Wine News

The French government is to hand its ailing wine industry €70 (GB£48 million) in aid to help it battle falling sales and damaging overproduction. The indusry has suffered over the last couple of years due to falling consumption at home and increased competition on export markets.

Agriculture Minister Dominique Bussereau said €11.5 million (GB£7.95 million) would be paid out to winemakers in extra grants and tax breaks, along with €55 million (GB£38 million) in loans to producers and cooperatives in financial difficulty. The government will also pay for 500 vintners to take early retirement in 2005, the minister told a news conference after talks with winemakers' representatives in Paris.

Additionally the government will also ask the European Union to approve a crisis plan to distill some 250 million litres of wine into alcohol and pay compensation to vintners. For the first time, up to three-quarters of the distilled surplus would come from quality AOC wines.

Bussereau said the government had made a "considerable effort" to help the country's winemakers, who are caught between sharply declining consumption in France and tougher competition on export markets. However, wine makers and farmers said the support was much less than they had been hoping for. "I am afraid the resources are not up to the ambitions," said Jean-Michel Lemetayer, from the FNSEA agricultural union.