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China's graft crackdown hits France's wine, spirits exports

yahoo.com/ by 27/09/2014  

 

China's anti-corruption and frugality drive has hit France's wine and spirits industry hard as exports dropped more than 7 percent in the first semester, a leading trade body warned Tuesday.

 

The Middle Kingdom may have shot up to fifth place in France's list of best foreign clients, but its purchases -- which are usually in the high-end range -- suddenly melted away in the first six months of 2014, according to the Federation of French Wine and Spirits Exporters (FEVS).

 

These fell by nine percent in volume and by nearly a third in value, the trade body said.

 

"The anti-extravagance drive decided at the beginning of 2013 has clearly impacted the highest value-added products such as great cognacs and Bordeaux wines," Pierre Genest, deputy head of the federation, told AFP.

 

"The Chinese decision penalises us even more because it was sudden and we were not able to anticipate it, and because it targets the best-valued products."

 

Chinese President Xi Jinping has launched a graft crackdown since taking office last year with a series of high-profile takedowns of party officials that have sent shockwaves through an elite who once did little to hide their prosperity.

 

A related austerity drive -- ordering an end to excessive gift-giving and banquets within the state sector -- has also meant officials are wary of popping too many champagne corks or opening high-end bottles of wine.

 

According to FEVS, French wine and spirits exports in the first semester were worth 4.8 billion euros ($6.2 billion), a 7.3 percent drop from the same period in 2013.

 

Spirits alone were worth 1.5 billion euros, and exports of cognac, which count for two thirds of the turnover in this category, fell 12 percent in value.

 

Wine exports, meanwhile, also dropped. While the sale of champagne abroad continued to rise, Bordeaux wines plummeted by 28 percent in value.

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