France’s struggling wine sector is set to receive fresh European Union subsidies as policymakers respond to falling demand shifting trends and mounting trade pressure from United States tariffs.
The European Union will unlock €40 million to support French winemakers, the bloc’s agriculture chief Christophe Hansen said, striking a cautiously optimistic note ahead of the annual agricultural fair in Paris.
Acknowledged the mounting pressures facing farmers across the 27-nation EU – from animal diseases and trade tensions to persistently low prices – he urged a forward-looking approach.
“The sector is under pressure for many reasons,” he said, adding that while frustration among farmers is understandable, “anger is not the solution”.
The funding comes at a critical moment for France’s wine industry, which is facing structural challenges at home and abroad.
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Turning surplus into stability
A key part of the EU’s intervention will focus on reducing the glut of unsold wine that has weighed heavily on prices. Hansen said emergency funds would support the distillation of excess stock into ethanol for industrial use – a longstanding mechanism designed to bring supply back into balance.
“This will reduce market volume and stabilise prices,” he explained.
The move reflects a broader shift in the sector, as consumption patterns evolve. Younger consumers are increasingly drinking less alcohol, often opting for healthier lifestyles.
European producers are are contending with rising global competition and tariffs introduced during Donald Trump’s presidency, which continue to affect exports.
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The impact has been tangible: the value of France’s wine and spirits exports fell by eight percent last year.
Brussels’ support will complement national efforts already under way. France has introduced a €130 million scheme to subsidise growers willing to uproot unprofitable vines, signalling a willingness to adapt production to changing demand.
The EU has also rolled out additional measures this week, including simplifying labelling rules. New terminology will see “alcohol-light” replaced by “reduced-alcohol”, while drinks containing less than 0.5 percent alcohol will be labelled “alcohol-free”.
“Consumer behaviour has changed,” Hansen noted. “The sector needs to adapt to this new demand.”
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Trade hopes and tensions
Hansen also highlighted export opportunities, pointing to a new EU-India trade deal set to lower duties on European wines.
“We will enjoy better conditions than competitors like Australia and the United Kingdom in that market,” he said.
He defended the EU–Mercosur agreement, despite farmer protests over fears of cheaper imports, arguing safeguards are in place.
To ease pressure, Brussels has suspended tariffs on most fertiliser imports for a year, while exploring ways to support producers without raising costs.
“There is no silver bullet, no panacea for this problem,” Hansen said.
(with AFP)
