Tom's blog

France has a wine glut; let's rip up some vineyards

That sanitizer you spray on your hands may be a cru bourgeois.

France is reporting a wine glut so severe that it allocating $216 million for producers to destroy a portion of their wine to hold up prices. The alcohol from this wine can be used in hand sanitizers, cleaning products and perfume.

The crisis is a result of several factors. French wine growing regions had a good harvest last year in a time when consumption was heading downhill. Production was up 4 percent, but demand was down about 15 percent in France. Other countries face similar drops in consumption: 7 percent in Italy, 10 percent in Spain, 22 percent in Germany and a whopping 34 percent in Portugal. On top of this vortex are the lingering after-effects of the Covid-19 shutdown of restaurants and bars and higher cost-of-living expenses in France.

Hardest hit was the Languedoc region, France’s largest wine area. Rose and red wines were particularly affected. Bordeaux was not spared either. According to a local agricultural association there, one in three wine producers face major financial challenges.

The French government is providing financial incentive to wine producers who rip up vines and grow alternative crops, such as olives. Bordeaux is looking to uproot 23,500 acres. That’s a lot of vineyards and most likely not those that produce grapes for first growths.

I had hoped the glut would lower prices, but that’s not likely to happen. Prices may even increase as quantities decrease.

I’m headed for southern France in a couple of weeks. I’ll be eager to hear directly from wine producers about their futures.