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Let's not be deceived by the impression, Chianti Classico does not only consist of Castello di Ama, Felsina, Fontodi, Fonterutoli and Brolio. Most of the vineyard area, totalling about 10,000 hectares - of which about 7,000 hectares are Chianti Classico, the rest IGT - is cultivated by medium-sized and small winegrowers. Many of them nobody knows, because their self-marketing is weak. Thus, about one third of Chianti Classico still changes hands as bulk wine.

Selling bulk wine to bottlers used to be good business. At the end of the 1990s and again in 2002, the winegrowers first received the equivalent of 3.50 euros and then even almost 4.50 euros per litre for their young Chianti Classico. That was a lot of money; it was enough to cover costs and put something aside.

For the traditional farms with a few hectares of vineyards, winegrowing provided the liquidity to pay the bills, the olive trees had always been cultivated out of a sense of duty and tradition, and animal husbandry and gardening were used for self-sufficiency. Even larger farms did not feel pressured to push self-marketing in view of the high prices for cask wine.

As wine prices increasingly melted away, the bottle market also quickly became tighter and it became more difficult to expand self-marketing. When it came to exports, the quantities ordered became smaller, bottle prices fell, payment morale deteriorated and marketing costs (e.g. travel and discounts) increased.

At the same time, the production costs for the wineries doubled in these 15, 20 years. The negative trend reached its absolute low point in the summer of 2011 with cask wine prices as low as 60 cents for Chianti and 80 cents per litre for Chianti Classico.

(Photo: Merum)

Structural crisis follows sales crisis

The point has been reached where the weaker wineries have used up all their reserves, the banks are breathing down their necks and hopes of improvement have been caught up in the realisation of their hopelessness and the unpaid bills.

One hears of wineries that are several months in arrears with workers' wages and are being asked by their bank to become solvent by selling real estate or the whole farm. Some insolvent wineries are said to have already been foreclosed. Between Siena and Florence, at least 20 wineries are currently for sale, including famous ones, according to real estate agent Giuliana Grassi.

According to the real estate expert, real estate prices have dropped by 20 to 30 percent in these years, and if the situation remains the same, the loss in value of the wineries could soon reach 35 to 40 percent. The real estate agencies are busy, Americans, Swiss, Germans, Australians, Canadians, but also Chinese are diligently inspecting what is for sale. Buyers are in a bargain mood, even if the number of transactions is low compared to the number of interested parties. This is because the banks have lost their financing mood, interest rates in Italy are high (7-8%) and many foreigners are refraining from buying in view of the flood of regulations and the threatened taxes of the Monti government, which is no longer in office.

What is currently happening in Chianti, and even more so Chianti Classico, no longer passes for a normal crisis, but has structural consequences. Where the agricultural enterprise cannot be kept solvent thanks to deep-rooted commercialisation, massive self-exploitation among family farms or liquidity injections from non-farm sources, there is a liquidity emergency. The higher the obligations to the banks, the more desperate the situation.

(Photo: Merum)

Why Chianti Classico of all wines?

Merum readers may remember the Chianti Classico 2000 consortium project, which was reported on in detail in Merum at the time. It was launched in 1988 with the aim of making the vineyards of Chianti Classico fit for quality wine production.

More than 200 Sangiovese clones were tested for their qualitative suitability, suitable rootstocks were sought and the optimal planting density and the best training systems were clarified. At that time, 5,000 of the 7,000 hectares still had to be replanted, and the results came at the last moment: it was not until the end of the 1990s that the research project delivered usable results.

15 years have passed since then. Wine sales were booming at the time, prices were high, the winegrowers did their homework and, as expected of them, renewed the vineyards and brought their cellars into shape. And while they were at it, they also put a bit of money into the buildings and converted the rooms they didn't need themselves into rentable space.

No one would have financed these investments from their savings. The banks readily helped with loans, the reasonableness of the interest burden was measured against the income of the time. The lean years seemed to be over forever, people prepared themselves for a golden future and secretly dreamed of the famous Châteaux in the Médoc.

(Photo: Merum)

But after only 15 years, the dream was over again. Even without terrorism and financial crises, even if the Tuscan boom had lasted until today, the time was too short to bring the appellation up to scratch and write off the investments. A vineyard should last at least 30 or 40 years, and a new cellar renovation should not be necessary before 25 or 30 years. Thus, loans with long terms were chosen, because the banks were also convinced that Chianti Classico would flourish for a long time.

In contrast to the Classico core zone, the surrounding Chianti areas never saw rosy times. Although the price of cask wine there also rose to the equivalent of a good 1.50 euros per litre at one point in the late 1990s, neither this nor the bottle prices ever gave cause for daring investments. As a result, their indebtedness is much lower than that of the Classico wineries.

Demand for Chianti has picked up again - at a still low price level - and the situation in Montepulciano and Montalcino is also far less tense than in Chianti Classico. The Morellino producers also seem to be doing well, and even those of Vernaccia di San Gimignano are doing splendidly.

Why has Chianti Classico of all places been hit so hard? Perhaps we should ask the question the other way round: Could things have turned out differently in view of the producers' behaviour? Since Chianti Classico has enjoyed a certain success, everything is being done to weaken the Chianti Classico brand. They invest in quality, to their credit, but not in the brand.

It is pointless to do expensive advertising for the Chianti Classico brand if the basic question "What is a Chianti Classico?" cannot be answered and if the producers' image wine is not a Chianti Classico but a table wine. I don't know of a single winery where the most expensive wine on the price list is a Chianti Classico. Everywhere it is topped by a so-called Supertuscan.

It makes no difference at all whether this wine is epoch-makingly good or simply a barrique broth, what matters is that the market is told that the most valuable wines of the appellation are not Chianti Classico. Concentrating the image on individual wineries and making the collective brand unattractive is a surefire way to run an appellation aground.

So where do we go from here?

Chianti Classico, as it presents itself today, will not get back on its feet by itself. As long as the winegrowers don't understand that their existence is linked to the Chianti Classico brand, for better or worse, and as long as they forego a little extra income from super Tuscan speculation in the interest of its good reputation, the appellation will never get off the ground. Unfortunately, no one tells the winegrowers this, but it would be decisive that IGT wines are not more expensive than appellation wines.

A good 24 million litres of Chianti Classico, or 33 million bottles, is a ridiculous amount in an international context. Most of the wine is of good quality, and for some years now, thanks to the new controls, authenticity has also been guaranteed. What are 33 million bottles? Nothing compared to the turnover of an international company.

The difference between a big wine house and an appellation like Chianti Classico is that we are not dealing with a single management capable of making decisions, but with 600 winegrowers - 345 of them bottlers plus a handful of cellar cooperatives - each of whom has a different opinion and supposedly different interests, and each of whom is offended if things go differently than would serve their own current needs.

The decisions of the consortium must upset as few of these 600 members as possible. It is in the nature of things that the result is politically correct decisions without any depth or sustainability, such as the ban on white varieties and the introduction of Merlot & Co. instead.

(Photo: Merum)

The problem of Chianti Classico is neither a lack of credibility nor insufficient quality, but only the botched marketing with the help of practically all producers.

A few innovations are now supposed to bring a way out of the crisis. The consortium is proposing a new top category, "Selezione", with stricter production rules, which must be made from one hundred percent self-produced grapes (buying in is forbidden). This "Selezione" will thus only be produced by producers with their own vineyards.

Next to it, or rather below it, is the Riserva, for which it is now to be stipulated that the winegrowers have to declare the destination of the Riserva already at the time of the grape harvest. This means that an unsold Chianti can no longer be promoted to the Riserva league solely on the basis of its advanced age. In contrast to the Selezione, the Riserva may also contain purchased goods, which predestines it to the top category of bottlers.

As before, Chianti Classico DOC is listed below Riserva in the quality pyramid. New: Since people are apparently in a panic mood because of the three million litres of Chianti Classico left over every year, the Council of Wise Men is proposing the creation of a new second wine category with DOC status. Its varietal composition and name, however, have yet to be determined.

A positive aspect is the planned regulation that Chianti Classico cask wine may only be transported as certified DOCG wine in the future. This limits the possibility of dubious elements to upgrade any provenance to DOCG during transport.

In the hour of need, Gallo Nero, indeed one of the world's most famous wine brands, is now to be revived. The consortium intends to make the image of the Black Rooster obligatory on the bottle.

All in all, certainly ideas worthy of discussion. But even the best consortium cannot get to the root of the real root problem of Chianti Classico. The Italians, and even more so the Tuscans, are incorrigible individualists. Appellation comes from the French, the French tick differently, they feel collectively, they can subordinate themselves to common interests. The Italian winegrower scolds the consortium on principle, he speaks well of himself with preference, and he still likes to seal his more successful neighbour's wine cellar with nightly tankers from southern Italy.

You can tell the difference between Burgundy and Chianti Classico as soon as you start talking to the producers. In Burgundy, the appellation is a system, an organism, so to speak, whereas an Italian DOC is more like a chicken coop with a constantly changing pecking order.

You only belong to the consortium or an appellation because otherwise you can't get rid of your wine. As soon as your own success is greater than the brand effect of the DOC, you leave the consortium and downgrade your wine to IGT. But how are we consumers supposed to love - and buy - Chianti Classico if the winemakers themselves treat it as a second-class wine?

A serious shortcoming of the Tuscan appellations is the lack of a differentiating definition of origin. Without wanting to classify a priori, as a Chianti lover I would like to know whether the wine comes from a high-altitude parcel in Radda or a large site near Poggibonsi. As a wine lover, this information is worth something to me. The more identifiable the origin, the more valuable the wine - this is what Burgundy teaches.

Unfortunately, the Tuscans have not yet understood this: It is only thanks to the Grands Crus that Burgundian producers also sell the simple wines at good prices! In Tuscany, a geographically fine-tuned designation system has never been able to establish itself because everyone fears that the other vineyard could be rated higher than their own.

So everything remains the same. A large lake of wine called Chianti Classico, the bottlers will offer the more expensive qualities as Riserva and the winegrowers will offer them as Selezione. It is the producers who determine which is the better wine, they classify their wines themselves. They determine what is Grand Cru - Riserva, Selezione - and what is Appellation régional - Annata. With this paternalism of the market, the Chianti Classico appellation is giving away attractiveness that it actually needs.

(Photo: Merum)

Who the crisis makes poor and who rich..

When costs exceed income, people have to live off their savings, i.e. consume capital. This impoverishment manifests itself not only in reduced income for the owners, but also in increasingly poor payment practices towards suppliers and workers, in the obsolescence of farm equipment and vineyards, in the neglect of buildings, in compromises on quality, in savings on everything that does not directly serve sales, in registered letters from the bank's legal department and, in the end, the forced sale of the property.

But there are not only weepers, some also have to laugh. The wine houses are flourishing as never before. While the plaster is peeling on the farmhouses, the bottlers are building wine temples. The lower the cask wine price, the higher their marketing opportunities and profits.

Some large producers with strong marketing are also buying grapes and wine. Buying in is allowed for farms up to 49 percent of total production. Wineries with a high level of self-marketing hardly suffer from the crisis; if additional purchases are made, the losses in production and the lower bottle prices can be compensated by cheaply bought wine.

What can we friends of Tuscany do for Chianti Classico? With our purchase, we can support the winegrowers whose wines we consider good and authentic. That's all we can do. By buying these wines, we support the winegrowers who stand by the appellation with their wines.

Furthermore, we will probably have to slowly get used to the idea that in the coming years there will be more unknown faces, possibly of Asian character, behind old familiar labels.

This article was made available to us by the Merum editorial team. You can find out more about Merum, the magazine for wine and olive oil from Italy, here:
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