It was once joked that wine ran from the taps in certain parts of France, but those days are dying, according to a new report from the International Organisation of Vine and Wine (OIV).
It says French wine consumption dropped another two per cent between 2004 and 2005. Consumption had already halved in the last 40 years.
America, meanwhile, is now odds on to take France's crown as the biggest wine drinking nation, after consumption there grew three per cent last year. The US could topple France within three years if the trend continues.
The shift means competition for space in fast-growing 'Anglo Saxon' markets has become intense over the last couple of years.
Wine consumption in Britain actually rose five per cent in 2005, according to OIV, making it and the US officially the world's two fastest growing wine markets.
The figures add to the headache of many in France's wine industry, faced with falling consumption on the home market and lower exports to growing markets.
French wine exports were kicked back into third place in volume after falling 11 per cent between 2002 and 2005, according to the OIV. Italy dropped one per cent, but remained top, while Spanish wine exports soared by 47 per cent, with Australia and New Zealand up 50 per cent.
France is number two behind Australia in its biggest export market, the UK. It has also again applied for European Union crisis funds to distil more quality Appellation Contrôlée wine into undrinkable, industrial alcohol this year.
Denis Verdier, head of France's Wine Co-operatives' Union, told BeverageDaily.com that France must redouble its efforts to "seduce" new consumers abroad.
"The only solution to falling consumption in France is to export, export, export," he said.
France still heads Britain's premium wine market, but Australia has beaten it in the most popular price bracket, bottles priced £3-5, according to a report last autumn by the Inter Rhône wine buying group.
"The wine co-operatives must re-organise themselves and form better partnerships with buyers to create dymanic, modern businesses that will embrace new technology. Better marketing is also essential. If they don't, they will die," said Verdier, adding France must also learn how to adapt its wine to new consumers.
The French wine crisis has hit particularly hard in France's biggest wine growing region, Languedoc Roussillon. There, wine is the third most 'exported' product and accounts for 45 per cent of agricultural production.
Verdier said Languedoc winemakers were losing an average €500-800 per hectare, though losses were greater among independent producers. "We cannot survive like that for long. If it does not improve the situation will be catastrophic."
Wine Unions in the Languedoc have told BeverageDaily.com they estimate between 30 and 50 per cent of the region's wineries could disappear over the next few years. The situation in the region remains tense, following several attacks on government buildings and wineries by militant vintner group, CRAV.
The French government recently unveiled a battle plan to "relaunch French wine" on international markets. The plans included €12m export support and the potential creation of a 'France' wine brand.
Competition is fierce, however, and many small to medium wine producers in Australia particularly are also fighting for their livelihoods.
Verdier said the French wine crisis was made worse "because there are problems throughout the world". Still, "France must have the courage to modernise," he added.
For the moment, at least, global consumption is still crawling in the right direction. The OIV said world wine consumption crept up 0.1 per cent in between 2004 and 2005 to 23.56bn litres, although growth like this will not accommodate everyone forever.