French whine

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(HOST) Commentator Timothy McQuiston explains how Vermont can best market its high-quality products, while offering some insight into the old saying, “Do you want some whine with that cheese?”

(MCQUISTON) French wine growers recently organized a peaceful demonstration to bring attention to their industry. Their industry, unlike their lush vineyards, is dying.

The reason is basically two-fold: the French are drinking less wine, and cheaper imports are undercutting revenues. No one is exactly sure why the French are drinking less wine, but everyone knows exactly why there is cheaper competition. Welcome to global- ization.

Western Europe has always fought globalization with things like tariffs and subsidies. In other words, they’ve either simply kept foreign products out of the marketplace or made them very expen- sive relative to the local products. Those products have remained competitive, if that’s what you want to call it, by artificial means. But trying to keep out the effects of globalization is ultimately a hopeless endeavor.

French wine is considered to be a high quality agricultural product; and it isn’t losing out to Australian and American and Chilean wines because those are perceived to be better, but because they are cheaper. The French winemakers are family businesses. Because the ownership is so fragmented, it’s difficult to market against large corporate wineries on other continents.

That same high-quality, family-owned model is commonly found in Vermont. Vermont also gets hammered by larger corporate enti- ties, say, in our dairy industry from states like California, Florida and Wisconsin. The perception in the marketplace is that, across a spectrum of products, from cheese to furniture, Vermont has relatively low quantity but very high quality. However, the global marketplace isn’t going away, and these are common products.

While the French winemakers have expressed their frustration with globalization, they still don’t have a strategy to compete – just to, dare we say, whine.

Vermont’s economy is doing pretty well right now. Unemployment is low, real estate values are great (maybe too great in some areas), relative wages have increased to their highest level on record and maybe their highest level ever, tax revenues and the state budget are in good shape (so far, and in spite of Medicaid pressures) and, importantly, construction employment has increased.

Of course, Vermonters can’t safely assume that all this will last. Foreign competition will continue to eat away at low-wage manufacturing and even at high-wage business services. But, unlike the French, who just assumed that everyone knew their wine was better and that everyone would drink it, Vermont is keeping up the drumbeat of quality, quality, quality. Vermont is pushing its products, like dairy, as far away as China, Cuba and Japan. And Vermont exports in March had their best month since October 2000.

Certainly exporting offers promise, but let’s make sure we all understand where greatest potential growth for Vermont products truly lies – the United States. The U. S. is still the most important market for Vermont, and for everyone else.

This is Timothy McQuiston.

Timothy McQuiston is editor of Vermont Business Magazine.

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