Ministry of Agriculture to withdraw wine from market in attempt to push up prices
Over the next few weeks the Ministry for the Environment and Agriculture will put into action a plan to withdraw two million hectolitres of wine before distillation at a price of around 1.85 euros per hectograde. This measure, supported by agricultural organizations and cooperatives, is designed to reduce the supply of wine and increase its market price.
The operation is open to all wine producers and applies to all wine producing areas even if they do not meet other requirements. The Ministry of Agriculture has a budget of 14 million euros in order to carry out this operation.
Under the current campaign the Ministry of Agriculture has increased to five million hectolitres the amount of wine that can be handed over before distillation. However this quantity has not been enough to increase prices which at present oscillate between 1.90 and 2 euros per hectograde. The wine before distillation was bought by the Ministry at a price of 1.
10 euros per hectograde.
As a result the wine producing industry in Spain has asked for a crisis distillation for more than two million hectolitres at a price of 1.91 euros per hectograde. However, the Ministry of Agriculture has refused to introduce a crisis distillation and instead has opted for a complimentary distillation of two million hectolitres at a price of 1.85 euros per hectograde.
Wine producers will receive grants of 300 euros per hectre except for those producers whose areas of land used for the production of wine already receive a fixed price for their wine. The campaign to withdraw wine from the market is aimed at increasing the market price of wine, a measure which would benefit the wine producing sector as a whole.
The last campaign for the production of wine was initially 36 million hectolitres.
However, the final figure was closer to 39 million hectolitres which was nevertheless lower than in previous campaigns. The problems faced by Spain’s wine producing industry are not only down to the volume of production but also in the fall of 10% in demand for wine. Domestic consumption of wine is just 11 million hectolitres and exports have fallen from 17 to 15 million hectolitres.