Additionally, the low end wines have never been much of a market domestically. Their problem is they can't compete with other countries when it comes to quality on the low end price points. Even Australia who is clobbering the French, are also suffering from gluts.
Well, that does explain why French wine companies are heavily investing in California wineries. And with good reason: California grows more predictably good wines than in France, especially in the Napa Valley, Sonoma Valley, Paso Robles, Solvang and Lodi areas.
Another thing that is scaring a lot of French winemakers is that Gallo is now heavily investing in high-end wine production. Given Gallo's superior economies of scale, they could run rings around most French wineries fairly quickly.
I got curius and did a search on this topic.
Seems that the shortage crisis was something that was started by CA champagne producers, wasn't it? Very interesting. The market for champagne is fairly limited I'd imagine. Not too smart to drive their consumers to find alternatives. Too many choices at more reasonable prices and they generally taste far better.
Oh well, seems to be a trend in the industry these days.