Global Trade War and the Future of Georgian Wine: How US-Europe Tensions Could Impact Exports

The global trade landscape is becoming increasingly tense, and the alcoholic beverage sector is now at the center of this economic battle. The United States’ proposal to impose a 200% tariff on European alcoholic beverages and the European Union’s retaliatory plan to levy a 50% tariff on American whiskey indicate that the trade war is entering a new phase.

Every year, the EU exports $5 billion worth of wine to the US, with France and Italy being the largest suppliers. If these tariffs take effect, European wine will become significantly more expensive, forcing American consumers to look for alternatives. This situation creates new opportunities for countries like Georgia, which have been steadily expanding their presence in international markets.

Georgian Wine Export Growth: Key Figures

In the first half of 2024, Georgian wine exports saw strong growth:

• 54.5 million liters of wine were exported, a 26% increase compared to the same period in 2023.
• Export revenue rose by 24%, reaching $156.7 million.
• Georgian wine is now sold in 61 different countries, including strategic markets such as the US, Poland, Canada, Turkey, and Germany.

One of the most notable achievements was the 53% increase in exports to the US, confirming the growing interest in Georgian wine. Exports also surged in Poland (19%), Germany (34%), and Canada (110%)—demonstrating that Georgian wine is making significant progress in key global markets.

How the US-Europe Trade Dispute Affects Georgian Wine

If European wine becomes too expensive in the US, European producers will redirect their products to the EU market, intensifying competition within Europe. To stay competitive, European winemakers will likely reduce prices, which could challenge Georgia’s position in European markets by making European wines more affordable.

For Georgia, this shift presents both risks and opportunities:

• Opportunity in the US: If European wine becomes too expensive for American consumers, Georgian wine could fill the gap, leveraging its authenticity, quality, and competitive pricing.
• Risk in Europe: Lower-priced European wines could saturate the market, making it harder for Georgian wine producers to compete.

Strategic Considerations for Georgian Winemakers

1. Strengthening the US Market Presence

   • With European wines potentially becoming more expensive, Georgia must expand its marketing efforts in the US.
   • Targeting boutique wine retailers, premium restaurants, and direct-to-consumer sales channels can boost brand recognition.

2. Enhancing Wine Branding & Premiumization

   • If European wines flood the market with lower prices, Georgia must differentiate itself through quality and uniqueness.
   • Focusing on premium wine segments and investing in storytelling, heritage, and terroir-driven marketing can help justify higher prices.

3. Exploring Alternative Markets

   • With increased competition in the EU, Georgia should deepen its presence in Canada, China, Japan, and the Middle East, where demand for unique wines is growing.
   • Canada’s 110% increase in Georgian wine imports indicates strong potential for further expansion.

4. Diversifying Product Offerings

   • Expanding into organic, biodynamic, and sustainable wines could appeal to health-conscious and environmentally aware consumers.
   • Promoting unique Georgian wine varieties such as Saperavi, Rkatsiteli, and Kisi could attract new demographics.

Rising Spirits Exports: A Parallel Success Story

In addition to wine exports, Georgian spirits have experienced record-breaking growth:

• 23.4 million liters of spirits were exported to 45 countries in the past six months, reflecting a 55% year-over-year increase.
• Revenue from spirits exports reached $132.8 million, reinforcing Georgia’s growing influence in the global alcohol market.

This trend suggests that Georgian alcoholic beverages—beyond wine—are gaining traction internationally, further strengthening the country’s position.