Examination of Witnesses (Questions 820
- 830)
TUESDAY 22 MAY 2007
MR ALAIN VIRONNEAU, MR DENIS JOHNSTON AND MR PHILIPPE
CASTEJA
Q820 Lord Cameron of Dillington:
I have two questions. The first question is to get on the record
what we discussed at lunch, which was the question of marketing,
which other growers in the south or in other countries seem to
think is about promotion and advertising. I hope that you understand
marketing was what I spoke about earlier, which is researching
the consumer needs and their tastes and, therefore, adapting the
process of the growers. I think the answer to that was probably
just Yes. But maybe you could confirm that. My second question
is—if the reform is successful and some of your second level
growers have to withdraw and maybe there are other areas of the
industry in Bordeaux that are made redundant, what other economy
is there locally? And how would you mitigate the problem of unemployment?
Is there other work? What do you think the European Union could
do, particularly with the Second Pillar money, to promote a different
rural economy?
Mr Vironneau: In reply to the first part of
your intervention, I would simply confirm that I agree wholeheartedly,
marketing means adaptation. As I said at the beginning of our
lunch, every seven years or so, it is not a seven year itch but
a seven year change, there is a change in taste and market trend
and it is for the grower to be advised of that so he adapts to
it. My confirmation is yes, marketing equals adaptation. That
is where Europe can have a role to play by ensuring free competition
in the face of outside competitors when you are in the adaptation
mode. Our understanding, within the part of the reform concerning
the grubbing-up of vines, is that we see from Europe there is
an input of social support for those growers who want to retire
or who are going to have to retire. In partial reply to your question
on what other economies and other activities there are, there
is an increasing awareness within the wine profession of the tourist
phenomenon. France, and I say this without any animosity or boasting,
is one of the prime tourist destinations, which doubles its population
every year with 70 million tourists. In this part of the world
we do have a very strong tourist attraction. Obviously there are
the beaches and the mountains, but there is the possibility of
attracting tourists to the wine-growing areas for recreational,
instructive, educational tourism so that people can find out what
wine is all about, and see where it comes from; and that can provide
economic activity to the growers. Coming back to the question
of pulling-up of vines, there has been a definite effort to regulate
wine production by encouraging the pulling up of vines, but we
found it did not work because the majority of vines that were
pulled up were pulled up by people who were retiring in any case
or they were not quality plots producing quality wine, so, "Let's
pull it up and retire and take the subsidy from Europe, thank
you". What could be thought as a crisis within the Bordeaux
area is behind us, the growers want to move on head held high,
they want to be able to have a liberal policy, proper market regulation,
the change put forward with the support of Europe for a quality
move forward. That has all the advantages because it will boost
wine production in the Bordeaux area with wine growers who have
now reached a level of maturity where they know how to get out
of the situation and move on. Above all, by boosting and safeguarding
the wine industry and wine profession in Bordeaux, Europe is going
to save a lot of money with useless subsidies. We do not want
subsidies, we want to hold our head high.
Q821 Chairman:
Before I ask Viscount Brookeborough to come in, for the record
can I go back to what we were saying over luncheon and ask you
what your view is of crisis distillation and basically to answer
the charge that there is no justification for the European taxpayer
to give money for crisis distillation where it is the result of
either a bad decision made by the producer or weather conditions,
after all, we do not subsidise the strawberry producer when his
crop is damaged by frost.
Mr Vironneau: I cannot speak on strawberries,
I can speak on wine. I will give you some facts and figures. Taking
the example of France, €450 million for crisis distillation,
€140 million for restructuring of vines and vineyards either
by pulling up or replanting to get better quality vines, €300
million for the destruction of vines and of vine and wine products
and €14 million for communication. What I am saying—is
instead of giving €300 million to destroy things, why not
spend it to build things? Use the same constant budget but use
that €300 million going to destruction for communication
and marketing in the sense of adaptation and research.
Q822 Chairman:
So you do not have crisis distillation?
Mr Vironneau: That is part of the overall package.
Mr Casteja: The budget remains unchanged, it
is the same constant budget but it has to be used in a different
way.
Mr Roberts: They do not want money for distillation,
keep the money and use it for marketing purposes.
Mr Casteja: Keep it steady.
Q823 Chairman:
Keep the same money but use it differently?
Mr Vironneau: We have no help. To come back
to the facts and figures, on the European reform of wine production
we are talking about France, Spain and Italy as the three main
countries. But do not forget there is Bulgaria just over the other
side of the frontier with 330,000 hectares of vines, with competitive
criteria and costs that are on a completely different stratum
as compared with the three countries of France, Spain and Italy.
Europe is faced with a whole lot of economic and political choices.
France has its handicaps and has made its mistakes, OK, but we
are not there as a spokesman of Europe. There are convictions
firmly expressed as a European that Europe has an economic role
to play. It is very encouraging to see you gentlemen coming from
the UK, as a non-wine-producing country, to France, as a wine-producing
country, to lend your European support so we can obtain what we
are looking for—liberality of policy and market regulation
to solve problems such as this. Do you want to see European agriculture/viticulture
like Swiss agriculture that goes on pretty chocolate boxes? You
cannot dissociate agriculture and viticulture from the European
scene and there is no reason why agriculture and viticulture within
Europe should not be as competitive as industry, as aerospace
and the rest. I do not want to be on a chocolate box.
Q824 Viscount Brookeborough:
Firstly, you spoke during lunch and mentioned that the Bordeaux
region could manage itself if it was allowed to. We have spoken
about grubbing-up and you have talked about grubbing-up vines
that are already useless. In our country we had a similar problem
with fishing boats in the 1970s when we managed to decommission
everything that had gone on the rocks in the last 10 years. Surely
this is just a matter of control. You said you could do it. Why
would you consider grubbing-up useless vines when that is a matter
of control for yourselves? Secondly, you talked about tourism—and
I am delighted about tourism because I am involved in it, and
you would be competing with us because, now we have stopped shooting
each other, we are going to look for the tourists! The people
who do go out of the business because of reforms presumably will
be the marginal people. Are your marginal growers all full-time
professionals? Or are they part-time? If so, what proportion of
your growers are part-time? And what is their other employment
at present that they can expand on?
Mr Vironneau: Europe has already paid a pretty
high cost for taking fishing boats out of commission.
Q825 Viscount Brookeborough:
I did not have one!
Mr Vironneau: My hobbies, not in alphabetical
order, are wine, my family, economics and photography. Economics
means that I was interested in what was happening in fishing and
I know full well that the decommissioning of fishing boats cost
a bomb. There are fewer and fewer part-time growers because the
estates and the wine-growing properties have grouped together,
so we have fewer and fewer people who spend the morning in the
vines and in the afternoon go out; it is a minimal segment. The
majority of people are those who are going to simply retire when
they reach the end of their professional lifetime.
Mr Casteja: These people who have two jobs are
either members of the co-op and bring their grapes to the co-op
or they have a really small estate. Nowadays wine growers make
a lot of investment, tractors are expensive, everything is expensive,
so it means that there are less and less small estates.
Q826 Viscount Brookeborough:
This is different for Bordeaux?
Mr Vironneau: The trend is far more towards
reconsolidation and regrouping of vineyards. Ten years ago you
could practically count vineyards that were 100 hectares on the
fingers of one hand but now there are dozens that have 200 hectares.
Q827 Lord Cameron of Dillington:
What do you think about the possible ban on adding sugar to wine?
Mr Vironneau: That is going to be a very critical
issue, a very thorny issue, because it is a technical issue. Now
we are coming to the technicalities of wine production and the
question of enrichment of wine as a result of negative or unfavourable
climatic conditions. We have four main ways of doing it. We could
add in saccharose, we could add in concentrated must, we could
use reverse osmosis or concentrated grape juice.
Q828 Lord Cameron of Dillington:
Just to come back on that, if he is a free market man on a lot
of other things, are you a free market man on the adding of sugar?
Mr Vironneau: Yes. In Bordeaux we dedicate part
of the concentrated must for the possible necessary enrichment
of wine. For reasons of traceability and food safety you are only
allowed to use rectified concentrated must. If you use non-rectified
concentrated must, even those must be endogenous and not exogenous.
The use of concentrated must entails the possibility of material
in there which could be detrimental to health. The main problem
is there is no facility on the industrial plane within the region
of Bordeaux to provide endogenous rectified concentrated musts.
There is only one facility in the whole of the South of France,
which is quite incapable of providing the quantity necessary.
Q829 Chairman:
So he is in favour of sugar?
Mr Casteja: No.
Mr Vironneau: The other difficulty comes from
the fact of what is Europe doing. It is very difficult, as we
have explained, to get endogenous rectified concentrated must
in France, so what you do is you go to Spain which produces exogenous
rectified concentrated must far cheaper than you could produce
in France. As far as the addition of sugar is concerned, the first
measure reduces yields, cuts back on the yields, so we do not
have as much wine around. The second measure reduces the addition
of sugar to one degree of alcohol. There is a further possibility
that it may be in the interests of the French Government to protect
the producers of sugar beet. That is my emphasis on enhancing
and increasing production within the region of endogenous concentrated
musts to give the self-control and autonomy of management to the
industry. The simple answer is we cannot now afford a ban on additional
sugar but Europe could help by the criteria of competition between
exogenous Spanish concentrated musts and the endogenous Bordeaux
concentrated musts so that the emphasis is put on the self-sufficiency,
the autonomy of Bordeaux industry. We are exploring all of those
avenues for the final result to say we do not need to add saccharose
or sugar, but for the moment it is impossible.
Q830 Chairman:
I think we are just about there, are we not. Can I say that this
has been absolutely outstanding. It has been challenging and it
has been enjoyable. I do have to say, sir, it was a magnificent
performance. So well done!
Mr Vironneau: My Lord Chairman, thank you for
your kind words. As for us, it has also been extremely motivating
and has further whipped up our enthusiasm and our hopes particularly
if, as you say, we can say that the British are saying they want
wine growing in Europe. That would shake them. Thank you very
much.
Chairman: Thank you.
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