France is about to spend €200 million to destroy a 'wine lake,' an oversupply of wine that is threatening the fiscal health of many French wine-growers, especially in the Bordeaux region.
While the immediate crisis stems from dropping consumption, this year's high cost-of-living crisis and aftereffects of the pandemic, it is part of a longer term issue in Europe that dates back to the early 2000s, when European agriculture subsidies turned out to have the effect of encouraging overexpansion of the wine industry.
In the years since, EU policy and funding have been focuses on such measures as encouraging shifting production to other crops, such as olives, and to reducing overall acreage dedicated to wine grapes. The EU spends about €1.06 billion a year on the wine sector and issues arising from it.
€160 million of the French project comes from EU funds, with the rest from the French government. Similar situations exist in the EU's other wine-growing areas. It's powered recently by consumers shifting to beer and other alcohol products; as a result, consumption of wine has fallen this year: By 7% in Italy, 10% in Spain, 15% in France, 22% in Germany and 34% in Portugal.
The destruction process for the wine involves separating the raw alcohol from the other elements of the wine; the alcohol can then be sold for use in non-food products such as hand sanitizer and cleaning products.
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