A COUPLE of years ago when waging war in Iraq seemed like a good idea, Americans famously dubbed the reluctant French, “cheese-eating surrender monkeys”. Wisely, they failed to diss that other staple of the French diet, wine, the producers of which clearly have the stomach for a fight. Earlier this month a group of radical wine producers calling itself CRAV released an al-Qaeda-style video in which seven balaclava-wearing men threatened violence unless the French government put up the price of wine.

How seriously to take their threat that “blood will flow” is uncertain, but it would be unwise to dismiss it. Already there have been reports of attacks with small explosive devices against supermarkets selling foreign plonk in the Languedoc region, believed to be home to the shadowy CRAV, the Union for Viticultural Action. Shots have been fired at a lorry bringing wine from abroad. The last time the wine industry revolted, exactly 100 years ago, the army fired at the demonstrators, killing six.

Nicolas Sarkozy, the new president of France, no doubt expects a battle with his country's notoriously combative workers as he tries to make good on his promise to modernise the economy. But he probably didn't think that his first fight would be a war on terroirism. How he handles it will be watched closely by foreign investors, who have high hopes that “Sarko” can make France a great place to do business.

Mr Sarkozy has certainly sent many encouraging signals, not least by delivering a campaign speech in London, now home to 300,000 French people—by some accounts, France's entire stock of entrepreneurs. He seems determined to shake up the country's paralysing labour-market regulations. He seems far more likely to deliver economic reform than his predecessor, Jacques Chirac, or his socialist rival in the election, Ségolène Royal—which is why The Economist endorsed him for the Elysée Palace.

At a recent gathering in San Francisco, one leading American venture capitalist was so enthusiastic about Mr Sarkozy that he told The Economist that France and America may be about to swap economic models. But in truth, this probably owed as much to his gloom about America's growing risk-aversion and enthusiasm for regulating business as to a detailed knowledge of France and the prospects for change.

Although Mr Sarkozy talks of modernisation, he has long been an economic nationalist and a promoter of French business champions, quick to spout protectionist rhetoric. At last week's European Union summit he reportedly caused a stir by opposing the inclusion of a clear statement in favour of “free and undistorted competition” in the EU's new constitution, oops, treaty. (A French president opposing competition? Whatever next!) It will not be much of a surprise if the president decides to treat French wine as a national champion, rather than as a test of his determination to reform the economy.

AFP

Drinking it up

Over-regulated labour markets are not the main problem facing the French wine industry—though other policies are partly to blame. The European Commission is about to announce a big reform of Europe's wine-market regulations, which will give Mr Sarkozy a chance to show where he stands.

Although this plan will involve no reduction in the generous budget to support European wine, signs are that there will be widespread resistance from wine-growing countries, including France. Mariann Fischer Boel, the EU's agriculture commissioner, says that “there is more tension in wine than I have seen in any other agricultural product”.

The EU's plans include shifting government spending to promote European wines abroad and to foster a wider range of businesses, including wine tourism, in wine-growing regions. Another proposal is to pay low-quality growers to quit the industry. Each year about half a billion euros goes to subsidise winemakers whose output is of such poor quality that, instead of being drunk, it is turned into industrial alcohol. Brussels has also suggested ploughing up thousands of acres of vineyard in the Languedoc region. The CRAV claims that it will fight the plan much as the French resistance fought the Nazis.

Two things have gone wrong for French winemakers. First, producers elsewhere in the world have got much bigger and much better, especially at exporting and marketing. Second, the French have been protected to some degree by the complex regulations governing their industry domestically and within the EU. Perhaps as a result of weak competitive pressures, they have been slow to respond to innovations by foreign producers, who tend to stress grape varieties and branded blends rather than place of origin. Of course, the very best French wines remain highly sought-after, and exactly where they come from matters a lot, and rightly so. But that is not true for much vin ordinaire.

Allowing “free and undistorted competition” would strengthen the French wine industry in the long run, even though many of the low-quality producers would need to find another career. But, unless Mr Sarkozy is a truly bold reformer, this year's clarets are likely to be ready for drinking long before that happens.

The CRAV would have been meat and, er, drink to Frederic Bastiat, the great satirical French economist and early fan of The Economist. In his famous “Candlemakers' Petition” of 1845, he argued on behalf of candlemakers that the French government should block out the sun, to prevent its unfair competition with their products. Were he around today, he would no doubt have adapted this petition for the CRAV. It would call on President Sarko to stop the sun shining on the vineyards of the Mosel and Piedmont, New South Wales, the Cape and Napa, so that its rays fell only on the grapes of France.