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Friday, 6 September, 2002, 08:02 GMT 09:02 UK
France's unwanted wines
Jostling for space - French wines compete with wines from all over the world
Jostling for space - French wines face competition

Travel about twenty minutes north of Lyon, in eastern France, and you'll soon find yourself surrounded by the squat rows of vines that mark out wine country.

Welcome to Beaujolais: a region to warm the heart, and eventually redden the nose, of wine-lovers the world over.

But there is trouble in this paradise.


With all of these regions the high quality wines are doing well, but the cheaper wines are not selling out

Graham Martin, Wine and Spirit Education Trust
Just as the 2002 harvest is about to begin, the region's wine co-operatives have revealed that they still have a lake of unwanted 2001 wine.

Wine into vinegar

The Union Interprofessionelle des Vins du Beaujolais (UIVB) is an association of wine growers and merchants formed to protect and promote Beaujolais wines.

It said that about 7% of the total 2001 production will have to be destroyed, distilled or sent to vinegar makers.

For anyone who enjoys wine, it is heartbreaking news.

Michelle Rougier, general manager of the UIVB said: "The wine is grade three, the lowest grade. It is being destroyed to preserve the image of the brand and out of respect to the consumer."

That may be true, but the unwanted wine is testament to a bigger problem: production of Beaujolais wines is peaking just as demand falls.

Graham Martin, a teacher at London's Wine and Spirit Education Trust, and a resident of Mille Lamartine in Macon just outside of Beaujolais, said: "The region has lost sales in key markets.

"Some of the more conscientious wine makers are responding by cutting production and increasing quality.

"But others are just grape growers; they are producing right up to their yield limits and shoving it down to the co-ops."

Falling sales

Sales in Germany and Switzerland, traditionally two of the biggest markets for Beaujolais, plummeted by as much as 20% last year.

Much of the decline has resulted from the growing popularity of low-cost eastern European wines, particularly those from Hungary and Bulgaria.

These are wines that compete with the lower end French wines - such as those in the Beaujolais lake.

The news is not all bad for Beaujolais.

Britain is doing its bit for the regions sales.

Beaujolais consumption in the UK was up 26% last year and is already up a further 10.5% over 2002.

French vineyard
This year's crop is also expected to be huge
The US, Japan and Sweden have also bought more wine in recent years.

But these successes have not been enough to offset the lost sales and there is a fear in Beaujolais that after 45 years of growth, the regions' sales may be in long-term decline.

Harvest

For Beaujolais' 4,200 wine makers, the problem is about to be compounded.

The 2002 harvest begins at the end of this week, on 6 and 7 September, and according to the UIVB it will be as big as the 2001 harvest.

Beaujolais' co-operatives are running out of time to get rid of the old wine to make way for the new; raising the likelihood that the wine will be destroyed not sold.

And whatever happens to the 2001 wines there is every chance that the unwanted wine lake will be back again this time next year.

The region's wine-makers are yet to come up with a co-ordinated plan to boost sales and no talk of cutting production is taboo.

Mr Martin said: "Some of the wine makers are taking matters into their own hands. There are some individuals that are actively marketing their labels, others have chosen to harvest only the better grapes and so cut their yields, but there is no concerted effort."

Muscadet and Bordeaux

Unfortunately for France's wine makers the story of Beaujolais' unwanted wine is not isolated.

Other famous wine regions, most notably Muscadet and Bordeaux, are rumoured to be accruing their own stockpiles.

Wine bottles
Wine drinkers are looking to eastern Europe
Mr Martin said: "With all of these regions the high quality wines are doing well, but the cheaper wines are not selling out. They are being overproduced and they are coming under competition from Eastern Europe and, in the case of Bordeaux, Chile and Australia."

Advantage

The UIVB admits overproduction is a problem.

Mr Rougier said that about 50 million to 60 million hectolitres (6.6bn to 8bn bottles) of excess wine is produced throughout the world each year.

"It is a problem for everyone, the competition is harder, but we have advantages.

"Our wine is appellation (government quality certified), so it is very controlled. And we have the Gamay grape which is special to this region. It is a very good advantage if we know how to use it."

Until Beaujolais' growers work that out, it seems the most that we can do is continue to drink generously.

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05 Aug 02 | Business
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