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Amazingly The World Has A Solution To Excess Wine

Credit – public domain

As is typical of Latin Europe there’s a refusal to learn the basics of economics:

The grapes are tended with loving care for months on end before being picked and pressed to produce the fine wines for which Europe is renowned.

This year, however, hundreds of millions of litres of wine could end up as industrial alcohol and sold to pharmaceutical and cosmetics firms.

The prospect will break hearts across the continent, according to one producer, and yet the consensus is that no other solution exists for a sector facing a crisis of historic proportions.

A combination of President Trump’s tariffs, Brexit, a trade deal between China and Australia and the coronavirus pandemic has left vineyards in France, Spain and Italy with their cellars full of unsold bottles.

Many smaller producers say that their only option is to distil the wine into alcohol — a procedure which requires authorisation from Brussels.

The answer is to lower the price. For lower prices increase demand, that’s just how us human beings work.

Mr They added that if producers put all their unsold bottles on the market when the lockdown ended, prices would collapse. Distillation was a better option, he argued, although “it will break our hearts”.

Yes, quite so, that’s the way prices work.

Quite why, after all these millennia of working out how things do work, they’ve still not got it is uncertain. Perhaps it’s the garlic in the diet, it clouds the mental facilities or something?

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Bloke in North Dorset
Bloke in North Dorset
1 year ago

“ a procedure which requires authorisation from Brussels.”

WTF is that about?

Anyway, there’s a big chunk of sunk cost fallacy going on there. The only thing they should be concerned about is whether they get more for selling for whatever they can get, turning it in to alcohol or pouring it down the drain.

If it’s a luxury good I can see some argument about not devaluing the brand, otherwise sell it and see if you can broaden and deepen your market.

Bloke in Germany
Bloke in Germany
1 year ago

Is there a single country in Europe where distillation is not heavily regulated, and basically illegal without a license? This has been the case for centuries. Long predates “Brussels bureaucracy”

Bloke on M4
Bloke on M4
1 year ago

France is quite lax. In the Charente, there are still travelling stills. People grow some grapes in their garden and when the travelling still comes to town, they get it turned into eau de vie. I think there’s some sort of tax, but it’s small and you just hand over cash rather than lots of form filling.

My father lived out there for a few years and the farmer next door made his own Pineau. It was quite rough, but fun.

Bloke in North Dorset
Bloke in North Dorset
1 year ago

I hadn’t realised that had been handed to Brussels and was now an EU competency.

Bloke on M4
Bloke on M4
1 year ago

Producers like Romanee-Conti and La Tache don’t have problems selling their wines. If anything, all this globalisation has been a boost to them. It’s created another load of multimillionaires in China bidding to get hold of it (DRC is around £15,000 a bottle, La Tache is a snip at a mere £3,500 a bottle).

Spike
Spike
1 year ago

Lower the prices, yes, but above all, follow the numbers and maximize profit. It may be that it’s better to distill a different product altogether, though the craftsmanship was wasted. Now, your business having been vetted, it’s remarkable that it takes EU permission to produce a product that’s different from the one you set out to produce, though the EU partly exists to protect established alcohol distillers against tomorrow’s sunrise.

Bernie G.
Bernie G.
1 year ago

“The answer is to lower the price.”

The sort of wine most people consume costs about 30p/bottle – the other five-quid is tax and retail.

SJH
SJH
1 year ago

“Mr They”: my new preferred pronoun

John B
John B
1 year ago

Over-production of wine in Europe is a decades old problem. Too many farmers are on land good for nothing else than growing grapes to produce mediocre to awful (already industrial alcohol) wines. Do we forget the ‘wine lake’?

It is endemic, and not just wine.

The CAP and strong grip farmers have on politicians and their fortunes has fossilised agriculture in most of the EU, farmers that should have gone out of business or changed long ago, just keep plodding on.

HJ777
HJ777
1 year ago

“A combination of President Trump’s tariffs, Brexit, a trade deal between China and Australia and the coronavirus pandemic has left vineyards in France, Spain and Italy with their cellars full of unsold bottles.” Trump’s tariffs, perhaps. Brexit, however, has made no difference whatsoever to UK wine imports as there are still no import duties on EU wine, whereas there are still are on non-EU wine. This may change after the transition period is over, but it hasn’t yet. Also, a trade deal between China and Australia may have made wine imports from Australia relatively cheaper for Chinese consumers but I… Read more »

Snarkus
Snarkus
1 year ago
Reply to  HJ777

yes, but Oz stuff is drinkable. Oz has not completed the braindead trend to making wines indistinguishable from leather tanning liquids, except for the $200 plus bottles perhaps and a very few affordable tipples.

HJ777
HJ777
1 year ago
Reply to  Snarkus

You don’t know much about wine then? The general trend over the last two decades, especially in Europe, has been towards more fruit-driven wines with lower levels of tannin for earlier consumption. Europe produces easily the most varied and interesting range of wine styles in the world (which is not to denigrate Australian wines, it’s just a fact, as any Australian producer would admit).

Bloke on M4
Bloke on M4
1 year ago

This is mostly just the big guys crying because of external competition. Italy, France and Spain are the 3 largest producers in the world, but over time, their share of the overall pie has been decreasing as the new world has grown. Back in the early 80s, they were almost everything. A load of technological and political changes brought in new competition. A big thing is the fall of communism. People started investing in better equipment once they knew they could profit from it, so quality improved. You also got containers and then containers that could carry wine in a… Read more »

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