PARIS – The French government announced on Friday that 200 million euros (S$293 million) would be set aside to fund the destruction of surplus wine to support producers and shore up prices.
Several major wine-producing regions in France, particularly the famed Bordeaux area, are struggling because of a cocktail of problems from changes in consumption habits, a cost-of-living crisis and after-effects of Covid-19.
A fall in demand has led to over-production, a sharp fall in prices and major financial difficulties for up to one in three wine makers in the Bordeaux region, according to a local farmers’ association.
An initial European Union (EU) fund of 160 million euros for wine destruction has been topped up to 200 million euros by the French government, Agriculture Minister Marc Fesneau told reporters on Friday.
The money is “aimed at stopping prices collapsing and so that wine-makers can find sources of revenue again”. But he stressed that the industry needs to “look to the future, think about consumer changes… and adapt”.
The south-west Languedoc region, the country’s largest wine area known for its full-bodied reds, has also been hit hard by the weak demand.
The alcohol from destroyed wine can be sold to companies for use in non-food products such as hand sanitiser, cleaning products or perfume.
“We’re producing too much, and the sale price is below the production price, so we’re losing money,” Mr Jean-Philippe Granier from the Languedoc wine producers’ association told AFP earlier this month.
The agriculture ministry also announced an injection of 57 million euros in June to fund the pulling up of around 9,500ha of vines in the Bordeaux region. Other public funds are available to encourage grape growers to switch to other products such as olives.
Output up, sales down
Europe last suffered a so-called “wine lake” in the mid-2000s, which forced the EU 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 to beer and other alcohols, the industry was badly hit by Covid-19 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.
