In vino veritas

Our readers will not be surprised to learn that Nicholas Watt of the Guardian managed to miss the point about the wine agreement between the EU and the US. After all, he is the man who discovered the fragrant Margot’s blog months after everybody else. (Gosh, it must be wonderful to work for a newspaper that pays good money for this sort of reporting.)

Anyway, according to Mr Watt, tee-hee-hee, the Americans “have finally been rumbled”. They will be able to label their wines as château only if these are produced anywhere near one and there are no châteaux in America. Well, there are not as many in France as there are wines labelled as such, either, but let that pass.

He then goes on:

“Other European "traditional expressions", such as vintage, noble and classic, will also be banned unless they are true.”

Well, dear me, and who is to judge what is true in wine labelling?

“Existing US wines can still be given European names, such as burgundy, champagne and claret, but new wines will have to be given a US name.”

In other words, despite Mr Watt’s hilarity, the Americans managed to get quite a good deal.

Thomas Fuller in the International Herald Tribune, a newspaper that usually waves the flag for the EU, puts it differently:

“Under the compromise, which has taken more than two decades to reach, Europeans will permit U.S. winemakers to use what the European Commission calls "EU traditional expressions" like château, late bottled vintage, noble, superior, sur lie and vintage character.

American producers from now on will be restricted from using place names like Bordeaux, Chablis, Champagne and Chianti. But in a crucial concession won by Washington, U.S. winemakers who already label their bubbly "Champagne," or whose wines already hold certain other regional appellations, will be allowed to keep the label.

That aspect of the deal stung in some European quarters. An official at the European Commission in Brussels said that he was disappointed, but that the European side would try harder in a second round of negotiations that they hope to have later.”

They should be so lucky. For the real story has passed Mr Watt and various other commentators by. It is that the French wine industry is in deep trouble and has been for some time.

The cachet of a wine being French has largely faded away and competition in the mid-range wines, where most of the money is being made, has been too fierce for the producers who have been used to riding out on that cachet.

French wines are being challenged by ever improving New World wines, superior California vintages, especially from the Napa Valley, and improving Central and East European ones. Hungarian wines have improved enormously in the last five years and the white ones can compete successfully on the world market. The Austrians post-anti-freeze scandal have made colossal efforts. Their wines are coming back to the international market and are now of considerably higher standard than they were before the scandal.

At the same time, the middling range of French wines has remained unpredictable. Matters were not precisely improved by a recent “judicial inquiry into allegations of ollegal wine-blending by the so-called King of Beaujolais, wine-trader Georges Duboeuf”, not the first of such scandals by a long chalk.

The continuing American boycott of all things French has not helped either. On the other hand, it has been enormously helpful to Californian producers, who are finding that their label is beginning to be valued by many customers, whether the EU allows them to use certain terms or not.

On top of which, the Beaujolais producers are facing a crisis. According to Ross Tieman’s article in the Business of September 11, the winegrowers of Beaujolais are harvesting what will be their best vintage for 20 years.

Why would that cause a crisis, one might ask. Simple. There is too much of the stuff and they do not think they will be able to sell it. The figures across the entire wine producing sector are bad. According to a recent article in the San Francisco Chronicle

“In the first quarter of 2005, exports of Bourdeaux wines fell by 11.4 per cent in volume and 17.9 per cent in value.”

So what is the answer to the problem? Obviously, let’s throw money at it.

The Business reports:

“Meanwhile, proposals by the Beaujolais producers’ association the Union Viticole, the reduce permitted yields per hectare and seek subsidies to tear up 13% of the revion’s vines have provoked divisions among the 4,500 growers.”

The anger expressed by producers at plans to bring the production in line with demand, has prompted Ghislain de Longeaville, chairman of the union to offer his resignation.

He had proposed that

“... subsidies of €9,800 ($12,250, £6,600) a hectare would be made available to growers who pull up permanently 3,000 hectares of vineyard.

The European Union offers a subsidy of €6,300 a hectare of vineyard removed. Longevialle is seeing a top-up €3,500 pay-out from the Rhône regional council, though councillors have yet to agree. In total, the subsidies would cost European and French taxpayers €30 million (£21 million), but details need to be finalised by 15 December to have an impact on the 2006 harvest.”

If the cuts are implemented, the Beujolais region will cut its production by 7.7 per cent.

The Institut National des Appellations d’Origine is instructing growers in most French wine-producing regions to reduce production and is, no doubt, offering various financial inducements. The Bordeaux region has been told to reduce output by about 12 per cent.

Alas, for the French producers. Not only are they unlikely to benefit from the 2005 vintage (unless you count large amounts of taxpayers’ money a benefit), they also have to witness a certain amount of gloating on the Californian side.

They, too, are expecting a vintage harvest and their exports have been rising on average by 23 per cent year on year for the last decade. I am not sure the absence of a château will bother them all that much.