Devil's Advocate: The Need to Uproot 15% of the World's Vineyards

Robert Joseph sees parallels between the wine industry and a huge, dysfunctional furniture manufacturer.

Reading time: 4m

Robert Joseph with horns
Robert Joseph with horns

I was reading in the Economist the other day about UNIF – the Universal Furniture Co – a company you may never have heard of. It’s a huge concern that produces 26.7m tables and chairs every year, for sale across the world – mostly in Europe and the Americas. It does most of its manufacturing locally in each market but, because of the varying availability of specific materials, quite a lot of stock gets moved from one part of the planet to the other.

The striking thing about UNIF is its staggering inefficiency when it comes to estimating supply and demand. On average, over the last decade, its factories have annually produced 11% - around 2.9m - more tables and chairs than the company has been able to sell.

Worse still, far too often, when it has been able to find buyers, the price they have paid has barely covered the cost of production. And now, it seems, demand is slipping still further. What is to be done?

From furniture to wine

Regular readers will probably have guessed that UNIF is a figment of my imagination. I invented it to illustrate the state of a wine industry which, according to the OIV, instead of producing 26.7m pieces of furniture, turns out 26.7bn litres of wine. Of these, since 2012, every year, an average of 2.9bn have gone unsold. There was just one point in the graph  – 2017 – where, thanks to a small harvest, supply and demand reached equilibrium, but the following year’s excess of over 5bn litres helped get the surplus back to its normal level.

I know that some people will jump in at this point to complain that one cannot compare wine to furniture but I’d ask them, for the sake of an economic argument, to think in broad terms about the basic need for commercial products to be made and sold profitably

My dysfunctional imaginary furniture corporation is a useful conceit because it allows me to bring in an equally imaginary team of consultants tasked with devising a strategy to resolve its problems. Their first job would be to do ground-level research to understand why it has all gone so wrong.

Confusingly UNIF executives seem to have quite different explanations depending on where they happen to be located. In the US, blame is laid at the door of the poor quality and design and overpricing of the locally manufactured stuff, and an arcane distribution model. In the UK it’s all the fault of high taxes. These are also an issue in the Nordics, where sales are stifled by everything having to be sold through monopolies. In France, the finger is pointed at restrictions on how UNIF’s products can be advertised and promoted.

If the consultants were any good, they’d dismiss all of these as the kinds of line salesmen always come up with when trying to excuse themselves for failing to hit their targets. There is, they would conclude something very wrong with UNIF’s business model. Clearly, there is not enough innate demand for its products, and insufficient customers who’ll to pay the right price for them.

Given the range of styles UNIF is producing, and the decentralised way the company is managed, it isn’t possible to change the products easily or quickly, and the business lacks the funds and skills to market its way out of trouble.


Each April, the International Organisation of Vine and Wine (OIV) presents its report on the "Situation in the global wine sector". In 2023, production volumes fell, but so did consumption. And there is still a surplus.

Reading time: 2m 15s

Smaller would be better

The only solution is to slash production – not by 10%, which would still leave a barely profitable business with demand that is continuing to fall, but more likely by 15%. Prices would have to rise by at least this amount, but this would not be so hard to achieve in what would become a sellers’ rather than a buyers’ market.

To an economist, this would all make sense. But an economist would also have noticed two flaws in my use of UNIF for this argument. Unlike producers, furniture manufacturers are not subject to the vagaries of the weather – or threatened by climate change. Everyone, she’d also point out, needs at least one table and one chair. It’s hard to substitute them with anything else. Nobody needs wine.

In other words, the wine industry is in an even worse state than UNIF.

Most wine lovers, would be horrified by the idea of a vine-pull scheme involving 600,000ha of the world’s 4m or so of wine-producing vineyards. But, if you take a long view, the location and size of the world’s vineyards has always been a movable feast.

Movable vineyards

There are parts of northern France that no longer have vines – lots of them once grew close to the walls of Paris – and former European colonies where they have been widely introduced, and where overplanting has been encouraged by the relevant governments. Algeria has lost all but 56,000 of the 400,000ha of vineyards it had at the peak of its success. I’ve never heard anyone bemoan the loss of all that Aramon.

Likewise, how many people would oppose the pulling out of over 40m ha of tobacco plants that are still growing across the globe? How much sympathy dis there for the Asian farmers whose poppy seeds have been supplanted by cheaper, more powerful synthetic narcotics?  

It’s all a matter of perspective.

Even if you never get to read about UNIF in the Economist, you’ll see reports there of vines that are already being grubbed up in Bordeaux, California and Australia. There will almost certainly soon be a vine-pull in Rioja.

But this is just the start. No low-margin business can continue to throw away 10% of its production for ever. The question is not over whether we need to rip out huge numbers of vines, but which vineyards should suffer this fate. The danger, as experience in Australia has taught us, is that all too often we get this wrong. 

In a properly-ordered world, the wine industry - probably through the OIV - would be putting a lot of effort and cash right now into planning how to reduce volumes globally while improving quality.

This isn't happening, nor is it likely to do so any time soon.


Robert Joseph looks beyond the financially attractive top Grands Crus Classés, at the far less successful mass of Bordeaux and its sub-appellations where large swathes of vines are due to be uprooted.

Reading time: 5m



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