May 11, 2020 / 8:24 PM / 25 days ago

France agrees 140 million euro wine distillation support plan

PARIS (Reuters) - France approved support for French winemakers on Monday to distil wine surplus into alcohol following a slump in demand because of restaurant and bar closures and lower exports due to extra U.S. tariffs, but the measures fell short of union requests.

The government cleared a 140 million euro ($151 million) crisis mechanism for distillation, Agriculture Minister Didier Guillaume and Economy Minister Bruno Le Maire said on Twitter without giving further detail.

They also cleared exemptions from social security contributions for small and medium companies, they said.

Last month, the European Commission decided it would support crisis management measures in wine and other agriculture sectors hurt by the new coronavirus crisis.

The measures put forward fell short of expectation of France’s largest farm union FNSEA which last week had asked for a total 500 million euros aid package for wine makers including crisis distillation support for 260 million euros that would cover some 3 million hectolitres (Mhl).

The government plan was for 2 million hectolitre instead, FNSEA Secretary General Jerome Despey said on Twitter.

“The wine plan to face the Covid-19 was announced tonight: exemption of 100% social charges and distillation for 2 Mhl at 70 euros/hl on average. We had asked for 3 Mhl at 80 euros/hl. It is a first gesture (...), which must be completed,” he said.

Reporting by Sybille de La Hamaide; editing by Grant McCool

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