French wine producers will not look back on the 2024 vintage with any fondness. It has hit growers across the country with a bewildering array of problems – “frost, colour, hail, mildew, drought – take your pick,” said one grower somberly. While some regions have been hit harder than others, none have escaped. The consequences are likely to be felt in the short, medium and long term.
Volumes in 2024 always seemed to be below average. Midsummer estimates from the Ministry of Agriculture indicated a volume of approximately 43 million hectoliters. However, the ministry lowered this estimate to 40 million hl in September and increased it further last week.
The current forecast vintage stands at 37.5 million hl, which puts 2024 roughly on par with the frost-affected 2021 vintage and only just above 2017, the smallest France has seen in modern times.
The figures make for gloomy reading across the country. Compared to the five-year average, production in Burgundy/Beaujolais fell by 18% and that of the Loire by 14%, while production in the south-east, south-west, Bordeaux and Languedoc Roussillon fell by 16%, 25%, 22% and 23% has fallen. % respectively.
So what is the expected economic impact for French wine producers and for the markets?
In Burgundy the answer probably lies in higher prices. Over the past 15 years there has been strong demand across the board, coupled with generally small vintages, and as a result prices have risen relentlessly.
Producers were already buying up supplies before the minuscule 2021 vintage. 2022 and 2023 were both big, giving hope to those who thought they could open new markets instead of massaging allocations.
2024 marks another step backward and will likely exacerbate the kind of upward pressure that is causing Burgundy to price itself out of shelves and wine lists around the world.
“We have lost many regular Burgundy consumers,” says the commercial manager of a major negotiator. “When it comes to commercial wines such as Chablis, Macon-Lugny or Bourgogne Pinot Noir, elasticity is key and we tested this in [recent] years.”
Demand exceeding supply may have overheated the market for Burgundy, but the region is an outlier in this regard. The macroeconomic picture in the rest of the country is very different.
Consumers in France drink less alcohol in general and wine in particular every year. In 2001, the OIV estimated domestic wine consumption at 70 liters per capita. In 2011 this was 55 liters and in 2021 46 liters,= and the trend remains downwards.
The big declines have been in cheap wine and red wine – which has led to a crisis in Bordeaux. For years, a booming Chinese market masked the trends, but as China has slowed down, the underlying problems have become apparent. The negotiators have stopped buying, bulk prices have fallen through the floor and millions of liters of Bordeaux Rouge sit unsold in tanks.
A small vintage in volume is absolutely not good for Bordeaux.
Franck Bijon, Vignobles de la Rose
Given the oversupply, a three-quarter vintage may not seem so bad, but Franck Bijon, general manager of Vignobles de la Rose, disagrees.
“A small vintage in volume is absolutely not good for Bordeaux,” he says. “No volume entails high costs, so properties have no room to maneuver to set an attractive price.”
In other words, producers will be left with the near-impossible task of stimulating tepid markets with firm prices and massive amounts of inventory.
It is not a different picture in the major wine regions of southern France. Languedoc, for example, has seen four minor vintages out of the last eight. Coinciding with post-Covid supply chain issues and inflation, upward price pressure has been significant.
The timing could hardly be worse, as it comes at a time when much of what is being made – full-bodied, cheap red wines – is becoming increasingly difficult to sell, both at home and abroad.
Pierre-Alexis Terrier, head winemaker at Collovray-Terrier, says he can foresee price increases for Pinot Noir and Chardonnay, but is “not sure that prices will increase on a large scale.” [production]”. In other words, a volume drop of more than 20% corresponds to a comparable drop in income.
Dissatisfaction with the current situation in the south is growing. Over the past 12 months, growers have emptied imported tankers of Spanish wine and blown up a regional government office.
“Of course producers are concerned about the low quantities,” says Helene Taillefer of Domaine des 2 Sources. “That is why grubbing-up campaigns will take place.”
Grubbing – Arrachage – involves paying growers to remove vines to balance supply and demand.
In 2023, the French government and Bordeaux CIVB drew up a plan that involved paying 6,000 euros per hectare to uproot an expected 9,500 hectares of Bordeaux vineyard. While it is a step in the right direction, most observers believe the region needs to increase at least double that amount to reach equilibrium.
This month, the French government announced a new €120 million grubbing-up program that it hopes will clear 30,000 hectares of vineyards in the country’s wine regions. Growers are paid €4,000/ha to clear vineyards – and are not allowed to replant until 2030.
Growers have until December 31 to register for the scheme and it is expected that acceptance will be high.
This may be the true meaning of the 2024 vintage. Small, difficult, expensive and largely unwanted, it could be the final straw for many.
Removing 30,000 hectares is still less than 5% of the total French vineyard – not enough to rebalance the market. The strong demand for uprooting may now lead to more money becoming available for further uprooting Arrachage plans in the near future.
Three of France’s smallest vintages have taken place in the last eight years, but as vineyards disappear we can expect crushes of less than 40 million hl to become increasingly common.
“Why 2024 vintage could be the final straw for vintners in France” was originally created and published by Just Drinks, a brand owned by GlobalData.
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