EU throws more crisis distillation funds at wine sector

By Chris Mercer

- Last updated on GMT

Related tags European union

France will again get European Union money to turn 150m litres of
quality wine into unusable, industrial alcohol, as the Commission
promises to clean out Europe's wine lake once and for all.

France had asked the EU to help distil 200m litres of quality appellation contrôlée wine, but learned today it would have to settle for the same as last year.

It will also get money to distil 150m litres of table wine, alongside Italy, which will receive funds to dispose of 250m litres of table wine and 10m litres of quality wine.

It is the second year running that French appellation contrôlée wines have needed EU crisis funds.

And the move, previously unheard of on these quality vineyards, highlights just how badly some winemakers have flooded the market with products that consumers do not want, according to Mariann Fischer Boel, European agriculture commissioner.

"Crisis distillation is becoming a depressingly regular feature of our common market organisation for wine,"​ she said, re-iterating her plan to unveil proposals for "deep-rooted reform"​ of the wine sector on 22 June.

The Commission is expected to propose ripping up around 400,000 hectares of EU vines to try and drain the bloc's surplus wine lake, estimated at 1.5bn litres. That is roughly enough for every European Union citizen to take four free bottles.

Suffering on the EU wine sector has spread over the last couple of years due to overproduction, falling consumption in the bloc as a whole and rising competition from the New World.

The situation has become more serious following record grape harvests in both Australia and New Zealand over the last couple of years, causing a world wide wine glut.

EU crisis distillation, begun in 1982, was brought back in after a two year break last year to cope with the problems in Europe.

The cost of bailing out France and Italy alone is expected to cost the Commission an extra €131m this year, on top of around €220m put aside annually for 'normal' distillation of excess wine.

Spending is also likely to rise further with Commission officials still considering demands for crisis funds by Spain and Greece.

Some winemakers themselves have questioned the effectiveness of crisis distillation as a voluntary scheme, however.

A few French winemakers told​ at a recent protest that there was little incentive to sign up for distillation because of the low price paid. French wine unions have even called for distillation to be obligatory in some cases, to ensure excess wine is dealt with.

French wine prices largely collapsed last year for most bottles outside the very top bracket, and they have struggled to recover this year.

The industry 'crisis' has hit smaller winemakers in southerly Languedoc Roussillon particularly hard. The tension has led to several attacks on foreign wine and government buildings by militant vintner group CRAV.

A source close to CRAV told​ the group's membership was growing in the region as debts and market depression took their toll on businesses.

See the archives for many on-the-ground articles covering the French wine crisis.

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