French wine sales remain steady throughout valley

Max Jacobson

Wednesday, May 28, 2003 | 8:15 a.m.

Since early March, when the French government and President Jacques Chirac opposed the U.S. invasion of Iraq, anti-French sentiment has resounded in this country.

In Washington, a few wags decided to rename french fries to "freedom fries." Meanwhile restaurants, boutiques and wine shops all over the country began to experience a lag in sales of French products, and the idea of a boycott was discussed with seriousness.

A Texas legislator even introduced a bill to triple that state's taxes on French wines.

Perhaps no lobby was more concerned about impending boycotts than the French wine industry, which in recent years has been rocked by scandals of dumping and price fixing, and a drop in market share caused by such weighty competitors as Australia, Chile and other countries that produce quality wines at low prices.

According to an article written in Wine Spectator magazine by Dana Nigro, "American boycotts of French wine seems to be making an impression." According to Information Resources Inc., which tracks retail purchases in the U.S., there was a 17.2 percent drop in total sales of French wines -- and a 19.4 percent drop in dollar volume -- in the four weeks of April, compared to a similar period a year ago.

Retailers in Las Vegas were happy to weigh in on this subject, and the results might come as a surprise: Sales of French wines are down, but basic laws of supply and demand still apply.

Gregoire Verge, the French-born owner of Marche Bacchus, a wine boutique and cafe on the north side of Las Vegas, said, "We've seen no changes. In the beginning, we were afraid, but because we cater to a clientele who is passionate about wine, everyone has been great."

That's in part because of the high-end 2000 vintage from both Bordeaux and Burgundy, the two premium wine districts of France. Many vintages are hyped as "the vintage of the decade," or similar hyperbolic descriptions, but this vintage has been praised by virtually every major world wine writer, from Britain's Jancis Robinson to Steven Tanzer to influential American wine critic Robert Parker, who called the 2000 "the best vintage of all time."

That kind of hyperbole might be silly, but many have gone so far as to call the 2000 vintage "the vintage of the century." As a result, the demand for this vintage has been extraordinary, demonstrating that high-end wine collectors put pleasure above politics.

Stuart Roy of Southern Wine & Spirits of Nevada and J&P Wholesale, a subsidiary of that company, buys and distributes a large number of these high-priced wines to local retailers.

"After looking at this year's sales to date, against last year's sales to date, French sales are only down 10 percent. All of it comes from the lower- to middle-tier wines," Roy said. "High-end wines are up this year about 5 percent, which makes up the dollar amount on the lower-end wines, so everything is about even, dollar-wise, for the year. I expected the percentage of wine sales to be lower, and it probably has been during the past two months.

"But with the 2000 Bordeaux coming, summer sales will most likely be up by the end of the year."

What this means, according to local wine consultant Barry Herbst, is that a $25 to $30 fourth or fifth growth (a century-old designation for the vintages of the Bordeaux region, which descend in price from first growth to fifth growth) from Bordeaux will be equal to, or most likely even better than, a $45 cabernet from California. Naturally, this has the California wine growers worried.

But Herbst also adds that lower-priced wines from France have suffered.

"Wine from the Rhone is down and will stay down," he says, and wines from other regions of France priced in the $6 to $12 range, such as Provence, the Languedoc and Pic St. Loup, in the southwest of France, have also suffered lately.

Burgundies, however, have stayed high and even drifted higher because there simply aren't enough of them, and a reflection of the strong euro is beginning to show up in the new vintages.

"I haven't seen much discounting at all," Herbst said.

Las Vegas' largest retailer is Lee's Discount Liquors, and it's interesting to see the impact in those stores. Says Lee's General Manager Kenny Lee, "Prices are reflected more in the high-end stuff. We have a nice $5 wine from France called Domaine de la Tour Merlot that we can't keep on the shelf."

But he goes on to say that, "The variance in vintage prices is huge. Take a second growth such as Chateau Duhart-Milon. The '99 is selling for $27.99, and the '98, which is considered a better vintage, is $40, but the 2000 is $90, and again, we will have a hard time keeping it on the shelf."

So much for those top-end wines.

Meanwhile, over at discount retailer Trader Joe's, spokesman Pat St. John says, "there has been no significant drop in the sales of these items." The wine buyer for Trader Joe's is Tim Bekins, based in South Pasadena, Calif.

"In Las Vegas, we don't carry many French wines, but the ones we do carry generally have low prices, such as our French Market Cabernet Sauvignon, and our French Market Merlot, both of which sell for $3.49, and both of which are selling briskly," Bekins says.

A red table wine from France, called la Authentique, is $3.99, and the signature Mumm's Cordon Rouge Champagne is still a good buy at $27.99. Trader Joe's would not release any figures, but Bekins said there was no drop in sales because of the events in Iraq or France.

But in spite of everything, the world wine market becomes ever the more diverse, and the French are looking over their shoulders at the competition -- no matter what.