NEGRAR, Italy, July 28 (Reuters) - Italy's wine
producers, already struggling amid a slowing economy and a
strengthening euro, face a further challenge after wine and
spirits were left out of the U.S.-EU trade deal agreed on
Sunday.
Discussions are continuing regarding any tariff exemptions
for the wines and spirits sectors in the framework trade deal, a
senior European Commission official said on Monday, a day after
the U.S. and EU agreed a 15% tariff on U.S. imports of most
other goods from the European Union.
Producers in the winemaking region of Valpolicella, in
northern Italy, warn that on the top of any new tariff, their
exports will be impacted by the depreciating dollar, which has
lost more than 12% against the euro this year, making European
goods more expensive for U.S. consumers.
"This is already pretty bad," said Andrea Sartori of the
Sartori winery in Negrar di Valpolicella, founded in 1898.
"I'm very worried about the economy overall. And we all know
that wine consumption doesn't thrive very well when we have seen
economic crises in the past," Sartori told Reuters. "So this
could be a domino effect that could hit the wine trade as well."
The United States is the biggest export market for Italy's
wine and spirits producers, generating sales of 2 billion euros
($2.3 billion) last year, or a quarter of their global sales,
according to industry group Federvini.
Lamberto Frescobaldi, president of Italian wine producer
association UIV, said on Sunday that 15% tariffs on wine would
result in a loss of 317 million euros ($372.63 million) over the
next 12 months.
Wine producers are already facing subdued domestic demand,
with the Italian economy forecast to grow just 0.6% this year,
according to national statistics bureau ISTAT, although premium
wines are set to do better as deeper-pocketed consumers are less
price sensitive.
They include Valpolicella's top end Amarone wine.
"Amarone is the least sensitive because it's already a
premium wine with a pretty high price. So I don't think it would
be a dramatic change," Sartori said.
"I'm more worried about Valpolicella and Ripasso, which are
mainstream, and a price increase could possibly damage the
sales," he added
(Additional reporting by Alex Fraser; Editing by Giselda
Vagnoni and Susan Fenton)