Should the French government relax its AOC system allowing French vintners to expand the size of their chateaux to capture economics of scale?: why or why not?

Should the French government relax its AOC system allowing French vintners to expand the size of their chateaux to capture economics of scale?: why or why not?

 

 

Answer:

no, this is not a great idea as the French wine industry is an old one but the rules of AOC governing the production are recent. the AOC ‘s philosphy focuses on terroir and assumes that great wine is a result of great ineyard site and all wine marker do not have to allow them to interfere. there is a problem with AOC- type regulations, though they have preserved the diversity of wine styles with good achievement but there act shows no guarantee of quality. the only guarantee of quality is given producer’s reputation. the rules for wine had acted to hinder quality and also the poor producers from market forces are at threat. if we take an Chateauneuf or Chablis from the supermarket, there is disappointment as AOC’s valuable function is just to ensure product authencity and preserve diversity but the quality is not guaranteed. so this proposal would not help the struggling French wine industry as rules do not ensure quality and also they are not concerned about the sick french wine industry. the perspective of consumer and producer matters as producers the cheaper end of the market there is problem as french is doing badly and also in global the supply is more and french wine is unsold and losing the exports market from the world. while on the part of consumers it is difficult for them to find a good and inexpensive french wine and this occurs because of split between independants and supermarkets growing into gulf and the consolidation of retail market in UK.

bailing out uncompetitive elements is a big mistake in the long term and AOC system has sheilded poorer producers from market forces. therefore it is not a good idea.

Asked on February 15, 2018 in economics.
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