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LEFT: The barrel aging room in Domaine Georges Mugneret-Gibourg in Vosne Romanee, France, is only half-full because the 2012 crop was in short supply.

Wine price spike looms

Burgundy vintners endure bad harvest with regret, smiles

Bloomberg News photos
ABOVE: Pascal Arnoux is a vinter at Domaine Arnoux Père et Fils, in Chorey-Le-Beaune, France. “I like my wines with lots of fruit,” he says.

Despite losing as much as 40 percent of their grapes for the 2012 harvest, vintners and merchants in Burgundy are smiling.

In Burgundy, whose wines compose only about 3 percent of France’s total production, the wineries sell just about every drop they make, even in abundant years, though that hasn’t happened since 2009.

In 2010 quantity fell 40 percent, and in 2011 it was down 15 percent. This year winter’s frost, combined with mildew and hail, destroyed more than half the crop in prestigious vineyards like Chateau de Pommard.

At the charity wine auction at the Hospices de Beaune held each November in the city of Beaune since 1851, Burgundian officials, vignerons and negociants described the situation with a curious mix of regret and bonhomie.

“The damage of up to 50 percent in the Cote de Beaune was a disaster,” moaned Michel Baldassini, president delege and acting chairman of the Bureau Interprofessionnel des Vins de Bourgogne, who then brightened with the declaration that “the highlight in 2012, however, is that the reds have fantastic concentration with silky, powerful tannins.”

Pierre-Henry Gagey, president and chairman of the bureau, was positively buoyant, saying: “Prices are always a question of supply and demand, and Burgundy is selling very well these days. Prices will definitely be higher for the 2012s, but if we get a big harvest in 2013, it may dampen the consumers’ shock.”

Louis-Fabrice Latour, president and chairman of the Federation des Negociants-Eleveurs de Grande Bourgogne, joined the joyful chorus noting that “Burgundy has been recession-proof the last two years. The U.S., our biggest market, was up 10 percent for 2011, and is our biggest priority right now because the dollar is getting stronger.”

Exports to Japan are up 35 percent in value for 2011, and it soon could surpass Britain as Burgundy’s second-largest market, he said. Canada is No. 3, followed by China, where all the wine goes through Hong Kong.

Latour also said higher prices were inevitable and warned, “There just won’t be any burgundies available at under $10 a bottle.”