Wood chips may make their way into French wine

Friday, July 23, 2004

PARIS -- Wine flavored with wood chips was, until recently, just the kind of thing France's vintners were proud to have nothing to do with.

But in a sharp break with tradition, the government agreed to allow this and other moneysaving shortcuts to help French vineyard owners revive their flagging fortunes.

The plans, drawn up by the winemakers themselves, were endorsed by French Agriculture Minister Herve Gaymard on the eve of his meeting Thursday with a group of lawmakers pressing for government action to stem the decline.

The new measures would not change the stringent rules governing top quality wines sold under prestigious "appelation d'origine controlee" labels.

But production requirements would be relaxed for mid-market "Vins de Pays" -- or country wines -- in a move designed to make it easier, and cheaper, to produce mass-market French wines in high volumes.

Speaking to reporters, Gaymard described the plans as a "global offensive for French wine" that would "clarify and simplify the presentation of French products on the international market."

Lower standards

Instead of branding their wine with obscure local place names, mid-market vintners could sell their products under the name of a single well-known grape -- even if up to 15 percent came from other varieties. Under current rules, only 100 percent Chardonnay can be sold as Chardonnay.

The geographical areas from which vintners have to source their grapes would be broadened, making for a cheaper and more reliable supply, as well as higher capacity. Wood chips could also be added to the maturing Vin de Pays to give it an oak flavor without using expensive wooden barrels.

Such cost-cutting tactics are already common across the rest of the winemaking world, including the United States and Australia, but were viewed by most French winemakers as too unorthodox to contemplate -- until now.

"Most of our global competitors are using wood chips and we think we should be able to do it too," said winemaker Denis Verdier, who chairs the advisory board of France's National Wine Office. "That's on condition that it's made clear to consumers when they've been used."

The collective change of heart is a sign of how tough times have become for winemakers as they face a slump in sales both at home and abroad.

Wine experts say a global oversupply of some 1.6 billion gallons weighs on prices and makes mass-marketing campaigns crucial -- a factor that works against France's fragmented industry and its thousands of small-scale producers.

The value of French wine exports fell 10 percent in the first five months of the year, compared with the same period in 2002. Exports also fell compared with 2003, when revenues were boosted by a lucrative sell-off of Bordeaux made in 2000.

Wines from California, Chile and Australia also overtook French wines on global export markets for the first time last year, as large producers like U.S. giant E.& J. Gallo Winery or Australia's Jacob's Creek, drew on their superior margins and muscle. France exported 1.78 billion bottles; so-called New World vintners exported 1.93 billion.

But winemakers say their shake-up of France's hierarchical wine categories and rules could change all that, clearing the way for the creation of some big new French brands.

"We have several companies that will be able to get down to work with these rules," said Eric Tesson, a lawyer for the AOC winemakers' national body. "But we're still some way from any kind of Gallo a la Francaise."

The loosened restrictions could also help French wine groups like Castel Freres and its Nicolas retail chain to reverse a slide in domestic consumption.

The average French person over 14 now drinks just a quarter bottle a day, compared to a half bottle in 1961. Sales have also been hurt by an onslaught of anti-alcohol campaigns and tougher drunk driving rules in the last two years.

Agriculture Minister Gaymard met Thursday with members of an influential parliamentary commission that is set to publish its own rescue plan for the French wine industry next week.

One of its leaders, legislator Philippe Martin of the ruling conservative Union for a Popular Movement party, said the plan will call for more "balance between public health priorities" and wine's importance to France's culture and economy.

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