CRISIS IN THE FRENCH WINE INDUSTRY

29 April 2025

Looking at the crisis in the French wineries industry. A representative case is that of a now-elderly gentleman - we shall call him Luc Raisinsec - who, about 20 or 30 years ago, combined his land with a neighbour's, making a splendid vineyard of some 60 hectaires of contiguous cultivated vine.

Many factors have combined to force viticulteurs into liquidation, the banks recover their loans of course, and some people must be getting marvellous chateaux in one of the best corners of France for a song.

Since the time of M. Raisinsec, his family has been obliged to halve the land under their cultivation.

The family receives aid from the local municipality to remove vines, or they sell the land to green washing companies who plant trees to set against greenhouse gas quotas.

Now they are looking to sell another 10 hectaires.

What is going on here? And what efforts are being made to save one of France's finest industries? What can viticulteurs expect for their futures and the futures of their children?

The French Wine Crisis: Causes, Impacts, and Responses

1. Introduction

French wineries face an unprecedented crisis, notably in regions like southwest France, exemplified by forced liquidations such as that experienced by a 60-hectare estate. This article explores economic, environmental, regulatory, and generational factors driving this industry turmoil.

2. Economic Pressures and Market Shifts

• French wine consumption nearly halved from 46 million hectolitres (1970s) to 24 million (2023).

• Structural surplus of 4–5 million hectolitres, especially in Bordeaux and southwest France.

• Decline in global demand, notably from China, has severely impacted exports.

• Collapse of bulk wine prices (from €800/barrel in early 2000s to €650–€700 today, far below production costs).

• Wine liquidations in Bordeaux resulted in sales as low as €0.05 per bottle, highlighting desperation.

3. Environmental Challenges

• Climate change causing severe droughts, heatwaves, and damaging spring frosts.

• Increased disease pressures (e.g., downy mildew), reducing yields and increasing costs.

• Climate adaptation expensive and limited by strict AOC regulations.

4. Regulatory and EU Constraints

• EU policies like planting rights and crisis distillation partially manage surpluses but impose bureaucratic delays.

• Strict French appellation (AOC) regulations restrict vineyard flexibility and adaptation.

• High labour and environmental compliance costs further strain growers.

5. Generational and Social Changes

• Aging vineyard owners without successors leading to farm abandonment.

• Younger generations less interested in viticulture due to poor financial outlook and lifestyle demands.

• Changing consumer preferences: younger people drinking less wine, favouring beer and non-alcoholic beverages.

6. Regional Impacts: Focus on Southwest France

• Bordeaux experiencing severe oversupply: 1,371 growers struggling, covering 35,000 hectares.

• Forced uprooting schemes (around 10,000 hectares) to balance market supply.

• Lesser-known southwestern appellations like Bergerac, Gaillac, and Cahors also face financial distress and surplus stocks.

7. Overproduction and the Red Wine Glut

• Excessive wine production creating massive inventories of unsold red wine.

• Dramatic drop in red wine demand domestically and internationally.

• Generic wines suffer most; distinct, quality-driven products remain more resilient.

8. Wave of Closures and Liquidations

• Sharp increase in insolvencies: Bordeaux alone saw 265 vineyard insolvencies in 2024 (up 58% year-on-year).

• Auctioning of wines at negligible prices becoming increasingly common.

• Cooperative cellars and wine négociants also under severe financial pressure.

9. Government and Industry Responses

• Crisis distillation fund (€170 million EU/French initiative) converting surplus wine to ethanol.

• Vine uprooting compensation scheme implemented to permanently reduce vineyard area.

• Emergency financial aid: debt relief, tax deferments, bridging loans to struggling producers.

• Increased industry promotion, market diversification, and tourism initiatives.

10. Paths to Transformation and Recovery

• Shift towards premiumisation: producing less wine of higher quality (organic, niche markets).

• Diversification into wine-adjacent products (non-alcoholic wines, grape juice, craft beverages).

• Growing importance of wine tourism, direct sales, and consumer engagement.

• Adoption of climate-resistant grape varieties and innovative vineyard management techniques.

• Potential market stabilisation by 2025–26 through ongoing interventions and adaptive strategies.

11. Conclusion

French wineries, particularly in the southwest, face a critical transformation. Short-term measures are providing emergency relief, while long-term strategies aim at creating a leaner, more resilient industry. Despite severe challenges, optimism persists around building a smaller, sustainable, and adaptive wine sector fit for future demands.

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References & Sources:

• Laurence Girard, Le Monde (2023, 2024)

• Jacques Dupont, Le Point (2024)

• BFMTV / Sud Ouest (2024)

• Alexandre Abellan, Vitisphere (2025)
  

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Listen to a lively discussion 

Aimed at raising awareness of the crisis and human suffering facing viticulteurs, especially in South West France:

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