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OCTOBER 23: TIME EUROPE COVER: WINE WOES


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OCTOBER 23: TIME EUROPE COVER: WINE WOES
Posted Tuesday, October 24, 2006


LONDON: 23 October 2006: "France is the superpower of the wine world, the largest producer and, measured by per capita consumption, the heaviest drinker. But for more than a decade, it has been sleepwalking as globalization transformed the business, bringing with it new markets, new consumers and new competitors. Producers from Australia, New Zealand, California, South Africa, Chile and elsewhere have launched massive — and often brilliantly executed — campaigns to promote their wines across the planet. They have ramped up production, introduced a new generation of consumers to inexpensive, fruity wines with labels that are easy to understand, and, in the process, run off with a colossal amount of business. A decade ago, France exported three times as much wine as all the so-called New World producers put together; today it has been overtaken, and now sells about 15% less than they do. The pummeling is especially bruising on its home turf: Europe as a whole now imports almost as much wine as it exports, something that would have been unthinkable a decade ago. In Britain alone, one of the biggest and most competitive markets anywhere, the Australians have gone from exotic afterthought to undisputed market leader in a few years," writes TIME's Peter Gumbel in this week's issue of TIME.

The full story is online at: http://www.time.com/time/europe/magazine/article/0,13005,901061030-1548039,00.html

The French barely reacted to these seismic shifts, largely because global wine consumption has been growing, up about 10% in the last decade to 240 million hL. But now so many people have got into the winemaking business that the world is awash in far too much of the stuff. In 2004, worldwide production hit its highest level in 20 years, almost 300 million hL, or 15% higher than the previous year, reports TIME. The glut is hitting producers everywhere, particularly in Australia, where a local success story has quickly soured. According to estimates by the Australian Wine and Brandy Corporation (AWBC), the government body that oversees the wine industry, the country now has surplus wine stocks that exceed an entire year of exports, and many grape growers simply left this year's crop on the vine rather than harvest it.

In France, a massive support system subsidizes producers who can't sell their wine, and it is cushioning the impact somewhat. Even so, revenues and incomes overall have been dropping since 2002 — the first decline in decades — and many French producers are under pressure, reports TIME. The result is a growing stratification: good winemakers are investing heavily to get better; bad winemakers are facing the prospect of being squeezed out; and the rest, the vast majority of producers caught in the middle, are scrambling to build a better future — or selling up. "The crisis is having a salutary effect," Christian Delpeuch, managing director of Ginestet, one of the biggest trading houses in Bordeaux and former head of the region's wine-industry lobby group, told TIME.

The big question, and the one most hotly debated, is whether Bordeaux, the biggest French fine wine region and arguably the most prestigious, along with other French and European wine regions, can shift fast and far enough to beat back the competitive challenges and become more efficient without jeopardizing its unique character. Fighting the Australians and Californians is one thing; turning into pale imitators of their ways is something quite different. "We're fed up with hearing that Bordeaux is a has-been product. I wouldn't have come to work here if I thought it didn't have a future," says Marie Courselle, 30, one of a new generation of combative winemakers who, with her sister Sylvie, 28, recently took over their father's winery, Château Thieuley. It's critical for Bordeaux to change, she told TIME, "but we mustn't lose our soul."

The full story is available in the October 30 issue of TIME Europe, on newsstands from Monday October 23.

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TIME Public Relations, New York
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