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12.04.2005

Some French Continue To Get It Completely Wrong

I continue to be amazed at what seems to me to be the jaw-dropping stupidity of the major marketing and trade bodies of the French wine industry. Their houses are on fire, and they are holding meetings at which they are basically deciding, well, instead of putting out the fire, why don't we just decide that we don't live there anymore -- problem solved!

OK. Maybe that's too obscure of a metaphor. Basically, though, the Bordeaux and Bordeaux Supérieur unions (the marketing and trade bodies which represent the Bordeaux chateaux) are acting like the steel industry in the Nineties -- trying to prop up the price of their product when really the problem is that it's too expensive in the first place and they're doing a lousy job of marketing it to boot.

Bordeaux wine prices (that is, what people are willing to pay on the market for wines from Bordeaux) have been falling as of late, especially in the mid- to low-priced wines. I (in my highly opinionated and partially informed state) attribute this to two main factors -- 1. The prices got driven up too high by general economic upswings in the 1990's and 2. People are less and less interested in buying Bordeaux because they don't understand and appreciate the wines, and because many people don't like the way they taste.

Now France can't do anything about the the first reason, but they can do something about the second, which would entail actually figuring out how to market to the world wine drinking audience, and relaxing some Appellation regulations to allow winemakers more freedom to make wines that might actually sell.

Instead, though, they are trying to fake the market out and "reduce the supply of Bordeaux" by simply telling many winemakers that they can no longer call their wines Bordeaux.

Riiiiiiiiight. So let me get this straight. You have 10,000,000 gallons of wine, or something like that. And the best price you can get on the market for it per bottle is $5. So one day you decide to tell everyone that actually only 5,000,000 of those gallons aren't real wine, and you expect the world to jump and say, "Oh. Well then. I guess we'll pay $8 a bottle for it" ? Meanwhile the people who own the most elite classed growths (the First Growths, Grand Crus, etc.) say that they have nothing to do with the problem, and that working with the lower and mid-range wineries isn't "relevant" to them.

Please ignore the clueless unions behind the curtain.
Somehow I don't think this is going to make the guys with the ski masks, sledgehammers, and baseball bats any easier to deal with. (Not that they should be appeased or mollified in any way -- they just need to be locked up, and quickly).

Who, or what, is going to come to the rescue of our beloved France?

Comments (13)

Andrew wrote:
12.04.05 at 11:12 PM

personally I think we should either a) send over Maggie to sort out the whole country b) annex Aquitaine - after-all we ruled it for several hundred years and most of the people living there now are ex-pat British anyway or c) both the above.

Dave wrote:
12.05.05 at 1:12 AM

Quite amazing isn't it....totally agree with having to relax some of the appellation laws.

The Bordelais are a political lot..you'd think maybe they would have thought of tweaking the 1855 classification for its 150th birthday but no..

The lower end wines in Bordeaux should be labelled by varietal blend maybe take a leaf out of the Spanish marketing book...funky labels,etc....don't be too stuffy and precious about it.

Dave

Terry Hughes wrote:
12.05.05 at 3:31 AM

I bet Michel Rolland is flying over some part of South America going, "So? They lost my phone number? Their fingers are broken?"

A prophet is without honour in his own country...

12.05.05 at 4:42 PM


It is the first time i visit your web-log, and, i msut say, it is so beautiful, and so interesting as well.

I'd like to be a perfect english translator to be able to understand, better.

So, see you soon, there,

Emmanuel, Sommelier (French, indeed...with a BIG accent) ;-)

Iris wrote:
12.06.05 at 9:46 AM

I think, things are a bit more complicated, than that, Alder, as you probably know.

First, the rise of prices in the 90th did not so much concern the "mid- to low-priced wines", but the classified ones. Bordeaux AOC wines have already to respect a limitation in quantity hl/ha (around 49 hl for 2005) to get their homologation. So if a winemaker, who sells his wine to a négociant does only get 0,80€ for a litre, this might be less than his production costs.

In other regions, it’s not better. The violent reactions in Languedoc are due to this kind of existential problems of winegrowers, who are no longer able to earn their livelihood by working their vineyards while they see négogiants enter cheap wines from for ex. Chile to France (Set is the sea-harbour of the Languedoc) - from regions, where production costs are much less than in France - and very often social protection of workers in the wines is inexistent.

This does not at all mean that I agree with these methods - but I understand the desperate state of mind.

I think, the only salutation would really be a concentration on quality production, but it’s easier to say than to do, and "marketing the classed growths more efficiently" won’t help thousands of winegrowers, who are not in the 1855 classification.

Well, very complex (and vital) problem, perhaps to complex to be treated in a "commentary":-)))

Eric LECOURS wrote:
12.06.05 at 12:02 PM

It is an interesting dilemma to ponder but the AC Bordeaux appellation has about as much relevance to the classed growths as the California appellation has to Napa. It is doubtful that Screaming Eagle and co. would be overly concerned or involved in the politics of prices paid to Central Valley growers for their fruit. AC Bordeaux has little relevance to the fine wine market in the US.

The union should not have the right to issue the AC name. Legislation should be put in place so that any grower meeting the AC standards is able to market their wine using the earned AC name. They have a monopoly over their members just like labor unions do. This issue is vaguely reminiscent of the recent crab strike in San Francisco which undoubtedly lowered the income of SF fisherman this year while increasing the income of those more distant. The growers are making this choice though. They make up the union.

If prices are artificially fixed higher than the market, the negociants will buy less but better quality wine which they can in turn market at required, higher prices. Consumers have many other options, particularly in the Vin de Pays category among others; just as, in the crab example, consumers had the choice to purchase, for example, crab sourced from Half Moon Bay fishermen. Producers of lesser quality wine will improve or go out of business (a bad thing?) because their wine will not be purchased; or they will demand price controls be abandoned--textbook economics. Fear not, unless you're a fan a cheap, low-quality AC Bordeaux.

Alder wrote:
12.06.05 at 2:35 PM

Iris,

Thanks for your comments. It's DEFINTELY a more complicated situation than I'm aware, I'm sure. I want to make clear, however, that I think the marketing problem is not with the classed growths at all. If the mid- to low-priced wines are to command a higher price in the market, it will only by creating more demand for them. Part of this is quality, of course, which you mention, but also marketing, which is currently prevented by what I see as a combination of backward thinking and inane legislation.

While all of this might actually not have anything to do with the classed growths (many of their prices are just fine or even growing) I think it's idiotic for them to dismiss this problem as not relevant.

I'm far from an expert on this, but I know enough to see that the system is badly broken and the people who could fix it continue to treat the symptoms, not the cause.

Alder wrote:
12.06.05 at 2:42 PM

Eric,

Thanks for the comments. I'm pretty sure I agree with everything you say. What I can't understand is why the union thinks this is going to change anything in the marketplace. It doesn't actually change the supply of wine, nor does it "increase the quality" of the wine on the market.

12.07.05 at 1:04 AM


It is really a big problem...We hope the french government will be interested to save the French wine...but, i'm afraid, it couldn't possible, cause the french politicians are so INCULTES ET DECULTURISES (In french), this is for me the FRENCH PARADOX...

Emmanuel

Blan Mana wrote:
12.07.05 at 9:48 PM

I agree that with most of Alder's remarks regarding the Bordeaux unions and some his remarks regarding the AOC. However, as a consumer, with a fairly catholic (new world/old world) palate, I would hate to see Bordeaux or Bordeaux Superieur move towards a more "international" style which presumably (I don't necessarily agree) would sell better. The problem is not the AOC rules or the Bordeaux "style", it's mediocre wine-making that shouldn't be subsidized. I'm not sure what the market (availibility/price) is like for Bordeaux AOC wines in the US(not having lived there for the past 8 years) but I can say that in contintental Europe it is easy, with a little discernment on the part of the buyer, to buy well-made food friendly Bordeaux for around 5 euros. That is not to say there isn't a lot of dreck at that price - as always it pays to know what you're buying. My point is that in my opinion at the low price point that most Bordeaux sells for, the QPR is generally higher than it's Chilean, Aussie, SA and heaven knows, Californian counterparts. The day basic Bordeaux starts tarting itself up like a 5 euro/6 dollar Aussie shiraz is the day I stop buying it. As I said before, I love and buy wine from all over, be it Oregon, Italy or Lebanon. I buy different wines because I like them to taste differently.

Alder wrote:
12.08.05 at 9:04 AM

Blan,

Thanks so much for the comments. I want to make it clear that most of the rule changes that I would advocate for from an AOC perspective have to do with the ways wine is marketed and labeled (although a little less restriction on varietal composition wouldn't hurt). However, I do think it would be interesting to see where Bordeaux would go if it was simply subject to pure market dynamics -- would the wines really end up "tarted up?"

Eric LECOURS wrote:
12.15.05 at 11:56 AM

It looks like the lesser regions of Bordeaux have come upon hard times. The price fixing seems to be a desparate attempt to maintain solvency for many growers. It looks like a rationalization will inevitably take place. Decanter magazine reports that property values are plummeting.

http://www.decanter.com/news/72216.html

Julien wrote:
12.20.05 at 7:25 AM

If you happen to read French an interesting article in Le Monde should reinforce your conviction on the weaknesses - and advantages - of the French System: Trop de vins va-t-il tuer le vin ?
http://www.lemonde.fr/web/article/0,1-0@2-3234,36-723140@51-718993,0.html

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