Wine Industry in France

Wine Industry in France Etienne Montaigne, Professor Alfredo Coelho, Associate Researcher montaign@iamm.fr coelho@supagro.inra.fr

France: Evolution of the surfaces planted with vines (000 hectares) (1996-2010) - 0,9 % per year 900 79 77 77 73 72 71 70 69 800 700211 219 220 222 215 218 215 248 600 74 75 77 75 76 74 75 219 230 225 231 222 202 196 133 115 105 112 109 82 81 72 500 71 61 59 40 34 46 400 300 PDO wines 461 461 472 467 475 488 492 491 482 482 481 480 474 470 200 45 461 100 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 V.Q.P.R.D. vins de pays Vins de table Vins pour eaux de vie à AOC Source: FranceAgriMer

Evolution of the grubbing up of vines in France (hectares financed) (2000-2011) 16000 14000 14498 13963 13447 12000 10000 9451 8000 6000 7223 5964 4000 2000 0 683 1379 1535 338 1739 France Languedoc Roussillon Source: FranceAgriMer

France: The grubbing up of vines in the main wine regions (22,638 hectares) (2008-2011) Auvergne Burgundy Poitou-Charentes Centre Pays de la Loire Corse PACA Rhône-Alpes Midi-Pyrénées Aquitaine Languedoc-Roussillon 3 5 78 165 554 578 1261 1309 1382 1421 15882 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 Source: FranceAgriMer

France: Main wine regions Typical Farm M2 Typical Farm M1

France: Weather conditions across the regions (1998-2007)

France: Evolution of the main varietals grubbed up (co-financed) (2008-2011) Varietal hectares Carignan N 4914 Grenache N 3075 Merlot N 2672 Syrah N 2209 Cabernet Sauvignon N 1532 Cinsault N 1199 Gamay N 745 Cabernet Franc N 507 Chardonnay B 485 Alicante H. Bousch.N 449 Sub-total 10 varietals 17787 Top 10 varietals % of total surfaces grubbed up 79% Source: FranceAgriMer

France: Land prices for vines in 2011 (000 / hectare) Champagne (PDO) 868,3 Val de Loire Centre (PDO) 23,9 Burgundy (PDO) 202 Rhône-Alpes (PDO) 15 Gironde (PDO) 74 South-West (PDO) 12,8 Rhône Valley-Alpes-Provence (PDO) 34,3 Rhône Valley-Alpes-Provence (non-pdo) 11,3 Languedoc-Roussillon (PDO) 11,2 Languedoc-Roussillon (non-pdo) 10,8 Corsica (PDO) 15,6 Corsica (non-pdo) 8 France (PDO excluding Champagne) 49 France (non PDO) 10,6

1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 France: Evolution of the wine production (Million hectoliters) (1975-2011) 90 80 70 60 50 40 30 20 10 0 Source: OIV (2012)

France: Evolution of the production of wine & juices & musts (Million hectoliters) (2000-2011) 1000 900 800 700 600 500 400 300 Vins pour Cognac IGP/Vins de pays VSIG/Vins de table AOP/VPQRD 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: France AgriMer

Surfaces for Bio Wines have increased 3X in 4 years Evolution of the number of grape growers & surface of bio grapes and in conversion (2001-2012) Source: Agence Bio

Surfaces for Bio Wines have increased 3X in 4 years Evolution of the surfaces certified as organic grapes in the main regions (2007-2014) LR = 30% of total

France: Average Monthly Prices for Red Wines Without Geographic Indication (2000-2012) Prix en /.hl 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 6,00 Italie France Espagne 5,00 4,00 3,00 2,00 1,00 Sources : Contracts FranceAgriMer, ISMEA, "Semana Vitivinicola«/ OIV.

France: Average Monthly Prices for White Wines Without Geographic Indication (2000-2012) euro/.hl 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 6,00 Italie France Espagne 5,00 4,00 3,00 2,00 1,00 Sources : Contracts FranceAgriMer, ISMEA, «Semana Vitivinicola» / OIV.

France: Average Monthly Prices for Bulk Wines (2000-2010) ( /hl) Source: France AgriMer /Interprofessions 275 250 Burgundy 225 200 175 150 Sylvaner Beaujolais 125 100 75 50 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Bordeaux Cahors Corbières Gaillac prix bdx prix beaujolais prix bourgogne prix cahors prix gaillac prix cotes du rhone prix corbières prix rosé d'anjou sylvaner

France: Evolution of Wine Exports (1994-2011) 11 13,8 millions d hl en volume / 6,8 milliards d euros en valeur 21 10 9 8 Volumes + 7 % 19 17 15 7 13 6 5 4 3 2 1 94/95 95/96 96/97 97/98 Valeurs en milliards d'euros 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 Value +16 % 09/10 10/11 Volumes en millions d'hectolitres 11 Source: Ubifrance/Agreste/Douanes françaises 9 7 5 3 1

Evolution of average price (in %) French Wine Exports campaign 2010-2011 / campaign 2009-2010 25 20 15 10 5 0-5 -10 Switzerl. Third-Countries World Canada Italy Japan USA UK Denmark Sweden Belgium UE Germany Netherl. -10-5 0 5 10 15 20 Evolution of volumes (in %) (Source : Agreste/FranceAgriMer)

The Structure of Wine Farms in France

Wine Farms in France: Strong Geographical Identities 85 000 wine farms in 2010 780 700 hectares of vines (i.e. 3% of the SAU) Size of wine farms: 9,1 hectares/farm (average). The wine chain is highly specialised: 90% of wine farms in PDO or PGI Geographic indications dominate 4/10 grape growers < 50 years old Source: Agreste (2011)

Wine Farms in France: Evolution of the vine surfaces in the regions (2000-2010) Source: IGN/Agreste

Wine Farms in France: % of farm holdings specialised in a category of wines Wine regions PDO wines PGI wines PDO & PGI wines Other wines # farm holdings Loire Valley - Centre 75 4 4 17 4000 Rhône Valley - Provence 67 17 11 5 10000 Aquitaine 97 3 8100 Charentes - Cognac 1 99 4000 Alsace-East 100 3900 Burgundy - Beaujolais - Savoie - Jura 97 1 2 7300 Champagne - 100 13000 Languedoc-Roussillon 26 59 10 5 16000 South-West 41 29 10 20 2000 Corsica 54 19 14 13 200 France (metropole) 68 18 4 10 68500 Source: Agreste (2011)

Wine Farms in France: % of farm holdings specialised in a category of wines Economic dimension PDO wines PGI wines PDO & PGI wines Other wines Total Small farms 27 49 18 47 33 Medium farms (PBS > 25 000 ) 29 35 42 16 29 Big farms (PBS > 1000 000 ) 44 16 40 37 38 Number of farms 46600 12100 3100 6700 68500 NB: PBS Gross Standard Production Source: Agreste (2011)

France: Structure of Wine Farms (FADN 2005-2007) (source: B. Delord, UMR MOISA Montpellier, 2012) Region commercialisation prices prod-wine ( /hl) Champagne Bottled >600 Burgundy Bottled 300-600 Alsace Poitou- Charentes Aquitaine & Midi Pyrénées Bottled 300-600 Bulk-aoc 150-300 Bulk-vcc 80-110 Bottled 200-300 Bulk-aoc 80-110 Rhône Alpes Bottled 300-600 Languedoc- Roussillon Bulk-aoc 50-80 Bulk-vcc <50 PACACo (Provence- Alpes-Côte Azuer, Bulk-aoc 50-80 surf-vigne (ha) nb quest nb farms % sales bottled surf vines (ha) Wine prices ( /hl) Yields (q/ha) <2,5 11 1073 84 2,0 1231 133 2,5-5 25 1782 86 4,0 1104 129 5-10 16 1569 92 7,0 1261 132 5-10 10 357 58 8,4 403 76 10-20 11 326 48 13,1 467 72 5-10 10 324 76 7,4 462 93 10-20 11 291 81 13,2 456 98 2,5-7,5 10 499 4,9 166 99 7,5-30 10 276 10,5 130 95 5-20 10 770 12,7 47 138 20-50 10 594 28,0 65 131 10-30 12 565 37 15,6 235 61 >30 11 432 63 43,4 242 61 5-20 11 570 11,2 93 65 >20 14 483 31,8 90 66 5-10 10 554 84 7,6 420 73 10-30 8 326 85 16,2 412 80 10-20 13 889 14,3 60 51 20-50 11 470 27,9 61 55 10-15 13 1588 12,6 34 81 15-20 20 1619 17,7 34 82 20-30 22 1114 25,0 36 86 30-50 19 819 36,5 34 96 >50 9 217 72,7 41 84 7,5-20 10 470 14,4 72 56 20-50 319 27,7 68 57

Source: Guillaumin et al (2011) Languedoc Roussillon 3 different types of farm holdings (with different strategic behaviour): - Grape producers: strictly produce and market grapes - Crush grapes and market in bulk: these farm holdings integrate the processing/crushing of grapes in order to market the wine in bulk - Crushes grapes and markets packaged wine (bottles, bag-in-box ): fully integrates the wine chain (crushes, bottles and markets packaged wine)

Typology of Farm Holdings according to the use of practices taking into account the environment Source: Guillaumin et al (2011) Grapes Bulk wine Bottled wine Wines w/o GI --- -- + PGI -- - ++ PDO - = +++

Typical Farms in Languedoc & Aquitaine (2012-2013) Methods & Problems

The Data and Methods Typical farm in Languedoc Roussillon: 20 hectares of grapes Produces grapes and bulk wine Marketed under the Terra Vitis (sustainable) label Modern canopy management system: trellis with cordon de royat Density of planting: 4000 vines per ha Plantings include international varietals (Merlot, Cabernet Sauvignon) and Carignan The Languedoc farm uses a mix of family and hired labour (=120 hours/ha) There is a market for bulk wine but not a market for grapes

Typical farm in Languedoc-Roussillon Country France Region Languedoc-Roussillon Total farm size, ha 20 - full production, ha 18.5 - non-full bearing, ha 1.5 - other farm branch, ha 0 Lifetime of vineyard, years 40 years (average) Average time to first full yield after planting new vines 3 years Grape yield on farm, 2010 in t/ha 6 12 Share of irrigated vineyards (%) 0 Distance between the rows (m) 2.5 Total surface of these 6 international wine varieties, ha: Merlot, Pinot Noir, Syrah/Shiraz, Cabernet Sauvignon, Chardonnay, Sauvignon Blanc 14 Top 3 varieties grown - Name 1: Syrah/Shiraz ha 1: 5 - Name 2: Merlot ha 2: 3.3 - Name 3: Carignan ha 3: 2.2

Country Region France Languedoc-Roussillon Vines per ha 3,600-4,000 Distance between the rows (m) 2.5 Less favoured area No Legal form Family farm Decoupled payment, EU subsidies (per ha) 0 Subsidies (per farm) (e.g., for irrigation system, conversion of old vineyards, grubbing-up etc.) Yes Canopy management / production system Trellising system Cordon de Royat - selling grapes on the market (with or without formal contracts) or delivering them to the cooperative - producing and marketing bulk wine 100% - producing and marketing packaged wine Participation in private quality certification scheme Terra Vitis: sustainable viticulture Family labour (hours per year) 1,850 Hired labour (hours per year) 560 Seasonal workers (hours per year) 0 Use of own machinery yes Use of hired machinery / contractors / co-operative machine pool harvest & establishment Harvest 100 % machine

Vineyards in Languedoc-Roussillon

Vineyard in Languedoc (Hérault)

Vineyard in Languedoc (Hérault)

Data and Methods Typical farm in Entre Deux Mers (M2) (Bordeaux): 17 hectares of grapes 26 ha farm (diversification: forest, cattle, fruits) Produces grapes and bulk wine Marketed under the Agri Confiance (co-operative, sustainable) label Modern canopy management system: trellis with Double guyot Densities of planting: 2000 to 4000 vines per ha (in the same farm) Plantings include mainly international varietals: Merlot, Cabernet Sauvignon, Cabernet Franc in the past the regional focus was in white varietals, now reds dominate The Entre Deux Mers farm uses a mix of family and hired labour (=many activities outsourced through Entrepreneurs, Cuma (co-op) and Employers Joint Groups The roads to the market may vary: bulk wine sold to an unique cooperative, both to a co-operative and a wine merchant There is a market for bulk wine but not a market for grapes

Typical farm in Entre Deux Mers (Bordeaux) Country France Region Entre Deux Mers Total farm size, ha 26 - full production, ha 15.5 - non-full bearing, ha 1.5 - other farm branch, ha 9 Lifetime of vineyard, years 40 years (average) Average time to first full yield after planting new vines 3 years Grape yield on farm, 2010 in t/ha 7.2 12.8 Share of irrigated vineyards (%) 0 Distance between the rows (m) 4 3.5 2 2.2 Total surface of these 6 international wine varieties, ha: Merlot, Pinot Noir, Syrah/Shiraz, Cabernet Sauvignon, 14 Chardonnay, Sauvignon Blanc Top 3 varieties grown - Name 1: Merlot ha 1: 9.1. - Name 2: Cabernet Sauvignon ha 2: 4.3 - Name 3: Cabernet Franc ha 3: 1.8

Country Region France Entre Deux Mers Vines per ha 2000-2500 -3,300-4,000 Distance between the rows (m) 2.5 Less favoured area No Legal form Family farm Decoupled payment, EU subsidies (per ha) 0 Subsidies (per farm) (e.g., for irrigation system, conversion of old vineyards, grubbing-up etc.) Yes Canopy management / production system Trellising system Double Guyot - selling grapes on the market (with or without formal contracts) or delivering them to the cooperative - producing and marketing bulk wine 100% - producing and marketing packaged wine Participation in private quality certification scheme Agri Confiance: sustainable viticulture Family labour (hours per year) 1,680 Hired labour (hours per year) 420 Seasonal workers (hours per year) 0 Use of own machinery yes Use of hired machinery / contractors / co-operative machine pool harvest & establishment Harvest 100 % machine

Entre Deux Mers (E2M)

Vineyard E2M Landscape Gironde Blasimon the vine is connected with forest and other agricultural crops

Landscape La Réole (Gironde) Vineyard E2M

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