The European Commission is predicting that it will spend almost EUR87m (US$112m) more than the EUR1.5bn budgeted for 2006 wine production subsidies.

In a report to MEPs and ministers, the Commission claimed that this "over-implementation is temporary" and that "it is mainly due to the payments arising from the crisis distillations…earlier in the budget year."

France, Italy, Spain and other wine producing companies received millions of Euros last year for compulsory distillation, subsidies that have run on into 2006.