Ecommerce concern as wine demand falls - SwiftERM

Ecommerce concern as wine demand falls. Bordeaux’s winemakers are divided over calls for the European Union to pay them to rip up their vines to curb a glut of unsold claret.

The row comes after the Bordeaux Wine Council backed a plan to limit wine production in the region in southwest France.

Proponents say that the plan makes economic sense, particularly if Brussels can be persuaded to provide subsidies for winemakers who remove their vines; critics are aghast at the prospect of seeing Bordeaux’s châteaux turning to the production of crops such as wheat and sunflowers.

Bernard Farges, the council’s chairman, said the region’s vineyards were able to produce up to five million hectolitres of wine a year, or about 625 million bottles. But he said that with demand falling for claret, notably on the domestic French market, the region could hope to sell only four million hectolitres a year.

The council says the only way of avoiding a crisis is to pay unprofitable vineyards to limit their production by removing vines.

Bordeaux’s difficulties are hidden behind the glamour of its most famous châteaux, whose wines continue to win over wealthy connoisseurs and investors worldwide. Liv-ex, the London-based wine marketplace, expects Château Mouton Rothschild to sell its 2021 vintage for €407.70 a bottle, and Château Cheval Blanc for €388.30 a bottle, for instance.

Yet the vast majority of the region’s 5,400 or so vineyards are nothing like as profitable. The average price of a bottle of Bordeaux in French supermarkets is €5.66 and only 12 per cent of the local output fetches more than €12 a bottle. Many winemakers say that prices have fallen to such an extent that the choice is between keeping bottles in their cellars while waiting for a much-needed upturn in the market, or selling at a loss.

Serge Rizzetto, owner of Château Le Frègne, told France Bleu, the state radio broadcaster, “There’s too much wine, we all know that. I’ve got stock in the cellar that I cannot sell for a profit. I can sell it for €700 a barrel, but at €700 a barrel I go bankrupt.”

He said he was considering wheat and sunflower production because “vines, at that price, are no longer possible”, but he added that he wanted a subsidy of €15,000 a hectare to reduce the size of his vineyard.

Farges wants the subsidies to come from the EU’s common agricultural policy, which pays French winemakers about €280 million a year, including to modernise their vineyards. He urged other winemaking regions to join Bordeaux’s campaign to persuade the EU to authorise vineyards to use the funds to tear up their vines.

Not everyone agrees, however. Valérie Bassereau, who runs Château de la Grave, described the plan as a “sad symbol” for Bordeaux’s wines, which she said “are recognised the whole world”.

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