits.<\/p>\n
Although the US government issued a temporary 90-day pause on some of the planned tariffs on 9 April, and the EU responded with a corresponding suspension of its intended countermeasures, uncertainty remains.<\/p>\n
European Commission President Ursula von der Leyen has said that if ongoing negotiations fail to achieve a satisfactory resolution, the EU is prepared to reinstate its countermeasures.<\/p>\n
The Commission concluded Paris’ scheme is \u201cnecessary, appropriate and proportionate\u201d for facilitating wine and spirits exports from France to the US during the limited operational window.<\/p>\n
It also determined the measure has an \u201cincentive effect\u201d, as the exporters involved would not proceed with the transactions without the support.<\/p>\n
In April, the head of EU wine trade body Comit\u00e9 Europ\u00e9en des Entreprises Vins (CEEV) warned winemakers will struggle to \u201creabsorb\u201d<\/a> exports to the US in the wake of the country\u2019s 20% tariffs on imports from the bloc.<\/p>\n Speaking to Just Drinks, CEEV secretary general Ignacio S\u00e1nchez-Recarte said producers will \u201chave to re-evaluate\u201d their export strategy after the introduction of the 20% levy<\/a>.<\/p>\n Commission executive vice-president Teresa Ribera said: \u201cThe Commission responded rapidly to France\u2019s request to approve this export re-insurance scheme.<\/p>\n \u201cGiven the possible EU-wide shortage of export credits to the US during this period, the commission will apply the same approach to all comparable future cases notified by member states.\u201d<\/p>\n According to the F\u00e9d\u00e9ration des Exportateurs de Vins & Spiritueux de France (FEVS), the US is the largest market for French wine and spirit exports.<\/p>\n The trade-body data showed the country’s overall wine and spirits exports dipping 0.1% in volume terms last year<\/a> to 173.9 million cases.<\/p>\n Story Continues <\/p>\n FEVS data showed the value of export sales to the US rising 5% to \u20ac3.8bn, driven by wholesalers replenishing stocks.<\/p>\n The rebound was more pronounced for wines, up 8.4%, while spirits remained stable.<\/p>\n Navigate the shifting tariff landscape with real-time data and market-leading analysis.<\/p>\n Request a free demo for GlobalData\u2019s Strategic Intelligence here<\/a>.<\/strong><\/p>\n