France has received approval from the European Commission to distill approximately 3m hectoliters (hl) of surplus wine. This was confirmed by Anne Haller, Deputy Director-General and Director of Vignerons Coopérateurs.
On May 31, 2023, the countries applying for distillation, France, Spain, and Portugal, received a draft act from the European Commission. This grants individual agricultural ministries the right to carry out a distillation campaign. "Now it's just a matter of final negotiations before the measures can begin," confirmed Jérôme Despey, Chairman of the Wine Technical Council of FranceAgriMer.
In February, Minister of Agriculture Marc Fresneau announced his intention to advocate for the distillation of excess red and rosé wines. This will be funded with €160m from France and Europe and shall be carried out in two consecutive phases.
Despey stated that the proposed prices for distillation aid by the European Commission are as follows: €45/hl for French wines without geographical indication, €65/hl for wines with protected geographical indication (IGP), and €75/hl for wines with protected designation of origin (AOP). Additionally, a rate of €5/hl is set for distilleries. It was noted that these prices are below the average market prices per segment.
Time is running out
The final "go-ahead" will come after the concluding discussions between the European Commission and the three member states. “We don't have an exact date for when it will finally start, but we hope it will be within the next 10 days," explained Anne Haller to our sister publication WEINWIRTSCHAFT.
The French wine industry eagerly awaits the campaign's initiation as numerous wineries face the burden of excessive surpluses that now threaten their livelihoods due to a declining market, particularly for red wines. Furthermore, many wineries have exhausted their storage capacities, and the upcoming vintage is approaching. The wine regions most affected by this situation are Bordeaux, Languedoc, and the Rhône Valley. Jérôme Despey is pursuing strategic considerations for the future of winemaking: "We need to think ahead. We don't produce to distill. I want to move away from this mindset of distilling every year," he emphasized.
However, the practice of subsidized distillation has become a true exception compared to previous years, as the complex approval process also indicates. It is undeniable that France is facing overproduction, particularly concerning red wine. As an additional measure to achieve a balance of supply and demand, France is also addressing the subsidized uprooting of vineyards. ITP