ProWein 2015: Global currency fluctuations a key topic at this year's fair

By Erin Smith

Published: 19 March, 2015

The current fluctuations in currency exchange rates was the 'conversation of ProWein', particularly with the weakening euro and the strengthening US dollar having ripple effects on the global wine trade.

The euro which began weakening over a year ago has fallen from £1 to €1.19 (www.xe.com) to a low earlier this month of £1 to €1.42 (www.xe.com). This helped to make European imports more attractive to suppliers in global export markets.

Mauricio González-Gordon chairman of Gonzáles Byass spoke to harpers.co.uk at Prowein 2015 and said: "Obviously the exchange rate is very important to us and at the end of the day all of our costs are in euros. But it also depends on where our exports are going. The UK is very important to us, the US is very important to us and Mexico is very important to us. Germany isn't a problem in that respect as it uses the euro. Obviously the exchange rate is helping us very much and gives us a number of opportunities at the moment."

Ferando Da Cuhna Guedes, board member of Sogrape, which is based in Portugal, said: "Now for us, we have to admit that the situation has been favourable. It is good for us. We have benefited from it, of course. At the moment let's enjoy the present, for a long period it was slightly too expensive. "

Australian producers equally have benefited from a weakening currency which recently reached £1 to AU$1.97 (www.xe.com), compared to £1 to AU$1.80 at the same time last year.

Matt Tallentire, senior export manager of Casella Family Brands said: "Of course it has helped us. I think you'll find that everyone in the Australian wine industry is fairly happy about the weakening of the Australian dollar. It is weakening and coming back to a position where it makes exporting wine more achievable. It makes the proposition that much more attractive. When we were at parity with the US dollar, the Australian wine market had a bit of a hiccup. But it is coming back to normal now, which is great, so you have to ride the wave."

US producers are equally having a harder time exporting to Europe as the US dollar has been strengthening while the euro has been declining. The Pound Sterling has not been as negatively impacted. Over the course of the year the US dollar has gone from £1 to US$1.64 (www.xe.com) down to US$1.49 (www.xe.com), which is a 9% decline.

The euro however has fared far worse, falling from €1 to US$1.37 (www.xe.com) to US$1.04 (www.xe.com) a 24% drop in a year. This headwind for US producers not only makes exports more expensive, but makes imports that much more attractively priced in their domestic market.

Gayle Bartscherer, vice-president of international marketing and business development at Jackson Family Wines said: "Clearly it is the conversation of ProWein, the strength of the euro and the US dollar. It makes it difficult. But honestly I think it is a global problem, as there are plenty of currencies right now that are weakening as the US dollar is strengthening, obviously that has an impact."

Siobahn Thompson, the chief executive of Wines of South Africa, said: "Europe is still hurting from the global financial crisis and exports are impacted. The UK is bouncing back and Germany is relatively solid, but in other parts of Europe consumers are still stretched."

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