Media Briefings

Economists Question The Importance Of ‘Terroir’ In Making Topquality Wines

  • Published Date: June 2008

It is wine-making technologies rather than ‘terroir’ that determines the quality of wine,
according to new economic research by Professors Olivier Gergaud and Victor
, published in the June 2008 issue of The Economic Journal.
Are good climatic conditions and specific choices of vines sufficient to produce
quality wines? Or is there no good substitute for terroir, as the French have often
claimed and still do? At best, this looks highly exaggerated. At worst, terroir has no
influence, and the right combination of weather, vines, technology and chemistry
are sufficient.
These researchers try to quantify the impact of each of the many inputs and steps
used in producing wine in one of the most renowned wine-producing regions of
France, Haut-Médoc with its celebrated châteaux, such as Mouton-Rothschild,
Latour, Lafite-Rothschild and Margaux.
They use a database on terroir characteristics and techniques in 100 vineyards in
1990, to describe and quantify the wine-processing technology and to separate its
effects on quality from legend and from reputation effects. Quality is represented by
ratings – including Robert Parker and Michael Broadbent – and by auction prices.
The results of the analysis show that endowments do not seem to matter, whereas
technologies do. Wine-making has become so sophisticated that it can completely
shade the effect of terroir, and vines can be grown in almost any place, as long as
the weather permits, and the right combination of vines is made.
The French terroir legend obviously does not hold, at least in the Haut-Médoc region,
which is probably one of the most famous in the world. Nowadays, high quality wines
are produced in many different environments, and sold at prices comparable to
second growth Pauillacs or Margaux.
Old-world producers typically use a terroir-based strategy to convince consumers
that they produce top-quality wines (good wines, best terroir and old-world are
synonymous). A comment made in 2003 by Denise Capbern Gasqueton, owner of
Château Calon-Ségur, a third growth Saint-Estèphe, is typical:
‘I drink [foreign] wines. Very good wines are produced in Chile, for example,
but they lack terroir, and terroir is what makes everything. A wine that is wellproduced
is a good wine, but lacks complexity and other elements to which
we are used.’
The importance of terroir has been questioned for many years. For example, Johan
Joseph Krug (1800-66), a famous champagne producer, pointed out that ‘a good
wine comes from a good grape, good vats, a good cellar and a gentleman who is
able to coordinate the various ingredients.’
And indeed, highly appreciated wines are now produced in California, South Africa,
Australia, South America, as well as in some regions, such as Languedoc-Roussillon
in Southern France that were thought, 20 or 30 years ago, to be good enough for
‘table wines’ only.
French producers try to mitigate the numerous drawbacks of their ‘Appellation
d'Origine Contrôlée’ (AOC) system in order to recover their lost market shares.
These AOC laws are now much too strict. Many exceptional wines such as Daumas-
Gassac, produced in Languedoc, are unable to obtain an AOC label essentially
because they use vines that are not in conformity with AOC rules.
As a result, producers are forced to sell their wine as ‘vin de pays,’ a low grade for a
wine, while Didier Daguenau, who is known to produce outstanding Pouilly-Fumé
wines, obtained an AOC label for his worst production, a lemon he calls
‘quintessence of my balls’ (sic), produced with bad quality grapes that are however in
conformity with the AOC tradition.
In contrast with old-world producers, new-world producers have favoured a brandbased
strategy (sun, good oenologists, etc.), in which terroir is not a crucial factor.
Notes for editors: ‘Natural Endowments, Production Technologies and the Quality
of Wines in Bordeaux: Does Terroir Matter?’ by Olivier Gergaud and Victor
Ginsburgh is published in the June 2008 issue of The Economic Journal.
Gergaud is at the Université de Reims Champagne; Ginsburgh is at ECARES,
Université Libre de Bruxelles.
For further information: contact Victor Ginsburgh on +32 10 474339 (email:; or Romesh Vaitilingam on +44-7768-661095 (email: