France’s agriculture ministry has announced plans for a new scheme that would pay winemakers to uproot vines in the country.
Global wine production outstripped demand by 10% in 2023, according to figures from the International Organisation of Vine and Wine (OIV).
That has contributed to a significant wine surplus, which has pushed down prices and threatened the livelihoods of French producers.
France currently has approximately 800,000 hectares (ha) under vine, and the government hopes to ease the oversupply crisis by reducing the total hectarage.
Under the new proposals, vineyard owners could be offered up to €4,000 for every hectare that they allow the government to uproot. If they accept, they will be prohibited from replanting vines on the land until 2029 at the earliest.
France’s government has notified the European Commission of the state aid plan, forecast to cost €120m. This would potentially allow it to pull up 30,000ha in total.
It follows a plan announced last year to uproot almost 9% of Bordeaux’s vineyard in response to the oversupply issue.
The crisis has partly been driven by changing consumer habits. According to the Observatory for Drugs and Drug Addiction (OFDT), the average French adult consumed 120 litres of wine per year in the 1960s. That has fallen to just 40 litres today.
That trend has started to accelerate in recent years, as young adults either reject alcohol entirely or choose beer and cocktails instead of wine.
Wine sales in French supermarkets decreased by 5% year-on-year in the period between 1 January and 11 August this year, according to government agency FranceAgriMer. White wine sales were flat, but red wine sales were down 8.5% and rosé sales fell by almost 6%.
In the past, producers have relied upon export markets to make up the shortfall, but that trade has faced challenges, too.
French wine exports fell 9.4% last year to their lowest level since at least 2007. Shipments to the US dropped by 13% in volume, while exports to the UK decreased by 5.2% in volume.
The French Ministry of Agriculture also mentioned a ‘market crisis encountered by the agricultural sector, particularly due to the war in Ukraine’, when announcing the €120m plan to grub up 30,000 hectares.