Crisis distillation of wine to be opened in France and Italy

The Wine Management Committee voted today on proposals from the European Commission to open crisis distillation of wine in France and Italy. For France a maximum of 1.5 million hectolitres of table wine and of 1.5 million hectolitres of quality wine can be offered for crisis distillation. For Italy crisis distillation has been opened for a maximum quantity of 2.5 million hectolitres of table wine and 100,000 hectolitres of quality wine. Further demands from Spain and Greece are still under examination.

Commenting on the opening of distillation Mariann Fischer Boel, Commissioner for Agriculture and Rural development, said: "Crisis distillation is becoming a depressingly regular feature of our common market organisation for wine. While it offers temporary assistance to producers, it does not deal with the core of the problem – that Europe is producing too much wine for which there is no market. That is why a deep-rooted reform of the sector is needed urgently. We must increase the competitiveness of the EU’s wine producers, strengthen the reputation of EU quality wine as the best in the world, recover old markets and win new ones. We must create a wine regime that operates through clear, simple rules and ensures balance between supply and demand. And we must create a system that preserves the best traditions of EU wine production and reinforces the social and environmental fabric of wine-producing regions. I will be coming forward on 22 June with proposals to do just that.”

Considerable surpluses have been recorded on the wine markets in different Member States resulting in a fall in prices and a worrying rise in stocks. The wine Common Market Organisation (CMO) provides for the possibility of a crisis distillation in the event of exceptional market disturbances due to major surpluses. Following demands from Member States, the Commission proposed to use this possibility.

The price paid for the wine to be distilled is € 1.914 per %vol and per hl for table wine in both France and Italy and € 3.00 per % vol per hl for quality wine. The total cost for the EU budget is € 131.....million.

The raw alcohol resulting from this distillation can only be used for industrial purposes or as biofuel in order not to disturb the market for potable alcohol, which is supplied largely by another distillation system also foreseen in the CMO.

The proposals still have to be formally adopted by the Commission and will apply from 29 June 2006 and 3 July for Italy.