2023-08-16 08:14:15
France gives €6,000/ha to uproot vineyards because of a severe drop in wine sales
The winemakers in the prestigious region Bordeaux are ready to eradicate thousands of hectares vineyardsas changing consumer habits and global warming hit one of the jewels in the crown of the French agricultural industry, writes Politico.
Given Bordeaux’s flagship status in the public mind, this may seem surprising. Yet a combination of factors – including a decline in red wine consumption, declining demand from China and the difficulty of making wine in an increasingly warm environment – has dramatically transformed winemaking in France.
Red wine consumption has declined significantly in recent decades as French drinkers turn to other, more refreshing beverages such as beer. While high-end Bordeaux bottles like grand cru still easily find buyers, demand for basic mainstream red wines is declining.
This has driven down prices to such an extent that for many winemakers, uprooting their vines and receiving compensation is a better option than continuing to make wine.
6,000 euros per hectare
The French government plans to spend millions of euros to help winemakers uproot vines, a process called “grubbing”.
The eradication program announced earlier this year at the annual Agricultural centre , aims to reduce production while allowing growers to reallocate land to other activities. This will be implemented this fall, with winemakers receiving compensation at the end of the year.
Public funds will be used to convert unsold wine into industrial alcohol for perfumes or hand sanitizers. In parallel, parts of the vines will be uprooted to reduce overall production.
French authorities are offering around €6,000 in compensation for each hectare removed. Almost 1,000 pre-applications have already been submitted for the program in the Gironde department in southwestern France, home of the iconic Bordeaux wine.
While a third of applicants want to remove all their vineyards and give up winemaking altogether, the rest are looking to produce less and focus on higher quality wines, according to official data on applications submitted so far.
For Stéphane Gabbard, who owns 40 hectares in Bordeaux and produces mostly red wines, reducing production is the only way to adapt to the relentless decline in sales.
“We are having trouble selling everything we produce and we prefer to reduce the volume of production to bring it in line with what we can sell,” he said, adding that he plans to uproot about 10 hectares.
Last year, its sales were about 30 percent lower than before the 2019 coronavirus pandemic, Gabbard said.
Overproduction – which he prefers to call “underconsumption” – means that winemakers have to sell their wine at extremely low prices.
Gabbard, who also chairs the Union of Bordeaux Winemakers and Higher bordeaux describes how Bordeaux can sometimes be found on sale for €2 a bottle in supermarkets.
In the second half of 2022, the price of Bordeaux red wines has fallen by 21 percent
compared to the average price for the previous five years, according to data from the Ministry of Agriculture. At the same time, the average price of white Bordeaux rose slightly.
With exports, the situation is not much rosier. China, still Bordeaux’s main export destination, halted all imports during the coronavirus pandemic. Although exports to the Asian country have since resumed, they have not yet reached pre-pandemic levels.
In 2022, Bordeaux exports to China fell by almost a quarter year-on-year, according to data from Bordeaux Wine Interprofessional Council (CIVB), a group representing hundreds of Bordeaux producers and sellers.
With the United States being Bordeaux’s second largest export destination, trade tensions are undermining exports across the Atlantic. Former President Donald Trump imposed tariffs on French wine as part of a long-running transatlantic battle over subsidies for plane makers Airbus and Boeing. Although the duties have since been lifted, winemakers say the impact continues.
Changing consumer preferences are a key driver of the downward trend in the wine industry, as sales of beer in French supermarkets may overtake wine for the first time this year, several surveys show. A study conducted by media conglomerate RTL last year found that red wine consumption has fallen by 32 percent over the past decade, led by the 18 to 35 age group.
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