FRANCE: France's most prestigious wine-growing region has decided to cut back the amount of wine it sells, because it faces what some are calling its greatest crisis for 150 years.
The Bordeaux Wine Council (CIVB), which includes legendary names such as Château Latour, Château Margaux and Château Haut-Brion, and countless smaller producers, independent wine merchants, trade unions and co-operatives, said yesterday its members had agreed to limit sales from this season's harvest to 50 hectolitres (5,000 litres) per hectare.
Anything more would be stored until the CIVB decided that conditions had improved.
It is an unprecedented decision that will reduce the volume of 2004 vintage Bordeaux sold by between 15 per cent to 35 per cent compared with last year.
A spokeswoman said the decision made by an emergency council meeting last Thursday had been "very difficult, but had to be taken". She added: "We are simply producing far more than we can sell. Prices have collapsed dramatically; we have to reduce supply in the hope they'll pick up again."
Bordeaux, which produces some of the world's grandest wines, has seen the wholesale price of a standard AOC (appellation d'origine contrôlée) red collapse by almost half in the past three years, to far below the point where winemaking can be profitable.
A 900-litre barrel now sells at €710 to €760, or €0.62 a bottle wholesale, compared with €1,500 for a barrel in the late 1990s, industry observers say. In the past 12 months, exports have fallen by 9 per cent. Ten to 20 per cent of the region's 9,000 producers are in varying degrees of financial difficulty.
"The collapse in price of some Bordeaux AOCs has reached an unacceptable level that threatens the viability of our vineyards, the unity of our industry, the stability of our institutions and our image in France and the world," said Mr Jean-Louis Trocard, the CIVB's president. "This situation cannot continue."
The CIVB is also proposing that hundreds of hectares of vineyards currently disused or the subject of inheritance fights should be be uprooted to help pull the region out of the crisis, which is grave enough to have been compared by some to the phylloxera outbreak that almost wiped out France's wine-making industry in the early 1860s.
Bordeaux's problems in part reflect those of the wider French wine business.
Domestic consumption is half what it was 25 years ago, and export sales are in steep decline, suffering from the competition of more consistent, easier to identify, cheaper and more drinkable wines from Australia, California, South Africa and Chile.
In the mid-1990s, when a basic red brought €1,500 a barrel, many producers invested heavily in new equipment and land. The Bordelais has grown from 75,000 hectares of vineyards in 1980 to more than 120,000 now. It can produce seven million hectolitres of wine, but can currently sell less than five million.
The best-known Bordeaux chateaux have so far escaped the crisis. It is the producers of generic Bordeaux wines who are suffering most.
"The small producers are getting smaller, and the big are getting bigger," said a disillusioned producer from Entre-deux-Mers.