Overcoming the crisis

The French wine industry has been hit hard in recent months. Climate change is exacerbating the situation. The structure of the cooperatives is sustainable, but the call for reforms is growing. Iris Trenkner-Panwitz reports.

Cave du Château de Chénas / Credit: (C)2007 tous droits réservés
Cave du Château de Chénas / Credit: (C)2007 tous droits réservés

The French wine nation continues to go through hard times. At the end of March, it was thought that the storm had been weathered – thanks to the suspension of US punitive tariffs, the revival of the Chinese market and the gradual reopening of the Horeca Canal – but the momentous frost nights at the beginning of April literally put the new optimism on ice. The damage was in some cases immense. Grapes that were spared by the cold were affected by fungal infestation in many places due to the wet spring. Against this background, last year's discussions about the distillation of harvest surpluses seem almost grandiose. 

One positive effect: in addition to the reawakening of trade activities, the unpleasant harvest prospects have probably also led to a massive increase in wine sales in the first half of 2021, in many cases even exceeding the figures for the same half of 2019. 


New structures indispensable

In these turbulent times, it is once again evident what a supportive framework the cooperative model can offer compared to individual wineries. Almost 60 percent of all wine producers in France are members of a cooperative. The LCA-VCF, La Coopération Agricole – Vignerons Coopérateurs de France, represents the wine sector of the umbrella association of the Coopération Ag-ricole. Today, it brings together 570 cooperative wineries, associations and unions and accounts for about half of France's total wine production.

On 2 July 2021, the annual 48th Congress of the LCA-VCF took place in Colmar, Alsace. The central theme: "Anticipating and managing crises at the heart of the cooperative contract." To define their future direction, the members of all wine-growing regions discussed the expected harvest, harvest insurance, and the environmental obligations and development perspectives of the cooperative cellars, in view of the influences of climate change. 


Structural data of French cooperatives


These are burning issues because this year's harvest is unlikely to exceed 30 million hectolitres nationally after the devastating frost, as the director of the Coopération Agricole, Anne Haller, fears. President Dominique Chargé denounces that the current insurance status can no longer be maintained in view of the risks associated with climate change. Above all, the "multi-risk weather insurance" (MRC) should be targeted. In addition to damage coverage, the problem is that some insurance companies are now withdrawing from the market due to the increasing climate extremes. 

But many winegrowers do not even have insurance: a study commissioned by the LCA-VCF says that only 20,000 winegrowers in France have climate insurance, many of them only partially insured. This would correspond to a national winegrowing area of 48 percent. A cost-benefit analysis? Who knows?

There was also a debate about the intervention of the state as a reinsurer for damage amounts of 50 percent or more. Until now, vineyards were completely excluded from the agricultural catastrophe scheme, but this has been suspended in specific cases. The new decree of 6 July 2021 states that "the compensation rates for crop losses of table grapes, wine grapes (...) recognised as agricultural disasters related to the frost period from 4 to 14 April 2021, are 20 percent for damage between 30 and 50 percent, 30 percent for damage between 50 and 70 percent, and 40 percent for damage of 70 percent or more." 

This is the highest amount that can be paid under European regulations. In the case of 100 percent damage, the winegrower without insurance would consequently have to pay 60 percent out of pocket.


Heavy losses

But the health crisis also continues to be a concern. How have the cooperatives survived the crisis so far? "The hard facts of the last few months have left their mark," sums up Haller. "Overall, the turnover losses of the cooperative wineries during the lockdown amounted to about 40 percent. However, the situation was very different depending on the market orientation, cooperatives with a focus on food retail did well, but have a lower economic significance," summarises Haller. She is cautiously optimistic because of the opening and revival of the markets: "The market balance will not happen immediately. There are still many stocks in the various European countries," she points out. 

French cooperatives in numbers



Who with whom, is really just the question now. "Merging" continues.

Champagne region. There has been a merger between the Union Champagne and the cooperative Grauves. The Union now includes 15 cooperatives with 1,416 ha of vineyards and about 2,200 winegrowers. According to its own information, it is now the largest owner of Premier and Grand Cru sites in the appellation.

With the aim of becoming the second largest player (after the Moët-Hennessy group) in Champagne in terms of turnover, Nicolas Feuillatte (CV-CNF) is planning a merger with the Champagne Castelnau cooperative group (CRVC). Originally announced for June 2021, it is expected to take place in January 2022 at the latest. 

The umbrella cooperative group Alliance Champagne, one of the largest producers in Champagne, has recorded a significant exit. One of its three cooperative associations, the Coopérative Générale des Vignerons de la Champagne Déli-mitée (COGEVI) left the group on 1 October after 23 years. 

Sud-Ouest Region. The Vivadour cooperative group and the Vignerons du Gerland cooperative association are planning to pool their resources. The current economic context has prompted the businesses to do so, they said. The vote will take place in April 2022.
Foncalieu registers two new cooperative members. With the La Redorte winery and the Vignobles de Mon-tagnac cooperative from Hérault, they now unite 1,300 winegrowers and 6,700 hectares of vineyards. 


La Chablisienne in Chablis


What happened in spring 2021 was very important: The cooperative group InVivo with its subsidiary InVivo Wine and Cordier became Cordier by InVivo at the beginning of March, to which the group Vinadeis from the Languedoc has also belonged since April. The group now has six production sites and nine partner cooperatives with 3,600 winegrowers and 25,000 hectares of vineyards and it now produces 1.6 million hectolitres. The company estimates its annual turnover at €400 million. "Through the merger we have become one of the top three French wine suppliers," says Philippe Leveau, deputy general manager. The Corona crisis has also left its mark on them. But adversity also creates positives: "Crises are times that allow us to question ourselves, to go back to basics on the one hand and to innovate on the other," he reflects.
Region Var. Under the name Terra Provincia, the cooperative wineries Saint Roch de Vignes and Saint-Sidoine united in January this year. 

The Agricole Sud cooperative is planning to add two new associations at the beginning of 2022 with the cooperative wineries of Boûches-du-Rhône and Var. Vaucluse would also like to be brought on board. So far, a one-way street: as Vaucluse president Laurent Choveton metaphorically underlines, they don't want to be the "unruly Gaul," but they want to remain independent for the time being. 


Better future

Organic practices and sustainability remain big issues for French cooperatives. For the Rhonéa cooperative, another aspect plays a role: "We are a founding member of 'Vignerons Engagés,' and support the production of ethical and fair wines, adapted to the expectations of the market," says Rickman Haevermans. Fair remuneration of the winegrowers and the preservation of the environment are the basis for this. 

The preservation of the environment also has a "deadline" since 2019. At its national congress, the LCA-VCF reached an agreement with the ministers of the Confédération des vins IGP de France (VinIGP) that all farms must commit to environmental certification or organic farming within five years. This means that the protagonists are now working intensively on implementation. It goes without saying that this places great different demands on the winegrowers, depending on the topographical location of the winegrowing regions. It's a big package that will have to be tackled in the future. Perhaps the biggest task, however, awaits in just a few weeks: Then it will be a matter of getting the maximum yield and quality out of what will probably be a minimal harvest. A Herculean task, yes, but possible when handled together rather than alone. 

Iris Trenkner-Panwitz

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