Domestic Demand and Export Imperatives for French and Australian Wines

France is historically the world’s top producer of a wide range of fine wines. Its Bordeaux wines have dominated British and other northern European markets since at least the founding of the Angevin empire in 1154. In 2006, it was still the world’s largest producer of wine (4,636 million liters), followed by Italy (4,409 million liters), and Spain (4,280 million liters).1 However, France’s wine-growing sector is in crisis, and its position as a pre-eminent wine exporter is increasingly challenged by other wine-producing countries. One of its major competitors is Australia. The world’s fastest growing economy behind Ireland in the 1990s, with an average growth rate of nearly 4 percent a year (4.3 percent in 1999).2 Australia was not traditionally known as a wine producer. Nevertheless, by 2006 it was the world’s seventh biggest producer of wine (1,019 million liters),3 fiercely competing with France for top export markets. This chapter examines the historical trends in the domestic market for French and Australian wines, and the consequences in terms of export strategy, focusing upon their competition for the British market.