Wine is the beverage resulting exclusively from the partial or complete alcoholic fermentation of fresh grapes, whether crushed or not, or of grape must. Yeast consumes the sugar in the grapes and converts it to ethanol, carbon dioxide and heat. Different varieties of grapes and strains of yeasts are major factors in different styles of wine. These differences result from the complex interactions between the biochemical development of the grape, the reactions involved in fermentation, the grape's growing environment (terroir), and the wine production process.

Wines come in different varieties such as red, white, sweet, dry, still and sparkling and has different uses, as a beverage, in cooking, in religious rites, etc. Its actual alcohol content is usually less than 14.0% vol. and shall not be less than 8.5% vol. Nevertheless, taking into account climate, soil, vine variety, special qualitative factors or traditions specific to certain vineyards, the minimum total alcohol content may be reduced to 7% vol. by legislation particular to the region considered.

There are generally two categories of wines: regular (or table) wines and premium wines. Premium wine is distinct from regular wine in both quality and price. As high quality is subject to interpretation, the price point is a more suitable indicator to define whether a wine is considered a premium wine or not.

This report uses the combined nomenclature codes 220410 ‘sparkling wine of fresh grapes’ and 220421 and 220429 ‘wine of fresh grapes, including fortified wines, and grape must whose fermentation has been arrested by the addition of alcohol (excluding sparkling wine)’ in containers less than or equal to 2 liters and in containers more than 2 liters, respectively.

Italy, France and Spain have been the top three wine producers in the world since the 1960’s. In 2018, the three European countries produced more than 50% of the wine worldwide. The United States, China, Argentina, Chile and Australia together produced another 30%.

All the top producers, except China, are among the top exporters of wine. In terms of value, France has been by far the number one wine exporter of the third millennium. However, in terms of quantity, France ranked as the 3rd largest exporter. For the past few years, Italy and Spain have been exporting the largest quantities of wine. Quantity exported by the top five wine exporters dropped between 2016 and 2020, most notably in Spain. Quantities of wine exported by New Zealand, Argentina, Portugal, Moldova, Hungary, Netherlands and Austria increased over the last 5 years. Quantities of wine exported by Canada (130%), Slovakia (90%) and Georgia (86%) increased substantially in the last 5 years. For numerous countries with available data on quantity, changes in quantity and value exported varied by more than 20% implicating large variations in the unit price of exported wine.

Italy and France are two of the world’s finest wine producing countries, in terms of both quality and quantity. While Italy produces a larger quantity of wine, France is renowned for its production of premium wines; hence the greater value of exports despite the lesser quantity. Meanwhile, Spanish wine is cheaper because of the abundance of lesser-known grape varieties; additionally, Spanish wine is mostly sold in bulk to France and Italy where it is bottled, marketed and distributed.

Austrian wine exports underwent an overall increase despite the cancelation of major wine exhibitions and the closure of shops, pubs and restaurants for months. Bottled Austrian wine exports rose by 10% while bulk exports fell by 6% in 2020. Figures had also risen in 2019 hitting export records reflecting the exceptional 2018 harvest. The surge in recent years of the exports of wine from Georgia, the cradle of wine, can be attributed to the heavy investment by the wine industry and the government in raising standards and promoting products in key markets. Georgian exports to the UK underwent the most considerable increase in recent years. Meanwhile, Denmark produces very little wine and relies on imports which are partially re-exported. Similarly for Lithuania, wine production levels are low but around 70% of its imports are re-exported to Estonia, Latvia, Belarus and Russia. Growth in wine exports of both countries is mostly attributed to the growth in re-exported wine. Canada is the main producer and exporter of icewine, a type of dessert wine produced from grapes that have been frozen while still on the vine. While demand for this specialty wine increased, so did its production and exportation.

Lebanon’s share in the value of global trade of wine was 0.05%. In 2020, the total value of wine exports from Lebanon stood at $17 million, a 1.4% increase compared to 2016 levels, but a 21% drop compared to 2018 levels, the highest export value recorded. In 2020, the quantity exported increased by 0.8% compared to 2016 levels but dropped by 19% compared to 2019 levels, the highest export quantity recorded. Lebanon ranked 42nd in terms of export value and 49th in terms of export volume in 2020.

Lebanon’s share in wine imports of all countries is low (mostly less than 1%), which leaves room for future market share expansion.

In terms of duties, very few markets are a level playing field for exporters of wine, with Lebanon among the highest tariff paying countries on its wine exports to many destinations.

• Norway, Canada, the United Arab Emirates, Qatar, Bahrain, Hong Kong and Macao in China, Singapore, Cuba, Bahamas and few others do not impose any tariffs on all wine imports.
• European Union countries, the United Kingdom and Egypt faced zero tariffs when exporting wine to the EU or UK. Meanwhile, Morocco paid 0.1%, Jordan 1.9%, Palestine and Turkey 2.2%, Tunisia 3.2% and Armenia 4.8%. Lebanon and the rest of the Arab countries, Israel, Australia, USA and Argentina paid 4.9%.
• Lebanese wine exports to the United States faces 1.9% tariffs similar to Argentina, Georgia, Moldova and Brazil. Wine imports from South Africa, Canada, Israel, Australia and Mexico faced zero tariffs. The EU, UK, New Zealand, Switzerland and UK paid 2.7% taxes on their wine exports to the US.
• Imports into South American countries face high tariffs if they were exported by other countries. For instance, imports into Venezuela, Brazil and Paraguay faced 20%, 25.1% and 19.1%, respectively.
• Few countries, such as New Zealand, the US, Chile, Malaysia and China paid zero import taxes into Australia on wine products, whereas the EU paid 5% and Lebanon and most of the other countries paid 4.9%.
• South East Asian countries and African countries faced low tariffs (0.7%) on their wine imports into Switzerland. The rest paid between 16.9% and 18.7% with Lebanon on the higher end.
• Lebanon is among the countries that pay the highest tariffs on their wine exports into Japan and China.

According to the International Organization of Vine and Wine (OIV), wine consumption increased by 3.5% from 22.6 billion liters in 2000 to 23.4 billion liters in 2020. It dropped by 3% compared to 2019 levels because of the COVID-19 pandemic, an analogous drop to that caused by the 2008 global crisis, highlighting asymmetrical aggregate consumption behaviors in different countries of the world. The noteworthy adjustments in Chinese wine consumption in the last few years has made it the key driver in lowering global consumption levels. In 2019, half of the top 10 countries by per capita consumption of wine consisted of the top producers and exporters. The consumption per capita in these countries ranged from 4.13 liters of pure alcohol in Serbia (#10) to 6.74 liters of pure alcohol in France (#1). The gap with other countries is best illustrated by the per capita consumption of 1.16 liters of pure alcohol in Spain, the third largest producer in the world.

After being considerably affected by COVID-19, according to IWSR, the consumption of wine is expected to regain its growth momentum in the coming years.

1. Most Promising Markets for Wine from Lebanon
Following a model based on trade statistics and other variables, Norway, Denmark, Poland, Belgium, Latvia and Romania were identified as potential markets for wine exports from Lebanon (Figure 4). In 2020, 7.1% and 5.7% of Lebanon’s wine exports were imported by Belgium and Norway respectively. While shares of Denmark (0.7%), Poland (0.2%) and Romania (0.1%) were very negligible, no wine was exported to Latvia in the last decade.

Map constructed using https://mapchart.net/world.html The methodology includes a calculation based on total wine import value in 2020 and its growth in the previous 5 years, import value of wine from Lebanon in 2020 and its growth in the previous 5 years, tariffs faced by Lebanon compared to those faced by leading competitors in the market, concentration of suppliers, and projected average growth in GDP in the period 2021-2026 (Table 1).