France has always been known as the country where wine flows. This is where the big plants come from – and probably the most expensive bottles on the wine scene. Where Cabernet Franc, Cabernet Sauvignon and Merlot originated and conquered the whole world with it. But the success story is over now. The French government recently announced that it would spend 200 million euros to destroy excess wine. What’s behind it?

“We produce too much and the selling price is below the production price, so we are losing money,” Jean-Philippe Granier of the Languedoc Viticulture Association told the Guardian. The southwestern Languedoc region, the country’s largest wine-growing region and known for its full-bodied red wines, has been hit hard by the fall in wine demand. The alcohol from destroyed wine will be sold to companies and used for non-food products such as hand sanitizer, cleaning products and perfume.

The Languedoc is not the only wine region affected. The Bordeaux region in particular, where the most expensive wines such as Petrus and Lafite come from, are struggling with a number of difficulties. On the one hand there is the phylloxera infestation, which in some cases has completely destroyed harvests, but also changing consumption habits, the crisis in the cost of living and the aftermath of Covid-19 are causing demand to fall.

Consumers are now turning to beer and other drinks more frequently, the corona crisis has brought bars and restaurants to a standstill and thus led to a decline in wine consumption. In addition, the recent rise in food and fuel prices has prompted a rethink: Spending on non-essential goods like wine is being scrutinized.

The French government has announced it will allocate a €200 million fund to destroy surplus wine production to help struggling producers and prop up prices.

Too much wine, too little price: The fall in wine demand has led to overproduction, a sharp drop in prices and major financial difficulties for up to a third of winemakers in the Bordeaux region, according to the local farmers’ association.

In June, the Ministry of Agriculture also announced that it would provide 57 million euros for the clearing of around 9,500 hectares of vineyards in the Bordeaux region. Meanwhile, other public funds are available to encourage winegrowers to switch to other products, such as olives. Europe last suffered from a “wine lake” in the mid-2000s, forcing the EU to reform its agricultural policy to reduce the massive overproduction of wine encouraged by its own subsidies.