Grapes of wrath in Bordeaux

The French wine industry is in crisis, and the EU is paying winegrowers to tear up their vineyards and turn their fine wines into industrial alcohol, writes David Hearst.

It's round, juicy and deliciously fruity. Ripe grenache, carignan and a little syrah lovingly blended in a small cooperative tucked away in a valley of the Languedoc-Roussillon. But the wine which has the tasters tripping over themselves with effusive praise could soon be poured straight into a distiller's tank, converted into undrinkable industrial alcohol, and the grapevine tended by generations ripped up.

The French wine industry is in crisis. For the first time, Brussels has agreed to a French demand to convert 1.5m hectolitres of quality wine into industrial alcohol in response to a large drop in wine prices - up to 30 per cent in some cases - caused, in large part, by overproduction. Unlike previous years when "crisis distillation" was used to lower the European lake of cheap table wine, this time vins d'appellation d'origine controllée (quality wines produced under strictly controlled regional designations) are also being poured down the drain. Or almost.

The growers get paid half their cost price. (More precisely, they receive about €40 per 100 litres of wine). In return Brussels is demanding that between 15,000 and 18,000 hectares of vineyard are, in the unceremonious words of the deal, "grubbed up".

The news is not going down well in the hot valleys of the south. "The situation is already desperate for most winegrowers," says Hervé Passama, president of the Union of Independent Growers in Roussillon, and a winegrower with 60 hectares near Perpignan. "The price we are getting for distillation is catastrophic. This can only be a temporary measure to get us through to the next harvest."

Jean-Charles Tastavy, who has 28 hectares near Béziers and is president of the Winegrowers Union in L'Hérault, says they had asked Brussels for permission to distil 2.5m hectolitres: "The deal will not help soak up the excess wine. It could help improve quality, because most growers will distil their least good stock, but many of us have just lost hope."

A heady mix of factors is threatening an industry which employs 300,000 people and is worth €5.7 billion a year. A combination of spiralling yields (the industry is expected to produce 23 per cent more this year than it did in 2003), falling domestic consumption and cutthroat competition from home and abroad is forcing many out of the business. A survey published last week of bordeaux wine growers found that 15 per cent had no one to take over their business when they retire. In other words, one bottle of Bordeaux in six has an uncertain future.

Egged on by a more health-conscious government, and tighter enforcement of drink-driving laws, the French themselves are drinking less wine - 50 litres per adult per year, half of what they drank in the 1960s. The Australians are getting better at exporting mid-priced wine to Europe. The Spanish are getting cheaper, and the top wine-growers from regions such as Bordeaux and Burgundy are flooding the lower end of the market with appelation controllée wine that they themselves cannot sell.

In fact, seen from southern France, almost everyone else seems to be cashing in on their business. And frustration is turning to violence. A group of wine producers, under the respectable title of the Regional Action Committee of Wine-growers, or Crav, has recently attacked and emptied tankers carrying Spanish wine. Crav have also thrown sticks of dynamite at agriculture ministry offices at Carcassonne and blown up a car outside ministry offices in Nîmes.

Such acts recall for many the dark days of 1907. It may be a century ago, but what happened then continues to resonate today. Disaffected growers who could not sell their wine mounted a civil insurrection. Between March and July in that year hundreds of thousands of demonstrators from the Languedoc-Roussillon region took to the streets after the price for their wine collapsed. At first the action was good-humoured, and a tax strike was declared. But the mood soon hardened. The army was called in, and six demonstrators were killed. The revolt has lingered in local memory.

Mariann Fischer Boel, the new Danish European commissioner for agriculture and rural development, is grappling with a fundamental problem: a global market that is simply swimming in good wine. Her spokesman Michael Mann says: "The commissioner's job is to protect European interests, but not to pander to lobbies. She has to ensure the wine sector has a viable future. Carrying on the way we are, distilling wine into industrial alcohol is just not viable. She is a tough lady, and realises the situation just can't go on."

Many in the Bordeaux wine-growing region agree with the action Brussels has just taken. "I understand the anger of the winegrowers in Languedoc-Roussillon. When the price of bordeaux wine lowers, they have nothing else to do but to weep," says Daniel Mouty, president of the independent growers in Aquitaine. "I have been in this business for 32 years, and I have only known peaks followed by spectacular troughs, followed by another wave of interest again. In 1997, buyers from Taiwan and Japan were crawling all over us. They always wanted more than we could supply. Then the demand stagnated.

"Now we simply have too much wine growing. In Bordeaux we have 121,000 hectares of vineyard. It's too much. It must be cut back to 110,000 or even 100,000 hectares. This time I think we have got to clean up the market and then people may learn to appreciate the quality of product that we offer."

Yves d'Amécourt, the secretary general of the union of Bordeaux and Bordeaux Superieurs, agrees. "Crisis distillation and the tearing up of vine will allow us to re-establish an equilibrium in the market, and therefore a proper price. And then we have to set about reconquering the markets. There is worldwide overproduction. The measures that Brussels are taking will at least allow us to get out of this crisis as quickly as possible."

Jamie Goode, editor of Wineanorak.com and wine writer for Decanter and Wine International magazines, says more drastic action is required, yet doubts whether the French can stomach such a solution: "The problem with the French wine industry is that the whole system is geared towards the interests of the producers and not of the consumers. The appellation system just doesn't work when branding a wine. The entire marketing budget will go to promoting the appellation. So the name Chablis, say, has a cache as a brand. But the Chablis producers who are lazy and produce poor quality wine damage the whole Chablis brand. In the new world, it is the producer who is branded. The producer, therefore, has a huge incentive to produce quality.

"The French are really not facing up to the problem. What they need to do is let the poor producers go out of business, but they won't do that because there would be social upheaval. And the problem is only going to get worse as they muddle along." None of which brings much immediate comfort to the beleaguered and undersold wine growers of Languedoc-Roussillon.

"It is despair that creates violence," says Jean-Charles Tastavy, who is 51. "I understand it, because the situation is very difficult and some people simply don't have the means any more to feed their families. Those who take part in the activities of Crav don't talk about it. And if you take account of my age, I can't run fast enough."