VINEXPO / FRANCE: French wineries must merge or fail - JeanJean president
The economic downturn has plunged French wine into a fresh crisis, making the need for consolidation in the industry greater than ever, the president of JeanJean has told just-drinks.
Sterling's collapse against the euro currency, destocking in major markets and ongoing competition from big firms in the New World are causing serious headaches in France's wine industry in 2009.
"It is sadly true that we are in a crisis," Antoine Leccia, president of leading French wine firm JeanJean, told just-drinks at the Vinexpo wine show.
French wine exports fell by 15.5% by volume and and 29% by value in the first three months of 2009, compared to same period a year earlier, according to figures released at Vinexpo by UbiFrance, an consultancy group linked to the French Government.
Falling sales have caused intense financial difficulties for some wineries in JeanJean's native Languedoc Roussillon, according to Leccia.
Recent months have seen a fresh wave of attacks on foreign wine installations by the region's militan winemaker group, the Comite Regionale d'Action Viticole.
One separate wine source told just-drinks that CRAV, which defines itself as a "resistance movement" and has been active since the 1950s, is again causing "fear" among workers in some of the region's larger wineries.
"Some people are living below the poverty line and we understand that. We understand how difficult it is," said Leccia. JeanJean itself was attacked by CRAV in 2005.
"The problem is that French wine companies are too small. We need greater concentration in the industry," Leccia said.
"It will take some time to achieve this, but it must happen. The three biggest wine companies in France have less than 10% of the market. In the US, the top three companies have more than 60% of the market and in Australia the top four have 80%. Even in Italy, the top three have 15%."
Leccia said that JeanJean, which has expanded across Languedoc and into Provence, Cahors and Bordeaux in the last six years, has shown it is possible to expand and maintain principles of terroir.
"We will remain a terroir-based wine company. That is our focus. But, the fact is that we have 70 sales people on the street [in France], and we need 150."
JeanJean, which exports 40% of its wines, has out-performed the market so far in 2009. Net sales were flat for the six months to the end of June, compared to the previous year, Leccia said. The group's sales grew by 12% to EUR180m in 2008.
Despite this, Leccia said that it remains an uphill struggle to persuade France's army of small winemakers that bigger can be better.
"Some of them in Languedoc would rather die than sell up," he said.
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