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Mon, Nov 10, 2003 - Page 12 News List

New US law could add to the woe of French exporters

AFP , PARIS

French wine and spirit exporters, already suffering a slide in their sales on the lucrative US market, face an ominous new hurdle next month when a law aimed at combating bioterrorism comes into effect in the US.

The Bioterrorism Act, due to come into force Dec. 12, streng-thens controls on foreign food products entering the US in a bid to lessen chances of a biological terrorist attack.

"The situation is serious," said Patrick Ricard, head of the association of French wine and spirits exporters (FEVS). "It affects the heart of France, from north to south, west to east. The components of this law pose an enormous complication for dealers because they must register via the Internet. Many of them are unfamiliar with this means of communication and do not speak English."

Wine industry transport specialists have warned that if a French company has not registered with US authorities by Dec. 12 it will find the US market closed to it until all the formalities are completed.

For France that could be costly. Last year, French wine and spirit exports to the US were worth 1.7 billion euros (US$1.9 billion), or 22 percent of all such French sales abroad and 75 percent of all food product sales on the US market, according to Ricard, who is also chairman of the drinks group Pernod-Ricard.

French food product exporters number between 1,100 to 1,200 but the US law could affect 10 times as many people since any bottler whose products could be sold in the US must conform to the new rules.

French wine exports to the US, apart from high-quality Bordeaux vintages, have plunged 25 percent in the last four months, Ricard said.

While the sales slide has coincided with sharp diplomatic differences over the war in Iraq between the US and France, Ricard stressed that the Bioterrorism Act was not directed at French products and has nothing to do with the French stand on Iraq.

French vintages accounted for just 15 percent of all US wine imports in August this year, down from 23 percent in April, according to the FEVS.

And by the end of the year, France could fall from second to fourth place among US wine suppliers after Italy, Australia and Chile.

Ricard said he hoped that the Wine Accord between the EU and the US, adopted in 1983 and renewed 10 times since, will be extended between now and Dec. 31 when it is set to expire.

"It's extremely important for wine but we have to be pragmatic and not exaggerate the situation," Ricard said.

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