By Dale RiceThursday, December 14, 2006

There's a good news/bad news situation taking hold in the vineyards of Europe, where a glut of wine is being produced.

The good news is that the abundance in the supply is prompting the creation of new brands in the under $10 category, particularly from Southern France and

Italy.

The bad news is that the European Union has come up with a plan to fix this: The government is paying vintners to transform their wine into alcohol that can be used in gasoline or disinfectants, according to press reports from the region.

Steve Savina of Grape Vine Market says the glut hasn't forced a lowering of prices on well-established brands from Europe.

"We're not seeing as much decreased prices as we are silly brands," he says.

Large companies, primarily, are creating lots of new brands under $10. They are buying wine from the big co-ops and coming up with "kitschy labels" to help market it, Savina says.

That's especially true in the Languedoc region of Southern France. There's also "a trickle" of new brands from Germany, he says.

Not everyone is having the same problem. "Spain is not feeling the glut like the French," Savina says.

Although Italian wines are still in a growth pattern, he says, new brands from Southern Italy are showing up, too.

And new grape vodkas are appearing in the marketplace from France. They're "emergency distilled grapes — packaged up to sound fancy," Savina says.

Europe's oversupply is not likely to last for long. Besides paying vintners to convert wine to alcohol, there's an effort under way to rip out 100,000 acres of vines by 2011. That represents more than a 10 percent reduction in the total amount of grapes planted in Europe.

This is happening because European wine production is growing at a time when there is less demand for it due to the incredible competition from other parts of the world, such as Australia, South Africa, South America and the United States.

From a practical standpoint, that might reflect the laws of supply and demand, but it sure is sad to think about a bottle of good wine ending up as household cleanser.

To steal a line from reader Allen Armstrong, who responded to an item in my blog — Dale's Table — about the wine-to-detergent endeavor:

"Hey, sweetie, would you mind passing me the merlot? Preferably the '96. It seems to clean the counters better than the '97."

drice@statesman.com; 445-3859