BILLION LITERS OF EUROPEAN WINE MIGHT BE WASTED

The wine business in Europe is going through hard times. According to the experts, a decrease in wine exports by 14% is expected and the domestic consumption is also falling rapidly. They suggest that this season (from August last to July this year) it will decrease by 108 million hectoliters.

The statistics indicate that the average resident of one of the 27 EU countries will drink less by 24 liters of wine per year. The speech is not about a campaign to combat alcoholism, but about the fate of the wine market and the many enterprises that produce wine in France, Spain, Italy and other countries.

Several factors became a reason for such a negative situation. Due to the spread of coronavirus in Europe, all institutions of the HoReCa sector (restaurants, bars, hotel complexes) were closed. There is almost no chance that they will open in the nearest future. For example, the specialists from the Louis Pasteur Institute in Paris predict the start of the second wave of the epidemic in the country if the number of infected people does not exceed 6% of the total population of France by May 11.

The foreign market has also experienced a collapse in demand for wine. The main consumers of the European products in the recent years have been China and the United States. However, the consumption in the Middle Kingdom has decreased due to the pandemic.

Many Asian countries closed their borders, and wine containers were transited back to Europe. In the USA, on the initiative of the presidential administration, the import duties were sharply increased. An attempt to support their own wine production industry actually puts sticks in the wheel of European winemakers, blocking their ability to freely trade in the North American market. Given that only in France this puts at risk from 100 to 500 thousand people, working in this sector of the economy, the expert council has already asked President Macron for help for € 300 million.

The surpluses of production and a lack of storage in Europe can lead to spoilage of about a billion liters of wine. This statement was made by one of the members of the European Parliament, Eric Andrieu. He called on the European Commission to intervene in the situation, as this could cause the significant risks to the labor market.

Previously he stated that the surpluses of wine should be distilled so that they could not be wasted.

Distillation is a less profitable alternative than selling wine, but it will allow winemakers to survive the crisis and get a harvest in 2020. Moreover, the produced alcohol can be used in many countries and sectors of the economy (for example, for the production of antiseptics).

Eric Andrieu noted that many European manufacturers faced a drop in the US exports due to a government tariff, applied in response to the subsidies, paid by Airbus.

The wine, prepared for the export or for sale in the restaurants, has been left in tanks, which means there is a lack of storage space for the harvest of 2020, which will be collected in a few months. 

The European Committee of Wine Producers (CEEV) made a statement, which says that the winemakers in many European countries have already reported about the problems with logistics and falling sales. In connection with the necessary additional measures for the labor protection and safety measures, the production facilities operate at slower speeds, and the work of some of them is “completely terminated”. As the president of the committee noted, “everyone should understand that what we are facing now is not a short-term crisis. It will take time and require investment to restore the wine markets. ” CEEV has even developed an emergency plan, called the Covid-19 Wine Package, which includes measures to strengthen the finances and rehabilitate the market.

The CEEV Secretary General Ignacio Sanchez Recarte has emphasized the importance of freezing “the economic resources not being used as a part of the national wine support programs for the fiscal year 2019/2020 as the first measure and the future provision of them to the member states by the fiscal year 2022/2023 ". This will allow the wine-making sector of the economy to subsequently recover.