Geographic Indications and International Trade (GIANT)

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I. Identication

The Issue

In the mid-nineteenth century, plants were imported with no regard whatever to the possibility of introducing pests or diseases. The first discovery of pest infestation occurred in 1863 when an "unknown disease" surfaced in France. By the time the "disease" was identified and a remedy was implemented, almost half of France's vineyards had been wiped out. The French discovered that a certain root louse called Phylloxera was devastating their vineyards. The only available solution was to plant phylloxera resistant American and hybrid vines. The planting of these varities proliferated throughout France through the 1950's since they were productive and required less care than pre-phylloxera types. When the French government began addressing the problem of wine overproduction in the 1950's, one goal was to improve the composition of French vineyards. New plantings were forbidden without governmental permission;grape varities were classified by wine quality; and subsidies were offered to uproot vines. American varieties were subsequently prohibited and hybrids eventually had to be uprooted. With continued excessive production, the government adopted the Plan Chirac between 1971 and 1973, which was designed to eliminate some vineyards and to modify others by replacing lower-quality, high-producing varieties with higher-quality, lower- yeilding ones. The introduction of the European Community meant that wine could move freely among member states. French surpluses were amplified by a large inflow of cheap Italian wines. Low- quality French wines found few buyers, and stocks piled up at the wineries. A French problem had become a community problem, and the Plan Chirac became the model for a community-wide response to the problem of wine surplus.


History of the Wine Industry in France

The landscape of the French wine industry has changed considerably since 1860. The impetus for change was brought about by a microscopic bug called Phylloxera, which is the name of a genus of aphids in the Hemiptera order. There are 70 different forms but only 3 are damaging to vines. This indigenous American insect, was found to inject an irritant substance onto the grapevines. In the first year, a vine or two, would start to sicken, the leaves yellowing at first, the edges the turning red, the leaves finally drying up and dropping. The affliction would then spread to neighboring vines. The next year, bunches of grapes dried up and fell off. By the third year, the vine was dead. The French decided to adopt the American idea of grafting rootstocks to remedy their problem.

By the turn of the century, the only question left was what sort of graft and what kind of stock should be used. America came to France's aid, by providing the winegrowers with a certain rootstock immune to phylloxera. The solution to the decline problem' was to find a hybrid combining the quality of the desired grape with a resistance of immunity to phylloxera. Since American grapes were thought to produce bad wine, the grafting of European grapes onto resistant American rootstock became the widespread practice. The grafting of plants was almost universally embraced since the only real drawback to using American rootstock was the fact that it had half the lifespan as the native-grown stock. Although, the stock was said to have very little influence on the flavor of the wine, the Burgundy region prohibited the import and planting of American varieties until 1887. Proprietors of the famous vineyards were afraid of spoiling the reputation of their finest wines.

The effects of Phylloxera on vine-growers and their industry in France was substantial. Ancillary products such as barrels, corks, tools and their trading were also negatively affected. Many in the wine industry were forced to emigrate to Algeria or America. Those who stayed cursed the Americans and their pest. The US came in for considerable abuse for having sent their phylloxera to Europe. Nonetheless, it was not the philosophy of the age to impose any such restraints on business' as a prohibition of imports on phytosanitary grounds, an attitude that was later to change when it was realized that pest control laws regulating imports could be a method of protecting home production without imposing customs prohibitions and thus giving rise to retaliation by the countries affected. In 1881, at the Berne Convention, an international agreement aimed at preventing the spread of phylloxera was established. The signatories were France, Germany, Austria-Hungary, Switzerland, Luxembourg, Belgium and Serbia. The agreement can be viewed as somewhat successful since considerable areas of the globe are not yet touched by the pest-for instance, Crete, much of Russia, parts of California. Since trade treaties would not allow customs duties to be placed on the import of wine from abroad, Italy and Spain profited immensely from the French disaster.

The influx of phylloxera forced a change in the varietal composition of French vineyards. A national downward trend in wine consumption and changing consumer attitudes towards the quality of wine necessitated further alteration of French vineyards and the wine industry. Total hectarage area has shrank by 31% between 1968 and 1988, primarily due to a shrinking domestic market. Unfortunately for producers, vineyard yields rose concurrently with the declining consumption. Exports were nowhere near sufficient to absorb the surplus,so by the mid-70's the wine excess was some 30 million hectoliters annually.

Wine in France, Europe: Boon to Boom

Overproduction has always been a phenomenon for the leading European wine-producing countries. France has historically reacted with conviction to all aspects of the problem. In 1907, riots and death resulted from grower protests over low prices, caused by too much wine on the market. Similar market problems in the 1930's led to the enactment of the Statut de la Viticulture, a legal code designed to help ensure supply- demand balance in production. In the 1950's when domestic per capita consumption was at its peak, France was producing more wine than the populace could drink. No other country devised a Plan Chirac for improving lower-quality, abundant-quantity producing regions. In 1975 a crisis arose due to free flow of wine throughout the European Community. Wine surplus had reached a level unacceptable to Community officials. The following year, the EC established a regulation, EEC 1163/76, that offered growers a subsidy for uprooting vines. Subsequent regulations raised the subsidy and required that vineyards not be replanted.

For more than half a century, the French wine industry had served the market, without any great change in varietal character. Anyone who has associated France with quality wine and grapes might be astonished to learn what the French were fermenting as recently as the late sixties. After a phylloxera infestation in the late nineteenth century, growers planted phylloxera-resistant American and hybrid vines abundantly in many parts of France. The new hybrids often found their way into the best vineyards. That the wines were of lower quality mattered little as long as the French were willing to drink them in massive amounts.

By the end of the 1950's, a surprising one-third of the wine grapes in France had hybrid or American pedigrees. When the problem of overproduction came to be addressed by the French government, American and hybrid varities were targeted for removal. The EC, in addition, offered subsidies not only for hectarage reduction but for replanting recommended varieties. This restructuring program, authorized by EEC directive 78/627, contributed to the virtual elimination of the hybrids and American varities. The period since 1958 has been an age of plantings in the recommended category. Wine cognoscenti recognize a three-fold division: common recommended varieties,such as Carignane; higher quality varieties, such as Grenache Noir, often called enhancers; and premium varieties, such as Cabernet Sauvignon and Merlot, frequently referred to as aromatics.

The second period, since the mid-1970's, has marked the most significant change in French winescape since the replantings after the phylloxera scourge of the late 19th century. The era of premiums was at hand, a reflection of the changing French tastes in wine. Merlot, Syrah and Cabernet Sauvignon, all premiums made up more than half of the hectarage by 1988. Abundant producers were finally being displaced by higher-quality grapes throughout France. Until the 1950's and 1960's, when the glutted wine market began severely harming French growers, the country's highest-quality wines, AOC, were produced chiefly in the most famous wine-growing regions: Bordeaux, Burgundy, Champagne,and the northern Rhone valley.

Regional Trends in Wine Production

The areal diffusion of the premium varieties from the famed terroirs, Burgundy and Bordeaux, can be best explained by wine production trends outside France. Producers of wine in California and Australia had gained recognition in the 1970's for high quality wines made from varieties that came from traditonal high-quality French districts. French producers outside of the traditonal areas where premium varieties were grown began experimenting with them in the hopes of improving yields.

In Languedoc, Provence, the Midi-Pyrenees and the Loire Valley, growers began planting the famous grapes of Bordeaux and of Burgundy in large numbers and continue to do so. This development explains the huge expansion of varieties such as Merlot, Cabernet Sauvignon, Cabernet Franc, and Chardonnay outside their AOC regions. In nontraditonal areas these grapes generally cannot be used in what are legally considered the best wines, the AOC category. In Languedoc, for example, AOC red wine may not contain any Bordeaux-type grapes; Bordeaux-type wines from Languedoc at best can be called vin de pays(country wine), a bare notch above the lowest category,vin de table (table wine), which includes anything fermented from a grape.

With the diffusion of Bordeaux and Burgundian varieties to new regions, French vineyards have become more uniform Varieties such as Cabernet Sauvignon, Merlot, and Chardonnay, previously internationalized, are now being nationalized throughout much of France.

French wine industry in perspective

No other leading wine-producing country had such a high concentration of hybrid varieties as did France in the 1950's. No other country devised a Plan Chirac for improving lower-quality, abundant-quantity producing regions. No other wine bureaucracy matches the breadth and complexity of the French one. The French experience is not singular however. The increasing importance of the French premium varities, both in their traditonal areas and around much of the rest of viticultural France, replicates patterns in many other locations. France has largely followed the lead of other areas, especially California.

In the late 1960's California growers planted large amounts of classic French varieties, and wineries attempted to make high- quality wine. California soon proved that it could produce world- class wines from new vineyards in new wineries. Australia then followed suit with most of the same grape varieties. The success of classic French varities in these and other parts of the world commanded the attention of other Europeans. In the 1970's, Cabernet Sauvignon, Chardonnay, and Merlot gained footholds across southern and eastern Europe.

The surge in planting, especially the Bordeaux varieties in nontraditional parts of France, thus owes much to the examples set by other countries. Because of local tradition and actions of the French wine bureaucracy, diffusion afar preceded diffusion nearby, and the success of distant plantings prodded dispersal at home. Tradition and economic protectionism proved far greater barriers than distance.

One-third of the French winescape has disappeared, and parts of France that previously grew measurable amounts of wine grapes have been reduced to viticultural insignificance. Hybrid varieties are now uncommon, and lesser vinifera varities occupy greatly reduced areas. Vineyards will continue to be removed, and others with common varities will be replanted to premium ones. The wine surplus will likely continue, and the complications of French membership in the EC, plus the entry of abundant amounts of Spanish and Portugese wines into EC trade, promise no immediate end to the problem for the French and the Community as a whole. The adaptability of an industry steeped in archaic tradition based upon a long cultural legacy will be greatly challenged by the further enlargments within the EU as well as the ever-increasing globalization of international commerce.

3. Related Cases

KeyWord Clusters

  1. Trade Product = Wine
  2. Bio-geography = Temperate
  3. Environmental Problem = Species Loss, Land

4. Draft Author and Date:

Dan Sheahan 11/22/96

II. Legal Clusters

5. Discourse and Status:

Agreement and Complete

6. Forum and Scope:

EU and Regional

7. Decision Breadth:

2 France and EU

8. Legal Standing:

Domestic law and EC directive

III. Geographic Cluster

9. Geographic Locations

a. Geographic Domain: Europe

b. Geographic Site: Western Europe

c. Geographic Impact: France and EU

The EC directives put into place to disincentive mass wine production were born out of economic necessity due to the huge wine surplus in the EU. The ramifications of such regulations on grapegrowers are a cause for concern throughout Europe. European Governments, recognize the great public sympathy towards the support of farmers and maintenance of the rural population, particuarly that of France. The Agri-Environmental Action Programme of 1992 gives recognition to the dual role of farmers as 'producers and stewards ot the countryside.' The difficulties surounding the issue of agriculture for GATT negotiations demonstrates its historic importance to the European people. An article in the Journal of Common Market Studies asserts that the"contrasting responses to the challenges posed by GATT say more about national history, traditions, and culture than the implementation of farm subsidy regimes."

The French peasantry has always held a special relationship with the French State. The French state has traditionally intervened directly in agricultural matters, such as the replantation of French vineyards after the outbreak of phylloxera in 1870. The wine industry has enjoyed a particularly supportive rapport with the State. As a result the sweeping changes imposed upon the French wine industry by the EU and their own government are difficult to reconcile.

The importance of wine in France left the goverrnment especially vulnerable to the threat of trade sanctions on certain French wines as well. In trying to reach agreement on the Uraguay Round of GATT, US trade negotiator announced that the US would implement 200% tariffs on $300 million worth of European farm imports, notably white wine. Hills used great precision in selecting white Burgundy wines for the brunt of the trade retaliation. France has been the slowest to act on the reduction of farm subsidies within the EC, and the French Agriculture Minister, is from the region.

10. Sub-National Factors:

Yes Although France entered into an international agreement to fight against phylloxera, the region of Burgundy prohibited the import and planting of American varietals for some time.

11. Type of Habitat:


IV. Trade Cluster

12. Type of Measure:


13. Direct vs. Indirect Impacts:


14. Relation of Measure to Environmental Impact

a. Directly Related : Yes Wine

b. Indirectly Related : No

c. Not Related : No

d. Process Related : Yes Species Loss--Land

15. Trade Product Identification:


16. Economic Data

Phylloxera cost France more than twice the war indemnity (5000 million francs) paid by the Germans.
Loss of Crop 1878-93 5,715 million francs
Replanting 2,166
Importing wine 4,050
Total 12,000 (approx. 2 billion US $)

The phylloxera killed 40 per cent of the vines over a fifteen year period. Eighty per cent of France's vineyards were eventually reconstituted using American roots.

Vines are cultivated in:

The total income amounts to one quarter of French agricultural income.
1860 1970
Home Production 27.4 million hl. 61 million hl
Imports 10.8 million hl. 11 million hl.

17. Impact of Measure on Trade Competitiveness:


18. Industry Sector:


19. Exporter and Importer:

Many and France


20. Environmental Problem Type:

Species Loss Land

21. Name, Type, and Diversity of Species

Name Type Diversity
Vitis vinifera sativa L. Grapevine/Vitaceae family Numerous (48 species of Grapevines giving fruit of any economic importance: 35 in US, 12 in Asia, 1 in Europe)

Specific examples:

22. Impact and Effect:

High and Product

23. Urgency and Lifetime:

Low and 55-60 years

24. Substitutes:


Plant tissue culture for production of fruit-bearing clones. Multiply grapevine buds through biotechnological means since traditional nurseries can't deliver resistant material quickly enough to satisfy demand. In conventional propagation a fruit- bearing vine is grafted to a rootstock, and the union is then planted. Progenic grapes and vines could better ensure that only quality wines would be produced. Cheaper wines that are no longer in great demand would not further flood the "wine rivers" in the EU, anymore.

25: Culture:

Wine has been produced in France for more than two and one-half millennia and has played a large role in French culture, economy and dietary habits for centuries. Some two million French owe their livelihood directly to the vine. The international role and influence of the French in the ways of wine remain preeminent. Wine has long been a beverage of choice at mealtime, as demonstrated by annual per capita wine consumption, which peaked at 140 liters a year in the early 1950's.

As the demand for higher quality wine increases at the expense of lower-quality wines, traditionally the backbone of the French wine industry, the French will have to adapt their wine industry accordingly. Wine culture in France has changed. The French drink less wine, but wine of better quality. The future undoubtedly will be marked by fewer bottles of common wine and by larger amounts of premium wines, which is a desirable situation for the wine consumer, but unpleasant for many growers accustomed to extract as much tonnage as possible from bountiful, ordinary wines.

Alcohol, (especially wine) has associations in at least parts of Europe with fertility, (life, blood, strength) and reproduction. For example: "women in Messogia, Greece, give sweet wine to their husbands to ensure the procreation of male offspring." In Alsace, France, 'as women bear children, men give birth to wine.' The Alsatian's believe that 'only men drink wine.' Many Europeans subscribe to the old adage, In vino veritas, believing that after drinking wine people show their true selves and speak their innermost thoughts honestly. Another Latin proverb may be even more widely endorsed in France-- Vita virum est- -For while the French may or may not believe 'Wine is truth', They'd all agree 'Wine is Life and Life Wine'.

26. Trans-Border:

Yes (France, Italy, Spain)

27. Rights:



28. Relevant Literature

"A Pox on the Stox." by Rita Koselka, Forbes, June 7, 1993.

"Vines wither as pest returns", by Rosie Mestel, Los Angeles Times, January 15, 1991.

"Through the Grapevine" by Deborah Erickson, Scientific American, March 23, 1991.

"The California Wine Industry" by Delacroix, American Science Quarterly, December 1991.

"Adulteration Controllee," The Economist, September 22, 1990.

Ordish, George. The Great Wine Blight. Charles Scribner's Sons. (New York: 1972)

Crowley, William. "Changes in the French Winescape," American Geographical Society of New York.

"The Grapes of Wrath," by Barbera Rudolph, Time, November 23, 1992.

"Sour Grapes," The Economist, June 25, 1994.

"Bush's Well-Packed Kick in the Trade Talks," Business Week, November 30, 1992.

Gofou, Madianou. "Alcohol, Gender and Culture." New York: 1992.