The French government announced Friday that it will allocate some 200 million euros (216 million dollars) of funds from France and the European Union to destroy surplus wine production and convert it into alcohol for perfumes and hydroalcoholic gel.
French winemakers are facing a decline in consumption of this product due to inflation and changing preferences in a country where wine culture has historically played a major role, but now beer consumption is growing.
Given the excess of leftover bottles, the authorities subsidize producers so that they withdraw them from the market and turn them into alcohol for perfumes or hydroalcoholic gel.
Initially, the French authorities had planned to allocate some 160 million euros, but this Friday they announced that they were increasing this subsidy to 200 million euros. “The State confirms this supplement (…) which will increase the financing of the crisis in distillation to 200 million,” said the Ministry of Agriculture in a statement.
“We have to ensure that prices stop collapsing and that winegrowers recover their income,” said Agriculture Minister Marc Fesneau during a press conference at a distillery in southern France.
This wine crisis is especially noticeable in areas with a large presence of producers, such as the Gironde (south-west) or the Languedoc (south-east).
“We are producing too much and the sale price is lower than the production price,” lamented Jean-Philippe Granier, technical director of the Languedoc AOC union, in statements to AFP at the beginning of August.
In addition to France, this wine crisis is also particularly affecting Spain and Portugal.
Europe had already faced a similar situation during the first decade of the 21st century and then modified agricultural policies to reduce wine surpluses. The EU allocates up to 1,060 million euros each year to subsidize this product.