French Winemakers Can Now Increase Stock To Adapt To Weather Related Losses

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The French governing body overseeing wine appellation regulations, the National Institute of Origin and Quality (INAO), announced this month that wine producers are now allowed to hold back more stock, following recent losses caused by extreme weather conditions. The action enables winemakers to set aside a portion of any vintage in order to maintain a supply for future use. The INAO compared the action to "crop insurance" as a measure of adaptability.

The current stock storage rules date back to 2013, put in place in order to maintain a reasonable reserve in the case of adverse conditions resulting in reduced quantity. Prior to the June 2018 announcement by the INAO, wineries were allowed to hold back an amount equal to 10% of their stock.

The new ruling allows for retention of 20%, which can compound up to 50% over three years. The original adjudication applied to producers of red and white wine but excluded champagne and dessert wines. Considerations are being made to include the sweet wine appellations of Sauternes, Barsac and Monbazillac.

The Paris-based International Organisation of Vine and Wine (OIV) annual state of conditions report, which was released in April 2018, illustrated that 2017 global wine production was down 8.6% from 2016 figures. Harsh spring frosts, severe storms and summer droughts were to blame for drastic losses in Europe.

Wine in stock, particularly wine meant to age for several years, prevents against a shortage if a pattern of low yields, such as the experience of the European Union in 2017, continues as the trend. Already 2018 has brought a series of May hailstorms that damaged French vineyards -- in some parts of Bordeaux losses were estimated at 70%. At that time, Bordeaux’s Federation of ‘Grand Vins’ (FGVB) urged the government for support in the face of severe weather with devasting outcomes.

In March 2018, the European Academies Science Advisory Council (EASAC) released a statement indicating that "climate-related extreme events are rising". The report encouraged societal actions to mitigate economic damage and attempts at adaptation to these extreme events, confirming the forward-thinking approach taken by the INAO in this resilient ruling.

By Jill Barth 
June 30, 2018
Source: Forbes.com