Inflation is eroding ALL profit margins for French winegrowers, and that’s now a fact

At this rate, it will only be possible to sell at a loss or risk losing markets by increasing sales prices”, claims Jean-Marie Fabre, chairman of France’s independent winegrowers’ organisation. Spiralling energy and raw material costs, which began this spring, account for the equivalent of 21% of the average sales price of a bottle of wine, excluding tax, according to the latest independent winegrowers' observatory, based on feedback from 600 producers to date. The profit margin of a winegrower varies according to regions and farms, and is around 12 to 20 % of the sales price of a bottle of wine, explains Fabre. Last May, a survey of 1,800 independent wineries revealed a 13% hike in the average sales price of a bottle of wine.

With its profit margins shrinking, the wine industry is campaigning for aid to support business and competitiveness, starting with extending debt facilities. Welcoming the recent announcement of a French price cap on energy for small businesses, the leader of the country’s independent wineries warns of the industry’s exposure to additional costs on dry goods produced outside France (bottles, boxes, labels, etc.). “We need to find a way of getting rid of the packaging and shipping costs that weigh heavily on our sector, which is efficient and must remain so”, he warns. Reporting that 92% of winegrowers sell their wines in bottles, Fabre points out that 32% of them are unable to meet their orders on time due to late deliveries of their dry goods. The issues have made it impossible for independent wineries to market their wines normally.