Wine war in France as winegrowers trash distributors who are importing cheap wines

Mr Lionel Puech.
Mr Lionel Puech.PHOTO: NYTIMES

French winegrowers turn militant as their products are being pitted against imports from other European Union countries

BEZIERS (France) • On a late evening in March, a group of winegrowers wearing black balaclavas forced their way into one of France's largest wine brokerages and ignited three Molotov cocktails. Within minutes, the business, Passerieux Vergnes Diffusion, was in flames.

Vigilante vignerons had previously raided two big wine distributors nearby, in the Languedoc wine-producing region, smashing offices and dumping a river of red wine into the streets.

The businesses had one thing in common: They had struck deals to import inexpensive wine from Spain, prompting a backlash among local winemakers who feared their livelihoods were under attack.

"I was stupefied," said Mr Rene Vergnes, a native of Languedoc who has run the Passerieux Vergnes wine brokerage business for 35 years. "Everything was destroyed."

He was the latest target in a wine war across France's largest winegrowing area, pitting independent wine producers against imports from other European Union (EU) countries and the businesses that deal in them.

The movement has sparked outrage in Spain, where the government demanded a crackdown on what it called a violation of the EU's free trade rules.

Spanish wine doesn't conform to our rules, but the EU requires us to accept it.

MR LIONEL PUECH, owner of a small vineyard in La Rouviere and co-president of the Young Farmers Association, a union that has admitted to joining some of the militant actions

Spanish producers also say the actions distract from graver threats to Europe's wine industry, including Britain's decision to leave the EU, which could slow exports to the bloc's biggest buyer of European wines.

And as the United States under President Donald Trump pivots towards protectionism, European winemakers are expected to face stiff competition from Australia and other countries as the EU seeks new trade deals to compensate.

While France often conjures the image of well-to-do winemakers in regal chateaus, many are small struggling vignerons, especially in this region, otherwise known as the Pays d'Oc, which built its industry for more than a century on low-cost table wines.

These vignerons say they are facing unfair competition, especially from Spain, where a now-fading economic crisis had slashed wine prices.

European rules, they insist, deepen their woes by requiring free movement of goods that sometimes do not meet production or quality standards in the importing country.

EU labelling standards also make it easy for retailers to pass foreign products off as French - a problem that plagues other European countries with their products.

Wine rebels have executed dozens of attacks in protest since last summer, including ambushing Spanish wine trucks at the border and dumping the payload on highways.

The most aggressive rebels are part of a secret commando organisation that targeted businesses such as Mr Vergnes', which had brokered a handful of Spanish wine contracts for French clients.

"Many people are just scraping by, but no one is listening," said Mr Lionel Puech, a co-president of the Young Farmers Association, a union that has admitted to joining some of the militant actions, none of which have yet resulted in prosecutions.

France has sought to calm nerves. Last month, the government held a meeting of French and Spanish wine representatives and ministers. They condemned the violence and agreed to strengthen relations.

In Languedoc territory, where vineyards stretch from the Rhone Valley to the Spanish border, such statements make little difference.

While some local wineries have invested in higher-quality products, many vignerons still produce inexpensive table wine for the budgetconscious market.

But with labour costs and taxes nearly twice as high as those in Spain, French producers struggle to compete on price.

France also imposes strict grape-growing regulations that are more costly to follow than rules in Spain and other European countries.

"Spanish wine doesn't conform to our rules, but the EU requires us to accept it," said Mr Puech, who owns a small vineyard in La Rouviere, a village north of Nimes.

"The EU is proving to be a hollow shell," he said. "It creates competitive disadvantages within the single market."

Spanish wine producers see that argument as an excuse for protectionism. "We can produce the wine at lower cost because salaries are less," said Mr Juan Corbalan Garcia, who represents the Agri-Food Cooperatives in Brussels. "But that doesn't mean we're doing unfair competition."

Yet when everything is tallied, small Languedoc vignerons take home little more than France's monthly minimum wage.

Even that can quickly turn negative if a harvest is poor or retailers cut orders.

The region was just starting to recover from a decade-old production crisis that pushed some winemakers into bankruptcy - and a handful into suicide - when harvests were hit again in 2015.

This time, wine merchants and brokers such as Mr Vergnes turned to Spain to fill the shortfall. When the harvest rebounded, Languedoc producers were stuck with vast amounts of unsold wine.

The winegrowers thought orders would resume when Spanish stock ran out. But French retailers were getting a hefty margin from selling Spanish wines.

Last year, France became the biggest importer of bulk wines from Spain, according to FranceAgriMer, a French agricultural agency.

Languedoc vintners revolted.

Mr Puech and other activists smashed thousands of bottles at retailers such as Carrefour, which carried cheap Spanish wines made to look French, with pictures of chateaus and lavender fields, and selling them at the same price as the competing Languedoc fare, creating sizable margins for the retailers.

In addition to halting deals with Spain, Mr Vergnes is ordering new labels for Languedoc wines festooned with the "Made in France" logo.

Local distributors are discussing better traceability information for wines to educate consumers about quality, he said.

Carrefour and other big retailers have also agreed to buy more Languedoc wine, give them prominent display and clearly mark foreign ones.

"Languedoc has always been a hot-blooded place," Mr Vergnes said.

"But I can understand that they are in a crisis," he added. "If they hadn't done all this, would things really change?"

NYTIMES

A version of this article appeared in the print edition of The Straits Times on August 28, 2017, with the headline 'Winemaker? No, vigilante'. Print Edition | Subscribe