French brokers are more worried about the amount of wine to distil than the price

Tuesday June 09 2020 by Vitisphere

The unprecedented coronavirus crisis is having varying effects on French wine regions, depending on their market dynamics, and is worsening existing trends.The unprecedented coronavirus crisis is having varying effects on French wine regions, depending on their market dynamics, and is worsening existing trends.

The French distillation campaign is due to open from 4 to 19 June with prices now set per hectolitre at €58 for wines without a geographical indication and €78 for appellation wines. The aim of the measure is to remove a surplus of wines from the domestic market caused by lockdown restrictions and a slump in sales. Although the possibility of the government (or even Europe) extending the measure is still in the offing, the volume that can currently be distilled is limited, and ranges from 1.9 to 2.5 million hectolitres with current funding. Regions interested in joining the scheme already fear that funding will be insufficient to go around. “Crisis distillation is not the silver bullet and hinges on volumes. Distributing funding among regions will be a challenge - the South has expressed a lot of interest, as has Bordeaux”, summed up Claude Freyermuth, chairman of the Alsace wine brokers’ association.

“We are waiting to see what comes of the distillation campaign. Bordeaux is going to be a strong contender, as are the Loire Valley and Alsace which have been struggling for years. I think we're going to run out of volumes that can be distilled, there's a lot of wine on the market”, commented Louis Servat, chairman of the Languedoc-Roussillon wine and spirits brokers’ association. Stressing that the crisis has not impacted the market for PGI Pays d'Oc, Servat believes that in the South of France “our major problem is appellations. We’ve been struggling for almost two years now, ever since Bordeaux began to plummet, dragging us along in its aftermath. We have 18 months of appellation inventory compared with 3 for PGIs”. Although uncertainty regarding the volumes to be distilled remains high, there is one recurrent certainty - Bordeaux will be the most needy as its slump in sales has weighed most heavily on its economy.

 

 

 

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