Will you raise a glass to chamarré?
By Harry Wallop, Business Correspondent
(Filed: 23/06/2006)

A start-up company, backed by the French government, is launching a revolutionary wine, specifically tailored for British supermarkets in an attempt to stem the crisis in the French wine industry.

Chamarré, a branded French wine, has hit the shelves of Morrisons and Somerfield this week and the company is in negotiations with Sainsbury's. If it meets all its targets the brand could become one of the top 20 best-selling wines in the UK within five years, selling 12m bottles a year.

However, the wine has horrified many in France because it abandons the age-old concept of terroir - the belief that a wine's flavour is linked to where it is grown.

The new Chamarré wines

Those in the UK trade think the idea is one of the few chances the French have of salvaging sales of their wine, which continued to suffer last year despite a buoyant market for wine in the UK. Brian Howard, the founder of research company Wine Intelligence, said: "It's very innovative. It follows the big New World producers, and it's turning the established Old World model upside down."

The company behind the wine, OVS, is sourcing its wine from 15,000 cooperative growers, who are the company's main shareholders, alongside the founder, Pascal Renaudat, who has invested €400,000 (£275,000) into the venture.

The French government has injected €1.5m into OVS and French banks have lent it €5m. Next year it will look for new investors to help fund its marketing and a push into the United States. A Miami office was opened this week.

Vincent Norguet, the export manager of OVS, said: "There is a big crisis in the French wine industry. Our growers realise they need to create a brand to compete with the New World producers."

The wine is based on single grape types - varietals - rather than locality, and 400,000 bottles have been shipped to the UK, where they will sell at slightly premium prices.

A bottle of chardonnay-sauvignon, for instance, is on sale for £4.99 in Somerfield, compared to the average bottle of still wine in the UK, which sells for £3.97.

Angela Mount, the senior wine buyer at Somerfield, said that despite booming sales of wine at the supermarket, which increased on a like-for-like basis by 7.2pc last year, French wine sales remain static.
The only two French wines that make it into the top 20 best-selling wines in the UK are JP Chenet and Piat D'Or.

The only French wines in the UK top 20 are Piat D’Or and JP Chenet, while sales of New World wine are soaring

Both these brands are controlled by established companies, with Piat D'Or owned by global drinks giant Diageo. What makes chamarré so risky is that OVS is a complete start-up.

Ms Mount said: "Nothing is more terrifying for customers to be presented with a wall of wine. Once you are out of the comfort zone of claret and Chateauneuf-du-Pape, the mainstream consumer is lost. "In the past the French wine producers have been very poor at giving information about their wines. Chamarré changes that, we hope."

Many across the Channel are sceptical. Jean Pierre de Smet, who runs Domaine de l'Arlot, one of the top Burgundy estates, said: "I'm not sure it is a very good idea to go that way. We should stick with our specifities. We shouldn't follow what is going on in Chile.

OVS claims France needs to wake up to the realities of a market in severe trouble. The market has been hammered by over-production and falling demand, with swathes of French youth abandoning wine in favour of alcopops. Yesterday, the EU introduced drastic plans to offer money to wine growers to grub up their vines.