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Muscadet Growers Confront Bankruptcy and Sabotage

An unfavorable economy, a brutal frost in 2008 and years of problems have put Loire's Pay Nantais region in trouble

Ben O'Donnell
Posted: November 5, 2010

Hit with a one-two punch of a bad frost in 2008 and a global recession, a growing number of wine producers in the Loire Valley’s Pays Nantais region—the home of Muscadet—have turned to bankruptcy, and one may have turned to crime. But a closer look reveals woes that have slowly grown over the past two decades. And it will take more than just a few good vintages to stop the bleeding.

It is impossible to say yet how many Muscadet growers have filed for bankruptcy this year—some in the industry have put the number at 60 out of the 600 in the region—but it is clear that the hard times have forced many to walk away. One may have taken a different tactic—a négociant was vandalized last month when someone broke in and toppled two tanks, destroying 5,000 hectoliters of wine. Police are investigating.

The crisis began in April 2008, when a severe frost slashed production for that vintage by as much as two-thirds. Desperate to remain solvent, producers raised the prices of what they could produce, even though Muscadet, made from Melon de Bourgogne, has long been a reliable value white. The recalibration could hardly have come at a worse time, as the recession pushed buyers to abandon wines perceived as overpriced.

“The market stopped with the frost, and then, the following year, when we had a normal output, we could irrigate the market with normal prices, with nice quality," said René-Louis David, secretary general of the trade group InterLoire. "But unfortunately, the trade, particularly in France, said, ‘Well, yes that’s nice, but now your place was taken by other products.’” (France represents roughly 85 to 90 percent of the market for Muscadet.)

That dependence on French consumers is another problem. Muscadet’s export market share has been quietly slipping away for two decades, from some 2.2 million cases per year in the 1980s to a quarter of that today. Aggressive value-added tax hikes on wine in the U.K., traditionally an enthusiastic market for Muscadet, have turned away many British consumers. The wine also faces an image problem: Some customers know it only as a cheap and simple wine; others don't recognize the appellation or confuse it with the Muscat grape.

All these factors may have sparked the attack on the night of Oct. 22. Someone broke into Les Caves de la Nantaise, a négociant, and spilled 5,000 hectoliters of fermenting Melon de Bourgogne from the 2010 harvest into the surrounding vineyards. Two vats were destroyed and enough wine for 665,000 bottles went into the soil, the efforts of the 19 growers who vinify at the négociant’s facility. Noël Bougrier, the owner of the Caves, estimates the loss at 500,000 to 600,000 euros.

Police do not know yet whether the criminal is simply a vandal or a disgruntled vintner taking aim at a large négociant—Les Caves is a relative newcomer in the region and has been trying to update Muscadet's style to compete with better-known varieties abroad. Bougrier can only hypothesize about motive for now. “If it’s a producer, maybe just to have an article in the newspaper on Monday morning, to focus on the problem of the Muscadet.”

But the waste helps no one. “It’s not a good solution to solve the problems of Muscadet,” said Bougrier. “The situation is very difficult for the producers, but I can confirm that it’s very difficult for all the négociants also.”

Pierre-Jean Sauvion of Château de Cléray agreed. “The négociant doesn’t make the market, the producer doesn’t make the market. The market makes the market. Having 5,000 hectoliters on the ground isn’t a solution.”

For many growers, bankruptcy remains the most attractive option. For older growers, according to David, the subsidies France’s government provides to those who cede their plots, “might be an opportunity to retire with more money.” Younger growers, too, have had incentive to put down their shears. Sauvion said that many in his generation who invested heavily in the 1990s in their vineyards and equipment, are now running out of money and credit. “Those people had just had 15 years of working, and they didn’t have time to save money and put it in banks,” he said. “This generation in 2008 and 2009 had to make a decision: ‘Do I try to restock some new credits for innovation and transformation of the winery?’”

David thinks a few years will be needed for Muscadet to regain it's footing; Sauvion expects it could take a decade, citing the long upward trudge following the brutal 1991 frost. All agree that focusing on quality and expanding to new markets are the way forward. Nature gave the Pays Nantais promising vintages in 2009 and 2010, and Sauvion expects that the vintners who soldier through the downturn can make the best of such windfalls. “In every crisis, the good thing is the bad growers go bankrupt.”

Neil Barham
Vail, co —  November 8, 2010 2:56pm ET
Maybe if WS and others and the wine buyers who buy for retailers and restaurant actually took the time to offer and to serve their customers wines like Muscadet all would be fine, but instead all we see are industrial wines being pushed to consumers. I.E: like when Food Arts mag has listed Yellow Tail Pinot Grigio twice this year in its wine page, you can see where its going, farm fresh food washed down with industrial plunk.

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