All entries for Thursday 22 June 2006

June 22, 2006

Wine lakes

There is a lot of debate in the press today about the EU's decision to grapple with the overproduction of wine.

The problems that face the european wine industry have been well known for quite a while and it will be interesting to see how the EU plans to tackle the issue.

There are many reasons for the current situation – falling markets for european wine; strong competition from New World producers free of the shackles of over–regulation and restrictive practices; the changing tastes of traditional export markets for wine; the intransigence of certain nations to adapt and change.

It's worth a bit of history at this point.

The EU wine legislation is based on a system of controls introduced by the French that was orginally designed to act as a gaurantee of authenticity. At the time there were many dodgy outfits churning out cheap crap and selling it as the finest claret. The AC system was introduced to try and provide an element of authentication for wine so that consumers could buy a bottle in the knowledge that it was what it said on the tin.

Over the years the AC laws have grown to lay down what you could grow, how you grew it, how you made the wine and what you could say about it.

The system was not designed as a system of ensuring quality, just the geographical source and production methods used. The difficulty is that the AC rules have become associated with 'quality' but that there is nothing really that says any given AC actually acheives any particular standard.

The problem for Europe is that the system has stifled innovation and that the New World producers who can operate outside of such regulation have been able to experiment and drive markets in a way that European winemakers have struggled to do.

In Italy, for example, a number of Tuscan winemakers had to spend years outside of the AOC system making very high quality wine that had to be labelled 'Table Wine' because they didn't fit the rules. In the end a new designation of 'IGT' was established in recognition that the wines were out–performing many AOC wines – both in terms of quality and price.

The difficulty here I guess is that in the EU the debate is always – how can we change the system, how can we ammend the regulations – never how can we improve the wine.

At the heart of this dilemma is the idea of craftsmenship and industry. For the big New World brands wine is an industry, in Europe it's more often treated as a craft – full of tradition and methods of practice that only change slowly.

And here I am going to now leap to the defence of the AC system – without it Europe would no doubt have lost many rare varities, many great wines and the kind of cultural and regional differentiation that makes European wine truly great and interesting for the connesiuer. You can argue that the current situation is about fashion – that people will come round again to the european way of making wine. I dread to think of the damage that could be done to the heritage and art of winemaking by chasing the market demand for fruity plonk.

Waiting for the market to come round to your way of thinking is a dangerous business practice, however. Europe has to change its wine laws to survive. The Australian and Californian experience demonstrates that you can have both mass–market industry and innovation alongside specialist producers of high quality product. Europe needs to acknowledge that its markets have changed and they need to change with them.

This has rambled a lot and I am not sure I can draw any conclusions as to how to go forward. My brain says business demands that you meet the needs of the market. My heart says wine is special – it's an art, a craft of generations that should be protected and celebrated.

Having said that I am not the average consumer – my wine purchases tend to be £10+ and I would not balk at paying an awful lot more for a bottle. I am the kind of person who sees a bottle of Mouton Rothschild for £250 and thinks – hmm, that's a good price. In the end I am not the type of consumer who is going to decide the future of european winemaking – that will be in the hands of the sub £5 brigade filling the aisles of Tescos.

Damn this is difficult problem…


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