A French government state aid system for liqueur, wine and spirit producers is under threat, because of a European Court of Justice ruling.

Judges have heard a case brought by the Portuguese government that the aid gave French producers an advantage, which was both unfair and illegal under the EU's strict state aid laws.

Lisbon's position has now been backed by the court, which ruled that the aid should never have been sanctioned by the European Commission.

France had secured permission from Brussels to pay aid to producers of spirits such as Cognac, Armagnac and Calvados plus makers of liqueur wines including pineau, floc, Macvin, Cartagène and pommeau.

The state aid system also includes funding for promotional measures, research, technical support and investment.