International Wine & Spirits: Currency Exchange Guide for Importers

Key takeaways

• Wine and spirits importers face 12–18 month currency exposure from vintage pre-orders to final payment, creating significant margin risk.

• Traditional bank FX costs of 3–5% can eliminate 30–50% of gross profit on imported wine, especially for European and South American sourcing.

• Forward contracts, layered hedging, and multi-currency accounts let you lock costs when you commit to allocations, protecting both cash flow and customer pricing.

Why currency risk matters for beverage importers

Currency fluctuations hit wine and spirits importers harder than most industries. You commit to allocations months or years in advance, often at fixed supplier prices in EUR, GBP, or other foreign currencies. Between commitment and delivery, exchange rates can swing 5–15%, turning a profitable vintage into a break-even proposition.¹ Below is a practical framework for managing FX exposure across your buying cycle, plus tools to stabilize your costs.

1. Map your currency exposure across the buying cycle

Most importers underestimate their exposure because they think about FX only when making payments. Real exposure begins the moment you commit to an allocation or place a pre-order.

Identify exposure windows:

• Futures/allocations: Bordeaux en primeur, Burgundy pre-releases (12–24 months before delivery)

• Advance orders: Spring orders for fall shipments (3–9 months)

• Spot purchases: Immediate availability with 30–90 day payment terms

• Multi-year contracts: Rolling supplier agreements in EUR or GBP

Calculate total exposure:
Add up all committed purchases denominated in foreign currency, regardless of payment timing. If you have €500,000 in Bordeaux futures, €200,000 in Italian advance orders, and €150,000 in Spanish spot purchases, your total EUR exposure is €850,000. At today's rate, that is roughly $920,000 USD, but if EUR strengthens 5% before payment, you will need $966,000—an extra $46,000.

Track by delivery window:
Group commitments by expected payment date: Q1 2026, Q2 2026, etc. This helps you layer hedges across time periods rather than locking everything at once.

Why this matters: You cannot manage risk you have not measured. Many importers only discover their exposure when an invoice arrives and the rate has moved against them.

2. Time your purchases around vintage releases and harvest

The wine and spirits calendar creates natural FX decision points. Strategic timing can save thousands per year.

Bordeaux en primeur (April–June):
Châteaux release futures at fixed EUR prices each spring. You commit to allocations knowing delivery will occur 18–24 months later. The EUR/USD rate at commitment rarely matches the rate at payment.

Strategy: Lock a forward contract when you commit to allocations. If you commit €200,000 in May 2025 at a 1.08 rate ($216,000), lock that rate through June 2027 delivery even if EUR strengthens.

Burgundy allocations (fall):
Smaller, relationship-driven allocations typically have tighter windows (6–12 months). Margins are thinner on Burgundy due to scarcity, making FX precision critical.

Strategy: Use shorter-dated forwards (6 months) and roll them if delivery extends. A 3% FX swing on a $50,000 Burgundy allocation costs $1,500—often your entire margin.

Southern Hemisphere harvest (Feb–April):
Chilean, Argentine, Australian, and New Zealand wines arrive 3–6 months after harvest. Suppliers often quote in local currency (CLP, ARS, AUD, NZD).

Strategy: Lock rates when placing orders in February/March. Southern Hemisphere currencies can be volatile; Argentine Peso devaluation risks are particularly acute.²

Holiday ordering (July–September):
Build inventory for November–December sales. Most European suppliers expect payment 30–60 days before shipment.

Strategy: Forward contracts in summer when you know holiday volume. If you order €150,000 of Champagne and Prosecco in July for November delivery, lock EUR now.

3. Use forward contracts for pre-orders and allocations

Forward contracts are the primary tool for beverage importers because so much of the business is commitment-based rather than spot purchasing.

How forwards work:
You lock an exchange rate today for a future date. If you commit to €100,000 of Burgundy in November for July delivery, you can lock today's EUR/USD rate (say 1.09) even if the rate moves to 1.12 by July. You pay $109,000 instead of $112,000—a $3,000 saving.³

Matching forwards to payment terms:
Align contract maturity with supplier payment schedules:

• 30% deposit, 70% pre-shipment: Two forwards with matching dates

• Net 60 days: Single forward with 60-day maturity

• 50/50 split (deposit + balance): Two forwards at placement and estimated delivery

Rolling forwards:
Delivery delays are common (weather, logistics, customs). Most FX providers let you extend forward contract dates for a small fee, preserving your locked rate even if the shipment timing changes.

Partial hedging:
You do not have to lock 100% of exposure. A conservative approach is:

• Lock 70% of committed allocations (protect baseline)

• Leave 30% unhedged (capture upside if currency moves favorably)

Example: You have €500,000 in commitments. Lock €350,000 with forwards, leave €150,000 flexible. If EUR weakens, you save on the unhedged portion. If EUR strengthens, the hedged portion protects most of your margin.

4. Build region-specific hedging strategies

Each sourcing region has distinct characteristics that should inform your FX approach.

Europe (EUR):

• Largest exposure for most U.S. importers

• Relatively stable but moves 5–10% annually

• European Central Bank policy drives direction⁴

• Strategy: Core hedging tool; lock 60–80% of committed volume

United Kingdom (GBP):

• Scotch whisky, English sparkling, gin

• Post-Brexit volatility remains higher than EUR

• Bank of England policy divergence from Fed creates swings

• Strategy: Lock rates on confirmed orders; GBP can move sharply on economic data

South America (CLP, ARS):

• Chilean and Argentine wines - ARS is chronically volatile; CLP more stable but still emerging-market risk

• Suppliers increasingly quote in USD to avoid risk, but smaller producers may insist on local currency

• Strategy: Lock 100% of exposure immediately when committing; do not leave emerging market currency unhedged

Australia/New Zealand (AUD, NZD):

• Commodity-linked currencies (sensitive to global demand cycles)

• Less volatile than emerging markets but more than EUR or GBP

• Strategy: Moderate hedging (50–70%); these currencies can move favorably when U.S. economy weakens

Japan (JPY):

• Whisky, sake, craft spirits

• JPY volatility has increased due to Bank of Japan policy shifts⁵

• Strategy: Lock rates on premium whisky allocations given high per-bottle costs
  
  
  
  
  

5. Manage seasonal cash flow and payment terms

Wine and spirits importers face intense seasonality, with major cash outflows in late summer (holiday inventory) and spring (futures season). Currency volatility adds unpredictability to already tight cash cycles.

Holiday inventory challenge:
You order €200,000 of Champagne, Prosecco, and Rioja in July for November arrival. Payment is due in September. If EUR strengthens from 1.08 to 1.11 between July and September, you need an extra $5,400 that was not in your budget.

Solution: Lock the rate in July when placing orders. Your September payment amount is now certain, allowing precise cash flow planning.

En primeur cash flow:
Bordeaux futures require 50% deposit upon allocation (May/June) and 50% at delivery (18 months later). The two-year gap creates long-term FX exposure.

Solution: Lock two separate forward contracts—one for deposit, one for balance. This way, you know total USD cost at commitment, not just deposit cost.

Net payment terms:
Many European suppliers offer Net 30, 60, or 90 terms. This is convenient for cash flow but extends currency exposure.

Example: You order €50,000 of Italian wine on Net 60 terms. If EUR strengthens 3% during those 60 days, your cost rises from $54,000 to $55,620. Locking the rate at order time eliminates this risk.

6. Structure your payment workflow

Efficient payment infrastructure reduces errors, saves time, and ensures you never miss supplier deadlines (which can cost you allocations).

Beneficiary management:
Store verified supplier details for European estates, négociants, and distributors. Xe securely saves IBAN, SWIFT codes, and beneficiary information so you can pay the same supplier repeatedly with one click.

Scheduled payments:
When you place a large order with staggered payment milestones (deposit now, balance in 90 days), schedule both payments at order time. Xe automatically executes the second payment on the specified date at your locked rate.

Batch payments:
If you order from 10 different French producers in a single week, send all EUR payments in one batch. This ensures consistent FX rates across the group and reduces administrative overhead.

Multi-currency wallets:
Pre-fund EUR, GBP, or other currencies during favorable rate periods, then pay suppliers instantly when invoices arrive. This is particularly useful for opportunistic spot purchases where timing matters.

Reconciliation and record-keeping:
Export all transactions with clear references (supplier name, invoice number, wine type) for accounting. Each payment links to your original forward contract so you can demonstrate FX cost management to stakeholders or lenders.

Currency exposure assessment

Use this framework to evaluate your annual FX risk and prioritize hedging.

Risk calculation example:
You import €800,000 annually with zero hedging. EUR typically moves 7% annually. Your unmanaged risk is $61,600 (potential additional cost if EUR strengthens). Hedging 70% reduces that risk to $18,480, while leaving 30% flexible to capture favorable movements.

FAQ

When should I lock a forward contract: at order time or at invoice time?

Lock when you commit to the purchase, not when the invoice arrives. The moment you agree to an allocation or place an order in foreign currency, your exposure begins.

What happens if my shipment is delayed?

Most FX providers allow you to roll forward contracts to new dates for a small fee. Contact your provider as soon as you learn of delays. Do not wait until the contract matures.

Can I hedge allocations I am not certain I will receive?

Hedge only commitments you are confident will occur. If you are on a waitlist for a sought-after Burgundy allocation, wait for confirmation before locking rates. Speculative hedging can backfire if the allocation falls through.

Do I need separate forward contracts for each supplier?

No. You can lock a single forward for total EUR exposure (e.g., €500,000 across 15 suppliers), then draw down in smaller amounts as invoices arrive. Xe tracks your remaining balance.

Should I hedge 100% of my exposure?

Conservative importers hedge 70–80% to protect the baseline, leaving 20–30% flexible in case currency moves favorably. This balances protection with opportunity.

How do I decide between EUR and local currency pricing?

If your supplier offers both, compare the FX rate they use versus market rates. Often, suppliers add 2–3% margin when quoting USD. You may get better value accepting EUR pricing and managing FX yourself through a specialist like Xe.

How Xe helps

Once you have committed to allocations, reliable FX tools keep your costs predictable and your cash flow manageable.

Lock rates when you commit to allocations.
Forward contracts let you lock EUR, GBP, or other currencies for 3, 6, 12, or 24 months, matching vintage delivery timelines.

Hold multiple currencies for spot purchases.
Pre-fund a multi-currency wallet with EUR or GBP when rates are favorable, then pay suppliers instantly for opportunistic buys.

Send batch payments to multiple estates.
Use batch payments to pay 10, 20, or 50 suppliers in one transaction, reducing admin time and ensuring consistent rates.

Schedule deposit and balance payments.
Set future-dated payments to match supplier terms. Scheduled payments automatically execute at your locked rate on the specified date.

Move large sums securely.
Xe supports high-value transactions common in wine futures and large vintage purchases, with transparent pricing and no hidden intermediary fees.

Citations

¹ Wine Institute — U.S. wine import data and market trends
² Central Bank of Argentina — Exchange rate policy and peso volatility
³ U.S. Commodity Futures Trading Commission — Using foreign exchange forwards
⁴ European Central Bank — Monetary policy and EUR movements
⁵ Bank of Japan — Monetary policy and JPY intervention

Information from these sources was taken on November 10, 2025.

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Disclaimer:
The content within this blog post is for informational purposes only and is not intended to constitute financial, legal, or tax advice. All figures and data are based on publicly available sources at the time of writing and are subject to change. Actual conditions may vary depending on location, timing, and personal circumstances. We recommend consulting official government resources or a licensed professional for the most up-to-date and personalized guidance.