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The European wine industry is currently suffering from lower sales due to inflation and rising food and beverage prices. EU officials estimate the decline in wine consumption in the current marketing year at seven per cent in Italy, ten per cent in Spain, 15 per cent in France, 22 per cent in Germany and 34 per cent in Portugal.
In combination with the good harvest volume in 2022 and the consequences of the sales problems during the pandemic, producers' stocks are therefore rising significantly. Wine production in the EU increased by 4 per cent this year compared to last year, while opening stocks were two per cent higher compared to the average of the last five years. At the same time, EU wine exports in the period January to April 2023 had fallen by 8.5 per cent year-on-year. This had led to an increase in stocks.
This market situation leads to "sales difficulties for EU winegrowers and producers, falling market prices and consequently significant income losses, especially in certain regions most affected by these trends". However, the situation is very uneven across the EU and the imbalance between available supply and demand is concentrated in certain regions and wines, according to the EU. Red and rosé wines from some regions of France, Spain and Portugal are currently the most affected.
The EU has now allowed the wines most affected by the market crisis to be distilled until 15 October 2023. It has released a support programme for this purpose. The alcohol obtained may only be used for non-food purposes to avoid distortions of competition. The EU's financial compensation for wine eligible for distillation will be "limited to a proportion of recent market prices". In this way, the EU wants to avoid abuse or overcompensation. The EU Commission expects the member states concerned to communicate the implementation criteria for the special programme by 31 August 2023.
(uka / Source: Press release)