PrintNovember 28, 2006
Europe ignores market, pays the price
While American wine dealers, restaurants and wine bars advertise the recent arrival of Beaujolais nouveau, the young, raw-tasting wine that the French have persuaded some Americans and many Japanese to celebrate, back in France 8 million liters of Beaujolais wine is to be distilled into alcohol for commercial and industrial use.
From The Scotsman:
A chronic wine glut, falling domestic consumption and fierce overseas competition have converged to create a wine crisis on an unprecedented scale. With "lakes" of unsold wine threatening to undermine prices, the European Union has resorted to paying vintners to destroy some of their stock each year, distilling billions of bottles of perfectly drinkable wine into pure alcohol.
Last year 2.8 billion liters of European wine were distilled at a cost of 150 million euros. Although the market intervention was originally regarded as a temporary measure, like all such expenditures of public money to insulate producers from the marketplace, it has grown and grown. Now, even producers are starting to recognize there may be a need to reduce production.
"For years, we shrugged the crisis off as a temporary downturn," said Gilles de Longevialle, who heads a group representing the vintners of Beaujolais. "But we're beginning to see it's here to stay."
Domestic wine consumption has declined in Europe. Nobody mention the growth in the Muslim population as a factor, and instead tend to blame Coca Cola, fast food, and anti-drunken driving measures, as well as concerns for a healthier lifestyle. Competition from producers in Chile, Australia, the United States, South Africa, and elsewhere is also blamed.
With France becoming a pariah nation among a substantial fraction of Americans, French wine exports to America have been hit much harder than, say Italian wine. But all European exports have been hurt by the high value of the euro.
The most prestigious and expensive European wines sell better than ever. But the fact is that many wine drinkers around the world like the fruit-forward flavors of much New World wine, and fail to appreciate the complexity and subtlety which European fine wines pride themselves on, and in moderate and low priced wines, the bulk of the market, those wines are grabbing more and more share.
Once again, Europe, which thinks itself progressive, is stuck in the past, and having a hard time adjusting.
Hat tip: Ethel Fenig and Jack Kemp
