The Economist Is Right About Wine

"The more this happens, the more devalued it becomes, and the less consumers want to pay for it"

The "This" Monsieur Patrick Aigrain, a wine economist, is referring to is the use of geographic appellations on wines. He’s talking about reference on wine bottles to the source of the grapes that went into the making of the wine. "Bordeaux", Russian River Valley", "Macon, "Rioja", "Anderson Valley."

He’s absolutely right.
(Alder at Vinography has taken on this issue himself and has an interesting perspective.)

To quote M. Aigrain completely from the article:

"Three quarters of all wine produced in Europe now bears a specific
geographic reference. The more this happens, the more devalued it
becomes, and the less consumers want to pay for it….We wanted to use AOC to help differentiate our offering in the New World, but now they have it too."

Aigrain is an economist. A wine economist in particular. What he is saying is that wines that carry a specific AOC (Appellation d’origine Controle—a place name) no longer garner that  much higher a price than the average wine because a far higher percentage of wines carry such a designation on the label. But there is something else going on here too that he is not talking about.

The most famous appellations such as Bordeaux and Burgundy now have stiff competition for the title of "Great Wine". There was a time when Bordeaux and Burgundy was the best you could get. If you bought a bottle that had either of these words on it you had the expectation that you’d get something better than average. That still may be true. The problem is that wines every bit as good come from a number of appellations in Australia, South Africa, Argentina, California, Oregon and numerous other winegrowing areas. This is what the good economist was really alluding to.

There is a lot of talk these days about what the French in particular must do to combat this competition that is leading to falling prices and falling sales. And all this talk is going to lead to a significant philosophical crisis within the French winemaking community.

It appears that the rather stringent laws that govern what a winemaker must do to put an appellation on their label in France are going to come under question. Every time this questioning arises and someone suggests that the restrictive laws are loosened, you will hear someone lament the fact that terroir is being devalued. And they will be right. Terroir—the notion that the land is the source of wines’ quality and character—is at the heart of the French labeling laws. It’s why a wine is labeled Bordeaux or Burgundy, rather than Merlot or Pinot Noir. If you move away from that concept by allowing, for instance, the varietal to take center stage on the varietal instead of the appellation, you are in fact devaluing the idea of terroir.

Will French vintners allow this to occur? Probably. Particularly if the sales crisis that is affecting the French wine industry isn’t corrected. I’m going to enjoy the philosophical debates that take place as the French talk this over because these conversations go to the heart of what wine is and should be.

Posted In: Wine News


Leave a Reply