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01.2008

Massachusetts Beverage Business

archivedOnWineReport

VIVE le COME BACK!

Article By: MBB

TIMES HAVE BEEN TOUGH lately in the French wine business but things may be on the upturn. After years of watching foreign taste buds respond to innovative New World wines, French wine and spirit makers appear to be making their way back into the global market. Exports in the first half of the year rose 7.5 percent to 4.16 billion euros ($5.62 billion), France's export federation said in August. The Federation of Wine and Spirit Exporters France, or FEVS, said Champagne and Cognac sales led the increase. Wine sales showed more modest growth, which reflected expansion in the global wine market. Philippe Casteja, the federation's president, said the industry should not rely on Champagne, the drink of choice for celebrations around the world, to prop up sales. "Spirits and Champagne remain two undeniable locomotives for our results," he said in a statement. "This bright spot should not make us forget the need to pursue the necessary reforms" in order "to rediscover a durable competitiveness on all market segments of still wines." Champagne exports rose 13.1 percent to 9O4 million euros ($1.2 billion). Spirit export sales rose 9.1 percent thanks to a 23 percent increase in Cognac sales. Still wine exports rose 4.1 percent to 1.94 billion euros ($2.62 billion), with mixed results from region to region. Burgundy wines charted a 2O.9 percent increase while Bordeaux wines saw a 2.4 percent drop. French wines are regaining market share in the global market, Casteja said, noting that sales in the US are increasing. He said he expected exports for the full year to be "good" with an increase comparable to the first half. However, he did say that it was too early to tell how adverse weather conditions in Europe this year would affect the harvest. Over the last decade, the French wine industry has seen declining consumption at home, coupled with dwindling demand for French wine abroad. Wines from countries such as Australia, Chile and the US outpaced French exports for the first time in 2OO3. Sales in France - which still accont for about two-thirds of national wine production - have been hurt by anti-alcohol campaigns and tougher drunk driving laws. Chronic overproduction has compounded the problem, sending surplus wine to the distillery to be boiled down to pure alcohol. In 2OO5, quality wines joined the ranks of cheap table wines that are distilled. The EU's top agricultural official suggested digging up unprofitable vineyards last month and ending subsidies for the distillation of unsellable wine. EU Farm Commissioner Mariann Fischer Boel also wants to simplify and streamline the system of geographical origins to make European wines more attractive to consumers. Under the current system, wines are labeled according to small regions of origin, or terroir. New World wines rely more on production methods for their reputation. They are also more likely to be categorized by their grape variety or blends rather than by region. French vintners - and the powerful lobbies that represent them in the European and national parliaments - are fighting proposed EU changes, claiming they would discard centuries of tradition in favor of New World technique. What's really impressive is that, in the face of all this, sales are again rising. You have to hand it to the French, when it comes to wine and Cognac, they are nothing if not determined.

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