Wednesday, July 27, 2005

Wine Wars

Overproduction and competition from New World wines have touched all of the EU?s major wine producers ? Spain, France, Italy, Greece ? this year.

Italy has become the last of the four to apply for crisis distillation, though the Commission spokesperson said its request for funding to distil six million hl of table wine was ?very unlikely? to be successful. Three to four million hl is seen as more realistic.

The EU budget already sets aside around ?220m every year to fund wine distillation, but has not had to find extra crisis funds since the 2001/2002 season; mainly because Italy, France and Spain had managed to reduce wine production by a combined 22mhl (14 per cent) from the year 2000.
However, Spanish production crept up by eight million hl in 2003 and the French and Italians followed suit in 2004, increasing their production by 11m and 8.5m respectively.

Tensions have sporadically erupted between the nations, particularly in France?s Languedoc-Roussillon region where the militant vintner group, CRAV, has claimed responsibility for attacks on tankers and distilleries containing foreign wines.

French wine makers met with government officials last Wednesday to discuss the on-going crisis and ask for help to distil an extra three million hl of ?vins de pays? and ?vins de table?.
France, Italy and Spain still control around 60 per cent of world wine exports, but the New World is eating into their markets.
Australia recently overtook France to become the UK?s biggest wine supplier and a recent report by UK consultancy IWSR predicts Italy could lose 37 per cent of its export markets by 2008.


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