As Wine Prices ‘Collapse’, The EU Pays France €160 Million To Dispose Of Excess Wine

In response to “collapsed” prices brought on by declining sales, the European Union paid France €160 million to destroy excess wine.

A number of variables, including the rise in popularity of craft beer, the housing crisis, and overproduction, have been cited as contributing to France’s wine surplus. In some EU nations, wine consumption has decreased by as much as 34%, yet wine output has increased by 4% overall.

Now intervening with a large compensation is the EU. The French government has added €200 million to the fund, which will be used to purchase unsold wine. The wine’s alcohol content will then be used in products like hand sanitizer, cleaning supplies, and perfume.

According to Fesneau, the wine sector must “look to the future, consider changes in consumer behaviour, and adapt.” According to figures from the European Commission, wine consumption decreased in Italy, Spain, France, Germany, and Portugal for the year ending in June by 7%, 10%, 15%, 22%, and 34%, respectively.

The largest wine-producing region in the world, the EU, saw an increase in wine production of 4%.

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In an effort to aid struggling growers and support prices, the French government said on Friday that €200 million ($216 million) will be set aside to pay the destruction of surplus wine production. A number of significant wine-producing regions in France, including the renowned Bordeaux region, are failing due to a confluence of issues from changing consumption preferences,

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According to the local farmers’ association, a decline in wine demand has resulted in overproduction, a severe drop in prices, and significant financial difficulties for up to one third of wine producers in the Bordeaux region. According to Marc Fesneau, the French government has increased a 160 million euro European Union grant for wine degradation to 200 million euros.

He emphasised that the business has to “look to the future, think about consumer changes… and adapt,” adding that the money was “intended to stop prices collapsing and so that wine-makers can find sources of revenue again.” The greatest wine-producing region in the nation, southwest Languedoc, noted for its robust reds, has also been severely impacted by the decline in wine prices. The alcohol from destroyed wine can be sold to companies for use in non-food products such as hand sanitiser, cleaning products, or perfume.

Additionally, the agricultural ministry said in June that it would spend 57 million euros to pay for the removal of approximately 9,500 hectares of vines in the Bordeaux region. Other public funding are also available to help grape growers to transition to other crops, such olives. According to data from the EU, the 27-member organisation spends $1.06 billion annually on the industry. The sector was severely impacted by the Covid crisis, which closed bars and restaurants all around the world, as well as a long-term trend of consumers switching to beer and other alcoholic beverages. Customers have cut back on their purchases of luxuries like wine as a result of recent increases in the cost of food and fuel, which are connected to skyrocketing global energy costs and the invasion of Ukraine.