One of the trade bodies for winemakers in Portugal's Douro valley has been told to sell off some of its stockpiled wine in order to pay off its debts.

Casa do Douro, which was set up in 1932, has been told by the Portuguese Government that it will have to divest wine stocks worth up to EUR130m (US$179m) to resolve its debt situation. The association is EUR160m in the red.

The organisation owes EUR110m to the state and EUR20m to financial institutions. According to a recent report by Portugal's state-run news agency, Lusa, the remaining EUR30m relates to interest on the principal of the debt.

Portugal’s Agriculture Secretary, José Diogo Albuquerque, said last week that the solution for Casa do Douro is to sell around 9m litres of its stockpiled wine and other assets.

Casa do Douro is a public association that all Douro grape-growers must belong to. The association supports growers in their economic activities.