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11.06.2006

A Good Overview of France's Problem

I've written often (bitingly, sometimes) about the woes of the French wine industry. I tend to give the French a hard time because I love their wines, and I think the poor state of their wine industry is/was a totally avoidable situation. So like a friend who hassles you about your weight because they want you to get healthier, I tend to rag on the French a bit, hoping that maybe if enough of us point out how silly some of their laws are, they might actually get changed.

I know, I know. I've heard that one of the definitions of insanity is continuing to do the same thing but always expecting a different result.

For those who might not be as familiar with the predicament that the French find themselves in, I'd like to suggest an article that recently appeared in the European edition of Time Magazine. While I certainly don't look to Time as the pinnacle of enlightened journalism, I took a read through after Jack at Fork & Bottle pointed me to the article, and it's actually a great distillation (no pun intended) of the issues. Time may not be highbrow, but they do have a talent for breaking down issues into easily understandable prose.

Take a look. It's quite an extensive article, and an excellent primer on the problem.

Comments (23)

BrooklynGuy wrote:
11.07.06 at 10:14 AM

Interesting article, thanks. With all this talk about a wine glut its hard to get too worried about global warming and wine. A question: which laws do you think the French should change, and why? I can't imagine that allowing Bordeaux producers to make and sell "Merlot," for example, will impact their ability to compete with Aussie wine in Britain, unless the Brits prefer the "Merlot" over the Aussie wine.

Alder wrote:
11.07.06 at 10:30 AM

Neil,

Where to start?!

I should say that I am far from an expert on these matters, and may have some of my facts wrong. But here are a list of the top laws that I think could have a direct impact on French wine sales around the globe were they changed:

1. And I mean NUMBER ONE! For Pete's sake, allow the French to market and advertise their wine in Europe however they want, as long as they don't break any public decency laws or actively sell to children. Currently the wine marketing regulations in the country of France are so backward it's not even funny. While perfume companies are free to have fully naked women walk through their television commercials during prime time, a billboard that has a glass of wine too close to a woman's face with a sly smile is considered "too suggestive."

2. Relax the AOC regulations to allow more flexibility in blending different grapes in different proportions, which would allow winemakers who wanted to and knew how to make better tasting wine. And while you're at it, relax the regulations on vineyard yields and ripeness levels, etc. etc.

3. Allow winemakers to make "brands" that have a quality certification, but not strict ties to Appellation. If someone mixes a premier cru cabernet from Bordeaux with a premier cru syrah from the northern Rhone and wants to call it Brand X, this should not only be legal, but it should be able to advertise that the grapes come from cru vineyards.

4. Yes, Merlot! Let winemakers call their wines whatever the heck they want, and put the varietal name on the front of the label if they want to. It's fine to require place names, etc. but make people put them on the back label instead.

5. Bring French winemaking regulations in line with the rest of the world's major winemaking regions -- allow acidulation, oak chips, etc. for those who want to use them, without penalizing people by stripping them of the ability to sell their wines as AO designated.

Anyone else got suggestions?

BrooklynGuy wrote:
11.07.06 at 11:52 AM

I don't have an opinion about your point 1, but the rest of your points are essentially saying "let the free market dictate what is produced, and how." I agree with the economics behind your points, but I understand French concerns about the identity of their wine. Maybe they could relax rules for export wines, and retain their regulations for wines sold domestically.

Alder wrote:
11.07.06 at 12:04 PM

Neil,

Actually I would characterize it as "let whoever wants to make market driven wine do so."

This is not about forcing anyone to do anything, merely opening up the opportunity for those who want to make wine in a different (perhaps more internationally viable way) to do so.

The issue of "identity" has always been a red herring for me. The First Growths, and frankly almost any wine producer that "serious wine drinkers" patronize, have very few economic issues under any of the current laws. Even if all these laws changed overnight, they wouldn't need to do anything different to sell their wine, and therefore probably wouldn't. Yet these are precisely the people who freak out about the identity of French wine, etc. etc.

The people that get screwed are the smaller mom and pop producers and the bottom 50% of the market that would normally be competing with Yellow Tail and Red Bicyclette. While many of them are conscientious and passionate winemakers, mostly these folks are trying to feed their kids. Why not make it easier for them to do so?

BrooklynGuy wrote:
11.07.06 at 12:39 PM

Agree with everything you wrote Alder, but with one possible issue: if the mom and pop producers are free to compete with the Yellowtails out there, they only win if they can compete successfully - if their wine is good enough and marketed well wnough so that there is demand. If regulations are relaxed, I bet the subsidies for mom and pop will vanish, and they will be in trouble if the glut continues (as in Australia now) or if they don't fare well against Yellow Tail. I guess I am saying that with the regulations relaxed and mom and pop making "Merlot" or producers blending at will...CONSUMERS win - more choices at various price points. Some producers win and some lose...depends on their ability to compete in the market.

Alder wrote:
11.07.06 at 12:52 PM

I 100% agree. Not everyone will win.

Gene wrote:
11.07.06 at 1:47 PM

Alder, I share your love of and frustration with the French. Call it what you will, but the French "lake of wine" is of very poor quality. Instead of subsidizing volume, the French government and the EU should offer help in improving quality with consultations from Michel Rolland, for example, or, more seriously,loans or grants for new equipment and training. Simply switching from place names to varietal names or even propietary names with cute animals on the label will not do the trick. They've already tried Fat Bastard or whatever and "Carignane" isn't all that appealing either.The French appelation system works very well for quality wine. In fact, the classification of 1855 can be regarded as a very effective nineteenth century marketing tool. The problem of quality reflects a problem of attitude and marketing skill. Gallo sells successfully in France. Some French firm, or maybe American(?), needs to help mom and pop improve quality and marketing. Gene

Saint_Vini wrote:
11.07.06 at 8:07 PM

"let the free market dictate what is produced, and how."

"let whoever wants to make market driven wine do so."

Mon dieu! Sacre bleu! Next thing you'll be suggesting is a 40-hr workweek and reducing the 6-month subsidised parental leave!

V

Vino Girl wrote:
11.08.06 at 5:10 AM

Great article, thanks. I agree that not everyone will win but isn't that ok? I mean, there has to be some competition in the market! For better or worse the top producers will not have to change their game at all but at least relaxing the regulations will keep some mom and pop vineyards afloat. Maybe I am just being naive but I don't think you have to make "industrialized wines" to survive. Make good French wines and employ better marketing strategies.

Winegrunt wrote:
11.08.06 at 5:40 PM

I have worked with many french winemakers and all love the freedom that us new world winemakers enjoy. The core of the problem for the french is that for centries wine quality has been attributed to place. Specific vineyards create great wines...period. This is the basis for the AO and cru system. If the french were to change the nature of the way they make and market wine would be to dismiss the importance of place. Once "terrior" is debunked, the french postion of the center of the wine world becomes seriously threatened. To expect the french to quickly adapt to recent ( a decade or two ) changes in the world wine maket is to ignore the hundreds ( even thousands )of years of winemaking tradition. This and pride are slowing the evolution of the french industry and making it less competetive in the globalized market place. If you look closely often times it is young french winemakers, unable to work in thier own country, that are driving the quality of new world wines in emerging regions. They are victims of thier own rigid hierarchy.

Nicholas wrote:
11.08.06 at 10:57 PM

Alder,
You will have to excuse the wine neophyte, but I disagree with some of your ideas on how to reform French wine I agree with your points one and three, which have to do with marketing moreso than quality. My primary concern in the French winemaking tradition is quality and the economic foundation that will allow French winemakers to continue making superior wines.

I think the biggest mistake an artisan can make is try to compete by volume. France isn't selling as much wine because Yellowtail is the new Coca Cola? Even if they're outsold, the French still offer a superior product in many cases for the price -- in my opinion.

Which brings me back to quality...

I buy French wines because of appelation restrictions. I like knowing that there are quality-minded (as opposed to economy of scale) limits on vineyard yields. I like knowing that a wine was very likely aged in an actual barrel, and not merely treated with wood chips. I like knowing that the grapes were harvested at their peak. The French reluctance to sell out the only thing they have going for them -- quality -- is something I respect.

If you change the rules that would allow wine makers to decrease quality without obvious penalty, it changes the incentive structure of the industry substantially. You'll just end up with more mediocre French wine that's still being undersold by $5.99 bottles of Yellowtail.

Although I should point out about marketing wine to children... A friend of mine spent last year teaching English in Provence and it wasn't unusual for teachers to bring wine and cheese to share with (junior high equivalently aged) students on field trips. If only American children could learn taste from such an early age!

Tony wrote:
11.09.06 at 6:25 AM

I agree with Nicholas. And to add to his position on yield and quality, I would like to add terrior. Having Bonnes Mares on the label means so much more to me than Pinot Noir because there is so much that affects the wine, not just the varietal of grape. To "Make" them put this info. on the back label, as Alder suggests, may be fine for the U.S. market, but other contries including France do not have a back label.

Alder wrote:
11.09.06 at 7:03 AM

Nicholas,

I hope you'll forgive me, but your comments perfectly illustrate the fallacy that I was trying to highlight in my previous exchange with Neil. Everyone equates the relaxing of regulations with the disappearance of quality, typicity, terroir, and artisan values. This, frankly is BS. Is that artisan winemaker, who has been making fantastic place-driven wines for four decades going to turn around and start using oak chips the second they are legal? Absolutely not. And arguments that somehow these backward restrictions on the wine industry are protecting this little guy's ability to sell wine are complete bunk. Even if all restrictions and laws about winemaking disappeared overnight, that little guy is gonna make wine the same way he always has, and you and whoever else has been buying his stuff will continue to do so.

What WILL happen though, is all those producers who make wine that actually competes with yellowtail in quality and WILL be able to compete on price. To simply say "even if they're outsold the French still offer a superior product" is to miss the point entirely. If French wine doesn't sell, then people go hungry. They riot in the streets. They blow up buildings. They kill people. This issue is PRECISELY about selling wine, rather than about quality.

Tony wrote:
11.10.06 at 1:22 AM

You may be talking about sales, but the changes you discuss can directly affect quality. I see the real problem as too much wine on the market. If the French farmer is able to sell more wine, then another farmer somewhere else will lose out because there is to much supply. To me, the answer is not to internationalize the whole world. If the farmer in the Rhone makes wine the same as California, then what sense of place will we have. And what will have happened to the wonderful variety that exists now if everyone caters to the largest group of consumers. We need to allow the wine makers who cannot sell their wine to fail. Then the government should help them to rip out their vines, and grow something that will benefit their country and bring a profit to the farmer.

Alder wrote:
11.10.06 at 8:43 AM

Tony, sales and quality are inextricably linked. Wines sell because they are good quality (among other things).

While there may very well be too much wine on the French market, I think you can't say definitively that is the problem when you haven't given the producers a chance to create more demand in the marketplace. The reason that there is too much wine is because there aren't enough people buying. In some situations the answer is to restrict the supply of goods, but in this case it would make more sense to try to affect the demand side of the equation first. Certainly it is less expensive than dealing with the supply problem.

As for "tasting all the same" here we go again. I wish someone would explain to me why relaxing marketing restrictions and allowing some more flexibility in how lower-end wines are made in France will result in French wines tasting the same as California wines and the obliteration of terroir or place driven wines in general?

Remember we are talking about mostly the low end of the market. Does Yellowtail express terroir? I would argue no. So why are we so worried about whether the French wine that would compete with it, does? Frankly even with relaxed laws regarding winemaking, I would expect even the low-end of the French market to have more of a sense of place than some other mass produced wines.

Tony wrote:
11.12.06 at 11:49 PM

Alder, we disagree about the economics, but that's ok. I just want to respond to your question about why I think relaxing France's wine laws would Internationalize their wines. It happens currently while operating within the laws. For example, their are now producers in Chablis that are aging their wines in new oak. To me, that is not Chablis. That is what I expect from a California Chardonnay. They are known for their oak. So, I am afraid of giving them more room to change their wines.

Also, I agree with you about Yellotail. It does not express terroir. That is my point. I do not want France to lose their identity.

Alder wrote:
11.13.06 at 7:44 PM

Tony,

This is the old "slippery slope" argument that McCarthy used to use to fight communism. So what if some producers want to use new oak? No offense, but is YOUR definition of what Chablis should be the right one? Of course I would tend to agree with you in part -- I like my good old traditional Chablis, but it's ludicrous to believe that somehow allowing some producers to use new oak if they want will somehow result in EVERYONE using new oak. Don't you think the producers who you respect have more integrity than that? And don't you think that maybe, just maybe, using new oak will let some producers make better quality wine, or certainly more marketable wine than they do today? What is wrong with that?

So many people are stuck in this traditionalist viewpoint that somehow any change in winemaking practices will destroy the terroir of France. The wine industry has undergone several major shifts in the last 400 years that are much more significant than what would happen if the AOC rules were relaxed. To imagine that somehow the French wine culture or terroir will be ruined by allowing some people to use oak chips is the equivalent of someone in 1900 saying that the use of steel fermenting tanks will ruin French wine forever.

Alder

Tony wrote:
11.14.06 at 12:16 AM

Alder,

I understand your point, and I have been feeling a bit like a hypocrit in my writing because I know my viewpoint is very socialistic in nature. I am very much a capitalist, and normally I am a great champion of free markets. I just love French wine, and I don't want to see it change. I also want to know that if I open a bottle, I can expect a Chablis to be a Chablis (substitute with every other region as well) without having to know who the producer is, and whether he is a traditionalist who is maintaining Chablis good name or if he is innovative making his own wine while putting Chablis on the label for extra sales. Maybe the answer is to make all the innovators call their wine Vin de Pays, or make a new category. This would be similar to Italy's IGT, and Angelo Gaja taking Barbaresco off his labels to allow him to innovate.

In summary, you have converted me. I do want to allow French farmers to do what they want; however, each AC should maintain their standards. Thank you for making me think this through.

Tony

Alder wrote:
11.14.06 at 9:05 AM

Tony,

That's an interesting suggestion. Or perhaps those who choose to keep to the traditional ways could voluntarily put a disclaimer like "Method l'Ancienne."

But hey, as long as we're toying with changing the rules, why not change them so that every producer has to list all the manipulations they have done on the wine right on the label? Disclosure wouldn't be the worst thing in the world, and then consumers could make their own decision on which bottle of Chablis to buy, the one with 200% new oak, or the one with none.

carlos Serafim wrote:
11.14.06 at 6:17 PM

Hi guys, it seems to me that too much print is being used to explain the French malaise as pertains to their wine industry, but, here is some more.

-Firstly, I think a large part of the problem is that in general, there is a world wine glut. There are problems in Oz as well as California. Too much production, not enough demand.

-Secondly, the French are adding to their own problems by consuming much less wine than before. Last I read, consumption was down about 50% from the sixties.

-Thirdly, New Wold wine has caught on with the consumer and the fruit- forward, higher alcohol wines are more in line with people who expect" bang for their bucks." Face it, for most people a 10 year old Bordeaux that is still hard and austere is not most people's idea of a good wine. If they've paid big bucks for it and/or stored it for the last 7 years then those people won't be back for more. A hard-edged, bone-dry inconsistent white Burgundy won't help either.

Don't forget that France is still the no. 1 wine producing county in the world. If their sales fall 25% they would still be no. 2 by a long shot.

Yes, they have over-regulated themselves to death to protect their product, but maybe they can make a better product without so many rules. Seems to be the case in the Languedoc. It would be much better if for every new rule they make, it would be mandatory to drop another. That way, only the important ones would stay.

If a vine grower goes out of business it isn't the end of the world, since there are other crops out there that he could plant to offset the losses of some vines. I know that in some regions no other crops could grow where the vines do.

Things are cyclical. Not that many years ago sweet wines were the rage. Then they got drier. Then riper and more alcoholic. Too many people got good at producing wine too fast and consumption hasn't caught up. It's just like condo builders. They build too many and when the market tanks they stop building or make apartments instead.

If the French were clever, they would concentrate on getting their low end product into countries like China and India before those people develop a liking for Yellow Tail. Countries that drink lots of tea may prefer the Old World style of more tannins.

I have tried Yellow Tail and didn't like it much but I could certainly see how a newbie drinker would like the soft, plummy, berry flavors with no discernible tannins and acids. Like a warm cola. I believe that is how Kendall-Jackson got so popular so fast. They gave the people what they wanted in an affordable, consistent chardonnay, year after year. Once they were hooked then they also moved upscale. When I was a wine buyer for a restaurant I never carried K-J or Santa Margaretta PG because I knew they would sabotage sales of all other wines. A restaurant is a great place to educate consumers. Only lazy restauranteurs carry the top 20 selling wines.

Tonight for every person drinking Latour there are probably 10,000 people drinking Yellow Tail. I think that's a good thing. One day many of these drinkers will develop more sophisticated palates and buy better wines. The ones who will still be drinking YT will still be enjoying wine.

Anonymous wrote:
11.23.06 at 12:28 PM

i realize i'm late in the game on this, but i don't think anyone has mentioned how unaware the french really are of new world wines. seems strange i know, but i've lived in france off and on for years and only once have i been served a foreign wine by a host. what they fear is what they don't know, like all of us. i think only people associated with the wine industry know that anything much has changed- and they arn't really the ones who matter.

keely wrote:
12.02.06 at 4:00 PM

hi, i'm a business degree student and i am currently doing a marketing report on the french wine v australia. anyone with juicy info i'd love to hear from. what probs will france face if it tries to do what oz has done? what would u rec for french producers to do from here on? cheers k

Encomejenna wrote:
09.03.07 at 3:28 AM

Hi. I am very happy here. I think that I will stand here for a long time.

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