Falling demand for French wine has resulted in a surplus, causing Emmanuel Macron’s government to set aside €200 million to pay farmers for disposal.
The French agriculture ministry has secured EU authority and financial support to provide “crisis distillation aid”.
This assistance is projected to benefit mostly the Bordeaux and Languedoc areas.
Under the scheme, the wine is converted into ethanol for industrial uses such as perfume or hydroalcoholic gel manufacturing.
This plan is part of a larger government effort to support France’s troubled wine industry, which is dealing with diminishing domestic demand, increased competition in overseas markets, and decreased sales in China.
In order to decrease overproduction, funding will be made available to winegrowers to help them switch to alternative products like olives.
The French government’s goal in injecting financial help into the sector is to prevent “prices collapsing… so that wine-makers can find sources of revenue again,” according to Agriculture Minister Marc Fesneau.
Despite this financial assistance, which includes a €160 million EU fund that the French government boosted to €200 million, the wine business must also “look to the future, think about consumer changes … and adapt,” he said.
Wine consumption has declined by 7 per cent in Italy, 10 per cent in Spain, 15 per cent in France, 22 per cent in Germany, and 34 per cent in Portugal, according to European Commission data for the year up to June.
At the same time, wine output in the European Union, the world’s largest wine-producing region, has risen by 4 per cent.
The southwest Languedoc region, known for its powerful red wines and France’s largest wine-producing region, has also suffered severely as wine consumption has declined.
The ethanol created from the discarded wine can be sold to businesses for use in non-food products such as hand sanitizers, cleaning solutions, or scents.
According to Jean-Philippe Granier, a representative of the Languedoc wine producers’ association, the region is overproducing and facing financial loss as a result.
He said: “We’re producing too much, and the sale price is below the production price, so we’re losing money.”
The recent increases in food and fuel costs, which are associated with soaring global energy prices and the Ukraine invasion, have led consumers to cut back on their expenditures for non-essential items like wine.
