Regulating
wine: why AOCEs are a bad idea for France's wine industry
Regulations. Europeans love them
and the classic wine producing countries – France, Italy, Spain,
Germany, Austria and Portugal – all regulate their industries
tightly, with rules galore. Now we have proposals by the French to
introduce yet another tier of regulations on top of the existing AOCs,
with the goal of creating exceptional AOCs, AOCEs, a grand set of new
rules for the very best wine regions, in the expectation that this
will raise the standing of French wine and solve the many problems it
currently faces. Of course, this is a wrong-headed fantasy, and in
this piece I’ll explain why, offering my own humble thoughts about a
better way of solving the malaise in the French wine industry.
The French wine industry is an
old one – most French regions can trace their history back a
thousand years or more. But the Appellation d’Origine Controlée (AOC)
rules governing production are a relatively recent idea, dating back
less than a century.
The AOC rules legislate factors
such as maximum yield, permitted grape varieties, vine age, vineyard
site and can even extend to factors such as pruning and trellising.
There is also a tasting test of AOC wines. These rules guarantee that
what you buy comes from where it says it does, and meets these
production standards.
The underlying philosophy of the
AOC is the importance of terroir. This is a subject worthy of a book
in itself, but in short it is the notion that certain sites have
specific characters that transmit themselves to a wine. While it’s
clear that geography and geology do affect wine flavour (for a
discussion of this see this article), it is widely acknowledged that
the French overstate the influence of the vineyard site and downplay
the role of the winemaker (they don’t even have a word for
winemaker). There is an assumption that great wine is a consequence of
a great vineyard site and that all the winemaker has to do is allow
this greatness to show by not interfering too much. This leads to the
belief that a set of production standards, as stipulated by AOC
regulations, will result in wine of character and quality that is
typical of the AOC in question.
This is the source of the
problem with AOC-type regulations. While they have been successful in
preserving the diversity of wine styles – and this is a hugely
valuable achievement – they have not acted as a guarantee of
quality. I would strongly advise against using the fact that a wine
has an AOC as an indication that what is in the bottle is worthwhile,
because standards vary hugely. The only guarantee of quality is the
producer’s reputation.
If anything, the wine rules have
shielded poorer producers from market forces and acted to hinder
quality. Someone making ropey or mediocre wine can still get the AOC
and thus find a market for their wines by using the AOC as a brand. Go
to any French supermarket and pick up a random selection of Chablis,
or Meursault, or Châteauneuf du Pape and you’ll likely be
disappointed by most of the wines. It seems clear: the valuable
function of AOCs is to ensure product authenticity and preserve
diversity – they emphatically don’t guarantee quality. For this to
be the case, the tasting test would have to be far more stringent
(this will never happen for political reasons: likely a majority would
fail, if the test were strict enough to ensure quality for the
consumer), and the French would have to recognize that winemaking has
more influence over wine flavour than terroir does, and build this
into the rules.
The proposal to create a new
tier of AOCs at the top end will do nothing to help the struggling
French wine industry. Why? For two reasons. First, as discussed above,
rules don’t ensure quality – at least not the way they are
currently applied. Secondly, they aren’t addressing the sick end of
the French wine industry. To explore this further, it’s important
that we distinguish between the perspective of the producer and that
of the consumer. From the producer’s perspective, the problem is
that at the cheaper, more commercial end of the market, French wine is
doing badly. In contrast, the wines from the best producers from
across France are doing very well indeed. But in the face of global
over-supply, there’s a lot of French wine going unsold, and they are
losing out in export markets to the new world. From the consumer’s
perspective, it’s difficult to find good, inexpensive French wine.
This is partly because of the consolidation of the retail market in
the UK with the split between specialist independents and supermarkets
growing into a gulf, and the middle ground of the multiple specialists
shrinking. As a result, access to market for small producers – of
the kind making interesting affordable wines – is diminishing. There
may be different solutions to these problems, and solving the problem
faced by producers may not solve the problem of consumers looking for
affordable interesting wine.
The problem faced by French
producers is threefold. First, they have failed to understand the
markets they are selling to, and have been production-led rather than
market-led. They make their wines and then think about how to sell
them. The new world has done it the other way round, looking at the
market and then making wine that will succeed there.
Second, the French have not been
quality focused across the board. Look at Bordeaux: enormous
quantities of largely dismal, joyless, green wines have struggled to
find buyers. Where’s the ambition there?
Third, the AOC system has
shielded poorer producers from market forces. Market forces are a
powerful incentive to achieve quality: do it or you go bust. Bailing
out uncompetitive elements of an industry is a big mistake long-term.
There’s a lot of denial in the French wine industry, and a lot of
people making wine who shouldn’t be simply because they aren’t
good enough and don’t care enough. The sense of entitlement to
practice in a certain area by people who don’t deserve that right is
a dangerous one, but here we are touching on social issues as well as
business ones.
So the way forward is for wine
producers to understand their markets and make wines that will succeed
in them. The way the UK wine market is at the moment, with the power
of the supermarkets, if you want to sell commercial wines in large
quantities then you’ll need them listed there. This inevitably means
that there is no room for the family-owned domaine with perhaps a
dozen hectares of vines. The volumes don’t work. These producers
need to concentrate on higher-end wines, for which the thriving
specialist independent sector provides a route to market. In the
middle ground you are going to have a hard time exporting your wine,
simply because there’s no where to sell them. Of course, this could
change with the rise of internet-only retailers, but only if people
can change their buying habits.
What is my prescription for
French wine producers currently struggling against new world
competition? Should AOCs be scrapped altogether, or made much looser?
No. As discussed earlier, they have helped preserve regional
diversity, and in the light of the growing ‘internationalization’
of wine this role is a vital one. And the regionality of French wines
could be a big selling point: the alternative option, to make varietal
wines of no geographic distinction, pits the French producers directly
against the new world, without a USP.
I have to add that my potential
answers here are from the perspective of producers looking to succeed
in the UK marketplace as it stands now. Ideally, from the consumer’s
perspective, I’d like to see the marketplace change and for there to
be a route to market for the small family-owned producers who make so
much interesting wine. But that’s not the way it is. Taking the
marketplace as it stands at present, commercial French wine production
needs to consolidate, with fewer, more-professional, market-oriented
producers.
This could be achieved by
several means. One is for co-ops to be ruthless in raising their
standards, beginning in the vineyards and extending through the
winemaking process. Another is for producer associations such as Val
d’Orbieu to assume more of a role: they could reward the best
producers with separate bottlings for their wines, and then combine
the rest, raising the standard across the board. More thought needs to
be given to selling the image of each region and its wines, along with
creating proper, reliable brands. One option that may prove fruitful
is for a closer working relationship between agents, retailers and
producers. Bibendum have taken the step of forming a joint company
with Boisset, whereby the resources of both are shared. At the moment
the quality of commercial wines from most of France’s appellations
is pretty dodgy. Burgundy is flying at the top end, but look at
supermarket Burgundies. They’re invariably dire, and they aren’t
cheap. The same applies to Bordeaux and the Rhône, and likely many
other regions also.
The drive for increased quality
must come from producer ambition. Sadly, the rules shelter poor
producers and prevent good ones from reaping the full benefit they
deserve from their hard work – to a degree, this benefit is shared
across appellations. Someone drinks a great Châteauneuf du Pape, and
some of that glory rubs off on poor wines made in the same
appellation. Unless the consumer is aware that it is the producer that
is critical for quality, they will assume that it is the greatness of
the Châteauneuf du Pape terroir that was responsible for their good
experience.
Ultimately, the best option for
sorting out the French wine industry and guaranteeing its health might
be to expose it to market forces. Cruel as they can be, they will
likely have the effect of ensuring reward to those who do the best
work. This will do far more than a new set of rules to raise quality.
Say no to AOCE!
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