In the context of everything else that is happening in the world right now, it may seem strange — and even inappropriate — to use a word like ‘war’ when talking about protesting French winegrowers. But this is the term the vignerons of the Aude in southwest France are using as a justification for their recent attacks on trucks full of Spanish wine. As Frédéric Rouanet, leader of the region’s viticultural association told a packed audience of producers on 23rd October: “Sometimes you have to make war to get peace.”
The enemy, for Rouanet and his supporters, is Spain, the neighbouring country which, they believe, is selling wine to French merchants at prices with which they cannot compete.
The figures are stark. In 2022, France was the biggest importer of Spanish bulk wine, shipping in 380m litres at an average price $0.44 per litre. France, by comparison exported just 121m litres globally at $1.61/l. An eighth as much at nearly four times the price.
Spain’s bulk wine does not just look cheap when compared to France. According to Comtrade 2022 figures, only North Macedonia, Canada — a statistical anomaly at $0.27 - Ukraine, Uzbekistan, Luxemburg and Azerbaijan offer wine for less. Chile, Argentina, Australia and Italy are all more than 40% more expensive, while even Moldova and South Africa — two countries often seen as a reliable source of varietal wines at bargain-basement prices — are more than quarter more costly.
Big in bulk
Spain is a very big producer of cheap bulk wine. Last year, the 1,154m litres that left its territory in tankers were roughly a third of the entire global bulk trade. Spain sold more than the next three biggest countries of Australia, Italy and Chile combined.
Looking at bottled wine, Spain is not quite as near the bottom of the price chart. With an average of €2.77/l, its wines are costlier ex-cellars than those of Armenia, Bulgaria, Romania, North Macedonia, Hungary, Moldova, and Georgia, the latter of which has sold a lot of inexpensive wine to Russia and China. But they are still far cheaper than any country in western Europe. You get nearly two-and-three-quarter bottles of Spanish wine for the price of one from France.
Looking at these prices might set a casual observer in mind of the discussions a decade or two ago when US and European manufacturers of a wide range of products complained about China exploiting a low-wage economy.
Don’t blame low wages
The situation between Spain and France is very different. These are neighbouring countries within the European Union. Spain has a minimum wage of around €1,000 per month, compared to €1,500 in France. The gap is significant, but not enough to explain the gulf separating these two wine industries.
The problem lies in something too few members of the wine industry are prepared to discuss: brand value. While most photographs of French protesting vignerons tend to be of red wine pouring out of tankers, the most recent attacks included the destruction of a large number of Cava bottles.
Sparkling wine prices
Here too, export prices have a story to tell. Thanks to Champagne, the average cost of French sparkling wine is a huge $19.58/l. Italy, the world’s biggest shipper of fizz, sells twice as much – at $4.41/l, a little more than Germany gets for its relatively modest Sekt sales. But Spain, the third largest exporter of sparkling wine can only manage to charge €2.81/L, despite the widespread use of the costlier classic method.
If Cava is languishing in the bargain bins and some top producers no longer wish to be associated with it, Spain’s best-known denominación, Rioja, is also facing a crisis, as Tim Atkin MW, author of widely respected reports on the region reveals in a recent article. Since 1985, its vineyards have swelled from 38,817ha to 66,798ha today, but this expansion has not been accompanied by a market demand for premium-price wines produced from their grapes. Bottles can be bought in Spanish supermarkets for under €2 and even this has not prevented the need for 30m litres to be distilled and calls for the uprooting of 10,000 ha of vines.
Similar calls, that are being heard elsewhere in Spain, have received less international media coverage than the widely published recent decision to reduce the size of the Bordeaux appellation by the same area.
Losing the taste
Attentive readers will have noticed that I have focused much of this post on export figures. There is a reason for this: Spain desperately needs to sell its wine to other countries because the Spanish themselves seem to be losing the taste for it at a remarkable speed. In 2010, they consumed 18.7l per person. By last year, the figure had halved to 8.5l; the estimates from Wine Industry Insights for 2023 are just 7.9l. That fall in consumption represents a total drop of nearly 5m litres.
As a wine critic, Atkin is to be congratulated for raising the issue of Rioja. Most wine chatterati prefer to focus on the undeniable success stories of Spanish wine and to turn their attention away from the economic woes. They may also have little time to spend talking and writing about the efforts of Frédéric Rouanet and his angry French vignerons. But these too are only shining a much-needed spotlight on an unsustainable situation.
In the short term, Spain’s failure to build value for its wine sector may be allowing large Euroblend producers in France and elsewhere to profit from selling large volumes of cheap wine with faux-Gallic labels, but the situation is not sustainable. France's and Spain's wine producers are both struggling to make a living and the first group having to compete with the second will simply lead to a growing number of cross-border fights and protests. And, as the bottom falls out of wine, it may do real damage to the industry as a whole.
Wine wars are fortunately far less violent than the ones that are filling our media, but they and their root causes will also need to be resolved. A far from simple task.