More harvest insurance money means trouble for European wine

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Image: REUTERS/Albert Gea
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Europe is trying to safeguard its vineyards by providing more money for harvest insurance and mutual funds. The European Commission’s contribution to harvest insurance for wine will increase from 70% to 80% for the next 12 months. Additionally, the government is doubling its support for setting up mutual funds for vintners.

Wine production has been rocky for the EU’s biggest wine producers: Italy, France, and Spain. The European wine industry received two packages of relief in 2020 but EU wine production for the 2021-2022 marketing year is projected to be 13% lower than 2020 and 11% lower than the five-year average. France is projected to produce less wine than Spain for the first time since 2013 following a 27% year-over-year production decline.

Wine grapes were harmed by extreme weather

The third wave of relief is needed as vineyards are also recovering from a particularly harsh season—on top of the pandemic. “From the spring frosts, floods to heatwaves, the extreme weather conditions have been particularly challenging for the wine, fruit, and vegetable sectors this year,” said Janusz Wojciechowski, the EU’s agriculture commissioner. Climate conditions have caused vine diseases across Europe. In April alone, frost caused damage at 80% of French vineyards.

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That’s troubling for wine drinkers now and in the years to come. Over 70% of wine exports by value come from the European Union according to data from the International Trade Centre. While grapes harvested this year won’t make it into wine bottles for anywhere from six months to two years, demand will have to be met by using stored inventories of wine from more productive seasons.