Why is France spending over $200 million to destroy surplus wine?
French winemakers are facing a blend of problems that has left them with an oversupply. The EU and France are allocating millions to destroy the excess.
European winemakers are dealing with a dire harvest of problems that have blended together prompting the European Union and the French government to spend $216 million (€200m) to support producers. The crux of the problem is that winemakers find themselves with too much supply as well as demand shrinking.
Consumers have been changing their habits with more people switching over to craft beers and spirits or going without as they deal with the increased cost of living affecting households around the globe. At the same time though, wine production has been increasing across the economic bloc.
Why is France spending over $200 million to destroy surplus wine?
The European Union put forth an initial allocation of almost $173 million in June to destroy around 66 million gallons (250m liters) of wine according to TastingTable. The French government poured in more funds to top the total up to just shy of $216 million (€200m) Agriculture Minister Marc Fesneau told reporters at a press conference on Friday. The wine will be reduced to alcohol to be sold for use in non-food products such as hand sanitizer, cleaning products, or perfume.
Funds will also be dedicated to aid in reducing overproduction. The French government hopes to achieve this by paying for growers to uproot their vines as well as encouraging them to switch to other crops such as olives.
The ultimate aim is to stop “prices collapsing and so that wine-makers can find sources of revenue again,” according to Fesneau. A steep fall in prices due to the surplus means that it costs more to produce the wine than it can be sold for.
France 24 reports, according to the local farmers’ association this has created in the Bordeaux region major financial difficulties for up to one in three winemakers. The country’s largest wine producing region, Languedoc, located in the southwest, has also been hard-hit.
The Agriculture Minister stressed that the industry as a whole must be forward looking and “think about consumer changes ... and adapt.”