Why 2024 vintage could be final straw for wine growers in France

France’s wine producers will not look back with any affection on the 2024 vintage. It has hit growers across the country with a bewildering array of problems – ‘frost, coulure, hail, mildew, drought – take your pick’, one grower said gloomily. While some regions have been more affected than others, none have escaped. Repercussions are likely to be felt in the short, medium and long-term.

Volumes in 2024 always looked likely to be below average. Mid-summer estimates from the Ministry of Agriculture suggested around 43m hl. However, the ministry revised this estimate down to 40m hl in September and then wrote it down even further last week.

The current predicted vintage is 37.5m hl, which puts 2024 roughly on par with the frost-battered 2021 vintage and only just above 2017, the smallest France has seen in modern times.

The numbers make for sombre reading right across the country. Compared to the five-year average, Burgundy/Beaujolais production is down by 18% and the Loire by 14% while the South-East, South-West, Bordeaux and Languedoc Roussillon are off by 16%, 25%, 22% and 23% respectively.

So what is the expected economic impact for France’s wine producers and for markets?

In Burgundy, the answer is likely to be higher prices. The last 15 years have seen strong demand across the board, coupled with generally small vintages and prices have risen relentlessly as a result.

Producers were eking out stocks even before the minuscule 2021 vintage. 2022 and 2023 were both large, giving hope to those who felt they would be able to open up new markets rather than massaging allocations.

2024 represents another step back and is likely to exacerbate the kind of upwards pressure that has seen Burgundy pricing itself out of shelves and wine lists the world over.

“We have lost many regular Bourgogne consumers,” said the commercial manager of one large negotiant. “When it comes to commercial wines such as Chablis, Macon-Lugny or Bourgogne Pinot Noir, elasticity is key and we have tested it in [recent] years.”

Demand outstripping supply might have overheated the market for Burgundy but, in this respect, the region is an outlier. The macro-economic picture across the rest of the country is very different.

Consumers in France are drinking less alcohol generally and wine in particular every year. In 2001, the OIV put domestic wine consumption at 70 litres/capita. It was 55 litres in 2011 and 46 litres in 2021,= and the trend remains downwards.

The big drops are in cheap wine and red wine – which has led to a crisis in Bordeaux. For years, a buoyant Chinese market masked the trends but, as China has slowed, so the underlying problems have become evident. Negotiants have stopped buying, bulk prices are through the floor and millions of litres of Bordeaux rouge are sitting unsold in tanks.

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Given the oversupply, a three-quarter-sized vintage might not seem so bad but Franck Bijon, general manager of Vignobles de la Rose, doesn’t agree.

“A small vintage in volume is definitely not good for Bordeaux,” he says. “No volume gives a high cost, so properties will have no room for manoeuvre to set an attractive price.”

Producers, in other words, will be left with the nigh-on impossible job of stimulating lukewarm markets with firm prices and vast amounts of stock.

It’s a not dissimilar picture across the big-volume wine regions of the south of France. The Languedoc, for instance, has seen four small vintages out of the last eight. Coinciding with post-Covid supply chain / inflation issues, the upward price pressure has been significant.

The timing could hardly be worse, coming as it does at a time when much of what is made – full-bodied, inexpensive red wines – are ever harder to sell both at home and abroad.

Pierre-Alexis Terrier, chief winemaker at Collovray-Terrier, says he can foresee price rises for Pinot Noir and Chardonnay but is “not sure that prices will increase much on the mass [production]”. A 20%+ drop in volume, in other words, will equate to a similar drop in income.

Discontent with the current situation in the south has been growing. In the last 12 months, growers have emptied imported tankers of Spanish wine and blown up a regional governmental office.

“Of course, producers are worried about the low quantities,” says Helene Taillefer of Domaine des 2 Sources. “This is why grubbing up campaigns will take place.”

Grubbing up – arrachage – involves paying growers to remove vines in order to balance supply and demand.

In 2023, the French government and Bordeaux’s CIVB put together a scheme paying €6,000 ($6,508) per hectare to uproot a projected 9,500ha of Bordeaux vineyard. While a step in the right direction, most observers feel the region needs to pull up at least twice that to be in balance.

This month, France’s government announced a new €120m grub-up scheme it hopes will remove 30,000ha of vineyard across the country’s wine regions. Growers will be paid €4,000/ha to uproot vineyards – and are not permitted to replant until at least 2030.

Growers have until December 31 to apply for the scheme and uptake is expected to be strong.

This, perhaps, is the true significance of the 2024 vintage. Small, difficult, expensive and largely unwanted, it could well be the final straw for many.

Removing 30,000ha is still less than 5% of the total French vineyard – not enough to rebalance the market. So strong demand for uprooting now may well lead to more funds being available for further arrachage schemes in the near future.

Three of France’s smallest vintages have occurred in the last eight years but, as vineyards disappear, we can expect crushes below 40m hl to become increasingly common.

“Why 2024 vintage could be final straw for wine growers in France” was originally created and published by Just Drinks, a GlobalData owned brand.

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