A Dry Year for French Winemakers
A year ago, Kelli Kobor of Arlington, Va., snapped up the discounted French vintages at her local wine store. Now she shuns them altogether. The war in Iraq turned her off French wines, no matter how good or cheap they are. "It's a small form of protest," says Kobor, "but one that we can sustain indefinitely."
Small protests like that are starting to add up to big losses for French wine. When the Beaujolais Nouveau arrived on Nov. 20, French winemakers were more likely drowning their sorrows than celebrating the first wine of the harvest. Sales in the U.S., the secon-largest importer of French wine behind Britain, have fallen by nearly 20% this year.
The worst may be yet to come. French winemakers fear their losses could grow because of a new U.S. law aimed at thwarting bioterrorism that takes effect in January, 2004. The law will require stepped-up monitoring of imports into the U.S., which could make shipping to America more complicated and expensive.
PARTING THE RED TAPE.
There's talk that smaller producers may have to abandon the U.S. market altogether, although they're not going down without a fight. The Federation of French Wine & Spirit Exporters (FFWSE) is working with the French government to come up with a strategy for reversing the decline. An undisclosed sum will be spent monitoring the U.S. market and setting up a task force to promote les vins français in the face of mounting competition from vintners in Australia and other countries.
The industry's biggest obstacle is how to deal with the new bioterrorism measure. It's designed to reduce the risk of biological attacks, but it's a nightmare for the French wine industry, which relies on a long chain of exporters, labelers, manufacturers, and growers to get its product to overseas markets. "The rules have been made for the food industry," says FFWSE Deputy Director General Renaud Gaillard. "They haven't thought out the particularity of each sector."
The FFSWE has met producers all over the country, dealing with hundreds of enquiries daily to get everyone registered with U.S. authorities by the Dec. 12 deadline, as required by the new law. After that, exporters will have to keep records tracking the entire process of production. That means keeping tabs of wines' origins for the preceding two years, a cumbersome and expensive process, especially for those operating on behalf of hundreds of producers.
Vintners have been quoted fees ranging between $500 and $2000 per shipment for an agent to represent them to the U.S. Food & Drug Administration, also required by the new law. That's peanuts for large exporters but not for France's family-owned vineyards, which sometimes export directly to a handful of customers.
Vintners fear the cost may prove too great, rendering some wines uneconomical. Those who buy rare wines in foreign auctions without the producers' knowledge and then sell in American markets will have to identify where they bought the wine, who packaged it, and who produced it. That could be a lot of onerous research and paperwork. Gaillard warns that smaller brands could disappear completely from American stores.
The industry's strategy is to show a united front -- and that includes enlisting help from the French government. As well as organizing a task force to work with ministers and industry professionals, the government is looking to hire an American law firm to decipher the act's provisions. The French embassy in Washington will add a new staff economist to monitor the market. And France is planning a bigger presence at the major wine trade fairs in Las Vegas and Chicago next spring.
Importers aren't as concerned about the politics of the issue as they are about ensuring access, winning back customers, and maintaining price. "Success in the U.S. will be, as it has always been, dependent on the quality of product," says Bob Maxwell, president of the U.S. National Association of Beverage Importers.
Sales of Burgundy tumbled by a massive 30% in the first three quarters. Bertrand Devillard of Burgundy's Antonin Rodet winery wonders if the quality of past vintages, as well as bad Franco-U.S. relations, may have played a role. The trouble is, the euro exchange rate now makes virtually all Burgundy outrageously expensive. "It's a huge problem, because every year the winemakers raise their prices, no matter what," says importer Martine Saunier, nicknamed the Queen of Burgundy Imports in California.
For now, French vintners are using the word "atypical" to sum up 2003. The early harvest following this summer's heat wave is expected to produce richer vintages, although a 35% reduction in yield will mean higher prices -- again. With the biggest holiday sales period at hand, France's winemakers can only hope that they have a reason to party before January rolls around.
Edited by Douglas Harbrecht