The Existential Crisis of Bordeaux's Small Grapegrowers

Protesters carried dead vines through the streets of Bordeaux, pleading for help as shrinking wine consumption in France and changes in China have left them facing ruin

The Existential Crisis of Bordeaux's Small Grapegrowers
More than a thousand protesters marched through downtown Bordeaux, calling for financial aid. (Philippe Lopez/Getty)
Dec 27, 2022

Earlier this month, a thousand angry vignerons and their allies marched through the streets of downtown Bordeaux, calling for help to save their livelihood. When they reached the doors of the Bordeaux Wine Council (CIVB), the local trade organization, they hung a dummy from a tree outside, representing financially troubled grapegrowers at risk of suicide, and piled dead vines on the doorstep.

The growers are demanding financial compensation in exchange for grubbing up their vines, and no one on the Place de Bordeaux was surprised. (Several officers of the CIVB took part in the march.) The region faces a crisis and grubbing up vines seemed the most direct and equitable solution. Trading for bulk Bordeaux has skidded to a halt.

The vignerons are calling on the French government to subsidize pulling up vines in Bordeaux's less prestigious areas. They are asking for €10,000 per hectare, but the government has said that European Union rules prevent such funds. And that is leading to a crisis and anger.

Déjà Vu

How did one of the world's most prestigious wine regions hit this point? "The problem today is not the price. The problem is there are no transactions," said Christophe Chateau, spokesperson for the CIVB. Sales of bulk Bordeaux are so scarce, he said, the CIVB hadn't published price quotations since October.

If you're getting a sense of déjà vu, you're not wrong. For decades now, Bordeaux has been grappling with shrinking sales of value wines. "There are regularly similar crises every 10 to 15 year because exports are not sufficient for compensating for declining consumption in France," said Jean-Pierre Rousseau, CEO of négociant Diva.

In the years after World War II, the average French adult drank 150 liters of wine per year, mainly red table wine—that's nearly 17 cases per person annually or half a bottle per day. Today they consume 40 liters, or four and a half cases per year. Spain, Italy and Portugal have seen similar declines. In France, drinkers are not only drinking less, they're drinking differently—beer and cocktails are increasingly popular, and when they drink wine, they're showing a preference for better reds as well as white, rosé and sparkling wine.

Back in 2010, following a similar price crisis, Bordeaux launched a strategy that meant structural changes. They would eliminate the lowest category of wine and improve the quality and taste profile of the next category up, as well as expand the production of rosé and sparkling wines. So far so good. Sales of Bordeaux's sparkling wine or crémant has multiplied by four in ten years. "We don't even know if we'll have enough stock to respond to the market demand," said Chateau.

At the same time, négociants have been tasked with finding export customers for the wine the French aren't drinking. They've done a pretty good job, racking up record sales, shipping to more than 100 countries, from America to Sweden to Panama. And demand for luxury wines is particularly dynamic, but not value wines. "Demand remains very strong for Bordeaux's fine wines for export," said Rousseau, "[But] much less for entry-level and mid-range wines, at €20 starting price and below."

America is a lucrative market for Bordeaux, particularly mid-range to premium cuvées. It's the top export market in value. But America isn't interested in the bottom of Bordeaux's production. A decade ago, China solved Bordeaux's crisis.

China first entered the market for Bordeaux in force after the 2008 global financial crisis. Consumers there initially soaked up a flood of cheap wine that no one else wanted. But not anymore. "For China, the first eight months of 2022, we are down 27 percent in volume and down 12 percent in value," said Chateau.

It's not just the pandemic impacting sales. "China was indeed a huge buyer a decade ago but there has been a gradual reduction in consumption and a transfer to branded wines from other countries," said Rousseau. Chinese President Xi Jinping began a campaign against corruption and flamboyant spending after he took office. The Communist Party quietly instituted rules on how much could be spent on alcohol at banquets. Average consumers began to reduce spending on wine.

"Consumption dropped very sharply, dropping in 5 years from 1.9 billion liters to 1 billion. Local wine production itself has almost halved, and that is the main competitor of inexpensive Bordeaux," Rousseau told Wine Spectator.

For the lowest category of wine made in Bordeaux, the trouble in China leaves few other options. "Bordeaux doesn't make money in this category. We need to get out of it," said Chateau.

How much surplus wine are we talking about?

The calculation is fairly simple, according to Allan Sichel, president of the CIVB and a négociant. Over the last five years, the average annual crop for the region is about 480 million cases, but they've only been selling 440 million. And of the amount sold, 22 million cases are going at fire sale prices. "It's sold at very low prices, just to turn wine into cash," said Sichel. "It's uneconomic to produce, but they are completely desperate."

Protesting grapegrowers]
Protesters piled dead vines in front of CIVB offices. (Philippe Lopez/Getty)

If you consider the wine sold at unsustainable prices, plus the wine not being sold at all, you're left with close to 60 million cases of excess wine per year, or 500,000 hectoliters. "At 50 hectoliters per hectare on average, that means pulling up 10,000 hectares [of vines]," said Sichel.

Local bank executives say about 500 local growers are in severe financial straits, with no prospect of bouncing back. Then there are the growers nearing retirement, who have no buyers for their vineyards or demand for leasing their vines, meaning retirement isn't possible. While the value of vineyards in prestigious appellations like St.-Emilion or Margaux has skyrocketed in the past few decades, land prices in areas like Fronsac and Médoc have actually declined.

Nor can the growers simply abandon their vines. That's illegal. Abandoned vines are vectors for pests and disease, which easily spread to other vineyards. They must cultivate their vineyard or grub it up, and the cost of grubbing up vines is €2,000 per hectare, money they don't have.

Which Exit Strategy?

What Bordeaux needs for these growers was an exit strategy, and after much discussion a plan was devised for funds from the French government. But there's a problem.

"We were hoping for a blanket measure of €10,000 per hectare for 10,000 hectares. This was so we could engage in one big operation and over 12 to 18 months we would have solved the problem," said Sichel. "What is now becoming clear is that it's not going to happen the way we had hoped."

After calls with the French Minister of Agriculture and other government officials, the answer was a firm non. The European Union previously funded such plans, but current policy forbids its member states from using either EU or national funding to subsidize destruction of farming assets. "It's complicated," said Sichel.

Instead, officials are plotting a less-straightforward, more drawn out, basket of modest alternative measures—funds for the installation of a solar panel farm; planting harvestable trees; rezoning near urban areas; growing alternative crops; and for those needing help as they consider their future, auditing and counseling services, so they don't feel quite so alone.

"There is also a social dimension. These people have been farming their vineyards through generations. Now they're reaching the end of their professional career, with no prospects, completely stuck," said Sichel.

But the growers' demand of €10,000 per hectare? "It is not possible and it's not fair to let people hope that it will happen," said Sichel. Which means as Bordeaux continues to transition, more pain and more protests are inevitable.

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