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French government to spend €200m destroying surplus wine

The French government will spend €200m (£171.5m) destroying surplus wine in a bid to shore up prices and support struggling producers.

Agriculture Minister Marc Fesneau said the funds are ‘aimed at stopping prices collapsing and so that winemakers can find sources of revenue again’.

However, he warned that the industry needs to ‘look to the future, think about consumer changes and adapt’.

Demand for wine has fallen in this new era of high inflation, a cost of living crisis and lifestyle changes following the Covid-19 pandemic.

That has led to a surplus of wine, which naturally pushes prices down. Some wine drinkers may welcome a fall in prices at a time when household budgets are being squeezed, but it has led to major financial difficulties for winemakers, threatening the future health of the industry.

In December, a large group of winemakers marched through the streets of Bordeaux to highlight their precarious financial position and call for state aid to pull up vines.

The CIVB, a trade association representing producers in the region, revealed that one in three winemakers is in financial trouble right now.

Producers across the country are in a similar situation. Jean-Philippe Granier, the technical director of the Languedoc AOC, reported that the region is producing too much and the sale price has slipped below the cost of production, meaning vignerons are now operating at a loss.

Responding to pleas for help, the European Union pledged €160m to pull up vineyards in France earlier this year.

It revealed that wine consumption has fallen by an estimated 15% in France, 10% in Spain, 7% in Italy, 22% in Germany and 34% in Portugal. At the same time, wine production in the bloc increased by 4%, leading to oversupply.

In June, the French agriculture ministry announced €57m in aid to help producers pull up 9,500 ha in the Bordeaux region.

It has now provided an additional €200m to convert excess wine into products such as bioethanol, perfume or hydroalcoholic gel, which will reduce inventory.

Fesneau said he hopes the aid will ‘alleviate a little the difficult moment of crisis that winegrowers are going through’.

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