There’s a crisis in the wine industry, which could be linked to the Russian war in Ukraine, causing France to spend $200 million to destroy its precious wine.
Wine Producers in Peril
Struggles plague major wine-producing regions in France, especially Bordeaux, due to shifting consumption habits, soaring living costs due to the Russian/Ukraine war, and the lingering effects of the pandemic.
Oversupply Woes
The local farmers’ association reported that the decline in wine demand had triggered over-production, resulting in plummeting prices and dire financial straits for up to one-third of Bordeaux winemakers.
Ukraine War Changes Consumer Dynamic
Rising food and fuel prices, linked to surging global energy costs and geopolitical tensions like the Russian invasion of Ukraine, have prompted consumers to reduce spending on non-essential items, including wine.
Boosted Funding
France bolstered the initial EU fund of €160 million for wine destruction, increasing it to €200 million to aid winemakers and stabilize prices.
A Lifeline for the Industry
Agriculture Minister Marc Fesneau highlighted that the funds aim to prevent price collapses and help winemakers regain revenue sources, “[the money] aimed at stopping prices collapsing and so that winemakers can find sources of revenue again,” he admitted.
A Warning for the Future
He then issued a stark warning for the future, saying that the industry must “look to the future, think about consumer changes … and adapt”.
A Famous Region Struggles
The southwest Languedoc region, renowned for its full-bodied red wines, faced severe challenges due to reduced wine demand.
Creative New Ways to Use Wine
Surplus wine can be sold for use in non-food products such as hand sanitizers, cleaning supplies, and perfumes.
A Grim Situation
Jean-Philippe Granier of the Languedoc Wine Producers’ Association said, “We’re producing too much, and the sale price is below the production price, so we’re losing money.”
Funding Used to Destroy Vineyards
In June, the agriculture ministry pledged €57 million to remove approximately 9,500 hectares of vines in Bordeaux.
Public funds also encouraged grape growers to diversify into other products like olives.
Echoes of the Past
Europe faced a similar “wine lake” crisis in the mid-2000s, where the EU had to go back on their own law in order to cope with the overproduction of wine.
Ongoing EU Support
The EU continues to allocate €1.06 billion annually to the wine sector.
Changing Tastes
Besides the shift to beer and other beverages, the wine industry took a heavy blow from the pandemic, which shuttered restaurants and bars globally, leading to plummeting sales.
A Bold Rescue Plan
As the French government steps in with this massive funding to salvage the wine industry, the future of winemakers and their beloved vintages hangs in the balance.
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Source: TheWashingtonPost
