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For many, it therefore came as a welcome relief that Yves Bénard from Moët & Chandon accepted the vacant position at the head of the Institut National des Appellations d'Origine Controlée (INAO). Robert Joseph and Joel B. Payne spoke to him about his new job and where France is heading.
A shorter version of this interview appeared in Issue 4, August 2007
Wine Business International: A new reforming president, a new prime minister, a new minister of agriculture – if not the one some people thought they were going to have - and a new head of the Institut National des Appellations d'Origine Controlée (INAO) with experience of the international branded Champagne market. Does this mean that we are finally going to see some dramatic changes in the structure of the French wine industry?
Yves Bénard: Time will tell. Let’s be modest and realistic. I’ll repeat what I said to me colleagues at the Comité National Vins et Eaux de Vie de l'INAO when I first arrived: “My ambition is to bring to the network my understanding of the markets where the products are consumed, and my knowledge of the way things are done in Champagne. I have great freedom of action, without a road map drawn up by the government, but I must bring about the reform which was voted on by parliament to transform the INAO into l'Institut National de l'Origine et de la Qualité”.
Wine Business International: Jean-Claude Rouzaud from Roederer provocatively said recently: “L’INAO, ça éxiste encore?”. Does France even need the INAO?
Yves Bénard: The new INAO will have to make the appellations evolve into modern entities, correcting the practices that were fairly criticised such as the rubber stamping (autoagrément) of appellation status by local producers – and the running of the AOC by regional syndicats. The reform separates these responsibilities. I believe that France will need an effective INAO as part of the European wine industry.
Wine Business International: What do you think are the most urgent problems that need to be addressed at the INAO?
Yves Bénard: The most urgent task is the putting this set of reforms into action. We have three very clear objectives.
a) by the end of July 2007: recognition of the organisations that will in the future defend and manage the appellations in concert with all the appropriate industry members.
b) by the end of December 2007: establishing appellation decrees that will in future be known as “cahiers des charges” - sets of specifications - that I hope, will permit a fresh look to be taken at the structure of the French wine offer.
c) by July 2008: setting in motion a new system of |
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agrément by bodies that are independent of the regional syndicats.
Wine Business International: No one else wanted your job - and you didn't even apply for it yourself. Why did you take it? How long do you plan to remain at your post?
Yves Bénard: I accepted this position in order to give back to the wine world something of what it has given to me, and because the Minister of Agriculture gave me a free hand. The ministerial decree that confirmed my appointment is valid until August 2010.
Wine Business International: The INAO is thought by outsiders to control all of French wine, but its jurisdiction does not cover non-AOC wine. Does it make sense today to divide the jurisdiction of the French wine industry between several bodies?
Yves Bénard: In France, the wine industry is managed today by two structures: Viniflhor is responsible for Vins de Table and Vins de Pays and the INAO runs the the Appellations d'Origine Contrôlée (AOCs). Some form of evolution will be possible when the Common Agricultural Policy (CAP) has been reformed, with the probable disappearance of the VQPRD (Wines of Quality Produced in Determined Regions) and the adoption of a system for wine of AOCs and IGPs (Protected Geographic Indications). We'll see that happening at the beginning of 2008. There is, however, already some coordination between the two bodies because I'm a member of the management committee of Viniflhor. Its president is also a member of the National Committee of the INAO.
Wine Business International: French young people are drinking less and less wine. What can the INAO do to make wine more attractive to the next generation?
Yves Bénard: The role of the INAO is not to make wine more attractive to a young generation, but to give the most dynamic members of the industry all of the legal and statutory means to perform their role as entrepreneurs. Having said that, the INAO must put forth the image of a modern and forward-looking institution.
Wine Business International: French growers have become dependent on European subsidies that the rest of the community is no longer willing to pay. How can you help the new French president address this problem?
Yves Bénard: I don't want to express my personal views on the reform of the CAP negotiations other than to say that reform is necessary. The community’s funds need to be used more efficiently. For example, we should increase the budget to promote European wine in third countries rather than distributing subventions that are supposed to eliminate overproduction. European financing of ‘green harvesting’, that is the removal of excess immature grapes during the growing process, also strikes me as an interesting idea.
Wine Business |
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International: Thierry Jacquillat, the former head of Pernod Ricard, said last year that the creation of a French Jacob's Creek was not possible because of French attitudes. It is revealing how many of France's branded export successes such as le Piat d'Or, Blason de France, Fat Bastard and Red Bicyclette were conceived by outsiders. Why have French wine producers outside Champagne, and a few exceptions elsewhere, been so bad at building international brands? Does one of your tasks involve changing the philosophy of the French wine industry?
Yves Bénard: I share Jacquillat's views, but the most important aim for me is to encourage the growth of global consumption. With new markets, dynamic producers and talented distributors much can be done, irrespective of whether they are European, American or Australian. Nonetheless, I recognise the fact that the French wine industry has lost market share and hope that the future segmentation of the offer, notably with the most dynamic regional appellations in concert with the Vins de Pays, will inspire French companies to rethink their strategies.
Wine Business International: Is Champagne a model for other regions to follow, a set of globally recognisable high volume brands in whose wake smaller producers, estates and own-labels can follow?
Yves Bénard: Champagne can be an effective model, particularly in its ability to use contracts over several years to deal with peaks and troughs in supply and demand. While the grape growers deliver high quality raw material, the Champagne houses develop aggressive marketing strategies. Although there are strict rules covering the way the way the profits are divided between both groups, you still have to have a cake to divide in the first place!
Wine Business International: It could be argued that the success of Champagne lies in the relative simplicity of the offer, with a single appellation and a brand. Styles and qualities are relatively consistent through the non-vintage concept and prices are kept relatively in order by annual negotiation. Are there lessons to be learned by appellations like Bordeaux?
Yves Bénard: Given the particular way in which it is produced, that's where the Champagne model has its limits, but I hope to be able to create wider regional offers and more competitive means of production that will be of interest to large French and overseas industrial producers. The Vins de Pays have already taken a big step in this direction with Vignobles de France, a new category that authorises the blending of regional Vins de Pays in order to produce large volumes of varietal wines with consistent quality.
Wine Business International: Although Vignobles de France will allow the creation of more competitive higher-volume French wines to fight against Jacob's Creek and Gallo, closer analysis reveals that the |
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new designation is still a very cumbersome beast compared to the New World model. Why not introduce the kinds of freedom enjoyed by the New World producers?
Yves Bénard: It's a first step in the right direction, but the aim is to raise the bar for the Vin de Pays category rather than to pull it downwards. For this reason, brands that are to be launched under this category will have to conform to certain rules. That doesn't seem to me to put a brake onto the process. Everyone involved in the French wine industry has both called for and accepted a policy of "Wait and see"'.
Wine Business International: The French system allows producers in one region to restrict the activities of their counterparts in other parts of France. When Jean Thevenet wanted to make late-harvest wine in Mâcon-Clessé, successful objections came from producers of sweet wine in the Loire and Bordeaux. Is this kind of inter-regional interference sustainable in the 21st century?
Yves Bénard: The top French AOCs work well, with a legitimacy that has been derived from their regional traditions. Now is not the time to confuse matters by creating competition between regions. Having said that, we have to keep an open mind when it comes to new opportunities, especially if global temperatures continue to rise.
Wine Business International: The AOC and VdP systems explicitly prevent producers from innovating with different grape varietals or winemaking styles. In Spain, these are covered by the “experimental” designation which has, for example, enabled Rioja winemakers to produce novel blends using Cabernet Sauvignon and Syrah. In Italy, IGT rules have permitted the production of Chardonnay by Chianti estates. How can France compete with the liberty that is now enjoyed by its wine producing neighbours?
Yves Bénard: When it comes to introducing new grape varieties into AOC regions, I'd like future sets of rules to allow this to happen within a set of safeguards. Innovation should be a possibility and I really hope that the National Committee of the INAO will follow my lead on this.
Wine Business International: One of the central planks of the AOC system is the legal restriction of yields per hectare. Given the fact that in Bordeaux, for example, planting density ranges from a legally sanctioned 2,000 vines per hectare - or in some cases as little as 1,500 - to 10,000, it is not logical to impose limits per hectare. Surely, the easy way to improve quality fairly would be to introduce limits per vine.
Yves Bénard: The AOC system aims to establish a minimum of 4,000 vines per hectare in order to achieve a predetermined yield. Some vineyards could have 3,300 vines provided that the leaf area is sufficient and the yield lower - but this is still being studied. As we move forward, no |
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AOC vineyard should have less density than these kinds of levels.
Wine Business International: France does not currently have a central research facility of the kind that has helped the Australian and Californian industries. Where, for example, are the French studies on screwcaps and yeasts that have been carried out in Australia? Surely this would be a role for the INAO to lead on.
Yves Bénard: Research and development in France is handled nationally by l'Institut Technique de la Vigne alongside further research programmes by L'Institut National Régional de la Recherche Agronomique (INRA). The major regions such as Alsace, Burgundy, Bordeaux and Champagne also have their own research laboratories that work in synergy with each other. The INAO has no research centre, but it does have a Technical Commission which acts in partnership with l'Institut Technique de la Vigne
Wine Business International: The INAO was created in 1905 to deal with wine surpluses rather than quality. Since then, quality and style have become more of a focus, but these are necessarily subjective and rules vary from region to region. Bordeaux producers have been allowed to put their grape varieties on their labels and to use reverse osmosis equipment, albeit admittedly on an “experimental” basis. These liberties that have been denied to producers in other areas. Is this sustainable?
Yves Bénard: One of the objectives of the INAO reform that is currently under way is to harmonise cultural practices between regions. There will have to be clarification over the authorisation or outlawing of some techniques. The examples you refer to are currently the subject of study and experiment, but decisions need to be taken on their acceptability quickly.
Wine Business International: The INAO seems to have paid little interest historically to the requirements and benefits of consumers. In a market-driven age, isn't this something that should change?
Yves Bénard: In the speech I made when taking my position, I announced that our choices of strategy would give priority to the question of quality, and the exploitation of the natural value of our terroirs, but that they'd also take on studies of various markets, that we'd be permanently listening to consumers.
Wine Business International: The CRAV – the activist members of the Regional Committee of Wine Action - looks to President Sarkozy to guarantee minimum prices for their wines; Bordeaux producers protest at the prices paid by négociants in their region. What lessons can you draw, as a grower there yourself, from your experience dealing with Champagne growers?
Yves Bénard: I am against state intervention; it undermines the economic rules of the market. Production costs have to be linked to the |
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price commanded by the final product and the economic health of a region. The players in each region have to seek out the best way to share the profits – and to do so without discouraging consumers.
Wine Business International: Part of the role of the INAO is to create new appellations. If an appellation acts as a brand, surely France already has too many for the global market. LVMH would never launch new Champagne brands at the rate the INAO has launched new appellations. In the commercial world, brands need to have a commercial raison d'etre. Isn't it time to apply similar thinking to appellations?
Yves Bénard: I also announced that too many appellations had been created and that we had distanced ourselves form the original aim of Senator Capus, the first President of the INAO, which was to create appellations that had already gained not only renown but also a presence in the market. More than 50% of France's wine now has an AOC – and there are over 400 appellations! We urgently have to stop this spiral and reverse it by regrouping some appellations within the framework of a more straightforward offer. This, however, is easier said than done!
Wine Business International: The recent Australian strategy document “Directions” refers to innovation and getting close to the consumer, neither of which activities has been associated with the INAO. Do you see any benefit in following the Australian model and perhaps even drawing up a national strategy?
Yves Bénard: Despite the current drought, Australia today is undergoing difficulties linked to structural overproduction. I first await the sorting out of the CAP and the future regrouping of the French wine offering under geographic indications within the category AOP - Appellations d'origine Protégée Européennes – and IGP.
Then we'll be able to see the appropriate model and the initiatives to take with regard to the markets
Wine Business International: Australian winemakers can access huge resources of updated information on overseas markets. Far too many French producers seem to be ignorant of what is happening in other regions of their own country, let alone in other countries. French professional publications are not good at warning of threats such as the vineyards in Brazil that now produce two harvests of decent commercial wine a year, or the huge level of planting in China. Perhaps the INAO should take on the responsibility for this kind of communication.
Yves Bénard: Dynamic French men and women in the wine industry read Wine Spectator, Decanter or Wine Business International. Vinflhor regularly publishes interesting statistics for the exclusive use of professionals and commissions market studies on every style of wine - and these are rather well done. At present, the INAO has no economic service.
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Wine Business International: Irrigation is going to be a controversial issue in a time of climate change. Maintaining the ban on irrigation, which has already been lifted in Spain, on the basis that allowing it would simply enable producers to increase yields, has no logic within a system that a) allows low density plantation, which leads to overcropping per vine, b) restricts the amount of wine anyone can legally make and sell per hectare and c) has agrément tastings that should in any case serve to weed out wines that taste dilute. In some vintages, vines – especially young vines – suffer from stress that delays ripening and potentially leads to late harvests at times when there is an increased risk of rain. On the other hand, water is a scarce resource. One sensible option might be to legalise irrigation, but to levy a high cost on water used in this way.
Yves Bénard: I wouldn't disagree with your description of the irrigation dossier, with its advantages, risks and costs. In the context of rewriting the decrees in the form of a road map, the question of irrigation is open for discussion and our Technical Commission has been given the task of making a recommendation regarding experimentation in a few regions.
Wine Business International: Most observers of the wine industry would agree that the constricting wholesale and retail routes to market mean that there are too many wine producers across the planet. How will this affect France?
Yves Bénard: Routes to market remain vitally important to every brand, especially in the off trade. And there's no denying the fact that this is a weak point for less well known French brands. That's why the current reforms and the evolution of regional appellations and Vins de Pays are crucial if France is to rebuild its market share.
Wine Business International: Over half of France's wine is produced by cooperatives. In Languedoc Roussillon, the figure is 70%. A few of these are very dynamic, but these are the exceptions to the rule. How can the INAO change the attitudes among the cooperatives?
Yves Bénard: I am optimistic about a change in attitude that I see among the bosses of the cooperatives. They know that their future is now in their own hands and not in those of the state, but it is crucially important for future European agricultural policy to preserve the specific characteristics of the wine industry. Wine is neither sugar nor wheat.
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