DATELINE

Bitter spirits distill in Cognac

The growers of the region are popping their corks over France's new tax on their product

Marci McDonald July 6 1981
DATELINE

Bitter spirits distill in Cognac

The growers of the region are popping their corks over France's new tax on their product

Marci McDonald July 6 1981

Bitter spirits distill in Cognac

DATELINE

FRANCE

The growers of the region are popping their corks over France's new tax on their product

Marci McDonald

In the clouded dusk of an uncertain season, Jacques Begouin stood among the vines of Cognac, where his family has been rooted for three generations, and sniffed for a chill in the air. “You see,” he said, grasping the green flare of an embryonic bud, “a frost now could kill the blossoms to come. Things started so precociously that it’s a very risky year.” In fact, the weatherman’s whims aren’t the only factor that make this a risky year in Cognac. Ever since the French government slapped the first half of a proposed two-phase domestic tax blow on the industry, which will cost it an extra 51 per cent on every drop of Cognac sold in France by the beginning of next year, Begouin and his 40,000 fellow Cognacais grape growers have been in open revolt, aboil with all the fury of their pot stills against what he terms a “veritable ca-

tastrophe. The sacrifice of an entire region.”

Earlier this year, more than 5,000 growers overflowed Cognac’s main meeting hall, the Salle Polignac, to distill their outrage into a fine white heat before marching to the local prefecture under banners shouting, COGNAC WANTS TO LIVE and NON TO INJUSTICE. Shopkeepers shuttered their boutique fronts in solidarity and the big six shippers, such as Hennessy and Rémy-Martin, temporarily dammed the heady flow of their amber-toned ambrosia on the bottling assembly lines to show that, even though they were hardly touched (since as much as 95 per cent of their output is exported), they were intent on keeping the faith with the growers on whom they depend for Cognac’s essential blends of eaux-de-vie—quite literally its “waters of life.” “The French market may represent only six per cent of our sales,” protests Francis Arnaud, secretary-general of Martell, “but it’s our base market. It’s a showcase for us. We’re very sensitive to this injustice.”

The march was spearheaded by the region’s 400 mayors, who stormed through town in their tricolor sashes and had gone so far as to contemplate mass resignations or a blockade of the Paris rail lines. “You see, they’re turning us into a whole generation of Red Brigades down here,” blustered

André Cusanges, of the house of Camus, which might appear to be overstating the case a trifle. Still, to understand the depth of feelings fermenting in Cognac is to understand the utter tranquillity of the roughly 200,000 souls who inhabit the banks of the sleepy Charente River, 120 km northeast of Bordeaux.

So fundamentally placid is the populace that it can boast the highest longevity rate in France—a record attributed, of course, to daily doses of the local brew—and nobody can recall a demonstration of any sort since the peasants took up arms against the king three centuries ago. “Down here, the temperament is not so much Mediterranean as it is British,” says Gerard Sturm, spokesman for the Bureau National de Cognac. “People keep their feelings to themselves. They take a long time to ripen their anger. But when it does, it means things are very grave.”

Just how grave things were leaked out over the next months as growers such as Begouin, who also produce a sweetish aperitif called Pineau from their surplus Cognac grapes, defied the order and refused to pay the new tax, while the mayors dug into an administrative strike, stubbornly turning up their noses at all orders from the central government in Paris.

They snubbed the local prefect, Paris’ man, and bureaucracy ground to a slow

crawl. For all its lack of fireworks, the paperwork revolt proved wondrously efficient. When the 400 town halls of the Charente threatened not to compile the electoral lists before May’s presidential vote, and at a time when the government of Valéry Giscard d’Estaing was desperate for every ballot, Paris promptly shot into action, hastily promising to reconsider and whipping up a tripartite commission with local representatives to come up with solutions. “The climate is still very tense,” says Begouin, the 47-year-old president of the Charente Winegrowers’ Federation who won a commission seat. “But for now there’s a wait-and-see attitude in Cognac.”

What complicates the matter is that this isn’t a tempest in the French pot still alone. The Cognac war is simply the latest internal tussle in the uneasy balancing act of the European Common Market, a community which, ironically, was largely founded by a local son, the late Jean Monnet, who started out in life selling his family’s brand of afterdinner firewater across Canada to the trading posts of the Hudson’s Bay Co. This particular twist in the plot, in fact, began with the highland ire of Scotland’s whisky producers. Incensed at France’s high tax rate on scotch, they took their case to the European Court of Justice in Luxembourg which ruled in their favor in February, 1980, ordering France to iron out the price wrinkles between homegrown liquors and le whiskee. Confirmed free enterprisers that they are, the Cognacais accepted the judgment without a whimper. As Begouin says, “We can’t be against import duties on Cognac in other countries and for protectionism at home.”

Still, it was assumed that the new tax would be siphoned off all French liquors, of which Cognac represented only a nine-per-cent drop in the bucket. But last fall, when the national budget came before parliament, the blow broke over the region with a shock: the full tax brunt was to be borne by Cognac, its southwesterly cousin Armagnac and the Normandy applejack brandy known as Calvados. “Imagine some of our deputies having to vote against the national budget,” bemoans Begouin. “They did it with sobs in their voice.” That move has in turn prompted another sort of Cognac war, not just against the blundering bureaucrats of Paris, but against the producers of the country’s most popular aperitifs, the anisette drinks such as Pernod, which escaped scotch-free, as it were. These days the Cognacais are hinting lessthan-gallant things about the anisette lobby, never forgetting to underline that the drinks were outlawed after the war on suspicions of contributing to alcoholism. “Us, we do no harm to any-

body,” wails one shipper, and the zealous Cognac public relations bureau is careful to tuck into each press kit sheafs of eloquent, if somewhat hazily documented, testimony as to how Cognac can cure everything from premature childbirth to the pain of angina pectoris to the blues.

Government attempts to calm the storm with subsidy offers merely inflamed the fierce sense of local independence. “We don’t want charity,” fumes Begouin. “We just don’t want to be assassinated.” Indeed, it is more

than a small element of local pride that Cognac has helped itself out of its own woes ever since the local forefathers discovered that the mundane white wine pressed from the local grapes might not be able to compete with the elegant Bordeaux bottled to the south, but it could be vastly improved by two distillations.

Almost accidentally they stumbled on the fact that the resulting harsh, colorless eau-de-vie, when left to age in certain oaken casks, would not only lose its edge, it would take on an amber glow and mellow mobility which once inspired Victor Hugo to label it “the drink of the Gods.” It only took a handful of British expatriates named Hennessy and Martell, who set themselves up as shippers on the banks of the Charente in the 17th and 18th centuries, to spread Cognac’s seductions around the globe. Now the Cognacais like to boast that they have contributed the most readily recognizable word of French around the world, not to mention nearly $1 billion (as of last year) to the country’s balance of payments. Nor when the massive British market—a market so influential that designations such as VS (very superior) and VSOP (very superior old pale) were coined for it—began to sag, did they rest on their barrels.

Setting up their own slickly oiled marketing and public relations machine, they invaded the United States, which last year became Cognac’s No. 1

customer, quaffing 25 million bottles, and ventured as far afield as Hong Kong where the seven million Chinese down an extraordinary eight million bottles a year, preferably on the rocks as a table wine—a consumption rate that is perhaps spurred on by the Far Eastern belief that Cognac is an aphrodisiac.

In bad years or lean harvests, the Cognac growers organized their own version of social assistance, sharing the crop to keep the region on its feet. Recently, when overproduction threatened to prompt some to grub their vines, they instead decided to use the surplus to launch Pineau, once a private local indulgence, onto the commercial aperitif market and began bottling an unpresuming white table wine called Champerlé. The fact that Cognac has never once cried wolf to the government now leaves an even more bitter taste in the collective mouth. “We’ve always tried to help ourselves,” says Begouin. “And what do we get: a hammer over the head.”

If they seem resigned to accept the first blow which came into effect this spring, they are fighting the second 21per-cent-tax stage—scheduled for next Feb. 1—with uncommon spirits. Statistics already prove their worst fears: March sales fell by 26.9 per cent in France compared to last year. By next year, the tax will have added 23 francs, or nearly $6, to the price of every Cognac bottle sold at home—50 cents to the price of every snifter downed by Frenchmen who see therein an attack on the cherished national ritual of coping with bad news, or even good news, by heading straight for the café to knock back a fine at the zinc counter. “People are already touched,” laments Jacques Hardy, president of Hardy Cognac which depends on the French market for half its sales. “The French market is a mirror for the world market. We can’t have a dead market at home. It’s aberrant.”

Tempers have been temporarily put on simmer while awaiting the outcome of the government commission—a process that has been prolonged thanks to the extended election fever that has been gripping France. Not that the elections themselves haven’t added a new flavor to the Cognac war. The Cognacais are currently raising their glasses in the hope that they have a sympathetic ear in the new president, François Mitterrand, who was, after all, born among their vines 64 years ago and whose brother presides over one of the smaller houses. But the hope is hedged with a certain reserve: in Cognac it is remembered that Mitterrand himself is not much of a drinker, and that his father ended his days selling not Cognac, but vinegar.