France is preparing to destroy some 80 million gallons of wine to help its farmers in wine-producing areas to cope with a sharp fall in prices, as consumption decreases and overproduction has further complicated the situation. For this purpose the European Union has granted an initial 160 million Euros, topped to 200 million Euros by the French government, Agriculture Minister Marc Fesneau told reporters at a press conference.
Fesneau said the money was “aimed at stopping prices collapsing and so that wine-makers can find sources of revenue again,” but he stressed that the industry needed to “look to the future, think about consumer changes ... and adapt.”
Wine makers in the famous Bordeaux region said that because of the fall in prices, one in three of them were facing major financial difficulties.
The alcohol from destroyed wine can be sold to companies for use in non-food products such as hand sanitizer, cleaning products, or perfume.
The southwest Languedoc region, France's largest wine area known for its full-bodied reds, has also been hit hard by the fall in wine demand.
“We’re producing too much, and the sale price is below the production price, so we’re losing money,” Jean-Philippe Granier from the Languedoc wine producers’ association. .
The French agriculture ministry also announced 57 million Euros in June to fund the pulling up of around 9,500 hectares of vines in the Bordeaux region, while other public funds are available to encourage grape-growers to switch into other products, such as olives.
Europe last suffered a so-called “wine lake” in the mid-2000s, which forced the European Union to reform its farm policy to reduce the massive overproduction of wine which was being stimulated by its own subsidies.
The 27-member bloc still spends 1.06 billion Euros annually on the sector, according to EU figures.
As well as a long-term trend of consumers switching into beer and other alcohols, the industry was badly hit by the Covid-19 crisis which shut restaurants and bars worldwide, leading to a sharp fall in sales.
Recent rises in the price of food and fuel, linked to rocketing global energy prices and the invasion of Ukraine, have also seen buyers reduce their spending on non-essential goods such as wine.
While approving emergency help for the sector in June, the European Commission said that wine consumption for the current year was estimated to have fallen 7% in Italy, 10% in Spain, 15% in France, 22% in Germany and 34% in Portugal.
Wine production in the bloc, the world’s biggest wine-making area, rose 4%. The Commission said the worst affected vineyards were those producing red and rose wines from certain regions of France, Spain and Portugal.