In the early 1980s, recognizing the potential for sales of California’s world-class wines in overseas markets, the Wine Institute championed passage of the Wine Equity and Expansion Act (WEA). Passed by the U.S. Congress in 1985, the WEA marked official U.S. government recognition of the significant trade barriers faced by U.S. wine producers in foreign markets throughout the world and confidence that American wines could contribute to the overall growth of U.S. exports. This recognition set the stage for a concerted effort by the Wine Institute and its member wineries to develop foreign markets for California wine.
In most markets, California wines compete with those produced locally-- which are often protected by government tariffs and distribution regulations--as well as other imported wines. The Europeans, in particular, target wine and other value-added products for significant financial assistance through both individual European countries and the European Community’s Common Agricultural Program (CAP). The annual CAP subsidy budget for wine has been more than $1.8 billion for a number of years. In this highly competitive environment, promotion campaigns by California vintners have resulted in substantial growth for U.S. wine exports (90 percent from California) during the last 15 years. U.S. exports to 125 countries totaled $1.14 billion in 2010.
Since 1985, the Wine Institute has served as administrator of programs by the United States Department of Agriculture’s Foreign Agricultural Service. These programs provide funding on a matching funds basis for certain industry expenditures for category and branded promotion of California wines. About 125 California wineries participate in the Wine Institute’s International program.
Wine Institute’s export programs, guided by a committee of participating wineries, are aimed at educating the foreign wine trade and media about the quality and range of California wines. Analysis of foreign markets and information on market entry are also provided as an important service to wineries new to the export scene. Wine Institute representatives in Canada, Denmark, Continental Europe, Japan, China, Hong Kong, Southeast Asia, Taiwan, Sweden, South Korea, Mexico, the United Kingdom, Poland and Russia provide on-site support to exporting wineries.