The SW Summary: On France’s wine oversupply crisis, olive trees in the Gironde, dry-farming, and more

French government commits funds for distillation scheme to tackle “wine crisis”

The French wine sector is grappling with an oversupply crisis. In Decanter Chris Mercer reports on the recent commitment from the French government to fund a distillation scheme to help winemakers drain excess wine stocks this summer. Half of the €80m fund will come from national state funding, whilst the other half will be matched by the European Union’s European Agricultural Guarantee Fund (EAGF). The government hopes to run a second distillation programme in October, also matched by the EAGF, for a fund total of €160m in 2023.

Whilst the distillation scheme will help relieve some of the short-term pressures from inflation, industry leaders argue it is not enough. Wider structural issues in the industry must also be addressed, including climate change adaptation and shifting consumption trends. Read more here.

Winemakers in the Gironde diversify with olive groves

As French winemakers struggle with an oversupply of wine stock and uncertain cash flow, many are turning to alternative sources of income. Writing for Olive Oil Times, Paolo DeAndreis discusses how some winemakers in the Southwestern department of the Gironde are starting to plant olive oil trees. The warming climate is driving traditional southern cultivation further north and “the olive tree is no exception to this rule,” shares Hélène Lasserre, the director of conservation and research at producer association France Olive.

Olive groves provide struggling winemakers in the region with an avenue to diversify. Lasserre explains how most of the new olive groves planted by winemakers can be found in the southern part of the Bordeaux region, “not the Médoc nor its grand crus.” She notes how an estimated 15% of the vineyards should be shut down to keep the sector afloat, and “the olive tree could be a solution…as well as the almond tree and kiwi.”

Growing olive trees does not come without its own challenges, however. The region lacks the necessary water management infrastructure, historical knowledge of olive growing, and olive transformation facilities. Read more here.

“Do dry-farmed vines make better wine?”

This is the question Stacy Briscoe explores in Wine Enthusiast. As drought conditions continue to worsen throughout the West Coast in the U.S., some growers are turning to dry farming. This means they don’t use any irrigation, but instead rely on “residual moisture in the soil received during the wet season to supply the vines with water.”

Dry-farmed vines can produce highly complex wines given their broadly distributed deep root systems. The vines are able to absorb trace minerals from lower soil layers and nutrients from across the vineyard, which have “direct and indirect effects on the basic chemistry of the fruit.” Given the lack of a regular water source, dry-farmed vines are more resilient to changing temperatures and periods of extreme heat. Limited water also prevents excessive shoot growth, meaning “the vine focuses its energy on ripening, rather than producing green material.” As a result, dry-farmed vineyards tend to have earlier harvests and produce high-acidity wines with lower levels of sugar and alcohol.

However, dry-farming is not possible everywhere. Typically only vines older than three years can survive, and the subsoil (the layer below the topsoil) must be able to hold sufficient levels of moisture. Furthermore, Briscoe notes how the feasibility of dry-farming is also dependent on a range of environmental factors “that affect soil absorption and rate of drainage,” including temperature, winds, slope and aspect.

David Lattin, winemaker of Emeritus Vineyards in California, also points out how “dehydration events during the growing season can actually do more harm than good to the fruit.” Irrigation may be necessary and, if it’s “employed conscientiously in a way that mimics a normal rainfall pattern,” irrigated vineyards may develop deep root systems similar to dry-farmed vines. Read more here.

Rising EU wine exports to Russia

In Wine-Searcher Barnaby Eales reports on the rise in European wine exports to Russia during 2022. Ukrvinprom, the Ukrainian wine industry body, has made a plea to European companies to stop the exports. Volodymyr Kucherenko, director of Ukrvinprom, stresses how “every European wine sold in Russia provides tax for Russia, which is money used to buy weapons to kill Ukrainians.”

EU sanctions adopted in March 2022 allow EU wine companies to legally export wines to Russia as long as the value per bottle is below €300. Although the threshold of €300 was set to target oligarchs in the country, it has “controversially allowed the EU wine to expand in Russia’s growing billion-dollar wine trade” as the war in Ukraine continues. The situation became increasingly complex in November last year when Russian President Putin added wine and spirits companies to the parallel import mechanism. This scheme enables Russian companies to buy goods from any company outside Russia without approval from the trademark owners, meaning western brands lose all control of their distribution and sales.

Winemakers are faced with a moral dilemma and opinions among producers vary. Martim Guedes, co-CEO of Aveleda, a Portuguese wine company in the Vinho Verde wine region, argues: “Whether we export or not to Russia does not affect the war. Putin and his friends won’t be drinking our wines; our brands in Russia sell for $5 and $10 a bottle.” Guedes also notes that “all of [their] profits from wine sales in Russia go to non-profit organizations, the most of which help Ukrainian refugees settling in Portugal.” Read the full article here.