Burgundy in UK 'catastrophe'

The French region has been hit by falling demand in both the UK and the USA, contributing to a 30% decline in exports in the first quarter of the year. The two countries are Burgundy's most important export markets, accounting for 45% of volumes.

Gagey told Reuters that the UK had created particular problems: "Supermarkets are very powerful there. They refuse to sell a bottle at more than £10, and with an increase in taxes from the government, it's up to the producers to swallow the extra cost."

Sterling's fall against the euro has compounded Burgundy's problems, Gagey said.

He predicted a fall in grand cru prices from the 2009 vintage, when volumes are expected to be higher than in the relatively poor 2008 harvest.

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