The European Commission has admitted to being angered by the decision of the European Union's Council of Ministers to authorise additional national state aids for distillation. The subsidies are to be paid by the German, Italian and French governments to their wine industries, despite the fact that a new EU system of payments has only been in existence since August 1.

EU agriculture ministers backed the national handouts unanimously, with the agreed motion stressing that the money would be available for wine producers who already participate in European Union funded distillation schemes.

In a formal declaration, the Commission "expressed its concern," given that it has been keen to reduce distillation, which it views as an encouragement for wine makers to make substandard products, safe in the knowledge that Brussels or a national government will paid for it to be distilled.

The Commission said: "The new wine market organisation has only been in force since 1 August 2000. It reflected the common position of Member States to what kind of financial support is sufficient and necessary for the wine market to function. It is therefore quite worrying that already now three Member States resort to granting national aids of this type."