Officials at the European Commission have told just-drinks that the European Union’s (EU) annual EUR1bn (US$1.27bn) wine sector subsidy budget is facing deep cuts.

Heads of government will meet in Brussels next week to agree a 2014-20 spending deal, and officials warn that new proposals from European Council president Herman van Rompuy demand additional de facto cuts of 10.8% in Common Agricultural Policy (CAP) spending – above an already planned 12% reduction.

One official highlighted wine as one of three areas – along with fruit and vegetables and geographically-remote food production – that will “probably” face even deeper “substantial cuts”.

Food and drink production support is being targeted by governments wanting reduced EU spending to ease Europe’s financial crisis. EU agriculture spokesman Roger Waite warned: “This would severely disrupt our system of direct payments, and devastate future rural development programmes.”

The cuts would also probably end the EU’s vineyard grubbing up grants. A total of EUR17m was allocated this year.

Last month, EU agricultural commissioner Dacian Ciolos warned that the liberalisation of restrictions on planting new vines "is not an option". Ciolos' comments came as wine growers in the continent wait on EU plans for planting rights.