France jittery as wine harvest begins

New export figures for French wine look rather promising for the industry. Sales of French wine and spirits abroad rose 18 per cent in value for the first five months of 2006, with notable gains in Bordeaux and Côtes du Rhône.

The rise has been greeted with cheer in an industry facing dire problems, due to falling consumption in France, overproduction and greater competition from New World wineries.

Yet the increase mainly reflects higher prices top end of the market, leaving the glut at the lower end of the sector untouched, according to Jean Clavel, head of the Coteaux Languedoc wine appellation.

"There are still a lot of problems in Languedoc Roussillon, and in Bordeaux too,"​ he said. Wine exports from Languedoc were down in both value and volume in the first five months of 2006.

"Things have not got better and they have not got worse,"​ Denis Verdier, head of France's Wine Co-operatives' Union, told BeverageDaily.com​.

He said the government's strategic plan to re-launch French wine on the world stage had struggled to get off the ground so far. "They are still trying to appoint people to different posts. We have not seen any of the funds yet."​

Prices for both quality Appellation d'Origine Controlée​ (AOC) wines and lower end table wines have generally struggled to recover from a collapse in 2005.

And this year's wine harvest is expected to yield the same as last year, around 53m hectolitres (5.3bn litres), according to government wine agency Viniflhor. The news will bring grimaces in Brussels, where the European Commission is pondering how to drain Europe's 1.5bn-litre wine lake.

To make matters worse, the wine glut has spread to the New World this year too, casting a cloud over the global wine industry. Australian wineries have seen prices tumble over the last few months, and some lower end wines have become cheaper than bottled water.

Australians were, however, more likely to dig themselves out of trouble than the French, according to a recent survey of industry attitudes by researchers in Belgium.

The study, led by the University of Namur and the Colruyt Retail Group, questioned both Australian and French winemakers about the state of their industries.

It found the Australians were more pro-active, more market-oriented, more innovative and generally happier with the rules and regulations governing their industry.

"Australia has more of a growth strategy, while France has more of a stability strategy,"​ said Rohan Jordan, of Colruyt. He added that "unlike the French, Australians consider industry collaboration of paramount importance and this is applied much more"​.

Parts of the French wine industry have made efforts to recover. Some AOC wineries have risen above the crisis, and there are new moves to collaborate on branded wines, such as Sud de France, Chamarré and Fruité Catalan.

The lower end of the market remains in a difficult position. Debts have mounted, wine has been sitting unsold in the vats, and these are the businesses likely to be hardest hit by the European Commission's plan to reform the EU wine sector.

Their ongoing plight will have riot police ready for more attacks on foreign wine transports by militant group CRAV.

The debate over how France can retain its wine heritage, yet also fight to keep its place in world markets continues to divide the industry.

"The big companies from the New World countries sell their wine like it is Coca-Cola. Things are different here,"​ said Philippe Vaillé, who runs an AOC winery near Montpellier.

Many winemakers with small businesses hope that consumers in growing markets, such as the UK and US, can learn to appreciate and explore the diversity that French wine has to offer.

Denis Verdier hopes this too, but he acknowledged "France must redouble its efforts to seduce new consumers abroad"​. France's wine co-operatives agreed at their recent annual conference that they must find a way to re-group and work together to push exports.

"If they don't, they will die,"​ said Verdier.