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"Saturated" French Market Fuels Rhone Export Push

The vineyards of Château de Beaucastel
© PFV/Serge Chapuis | The vineyards of Château de Beaucastel
Overseas sales for the Rhône Valley are on the way up.

The Rhône Valley hopes to double its exports to China by 2016 and also has its eyes set on the United States, as the French domestic market becomes “saturated.”

Inter Rhône, which is the trade body representing France’s second-biggest wine region, has shifted its focus towards new markets in the Far East, and the move is paying off. New figures show that in 2012, Rhône Valley producers shipped 50,000 hectoliters of wine to China and they hope to double this within three years.

The United States, which is now the world’s biggest wine consumer, is also a key target for the region’s producers, with French wine consumption continuing to fall.

“We realized that the domestic market had reached maturity and was even saturated,” said Christian Paly, president of Inter Rhône.

The refocused export strategy has been in place “for the past two to three years,” according to Paly, and is now yielding dividends. Figures released this week show exports increased by more than 5 percent in volume in 2012.

Overseas sales reached 909,000 hectoliters, and exports now represent an all-time high of 31 percent of the Rhône's total wine sales.

In addition to selling larger volumes, the value of the region's exports has also risen by 10 percent, the new figures show.

The 2012 Rhône Valley harvest fell 6 percent in volume compared to 2011, due to inclement weather – particularly the hard frosts in February. However, it fared much better than most other French wine regions, with France overall recording a 20 percent reduction in last year's harvest.

Yet the Rhône still produced less wine than it sold in 2012. “We are tapping into our reserve stocks,” revealed Philippe Pelaton, vice-president of Inter-Rhône.

But this has given the region something to smile about.  “It’s in our favor,” Pelaton explained. The global market is “perfectly balanced."

The situation in the Rhône reflects the worldwide trend of moving towards supply and demand balance. In 2012, world wine production fell to its lowest level since records began in 1975, while at the same time consumption is on the up.

Inter-Rhône believes the region has improved its reputation on the world stage in recent years. It hopes that its higher profile will lead to the restructuring of vineyards away from entry level, low-priced wines, “toward the middle- and high-end of the market.”

There are more than 5,000 growers in the Rhône Valley, covering over 175,000 acres of AOC vineyards across six departments.

Related stories:

The World's Wine Lake is Drying Up

Global Wine Production Hits Historic Lows

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