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French PM promises €250m for surplus wine crisis

France’s prime minister has promised to increase emergency funding to €250m to help alleviate a surplus wine crisis across the country in the wake of the Covid-19 pandemic.

Prime minister Jean Castex said the French government stood in solidarity with the nation’s ‘artisan winemakers’ and that an aid package for the sector would rise by an extra €80m.

In May, the government said it would pay €170m to help winemakers deal with surplus wine, primarily via so-called ‘crisis distillation’, as the economic impact of Covid-19 exacerbated pressure on producers.

Around 5,000 winemakers had applied to distil around 330 million litres of French wine into industrial alcohol, said the FranceAgriMer agency in July.

Public funds at that point only covered around 58% of the demand, it said in a press conference reported on by French newspaper Les Echos. Winemakers were being offered 78 euros per 100 litres (one hectolitre) for appellation wines and Vin de pays (IGP).

Speaking against a backdrop of vineyards in the Loire Valley yesterday (5 August), prime minister Castex said the top-up in aid would be ‘distributed as quickly as possible’.

He said the money would primarily be used to deal with excess stocks, including help for distilleries to cope with extra demand.

Some wine bodies had hoped for more

Winemaker bodies have been calling for more aid in recent weeks, highlighting that key export markets also faced disruption before Covid-19, such as via the new 25% import tariffs introduced in the US in October 2019.

Not everybody was happy with the latest announcement, however. Thiébault Huber, president of the confederation of Burgundy appellations and winemakers (CAVB), told Decanter.com that he had hoped for ‘much more’.

Burgundy winemakers have been hit hard by the effects of Covid-19 and US tariffs but they had little need for crisis distillation funding, he said.

He criticised the government for failing to offer more support for private storage facilities to hold extra wine stocks, and for not focusing on a plan to ‘reconquer’ export markets. He also lamented the lack of support for social tax charges facing wine businesses.

In July, the CAVB joined with the Champagne growers’ union, SGV, and winemaker bodies from Alsace and the Loire Valley to call for a more comprehensive support package for the wine industry, particularly regarding export promotion.

They said the government had given billions of euros to other sectors, such as aerospace firms and car manufacturers.

Surplus wine an EU-wide issue

Surplus wine has been a key issue at European Union-level discussions so far in 2020, amid reports of excess supplies in other countries, including Italy and Spain.

In July, the European Commission said it would provide more support to the wine sector. It also temporarily loosened its rules on state aid and said that countries could pay crisis distillation funds in advance.

‘The wine sector has been among the sectors hit hardest by the coronavirus crisis and the related lockdown measures taken across the EU,’ said EU agriculture commissioner Janusz Wojciechowski.

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