Friday, October 26, 2012

French Wine Tops Market Depsite Weather

By: Jennifer Halliday
Produced & Edited by:Kaylyn Hlavaty

For decades, France has been on top of the world’s production of wine, competing closely with Italy and Spain. However, the wine industry is changing; almost every wine-producing nation is suffering a severe shortage in materials, prices are increasing across the globe, and competition is emerging in the international market. Despite the odds piled against French vintners, their confidence, and their sales, appear unaffected.

Due to this year’s inclement weather and disease-damaged raw material, France is expecting a 20 percent drop in wine production. The current production forecast is estimated at about 40.6 million hectoliters, down from 50.9 hectoliters in 2011. According to a report from the French Ministry of Agriculture, “all the categories of wine will see their production decline compared to 2011. Production estimates are particularly tricky this year due to the variation in grape weight in most of the vineyards.”

“Grapevines, like any other crop, need a healthy climate to survive,” said Catherine Thevenin, creator of Fuguesen France “they need warm, dry summers and very mild winters, and we haven’t been seeing that kind of weather at all.
    Bordeaux Grapes Courtesy of  non-profit Academic Fair Use
This year, French vineyards were damaged by cold and wet conditions as well as heat waves and droughts near the end of the summer. Grapevines in Burgundy and Beaujolais were destroyed in hailstorms, with surviving crops being ravaged by mildew and funguses.

“What has made this year so hard in particular is the fact that no one vineyard has been spared. Every region has seen at least some damage during this harvest,” said Thevenin.

France is home to several different wine regions and different species of grapes grow in each individual region. Therefore, production of certain wines will drop far more than others. Production in the Champagne region alone is expected to slump 40 percent after damage from frost and “particularly virulent” attacks by mildew and oidium, the ministry said.

Although wine may seem like a luxury commodity, it consistently brings in over seven billion euros annually to France. In 2011, France exported 7.17 billion euros of wine and champagne, accounting for 13 percent of the country’s farm and food exports. The expectation is that a lower yielding grape crop will result in a lower number of wine exports.

“Every month, the estimated [wine] production number seems to go lower and lower,” said Christophe Malvezin, an Agricultural Counselor for the French embassy, “but what we aren’t seeing is a negative effect on our international trade.”
In the first half of this year, wine shipments rose 14 percent to 3.57 billion euros. The main contributors were Americans, who are purchasing French wine and spirits in record amounts. Last year alone, America supplied 18 percent of France’s wine exports. This year’s shortage of supply has caused demand for wine to continue to grow, and French winemakers are taking advantage of it by raising the cost.
Prices on French generic red wine rose ten cents per liter last month. According to Anais Ricome, a winemaker for the Languedoc’s Domaine la Croix Gratiot, an increase in prices will not deter American consumers, who are looking for a more “sophisticated” taste.

“There seems to be a lot of young sommeliers and buyers who are interested in esoteric wines,” said Ricome.

In fact, even the French are amazed at how far American consumers will go to find the best French wine. Samuel Guibert, managing director of Languedoc producer Mas de Damas Gassac, remarked that he has been surprised how well French wines from outside the best-known regions have done in America.

“The rest of France is doing better than ever,” said Guibert, “five years ago you couldn’t fill a room if you had Languedoc wines. The whole emphasis on values is playing in our favor.”

With French wine stocking shelves all across America, American winemakers are trying their hardest to compete. In an attempt to sell more wine in their top export market, American vintners are trying to use chateau labels on their wine.

“What is at stake is the respect for tradition and quality,” said Laurent Gapenne, president of the Federation des Grand Vins de Bordeaux in an interview with The Associated Press.

French chateau bottles are wines made at the estate from grapes belonging to the chateau. The chateau wine tradition dates back centuries and the exclusivity of supplies makes it a more expensive product. However, the U.S. chateau definition is less stringent, including all “vines that have been traditionally used by this wine producer or producer group.”
Courtesy of, an association of wine makers. Academic Fair Use.

“The Americans could create ‘chateau’ wines from grapes from all over and prices would of course be much lower,” said Gapenne.
While some American winemakers may be trying to push French wines out of the market with lower prices, another group of American vintners is turning their attention away from France. The Wine Institute, an association of 1,000 California wineries and businesses, has decided to focus on Asia for its international wine trade.
“Asia is a strong wine market with long-term growth across the board for California wines,” said Linsey Gallagher, International Marketing Director at the Wine Institute, “California wine and its lifestyle and cuisine hold great appeal to consumers in China and our other key Asian markets.”

American wine exports to China provided $62 million last year, a 42 percent increase. However, French vintners do not appear to feel threatened.

“There is no fear from French winemakers about the position of China,” said Malvezin.

French wine exports to China have also jumped, rising 75.5 percent just last year. In fact, China rose two spots to become the third-largest importer of French wine and spirits. Despite rough weather trends and fierce competition, France still remains dominant over the international wine industry, both in market volume and value.

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