Too Much Of A Good Thing

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This is the wasteful — some say, shameful — side of the European Union's wine regime: when vineyards produce more than they're able to sell, the E.U. hands out subsidies to turn the surplus into industrial alcohol. The cash is supposed to be be reserved for exceptionally difficult years, but "crisis distillation subsidies" have been paid out three times since 2001. At €500 million a time, it's a hugely expensive way to deal with a market imbalance. And the European Commission is determined that it should stop. In June, the Commission published proposals for sweeping changes to the wine sector aimed at eliminating surpluses and making wine producers more competitive. Among the key measures it's proposing are the grubbing up of 400,000 hectares of vines over the next five years in order to stop overproduction; a simpler labeling system to make European wine more attractive to consumers; and the end of all distillation subsidies.

None of that went down well in France. "The proposals in their current state are unacceptable," growls Denis Verdier, head of the cooperative producers' association, whose members make one out of every two bottles of French wine. But in Bordeaux — and this is a sign of the times — a surprising number of people think the European Commission proposals make sense. Roland Feredj, director general of the Bordeaux Interprofessional Wine Council (CIVB), takes issue with some of the details, but says that, overall, the E.U. proposals are "interesting." He explains: "We need to permit the most dynamic producers to attack the competition by giving them more liberty to do it in their own way."

This isn't just talk. Bordeaux itself has put in place a series of measures that are broadly similar to the ones proposed by Brussels. The civb is offering to pay weak producers to pull up their vines. A new quality-control system is being implemented that, if enforced properly, could lead to underperforming wineries losing their right to call their wine Bordeaux. The Council is also quietly encouraging the 57 different Bordeaux appellations to consolidate. Five big areas — the Côtes de Blaye, Côtes de Bourg, Côtes de Castillon, Côtes de Francs and Côtes de Bordeaux — are now close to an agreement to combine into one single expanded Côtes de Bordeaux.

The measures only go so far: they still leave 17,000 different Bordeaux wine labels, and only a few hundred producers to date have signed up for the scheme to be paid to get out of the business altogether. As part of its measures, the civb agreed to supplement the subsidies for distillation, a move that is furiously contested by some, including Delpeuch, who argues that it makes no sense to encourage bad wine to be made in the first place. And it's no easy task persuading proud villages to give up their names; one planned merger between the Moulis and Listrac appellations fell through in 2002 when the authorities in Moulis got cold feet. Still, for Bordeaux, this all amounts to a sea change in attitude. "Ten years ago, if the head of the CIVB had said we'll grub up vines, somebody would have set fire to his car," says Frédéric Guiraud, who runs a wine trading business near Sainte-Foy-la-Grande, a town on the eastern edge of the Bordeaux region. Guiraud's firm, GRM, used to be the one that regularly bottled and bought Charles' wine. But times have changed. "Today, we refuse a huge amount, about 90% of the wine people offer us," Guiraud says. "Sure, we'll follow our old clients, but only if the wine is up to quality and they don't keep increasing production." On both counts, he says he has "some concerns" about Charles' output.

Driving these changes is a new hard-nosed attitude among Bordeaux's main customers: French supermarkets. They're pushing for good deals because per capita wine consumption in France has halved since the 1960s; wine is no longer a staple with meals. Bordeaux made a huge strategic mistake by stepping up plantings in the late 1990s — a move that increased production and exacerbated the already growing pressure on prices. As a result, the balance of power in Bordeaux has shifted. "Until 2001, the mentality of producers was to say: 'I make the wine, I label it and you take it and pay,'" Guiraud says. "Four years later, they're now saying: 'Do you want it? I don't care about the price. And can I have an advance?'"