LUSA 07/10/2024

Lusa - Business News - Portugal: EU attributes €15M in emergency support for wine producers

Brussels, July 9, 2024 (Lusa) - The European Commission announced on Tuesday the allocation of €15 million from the European Union (EU) to support Portuguese wine producers facing serious market disturbances, out of a total of €77 million for four countries.

In a statement, the EU executive said it had proposed to the member states, who accepted, the mobilisation of €15 million from the EU's agricultural reserve to "support Portuguese wine producers facing serious market disruptions".

This amount is part of a total sum of €77 million that will also support farmers in the fruit, vegetable and wine sectors in Austria, the Czech Republic and Poland, which have recently been affected by unprecedented adverse weather events, adds the institution, noting that the four countries in question can supplement this EU support by up to 200% with national funds.

It is planned that support for the temporary and exceptional distillation of wine in cases of crisis for beneficiaries in Portugal will have to be paid by 30 April 2025, while payments to farmers in the Czech Republic, Austria and Poland under the emergency financial support will have to be made by 31 January 2025.

To move forward, the legislative acts establishing these supports will be adopted in the coming days and will become directly applicable after their entry into force in July 2024.

In the press release, Brussels points out that "wine producers in Portugal are being affected by market imbalances that could turn into a prolonged and wider crisis".

"The current unprecedented accumulation of stocks in Portugal is the result of a decrease in sales of red wine combined with an increase in production last year," adds the European Commission, pointing out that last year, Portugal was the member state that recorded the largest increase in production compared to the previous year.

The €15 million in aid now announced will fund the temporary distillation of wine in response to the crisis situation in Portugal, eliminating surplus quantities and rebalancing the market.

"To avoid distortions of competition, the use of the alcohol thus obtained must be limited to industrial purposes, namely disinfection products and pharmaceuticals, as well as energy purposes. It is up to the national authorities to define the rules for applying for support, and they may grant financial aid to producers, co-operatives, distillers and wine companies," says the institution.

Following the process, Portugal will have to report to the European Commission on the implementation of the measure, namely the quantities of wine withdrawn from the market in each region.

The EU executive recently set up a high-level group on wine policy, which is due to make recommendations by the beginning of 2025 to respond to the challenges facing the EU wine sector.