Burgundy's soaring price bottles up trouble for future

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Prices for the poshest Burgundies went through the roof at this year's charity wine auction in Beaune, one of the key events in the global wine calendar. The high bidding, mostly on behalf of foreign buyers, angered local producers, who fear it will discourage purchasers of cheaper Burgundies. With the 1997 Beaujolais nouveau arriving on Thursday, John Lichfield, in Beaune, samples the paradoxical state of the French wine industry

Louis Trebuchet bought the most expensive items in the auction: two barrels of Batard-Montrachet at the equivalent of pounds 50 a bottle. Afterwards, he was delighted and disturbed.

Delighted, because his firm, a local specialist trader, made it a "point of honour" to buy the most prized white wine in the annual charity auction of the grands crus from vineyards bequeathed over the centuries to the Hospices de Beaune. Disturbed, because the price he had paid, 152,000 francs (about pounds 15,000) a barrel, was nearly double last year's price, confirming the sky-high trend in this year's sale.

"The wine I just bought is already paid for [by dealers in New York and Dallas]. But from the point of view of cheaper and medium-price Burgundies, the price is very worrying, even dangerous. The trend will put off buyers in the cheaper categories, where Burgundy is already suffering."

Mr Trebuchet said the high auction prices this year (47 per cent up on 1996 overall) reflected the potential quality of the 1997 vintage but also the weakness of the franc and the fact that "there is a lot of money in the world for luxury items at present". In Sunday's sale, barrels were marked down to buyers from 30 countries, including the United States, Japan and Britain (there were two succesful bids by Sainsbury's), but also Russia, Taiwan and Singapore. There were ironic boos for the purchase of one lot of Savigny-les-Beaune (a red Burgundy) by "Coca-Cola Japan".

Christian Flaceliere, a wine writer, was even blunter about the foreign money on offer. "It's sad," he said. "With prices like that, people are going to turn to beer and processed drinks."

For whatever reason, and price is not yet a major issue, wine drinking is already collapsing in France. Consumption has fallen by half in the last 25 years. Two-thirds of French under 30 now reject wine as fattening and old-fashioned. At the same time, the highest quality French wines are still enormously sought after abroad and - to the despair of some purists - production of the medium-range wines has been increased in the last decade.

Although on the surface, the French wine industry is doing well, helping to boost the country's record trade surpluses, there is concern that the growing dependence on foreign sales may prove destructive. The three-day festival in Beaune - "les trois glorieuses de Bourgogne" - was, as ever, a joyous occasion. There were sampling tents for wines and cheese and charcuterie; there were wine-bottle-opening competitions; there were street performers in medieval garb, including one man who rolled drunkenly around town in a gigantic, round-bottomed barrel.

But beneath the surface jollity, there was anxiety. In Bordeaux, the great rival to Burgundy, a controversy rages about the coarsening impact of American tastes, and specially the judgements of the US wine guru Robert Parker. It is alleged that some chateaux have abandoned the "subtlety" of French tradition for a more "vigorous" type of wine which appeals to America (that is, Parker). This was defined by one French critic as something which "strikes the palate like a dollop of wine jam".

Pierre-Henry Gagey, president of the Beaune wine traders, swore to me - with perhaps a supercilious glance towards Bordeaux - that such antics would never be accepted in Burgundy. "A great wine must remain faithful to its terroir [locality]," he said. "The method of manufacture must express the qualities of the terroir, not blot them out."

The other export-induced threat to the character of French wine is the expansion of the areas now allowed to make appellation controle medium- priced wine. In an interview with Le Monde at the weekend, the British wine writer Hugh Johnson, who is enormously respected in France, said the poor quality of some bottles under appellation labels was placing the reputation of French wine in the world "at very great risk". Some wine experts present in Beaune suggested that this was the real cause of the slow sales of cheaper Burgundies.