Trade diversification key to EU spirits growth

An ‘active’ EU trade agenda focused on free trade agreements (FTAs) will help drive growth for European spirits in 2023, a new report has said.

The 2023 Trade Review by trade body Spirits Europe notes, though, that while 2022 was an ‘exceptional’ year for EU spirits exports – with 16% growth to €9.74 billion (US$10.26bn) – the outlook for 2023 wasn’t as positive, due to factors such as high inflation, growing geopolitical tensions and rising production costs.

Speaking at the launch event with EU policymakers and stakeholders in Brussels, Pauline Bastidon, director of trade and economic affairs at Spirits Europe, explained: “2022 was an exceptional year for EU spirits exports and once again demonstrated the importance of international trade as a driver of growth for our sector.”

Bastidon noted that the sector’s performance in 2022 “has come under threat as high inflation and rising production costs are starting to impact exports to key markets such as the US, while growing geopolitical and trade tensions risk affecting our exports to emerging markets”.

She continued: ”During times of crisis, the temptation can be to turn inward. However, EU trade policy needs to maintain a proactive, outward focus, as diversification – not protectionism or unilateralism – is our best bet against the growing volatility and tensions that we see on the horizon.”

The review also stressed that ‘stable’ and ‘predictable’ relationships with major trading partners needs to go hand in hand with a strong focus on emerging markets, supported by new EU FTAs, and that closer regulatory cooperation, trade diplomacy, as well as ‘robust’ enforcement and an active promotion policy, are also required.

Ulrich Adam, director general of Spirits Europe, added: “With 85% of economic growth worldwide forecasted to take place outside of Europe in the next decade, an ambitious EU trade policy and the conclusion of new FTAs are a must.

”And let’s be clear: deeper trading relationships can deliver much more than just economic benefits.

”Modern-day FTAs can act as agents for sustainable change and contribute to achieving the UN’s Sustainable Development Goals (SDGs), by encouraging higher production standards and more sustainable practices worldwide,” he concluded. 

At the event, Spirits Europe also called for a ‘swift’ conclusion of the EU-Mercosur Agreement before the end of the year.

In 2022's review, the trade body predicted exports of European spirits would face ‘far more challenges’ in the next year.

Spirits Europe also backed a proposal for a Packaging and Packaging Waste Regulation (PPWR).