Bordeaux Provides American Wine Regions With a Very Scary Lesson
It’s quite possibly the most consequentially negative headline I’ve read about wine in 30 years:
BOTTOM FALLS OUT OF BORDEAUX PRICES
It comes from a February 1, 2020 article by Wine-Searcher written by, “Wine-Searcher Staff”. It describes exactly what it says: “the price of bulk Bordeaux had fallen to less than a euro a liter, with a fair possibility that prices could crash even lower.”
What does this mean for many of the producers of Bordeaux wine? “At this price, you don’t live and you don’t even cover the costs. Below €1000, it’s difficult to even pay yourself a salary,” said Olivier Lavie, a wine trade accountant.
So, why? I have to quote again from the Wine-Searcher article because this particular explanation describes what happens to an over-regulated, Old World wine region when it faces continually increasing competition from New World wines that are not subject to arcane, centuries-old regulations:
” ‘At these prices, wine is cheaper than water,’ he told Wine-Searcher. ‘It’s the result of INAO and CIVB policies these past 15 years – like the infamous ‘typicity’ rules enacted in 2009 in the appellations’ technical requirements. This simplification of the taste was advocated by the CIVB, which spends €7 million telling the world that Bordeaux is ‘Many châteaux, one style’. It’s the negation of the specificity of place, the negation of ‘climat’. And you can easily foresee that the arrival of hybrids will finish this imposition of a ‘typical’ wine, an industrial wine. It’s the death sentence of Bordeaux, signed by our own institutions’ .” —Loïc Pasquet of Liber Pater
The incentive in Bordeaux due to the regulations that require certain grapes be used, certain growing techniques be employed and certain styles are duplicated year after year don’t provide Bordeaux producers with the flexibility to respond to new market realities and new competition. This is a huge problem for Bordeaux producers and other producers in Old World appellations that require similar adherence to old, arcane wine-producing and appellation-related regulations.
This is a lesson for American producers of wine and to those who represent the interests of the various AVAs across the country. Be very, very careful of the kind of restrictive rules you think are necessary to put in place in order to protect your appellation. Tie the hands of your producers enough and you will find the same producers have not nearly enough options when the time comes to make changes in response to a changing market.