Dr Vino's wine blog

America will pass both France and Italy by 2008 to become the country with the most wine consumed says a study from VinExpo, the French trade show.

The 28% growth rate in America contrasts with a 2% growth rate in Italy and a decline of 7% in France.

But in the per capita consumption rates, the US will still be lower thanks to the large swathe of America that doesn’t drink any alcohol.

One of my Italian friends told me several years ago that “for export” on Italian foodstuffs generally means “lower quality.” Exaggeration to be sure, but his point was that nobody in Italy eats spinach pasta.

What are Americans dumping on the wine export markets? Why, Blossom Hill, Gallo, and Fetzer.

While the weak dollar policy has not yet tamed trade deficits for the economy at large, it is somehow working for the wine industry. Exports to Europe are up and total exports are at a high, now standing a mere 42% below the quantity of wine imported. (story)

Italy, which has one of the highest per capita consumption rates, has been developing a taste for American wine. With 33,000 cases of American wine imported in 2003, in the first 11 months of 2004 they have imported 638,000 cases. I’d better call my friend and see what “American wine” means in Italy.

What do you do if you have 250 million liters of extra wine lying around? Why burn it of course.

The wine cooperative organization CCVF and the FNSEA want to distill what they consider France’s excess wine and have requested €300m (US$390.8m) in public funds for it. While it is not unusual for such a prolific producer to siphon off a part of the national production, it is shocking that 200 million liters of that excess will be appellation (AOC) wines, about 8% of national AOC wine production. Usually that undignified fate is reserved for lowly table wines.

With 466 wine appellations right now in France, not only is it difficult for consumers to keep track of them but the AOC grade has clearly not saved the skin of many producers who make wine that has no commercial market. In a surprising development, this includes wine from Bordeaux.

The French regulatory body, INAO, has strict rules on what it takes to become an appellation. As they currently contemplate reform, considering what it takes to remove the appellation status if the terroir makes it commercially non-viable may be a logical next step.

Severely limited in advertising wine since 1991, French winemakers appear poised to be able to market their products more after a bill passed the French Senate.

The Loi Evin, has been the bete-noire of the French wine industry since its passage in 1991. It has been blamed for contributing to the decades-long decline in French wine consumption. Wine consumption among young French in their 20s has declined sharply and the thinking in the wine industry is that more marketing will better capture this generation that prefers the heavily marketed beer or soda.

However, supporters of the Loi Evin point to France’s high level of road fatalities, nearly twice that of the UK. Limiting alcohol is the best way to make the roads safer in their view (although one group in the south of France wanted to remove all the trees that so often line the roads in French departements.)

The campaign against drunken driving has taken its toll on the marginal and mainstream players in the wine industry. In a recent interview, a wine authority in Paris told me that, diners, limited to one drink if they intend to get behind the wheel, now choose to forgo the aperitif. As a result the makers of the sweet vin doux naturel, a common aperitif in France, are suffering. But the campaign has hurt consumption of other wines as well.

More marketing is not a panacea. To date, French wine ads even in America have been much more bland than their full-bodied wines. Better get the creative juices flowing and come up with a good ad campaign.

Or else start subsidizing the metro!

Just received this write-up in an email–how much would you pay for it? (and what is it? I’ll reveal the answer in a forthcoming post)

“The 2000 Cabernet Sauvignon Napa Valley exhibits a saturated ruby/purple color in addition to a big, cocoa-scented nose, a sweet entry on the palate, medium body, and a short, abrupt finish. A modest success for the vintage, it is a friendly, easy-to-drink effort that should be consumed over the next 7-8 years.”

Leave the cash – take the chenin blanc

So reads a headline about a recent burglary in Bulgaria. Having broken into a luxury apartment at a ski resort, gotten past two alarms and sequestered the guard dog, the thieves left thousands of dollars of cash and jewelry untouched and raided the wine cellar, drinking their haul right there.

The story doesn’t reveal the contents of the wine cellar–Chateau Margaux or Two Buck Chuck?

Brian Finn, chairman of Australia’s embattled Southcorp, has issued a letter to shareholders stating that “Foster’s offer of A$4.17 may be just its opening bid.” The Foster’s bid values all of Southcorp at A$3.1 billion ($2.35 billion).

Yet with no other suitor yet emerging, Foster’s controlling 18.8% of Southcorp shares, and Foster’s shares taking a licking in the stock market for fears of overpaying, it’s not clear how Finn hopes to rally resistance to the takeover.

Given that Southcorp barely eked out a profit in the first half of this fiscal year after a A$929 million ($709 million) loss last year, Finn is not bargaining from a position of strength. The combined company would control a third of the Australian wine market, produce Penfold’s, the country’s most expensive wine, as well as the biggest beer, Victoria Bitter.

Will Foster’s raise its A$4.17 per share offer price to meet the market’s 6.5% premium with Southcorp’s shares trading at A$4.44? It’s hard to see them bidding against themselves. As bitter as the news may be for Finn, maybe he’ll switch from drinking Penfold’s to Victoria Bitter.

New York, a state where wine consumers have a great deal of choice (particularly in the NYC area) but some already high prices, may have to brace themselves for slight rises in prices. Governor Pataki is proposing to raise the state tax on wine from $0.05 to $0.28 per liter.

But consumers don’t have to worry unduly since it would just affect wines made in New York state (the country’s second largest producing state with 4% of national production). Nor do producers need not fret unduly since Pataki is also providing the state’s wine makers with $3.5 million in promotional funds. A nice silver lining.