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21 Oct, 2023 08:24

French winemakers launch ‘economic war’ against neighbor

A huge surplus of wine in the domestic market coupled with cheap imports from Spain pose the risk of bankruptcies
French winemakers launch ‘economic war’ against neighbor

French winemakers staged a mass protest this week against Spanish wine imports, arguing that they create unfair competition in the local market, which is already suffering from a surplus.

According to a report from Le Parisien, around 500 protesters gathered on a highway near the French border town of Boulou on Thursday, stopped several trucks with Spanish products, and destroyed their cargoes. As a result, more than 240 hectoliters of Spanish rosé were poured on the road and 10,000 bottles of Spanish sparkling were smashed.

The demonstrators said they are suffering losses due to cheap Spanish wine entering the French market.

The problem is the price,” Antoine, a 79-year-old French winegrower, told the news outlet.

The Spanish have minimum charges, the right to put all the chemicals they want on their vines while we have the right to nothing… As a result, Spanish wine costs half as much as French wine. When their hectoliter costs €40, it is almost €80 with us,” he said.

Aude wine union leader Frederic Rouanet pledged to continue the protests, with a major mobilization of winemakers scheduled for the end of November.

It is out of the question to accept the situation as it is. Starting from today, we are going to remove the possibility of buyers being able to get cheap wines from elsewhere... We are going to stop Spanish imports. This is the start of an economic war that we are going to wage,” Rouanet said.

Earlier this week, French wine growers gathered in Ferrals-des-Corbieres to discuss the crisis in the industry, which they consider the worst in around two decades. The union prepared a letter to be sent to French wine merchants and importers that called for “a total halt in buying wine from other regions or abroad until the [local] wines are sold at a fair price.

Renowned for its centuries-old winemaking traditions, France has been suffering from a massive surplus of wine due to a strong harvest in 2022 and low consumption caused by soaring inflation. The French government introduced a drastic plan in August to allocate €200 million ($216 million) to destroy wine surpluses. Officials have also been offering financial incentives to growers to switch to other products.

The drop in the demand for wine has not been limited to France. The European Commission reported in June that wine consumption fell by 15% in France, but it also dropped by 7% in Italy, 10% in Spain, 22% in Germany, and 34% in Portugal. The EU’s wine exports have also been dropping. Between January and April 2023, cross-border sales fell by 8.5% compared to the same period last year.

Some analysts say the drop in EU wine exports partly stems from Ukraine-related sanctions that Brussels placed on Russia last year, banning wine sales that exceed €300 per bottle. As a result, while in 2022 Spain and Italy were among Russia’s top-three wine suppliers, this year they were replaced by Lithuania and Georgia.

For more stories on economy & finance visit RT's business section

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