Brussels, 06/06/2006 (Agence Europe) - On Wednesday 7 June, the management committee is expected to take a stance regarding the French and Italian requests to open a “crisis distillation” mechanism allowing surplus wine “lakes” to be used. Spain and Greece have also asked for such a measure but the European Commission needs more time to examine them.
France is requesting Community subsidies for the distillation of a total volume of 4 million hectolitres (hl) of wine: 2 million hl of quality wine and 2 million hl of table wine. The French government is calling for a Community purchase price of 4 euros per degree of hl for the 2 million hl of quality wine, a price that the Commission considers somewhat excessive, recalling the price paid last year (3.35 euros). The Community price for distillation of table wines should, as usual, be close to 2 euros per hl. Italy asks to be allowed to distil 3 million hl of table wine, as well as 100,000 hl of quality wine.
According to a number of sources, the Commission executive committee should give a positive opinion regarding the crisis distillation mechanism for French and Italian wines but will probably not approve the terms (tonnage and price) proposed by these two Member States. Spain has also asked to be allowed to take advantage of this mechanism (Spain's volumes are not yet known), as well as Greece (500,000 hl of wine). A decision for these countries is expected by the end of June.
Some 7.5 hectolitres of Community wine were distilled into industrial alcohol in 2005, costing the Community budget €185 million. Adoption of such market management measures comes at a tricky time. On 22 June, the European Commission is to present its communication on the reform options for the wine production sector, in which it will set out all its arguments against the crisis distillation mechanism, initially conceived for exceptional use but which has recently been frequently used. The spokesman for Agriculture Commissioner Mariann Fischer Boel, cited by AFP, commented that the high distillation demands “merely reinforce why a radical reform (as envisaged by the Commission) is so important”.