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Radical Changes for Long-Term Competitiveness in All Sectors

French winemakers are re-establishing dominance in the global wine market after years of challenges due to the innovative approaches of New World producers.

 It seems that recent reforms have aided them, which have, among other things, brought a new way of labeling bottles in France – not only by region but also by grape variety. The latest data shows a 13 percent increase in French wine and spirits exports last year, reaching a record 8.74 billion euros, along with a strong rise in the export of so-called still wines. The French market share of these wines in the United States, which is on track to become the world’s largest consumer next year, has increased by two percentage points to 14 percent, at the expense of Australia. "Export data shows we are heading in the right direction. We must continue with reforms," said Louis Regis Affre, director of the French Wine and Spirits Exporters Federation (FEVS). According to him, the competitiveness of French wine has been boosted by two years of good quality harvests, 2005 and 2006, and a price drop of 20 to 25 percent. However, he warned that the crisis is not over and continuous changes are needed to achieve long-term competitiveness in all sectors.

A study by the American agency Delaitte and Cie/Deussen showed that foreigners find the French way of labeling wine incredibly complicated and containing names that are impossible to pronounce. At the same time, marketing campaigns are too dispersed and inconsistent. "They perceive France as an old-world country, and our wines as products that are too expensive, snobbish, and elitist," emphasizes Affre. To somewhat change this perception of themselves, French winemakers want to offer the world a more modern image of their wines, he adds.

One of the innovations within the French government’s plan to reform the wine industry is the establishment of new wine production regions that combine medium-quality wines and those of controlled origin. A new class of wine called "French Vineyards" has also been created, allowing the blending of medium-quality wines from the same grape variety from different parts of the country. The issue of exports is crucial for this industry, given the decline in domestic consumption. Therefore, it is turning to the U.S. – which is expected to take the top spot from the French in the ranking of the world’s largest consumers in 2008 – and China, with a daily per capita consumption of only 0.3 liters, and even Russia.  (H)