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Bordeaux - Bordeaux wine supremos have ordered a cut in the amount of cheap plonk put on the market and the amount of land used for growing but are aiming to increase production.
Bordeaux's wine trade council, the CIVB, decided this week to increase overall production by 12% while reducing the current 1.1 million hectolitre production of so-called "Basic Bordeaux".
These cheap and cheerful labels retail for less than €2 per bottle in France, but producers fear they dilute the image of the world renowned wine region.
As part of the new campaign, the number of countries targeted for commercialisation has been reduced from 60 to 30.
Seven markets will receive priority: China, the United States, Britain, Japan, Germany, Belgium and France. Nine other markets, including Hong Kong, South Korea, Russia and Canada come just behind.
At a conference held after the CIVB general assembly, trade leaders declared that there is no room for cheap wine in Bordeaux's future.
Their strategy aims to increase current revenues of €3.5bn by €1bn within five to eight years.
It offers advice for struggling wine merchants and divides Bordeaux's wine production into four price categories - Art, Exploration, Fun, and the much-maligned Basic.
"The 'Basic' wine does not correspond to the image of Bordeaux", said Georges Haushalter, general manager of Compagnie Medocaine des Grands Crus, and the newly elected president of the CIVB.
Under the plan, one-third of the 1.1 million hectolitres of 'Basic' wine will be improved and sold in a higher category, one-third will become another product like rose or claret and one-third of the vines will be ripped up.
The number of winegrowers will drop by 26% and vineyard surface will shrink by 7%.
Haushalter and other trade leaders said the Bordeaux brand is "damaged", a number of traders and growers are in peril and the financial crisis has slowed the investments needed to improve quality and remain competitive.
Furthermore, the trade, which employs 50 000 people, failed to realise its potential before the financial markets crashed.
Wine merchants say that in growth markets between 2003 and 2007, Bordeaux missed the opportunity to sell 48 million bottles of wine and earn €293m in revenue.
And quality is not the only issue.
Volatile price fluctuations in the bulk wine market "weigh heavily on Bordeaux," said Bernard Farges, president of the Bordeaux and Bordeaux Superior wine syndicate.
"The low percentage in volume that is in difficulty is destabilising the rest of the sector," said Haushalter.
In December, one tonneau (900 litres/238 gallons) of red Bordeaux bulk wine sold for €980. In July it sold for €850.
In between, it dropped as low as €650, the same price as a bottle of Chateau Lafite 2010 on futures.
"Noone is making money on this segment of wine," said Farges. "It is not viable, it is not sustainable."
A sustainable future means moving toward high quality wine, according to Farges.
The new campaign, dubbed The Reconquest, calls for increasing production of "Fun" wines by 11%, "Exploration" wines by 57% and "Art" wines by 34%, which will increase revenues in those categories by 12%, 60% and 34%.
Overall revenues would increase by 30%.
Bordeaux's leaders are developing a simplified labelling system, apart from the often confusing appellation and classification labels, that will allow the consumer to easily identify the quality category of Bordeaux wine.
- Reuters
