The European Commission has approved a €5bn ($5.6bn) French re-insurance scheme to support the export of wines and spirits to the US.
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.
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The re-insurance mechanism offers short-term guarantees to French companies that provide insurance against “commercial and/or political risks” associated with payment obligations in export transactions.
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.
On 2 April, the US announced a new wave of tariffs on a broad range of goods imported from the EU.
These include 20% tariffs on products such as agri-food, and beverages, including wine and spirits.
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By GlobalDataAlthough 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.
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.
The Commission concluded Paris’ scheme is “necessary, appropriate and proportionate” for facilitating wine and spirits exports from France to the US during the limited operational window.
It also determined the measure has an “incentive effect”, as the exporters involved would not proceed with the transactions without the support.
In April, the head of EU wine trade body Comité Européen des Entreprises Vins (CEEV) warned winemakers will struggle to “reabsorb” exports to the US in the wake of the country’s 20% tariffs on imports from the bloc.
Speaking to Just Drinks, CEEV secretary general Ignacio Sánchez-Recarte said producers will “have to re-evaluate” their export strategy after the introduction of the 20% levy.
Commission executive vice-president Teresa Ribera said: “The Commission responded rapidly to France’s request to approve this export re-insurance scheme.
“Given 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.”
According to the Fédération des Exportateurs de Vins & Spiritueux de France (FEVS), the US is the largest market for French wine and spirit exports.
The trade-body data showed the country’s overall wine and spirits exports dipping 0.1% in volume terms last year to 173.9 million cases.
FEVS data showed the value of export sales to the US rising 5% to €3.8bn, driven by wholesalers replenishing stocks.
The rebound was more pronounced for wines, up 8.4%, while spirits remained stable.
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