This was announced by Minister of Agriculture Marc Fesneau on Friday. He hopes that French wine prices will no longer fall due to the lack of demand. For many winegrowers, production is no longer even profitable.
The minister is funding the destruction with 160 million euros from a special EU grant fund. It was set up about twenty years ago when Europe was struggling with a huge wine surplus, as a result of its own agricultural subsidies. The remaining 40 million euros will come from the French government.
The government uses the money to buy the surplus from winegrowers. How much wine will be destroyed and what the process will look like is not yet clear. The alcohol released during the destruction is intended for products such as disinfection gel, cleaning products and perfume.
Drinking less and less
Out Numbers the French Observer on Drug Consumption and Addictions OFDT shows that the French have started to drink less wine every year. Beer consumption, on the other hand, remains stable or slightly increasing year-on-year. In 2021, an average Frenchman drank about 40 liters of wine and 30 liters of beer annually. At this rate, beer will eventually become the dominant drink in France. Specialty beer in particular is becoming increasingly popular.
Also contributing is inflation, which has caused the cost of living to rise and the French bought fewer luxury products in the past year. Higher exports offer no way out: recent figures from the European Commission show that other Western Europeans have also started drinking less wine.
French winegrowers have not started producing less wine in the meantime, so that supply and demand are no longer in balance and the price is falling sharply. Many vineyards are losing money because of this. This is particularly noticeable in the Bordeaux region: according to the local farmers’ union, one third of the vineyards are in financial trouble.
The southeastern region of Languedoc, known for its extensive production of full-bodied red wines, is also facing major problems. “We produce too much wine and the selling price is now below the production price,” said the president of the regional winegrowers’ organization Jean-Philippe Granier to the French news agency AFP. “We are now losing money.”
Switch to olives
Destroying the wine is essentially market intervention by the French government, designed to keep the vineyards afloat. In June, the Ministry of Agriculture already allocated 57 million euros to support ailing vineyards in the Bordeaux region.
But, as Minister Fesneau emphasized on Friday, the fact that the government is intervening does not mean that the French wine industry can continue with the same momentum. “The industry must look to the future and adapt to changing consumer behavior,” said the minister. France already has subsidies for winegrowers who want to (partially) change their economic activity and, for example, want to produce olives.
France is not the only country with a wine surplus. Australia has 2.8 billion bottles left, which may also be destroyed. The Australian surplus is partly due to a trade dispute with China, which no longer imports Australian wine.
