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France Food and Drink Report Q3 2008Published by: Business Monitor International Published: Jul. 21, 2008 - 71 Pages Table of Contents
AbstractAs discussed in BMI's newly-published Q308 French Food & Drink Report, the French wine industry isset to be among the most highly impacted by the European Union (EU) wine reforms now formallyapproved by the Council of the European Union. Although, sales of the best quality French wine haveincreased rapidly over the past few years, partly thanks to growing demand in emerging markets, Francealso produces a large amount of low quality table wine, which often struggles to find a market. This partof the industry may shrink significantly after the full package of reforms is implemented.2007 was a record year for Burgundy and Champagne - two of the most highly prized and expensiveFrench wines. According to the Bureau Interprofessional des Vins de Bourgogne (BIVB), exports ofburgundy over the year increased by 14% in volume terms and generated a turnover of EUR718mn(US$1.1bn) - a rise of 21%. Meanwhile the Comité Interprofessionnel du Vin de Champagne (CIVC)reports that exports of champagne in 2007 were up by 7.3% on the previous year and set a new record. These record sales figures were thanks growing demand for high quality French wine in emergingmarkets such as China and Russia along with sustained growth in more traditional markets such as theUK and Japan. However, so far in 2008 there are signs that this rate of growth may have slowed - aspokesman for BIVB reports that exports of burgundy slowed in March and April 2008 meanwhile theUnion des Maisons de Champagne (UMC) reports that in the first quarter of 2008 sales of Champagnewere flat compared to the same period in 2007. This is largely due to a slump in demand in the US andreflects how closely premium wine sales are tied to economic prosperity. Despite this slowdown in 2008, the long term prospects for top-end French wine look very strong thanksto the growing demand for premium European food and drink products in emerging markets. However, atthe bottom-end of the industry things look less rosy and the package of wine reforms agreed by the EUcouncil is likely to lead to a significant decline in production. The reforms mean that EU subsidies for wine producers will be phased out by 2012 and inefficient anduncompetitive producers will be encouraged to leave the industry via a three-year voluntary grubbing-upscheme that will pay producers to decrease their number of vines. France's Languedoc Roussillon wineregion is likely to be among the worst hit by these reforms as it generates one of the lowest incomes perhectare in the EU. The wide scale destruction of vineyards, although economically sensible, is likely to bean emotive issue in France, as the countryside will be significantly altered. However, the reforms will alsomean the scrapping of planting rights that restrict the planting of new vines. This could potentially lead toa massive increase in planting in popular regions such as Bordeaux and Burgundy, and production of highquality French wines could therefore increase significantly Get Full Details About This Report >> |
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