The European Commission has taken action to support wine producers in the EU who are facing the challenge of excess stocks. In a recent announcement, the commission introduced emergency market measures that will allow member states to include crisis distillation as a subsidised measure to remove excess wine from the market. The financial compensation for the eligible wine will be based on recent market prices.
This decision comes in response to a decrease in wine consumption and a surplus in production. The wine industry has been affected by reduced consumption due to high food and drink price inflation. Additionally, a strong harvest in 2022 has contributed to the oversupply. In fact, wine production in the EU has increased by 4% compared to the previous year, and initial stocks are 2% higher than the five-year average.
The decline in wine consumption has been particularly significant in several EU countries. Italy saw a decrease of 7%, Spain experienced a 10% decline, France faced a 15% drop, Germany witnessed a 22% decrease, and Portugal had the most significant decline at 34%. Furthermore, wine exports from the EU between January and April 2023 were 8.5% lower than the same period last year, further contributing to the surplus of stocks.
The impact of these trends has resulted in sales difficulties for EU wine growers and producers, as well as a reduction in market prices. This has led to a significant loss of income, particularly in regions that have been heavily affected by these trends. The imbalance between supply and demand is concentrated in certain regions and specific types of wines, such as red and rosé wines from France, Spain, and Portugal.
The measures introduced by the European Commission are temporary and will need to be endorsed by member states. Producers will have until October 15, 2023, to distil their excess wine. However, it is important to note that the alcohol obtained from distillation will need to be used for non-food purposes to avoid distorting competition in the market.
These market measures demonstrate the EU’s commitment to supporting its wine producers during challenging times. By providing financial support and offering a solution to the problem of excess stocks, the commission aims to alleviate the economic burden on wine growers and producers. It is hoped that these measures will help restore balance to the wine market and provide relief to those most affected.
In conclusion, the European Commission has implemented emergency market measures to address the issue of excess wine stocks in the EU. With falling demand and a strong 2022 harvest, wine producers have found themselves with surplus supplies. The introduction of crisis distillation as a subsidised measure aims to remove excess wine from the market and provide financial compensation based on recent market prices. This support is crucial for wine growers and producers who have been facing sales difficulties and a loss of income due to reduced consumption and lower market prices. The temporary nature of these measures and the requirement to use distilled alcohol for non-food purposes uphold fair competition within the market. The European Commission’s actions demonstrate its commitment to supporting the wine industry and addressing the challenges brought about by changing market dynamics.
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