The wine market in Luxembourg, although small, profits from several anomalies. First, it descends from a very old tradition of viticulture on the Mosel valley adjacent to Germany. Second, 40 % of its residents are foreigners, with more than 7,000 bureaucrats of various European institutions having their headquarters here. Third, its wealthy population has a buying power that is the envy of neighbouring markets. Indeed, at $87,995 (€60,500) per year its nominal gross domestic product per capita is the highest in the world. Lastly, more than
100,000 people, or 20% of the population, pass the border every day on their way to work.

In addition, the taxes on wine, spirits, petrol and tobacco are considerably lower then in neighbouring countries. Neither wines nor sparklers are levied with excise taxes or duties and value added taxes are only 12% for wines with less than 13% alcohol. As these high rolling consumers mainly drink wines with meals, they are generally looking for quality. French wines are by far the most popular, and all its prestigious brands can be found here, but distributors are also trying to satisfy the habits of the numerous Portuguese (65,000) and Italian (19,000) residents who almost exclusively drink wines from their own countries.

Distribution
Luxembourg has domestic 60 wineries that produce almost one third of what the country consumes. Most importing is handled by about 30 companies, many of whom also sell to private consumers. Supermarket distribution is dominated, in order, by the Cactus group, Cora-Match, Delhaize and Auchan, while the vibrant on-trade sector counts some 200 hotels and more than 1,000 restaurants and cafés. Not bad for a country with only 480,000 inhabitants. Not to be underestimated are some 200 petrol stations throughout Luxembourg, many of which are open 24 hours a day, selling not only fuel and tobacco, but also baguettes, cheese and wine.

The Spring Fair of Luxembourg (www.luxexpo.lu) remains an important event, where almost all domestic producers and wine merchants are present to show their products. For some, this exhibition makes up a quarter of their annual turnover. At the end of the year, the local body promoting domestic wines also organises an important wine fair (www.vins-cremants.lu) at the Knuedler in the city centre.

Most popular import: France
France dominates the wine market, accounting for roughly one in every three bottles sold. With a total value almost €50m ($72.9m), tiny Luxembourg ranks sixteenth on the French export charts, outpacing countries one hundred times its size. The classical regions of Bordeaux, the Rhône and Burgundy have the most pull, but retailers see large fluctuations from one year to the next as consumers tend to cherry pick the finer vintages. Given their high income, local consumers have a lot to celebrate, which probably explains why bubbles account for a quarter of the value and more than 10% of the volume of imported wines, with Champagne being a favourite.

Domestic wine
Luxembourg has just one appellation, Moselle luxembourgeoise, which is granted to practically every wine, both still and sparkling. Luxembourg’s quality ratings are not awarded for geographical differences and the influence of soil and climate. The law considers that the best sites should automatically produce the finest wines, which, in theory, is true. Thus, varieties such as Auxerrois, Riesling and Gewürztraminer are ranked as Vin Classé, 1er Cru or Grand Premier Cru based on the scores the wines get at the annual official blind tasting. Vin Classé, at the bottom of the pyramid, is not very unpopular, either in Luxembourg or abroad. While Premier Cru does not have a much better image domestically, it is enjoyed by German and Belgian consumers, where its similarity to Burgundian first growths makes it appealing. The Grand Premier Cru, on the other hand, are so popular nationally that few are available for export.