Winemakers in a squeeze

At some of France’s most celebrated vineyards, vintage wine is being transformed into alcohol for disinfectants or gasoline additives -- a high-tech process winemakers hope will help them stay afloat.

Chronic overproduction, slipping domestic consumption and fierce overseas competition have created a European wine crisis of unprecedented scale.

With lakes of unsold wine threatening to undermine prices, the European Union has resorted to paying vintners to destroy some of their stock each year, distilling billions of bottles of perfectly drinkable wine into pure alcohol.

The steaming grape juice that’s left is hauled back to the vineyards, where it will be used to fertilize next year’s vintage.

Skeptics say the measure, which cost EU taxpayers $190 million last year, is a quick fix that does not get at the root of the problem: Europe produces too much wine for too few consumers.

A contested new EU plan aims to downsize Europe’s wine industry, shifting from distillation to ripping out huge swaths of vineyards -- about 100,000 acres of vines, or more than 10% of Europe’s total, over the next five years.

Across Spain, France and Italy, Europe’s vintners are putting up a united front against the proposal. But as more wine is distilled each year -- reaching 740 million gallons in 2005 -- even the most virulent opponents acknowledge something has to be done.

“For years, we shrugged the crisis off as a temporary downturn,” said Gilles de Longevialle, who heads a group representing the vintners of Beaujolais. “But we’re beginning to see it’s here to stay.”

Until last year, so-called crisis distillations were for only the cheapest table wines. Now, however, quality wines are also boiled away in large quantities.

So for the second autumn in a row, Philippe Terrollion, director of the Beaujolais Distillery in central-eastern France, sent out a fleet of trucks to pick up an expected 2.3 million gallons of unbottled, unsold Beaujolais wine -- enough to fill about 125 swimming pools.

“For vintners, the decision to distill is a hard one,” Terrollion said.

“But in the end, they have to do it to get rid of the old stuff to make room for the new.”

With funds from the European Union and local authorities, Terrollion paid vintners the EU-fixed price of about $1.66 per gallon -- about one-fifth of the average price paid by wholesalers for bottled wine sold for consumption.

While European vintages languish on the shelf, consumers around the world are reaching for bottles from so-called New World producers in Chile, the U.S., South Africa and elsewhere.

New World imports now account for 70% of wine sales in Ireland, for example, and Australia recently overtook France as Britain’s main supplier.

“In France, we used to think we were the biggest and the best and no one could touch us,” said Louis-Fabrice Latour, who heads the prestigious Louis Latour label in the Burgundy region.

The feelings of superiority blinded vintners to the threat from foreign rivals, he said.

But overseas competition is not the only reason behind Europe’s wine troubles. Changing continental drinking habits are also to blame. Wine consumption is down throughout the Continent, with wine-drinking champions Italy and France leading the decline.

In 1980, France and Italy each consumed about 1.3 billion gallons of wine a year, according to the European Commission. By 2005, yearly consumption had slipped to about 800 million gallons.

In the town of Beaune in Burgundy, Jean-Pierre Charriot sat in a bar nursing an after-work drink. But instead of a chilled Chardonnay or a robust Pinot Noir, both regional specialties, he was having a beer.

Charriot makes his living in the wine industry. A tour guide, he takes foreign tourists on visits to local vineyards and wineries.

Although wine pays the bills, Charriot said he didn’t drink much of the stuff.

“I drink beer pretty much every day, but wine is for special occasions,” he said, adding that wine’s high alcohol content makes it a tricky choice in today’s drunk-driving-conscious France.

“With wine, you can’t drive home after a couple of drinks after work.”