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France's President Attempts to Reform Wine Industry

Sarkozy's five-year plan will allow low-cost producers to use controversial methods such as oak chips

Mitch Frank

Posted: Wednesday, June 18, 2008

The French government has introduced an ambitious plan to "modernize" the country's wine industry to better compete with the rest of the world in the 21st century. The five-year program, introduced by agriculture minister Michel Barnier, after being approved by President Nicolas Sarkozy, will redraw the various categories of French wine and impose fewer restrictions on methods used to produce low-cost, non-appellation wines, allowing winemakers to use oak chips rather than barrels, for example. Producers will also be allowed to put the name of the grape variety on the label of those wines.

Some members of the industry praised the plan, while many more took a wait-and-see attitude. Others sharply criticized its focus on markets rather than terroir.

"I do not expect any improvement from the French government at all," said Nicolas Joly, owner of Coulée de la Serrant in the Loire Valley and an outspoken biodynamics supporter. "What is being introduced as an improvement is a campaign of advertising and marketing."

Sarkozy's government issued the plan, which will go into effect July 1, to combat current troubles in the industry. While France's top wines continue to dominate the world market, producers of low-cost wines are suffering. Domestic consumption has been shrinking for more than a decade, and affordable wines from new competitors such as Chile and Australia have been gobbling up market share. Consumers in expanding wine markets, like the United States, are drawn to easy-to-understand labels that stress varietals rather than appellations.

French wine "suffers from constraints that harm its competitiveness on the expanding worldwide market," Barnier said as he introduced the plan. "French wine is complicated and often little understood." Adding to the possible woe of small vignerons, the European Union approved a plan this year that will phase out subsidies that member states like France have been using to distill surplus cheap wine into industrial alcohol.

"For years we have been giving away money to growers, encouraging them to grow more," said Michel Haury, director of Castel, France's largest wine producer. "Now we are listening to the market."

The Sarkozy plan, crafted over two years, focuses most of its attention on those lower rungs of French wine. Vin de Table, or table wines, will now be called Vignoble Française or “Wines of France.” Winemakers can use grapes from multiple regions and employ low-cost techniques like adding grape must before fermentation to increase alcohol levels, adding powdered tannins or flavoring with oak chips rather than aging in oak barrels. These techniques are used by many producers in New World countries, allowing them to keep prices down. French producers can also put grape varieties on the label for all of these wines.

Vin de Pays will now be labeled Indication Géographique Protégée, meaning the wine is from a set geographical region. Appellation d'Origine Controlée wines will remain largely unchanged, except they will now be called Appellation d'Origine Protégée. As part of the changes, regional committees will have more control over the production rules governing their wines, including yields and what kind of vines may be planted. The national government will help with marketing and encourage wine region tourism.

Not surprisingly, the part of the plan that drew the most attention was the oak chips and tannins. "The ministry of agriculture's concern is to increase exports as much as possible by all means," said Joly. "If a place is good for vines, if the [grape variety] is right, if the farming does not destroy the soil, there is no need for artificial tastes like oak chips."

Others believe the Sarkozy administration is only facing reality. "The French government wishes to be as pragmatic as our competitors," said Roland Feredj, director of Bordeaux's trade group, the Conseil Interprofessionel des Vins de Bordeaux. "French producers must be able to benefit from the same rights as foreign producers, as long as information provided to consumers is as forthright as possible. What is most important is to respect consumers and not make them believe a wine was aged in barrels if in fact it was aged with oak chips." Feredj also believes France's top producers will be grateful the government largely leaves appellation wines alone.

Whether the plan is fully implemented and makes a difference remains to be seen, however. "Proposing important agricultural reforms yet rarely putting them into practice is a great French tradition," Feredj said.

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