The French government has announced it is to set aside €200m to fund the destruction of surplus wine production in an attempt to support struggling producers and shore up prices.
Several major wine-producing regions in France, particularly the Bordeaux area, are struggling because of a cocktail of problems including changes in consumption habits, the cost of living crisis and the after-effects of Covid-19.
A fall in demand for wine has led to over-production, a sharp fall in prices, and major financial difficulties for up to one in three winemakers in the Bordeaux region, according to the local farmers’ association.
An initial EU fund of €160m for wine destruction has been topped up to €200m by the French government, the agriculture minister, Marc Fesneau, told reporters on Friday.
The money was “aimed at stopping prices collapsing and so that winemakers can find sources of revenue again”, but he stressed that the industry needed 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 been hit hard by the fall in wine demand.
The alcohol from destroyed wine can be sold to companies for use in non-food products such as hand sanitiser, cleaning products and perfume.
“We’re producing too much, and the sale price is below the production price, so we’re losing money,” said Jean-Philippe Granier, from the Languedoc wine producers’ association.
In June, the agriculture ministry also announced €57m to fund the pulling up of about 9,500 hectares of vines in the Bordeaux region, while other public funds are available to encourage grape-growers to switch to other products, such as olives.
Europe last suffered a “wine lake” in the mid-2000s, which forced the EU to reform its farm policy to reduce the massive overproduction of wine that was being stimulated by its own subsidies.
The 27-member bloc still spends €1.06bn annually on the sector, according to EU figures.
As well as a long-term trend of consumers switching to beer and other drinks, the industry was badly hit by the Covid pandemic that shut restaurants and bars worldwide, leading to a sharp fall in sales.
Recent rises in the prices of food and fuel, linked to rocketing global energy prices and the Russian invasion of Ukraine, have also seen buyers reduce their spending on non-essential goods such as wine.