I often forget that wine is a business.

Like most people reading this, I am a consumer of wine, a customer of the vineyards and wineries of the world.  When I stop at a winery, I am having fun.  I visit the tasting room, I go on a tour, I buy wine, sometimes I picnic with my wife on the grounds.  Even if I have a little sticker-shock at the price of what just tasted so good at the bar from time to time, I am enjoying myself.

Life’s not quite the same on the other side.  They might enjoy meeting you and talking with you.  They might like sharing their knowledge with you.  But in the end, it is a business for them, and they need to make a living from it.  They are the ones who have to pay the bills, work the harvest and crush, worry about the weather and birds and pests like Phylloxera.  They might enjoy their work, but it is work.

I was thinking about that as I read an article on CNN (“Can anything save French wine?” by Gordon T. Anderson).  The subject of the article is the changing world wine situation.  For centuries now, France has dominated – and the quality of Bordeaux and Burgundy wines was a strong reason for that dominance.  Now the world has changed.  In the 1970s, people began to notice that California made some pretty good wines, too.  Italy and Spain greatly increased their reputations for quality.  Australia and New Zealand made great strides.  Now Chile and Argentina and South Africa are starting to knock on the door.

Part of this is simply the result of a growing demand for wine.  Part of it is the result of hard work around the world as winegrowers, who generally start out as small independent businesses, improve their craft and show that they can also produce good wine.  Another part is what is happening all over: the rapid spread of information in recent decades has brought knowledge and technique to many places where it was not available easily before.  More people working to make good wine, studying harder, has yielded great improvement.

There is also a lot more wine being made.  Some of it is what is referred to as “plonk”, wine that you will drink if you have to, but an awful lot of it is quite good.

In France, this has created a problem.  Their competition is better than ever.  The Euro has risen, so French wine (often expensive anyway) is even more expensive.  Customers begin to see alternatives with the same quality at more affordable prices.  Sporadic boycotts in America over the Iraq war haven’t helped.  Demand for French wine has leveled off, and for some reason the French are drinking less wine while the rest of the world is drinking more.  Even worse, the French are importing more wine than they did before.  The top-rank chateaus do not seem to be hurting.  The small vineyards and wineries are starting to hurt a lot.

The French, being French and long successful, have a well-entrenched set of regulations for anything related to wine.  This was very helpful years ago, but they are resistant to change and the regulations seem to have hindered the introduction of modern techniques in some cases, and to make it difficult to respond to changing trends in marketing.

We normally talk about American issues here, so why am I talking about the French?  Because the situation isn’t uniquely French.  America has been making wine for a shorter time and, due to the devastation of Prohibition, had a long hiatus from the wine world.  Even after Prohibition ended, it took decades to recover.  It is reasonable to say that the American wine industry only began to come back in the 1970s, when Robert Mondavi and a few other giants thrust us back onto the stage.  As a result, we are one of those young, bold competitors eating into the French market share.

This situation in France is all about competition.  The established leaders often get hidebound and complacent and price themselves too high in any industry.  The newcomers are hungry and want their customers.  That is all to the good for you and me, because it makes them struggle to bring us better wine at a good price.

You can see that in America now.  Wines from Chile and Australia compete on the shelves for your interest and dollar.  In California, they have a wine glut they are working off because of the rush to plant new vineyards a few years before.  Small vineyards are springing up in just about every state, new wineries are opening, new opportunities are being pursued.

Some of those new wineries are struggling.  Some will fail, some survive, some succeed and grow into giants.  They will have to deal with all the pests and bad weather and business issues, they will have to market their products and satisfy their customers.  Tough business, but then wineries are usually started by pretty strong-minded people.