Chicago, Feb. 18
Strict rules governing French wine labels will change to allow the optional placement of the grape varietal alongside the region said Robert Beynat yesterday in Chicago. The chief executive of VinExpo, the biennial trade show in Bordeaux, said that the changes will be officially announced during the June trade event as the appellation system celebrates its 70th anniversary.
An effort to attract more consumers in foreign markets is motivating the change to a marketing style more in line with wines produced in non-European countries. Beynat presented data from a VinExpo/IWSR 2005 study that showed sales of French wines, once the most imported wines in America, have now slipped to third place behind Italy and Australia. The rapid rise of Australian wines has relied not only on an accessible style of wine but also successful marketing that includes grape varietals, such as shiraz or chardonnay, as well as brands.
“The challenge for France today is to make the wine that the consumer wants,” said Beynat. “We need to concentrate and simplify our offer.”
Thus the prospect of consumers being able to select a syrah from the Chateauneuf-de-Pape region is not far off. The only question is whether it would be labeled under the Australian name for the grape, a shiraz?
With declining consumption in the domestic market, often attributed to tougher enforcement of laws against drunken driving, French wine makers are taking exports seriously. Although the French still export the most wine worldwide by volume and by value, their proverbial glass is decidedly half-empty and industry-wide efforts to reform are gaining speed.
Is there shiraz in your Chateauneuf?
The American market is crucial since the VinExpo study shows that a sharp rise in wine consumption will make the US the largest market for wine consumption in the world by 2008. The study forecasts 26% rise in consumption in the five years to 2008.
Supermarkets account for over half the wine sales in America and almost 80% in Britain, the other fast-growing market for wine consumption. While supermarket consumers may know their cabernet from their chardonnay they may not understand the intricacies of the 466 French wine appellations. Thus the decades-old French system is assuming a New World twist.
Placing the grape varietal on the label will remain optional and it is unlikely that many of the best known producers in Bordeaux or Champagne will enact the change. But their exports are already strong. The reform is aimed at helping the lesser-known producers in the competitive $5 – $15 price category. Wine that cannot be sold as wine in France is regularly distilled into alcohol. But for the first time an equivalent of 22 million cases of appellation wine, much of it from Bordeaux, was announced last month. This underscores the extent of the crisis now facing the French wine trade.
The grape varietal has been allowed on wines classified as vin de pays since the 1980s but not on appellation wines, which generally fetch a premium in the market and account for 55% of French wine production. Rene Renou, the head of the wine branch of the National Institute of Appellations (INAO) has championed this plan since last year.
In an interview yesterday, Beynat admitted that the plan had been delayed as the regional interests in French wine discussed the merits of the plan. The major appellation producing regions such as Bordeaux, Burgundy and Champagne support the plan but winegrowers in the Languedoc have seen the plan as a threat to the vin de pays system prevalent in the area since they can already state the grape varietal on the label. But according to Beynat, the minister of agriculture and INAO’s Renou will announce the reform on June 21 at VinExpo.
Changing the label is but one step in a helping the ailing French industry. Consolidation has been a major trend in the global wine industry and France has a fragmented industry. Bordeaux alone has over 10,000 growers while Australia has some 1,600 wineries and the US a total around 4,000.
Lingering anti-French sentiment from the diplomatic incidents surrounding the start of Iraq war may represent another obstacle in the American market. Although Juanita Duggan, president of the Wine and Spirits Wholesalers Association, declared last month in Paris that with the elections in Iraq, the diplomatic differences taken out on French wine remain largely relegated to the past.
The declining value of the dollar is another headwind for all exporters of wine to the US since it makes their products more expensive in dollar terms.
