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French Exports of Wine and Spirits Rise by 7.5% in First Half

French wine and spirit makers appear to be clawing their way back into the global market after years of watching foreign taste buds respond to innovative New World wines.

Exports in the first half of the year rose 7.5% to 4.16 billion euros ($5.62 billion), or the equivalent of 77 Airbus jets, France's export federation said Tuesday.

The Federation of Wine and Spirit Exporters France, or FEVS, said champagne and cognac sales led the increase. Wine sales showed more modest growth, which reflected an expansion of the global wine market.

Philippe Casteja, the federation's president, said the industry should remain "prudent" on wine sales and not rely on champagne, the drink of choice for celebrations around the world, to prop up sales.

"Spirits and champagne remain two undeniable locomotives for our results," he said in a statement.

"This bright spot should not make us forget the need to pursue the necessary reforms" in order "to rediscover a durable competitiveness on all market segments of still wines."

Champagne exports rose 13.1% to 904 million euros ($1.2 billion), FEVS said. Spirit export sales rose 9.1% thanks to a 23% increase in cognac sales.

Still wine exports rose 4.1% to 1.94 billion euros ($2.62 billion), with mixed results from region to region. Bourgogne wines charted a 20.9% increase, while Bordeaux wines saw a 2.4% drop.

Over the past ten years, the French wine industry has been plunged into crisis by declining consumption at home coupled with a dwindling demand for French wine abroad.

New World Countries Outpace French Exports

Wines from New World countries such as Australia, Chile and the United States outpaced French exports for the first time in 2003.

Sales in France -- which still account for about two-thirds of national wine production -- have been hurt in recent years by an onslaught of anti-alcohol campaigns and tougher drunk driving laws.

Chronic overproduction has compounded the problem, sending surplus wine to the distillery to be boiled down to pure alcohol. In 2005, quality wines joined the ranks of cheap table wines that are distilled.

European wine makers are being urged to respond to the challenge with a series of reforms.

The European Union's top agricultural official proposed in July to dig up unprofitable vineyards and end subsidies for the massive and costly distillation of unsellable wine.

EU Farm Commissioner Mariann Fischer Boel also wants to simplify and streamline the system of geographical origins to make European wines more attractive to consumers.

Under the current system, wines are labeled according to their often small region of origin, or terroir. The tradition stems from the notion that the combination of soil and climate gives the wine produced there its special character.

New World wines rely more on production methods to earn their reputation. They are also more likely to be categorized by their grape variety or blends than by their region.

Vintners -- and the powerful lobbies that represent them in the European and national parliaments -- are vigorously fighting the EU reforms, claiming they are trying to sink tradition in favor of New World technique.

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