Distillation funds to dry up by 2012

Distillation funds to dry up by 2012

France's wine industry plans to spend more than EUR7m (US$8.6m) of EU funding to distil surplus wine.

French authorities have signed off the money for the Loire Valley and Midi-Pyrenées wine regions as they each look to reduce a surplus of unsold wine by 80,000 hectolitres.

The move shows that France remains reliant on so-called crisis distillation funds from the EU in order to balance supply and demand in its wine sector.

France and other major European producers, including Spain and Italy, have required crisis distillation funds nearly every year since the EU introduced the scheme in 1982.

However, the European Commission will ban the practice from August 2012 as part of its wine reform programme.

France has provisionally budgeted to use a further EUR2m to distil excess wine next year, but will abide by the EU's 2012 cut-off.

A spokesperson for the European Commission told just-drinks late last week that the body is satisfied that the big producers are moving in the right direction. "We are heading towards a more market-oriented system," he said.