Trade war concerns Austrian winegrowers but Chinese market gives hope

European wine producers are relieved that U.S. tariffs on alcohol will amount to 20 percent instead of the previously announced 200 percent. 

Yet export revenue is still expected to drop, with some fearing that American orders will be cut in half. It all adds to the industry's growing existential threat, caused by COVID and high inflation which hit vineyards across the continent.

"At least the death blow has been averted," Viennese winegrower Fritz Wieninger told CGTN. He expects to receive 30 to 50 percent fewer orders from the U.S. but is convinced his business will survive. 

Meanwhile, sales of French wine and spirits are expected to slide at least 20 percent in the United States, according to French wine and spirits exporters group FEVS.

Gerhard Lobner, who runs Vienna's prominent Mayer am Pfarrplatz winery, feared losing his biggest export market entirely. Now that U.S. tariffs are much lower than expected, the Austrian businessman can continue shipping bottles to America. But he's uncertain how many customers will cancel due to increased prices.

"If the Americans want to build a wall around their country and only want to drink woody Chardonnay from the Central Valley in the future, then so be it," Lobner said.

Vienna calls itself the world's only capital that has significant wine production within city limits - but continuing production with fewer American customers will be challenging.

"If there is too much wine here in Europe, the winegrowers will have a problem because the prices go really down and they don't have an income from this wine," said Norbert Walter, President of Vienna's Chamber of Agriculture.

Europe exports roughly $5 billion worth of wine to the U.S. each year. If American customers stop buying that wine because of higher prices, export revenue could drop by up to 20 percent. 

Overseas hope

The European Commission says it wants to help winegrowers adapt by unlocking new market opportunities such as low-alcohol wine which more and more younger Europeans are choosing for health reasons.

Another solution is going East. Last year, Austrian wine exports increased by eleven percent to countries like Japan, South Korea and China. 

It's a trend Viennese winegrowers Like Marco Kalchbrenner hope will continue. "Exporting more wine to China would be really nice," the businessman who is currently traveling through China, told CGTN.

"I do think that China is an exciting wine market," Lobner says. "And Austrian white wine goes perfectly with Chinese cuisine." 

Even if he loses some American customers, Lobner is certain his historic winery will continue to thrive as it has done for the past 342 years - despite both trade wars and physical wars.