French AOC wine prices collapsing

Retailers and consumers have swooped on the French wine crisis to take advantage of cheaper Appellation d'Origine Contrôlée (AOC) wines, according to the French Wine Cooperatives' Union.

The union said hard discounters had led the charge by stripping AOC wine prices down to €1 per bottle in some extreme cases.

Others have followed both in France and abroad. Some UK wine clubs have been offering special deals and cut prices on AOC ranges for the last few months.

Less regulated, and often lower quality, table wines have suffered a similar price collapse, but the cooperatives' union said these had also been seriously hampered by the disappearing price difference between them and AOC varieties.

The government's wine sector agency, Onivins, said that the price difference between table wines and AOC wines was now only a quarter of what it was five years ago.

At the same time, wine consumption in France has continued to fall. The cooperatives' union said there were one million less regular consumers than in 2000, although occasional consumers have almost doubled.

The more worrying trend is that young adults have increasingly turned their backs on wine, preferring to drink beer and spirits when out.

At the same time, French wine exports have dropped by six per cent in volume so far this year, hitting vintners with a double whammy.

There is, at least, likely to be less overproduction this year due to slightly lower yields across Europe's three wine heavyweights, France, Spain and Italy. Forecasts so far are for a 17-19 per cent drop in Spain and a 6.5 per cent fall in Italy to around 40m and 51m hectolitres respectively.

Onivins said it was expecting a nine per cent drop in France to around 53m hectolitres, though cooperatives' union statistics showed that leftover stocks from last year were at their highest levels for more than a decade.

Quality is expected to be generally good thanks to a long dry spell in the early summer. And marketing has also notably picked up in France, with more vintners attempting New World-style label designs emphasising simplicity and grape variety.

Yet, many of the smaller French wine makers still face serious problems after struggling to sell their wines last year.

Privately, many vintners in southern France's Languedoc-Roussillon region, the largest of France's wine regions, believe a substantial number of wineries will go out of business in the coming years.

It is a very contentious issue in France and one vintner, who wished to remain anonymous, said he feared up to half of the region's wine makers could soon be looking for new jobs.

Jean Huillet, president of the wine cooperatives' union in the Herault region near Montpellier, recently encouraged more local vintners to apply for funds to convert old vineyards by planting new vines that are more palatable to first-time consumers.