French booze is in trouble as reports surface that over 10 million litres of spoiled beer will have to be destroyed and the country’s wine industry is asking for a 500-million-EUR bailout.
Furthermore, cognac producers Remy Martin are in the red too as the entire alcohol industry suffers during the coronavirus pandemic and the lockdown.
The wine industry reportedly expects it will need “at least 500 million EUR” (436.3 million GBP) to face challenges such as the coronavirus pandemic, Trump’s new import taxes, and the overall drop in wine consumption in the European Union,
Eight organisations representing French wine stated on Tuesday evening that “Sadly, at this stage, the answer from the European Commission is very insufficient, on a financial level and on the level of relaxing regulations.”
In reply to the French Agriculture Minister, Didier Guillaume, who on Thursday had said that he and Bruno Le Maire, the Minister of the Economy, were putting in place a “support plan” for the wine industry, the statement continued: “Our organisations expect the French government to show greater commitment.”
The statement also said: “The French wine industry is a pillar of the national economy. She cannot be forgotten by the public authorities. The French state must put in place an ambitious plan for our industry.”
The industry supports 500,000 jobs in France, directly and indirectly. In terms of production volume, the French are second in the world to the Italians, and first in terms of export value. Their international market was worth 12.2 billion EUR (10.6 billion GBP) in 2018, which represents about 2 billion bottles exported to over 200 countries.
The wine industry is also asking Brussels to help bear the cost of destroying excess production, to protect the market’s prices.
Meanwhile, over 10 million litres of top beer is set to be destroyed in France after consumption slumped during the lockdown, according to the Brasseurs de France beer industry union. Trendy, artisanal, or micro-brewery beers are the hardest hit, as they are often not pasteurised.
The union said: “The brutal closure of cafes and restaurants, the freeze of all touristic activity, and the cancellation of all the festivals and salons have left over 10 million litres of beer, mainly in barrels, suffering.”
The figure was determined by the union after they consulted at the end of April with 300 of their members, who represent 98 percent of France’s beer production.
The union, just like the wine industry, is asking the authorities for help. They say: “The destruction of this beer will have a significant cost for companies.”
Beer brewers are asking for help, especially with “destroying beer stocks”, just like the wine producers.
Maxime Costilhes, the general delegate of the Brasseurs de France, told local media: “We are in a very indebted industry, because we have invested 241 million EUR (210 million GBP) in development in 2019, a significant number for a turnover of just over 4 billion EUR (3.48 million GBP).”
The main reason for this huge quantity of beer that is going to have to be destroyed is because trendy beers, micro-brewery beers, which are often not pasteurised, unlike lagers, are more fragile.
Costilhes explains: “These beers often have lots of hops, and if we keep them too long, when we go beyond two or three months, the smell and taste, they disappear.”
However, it may not all be doom and gloom in the land of Beaujolais and Champagne, and Hennessy and Courvoisier, as Philippe Farnier, CEO of Remy Martin prefers to look on the bright side.
Despite a staggering 25-percent drop in turnover from January to March this year, meaning the 2019-2020 annual result is a 7.5-percent drop, and despite April to June this year expected to morph into a whopping 50-percent drop in turnover, Farnier has set his hopes on China, where 60 percent of the bars and clubs have reopened.
Farnier said: “China was the first country hit, and it is also the first country to come out of this crisis. We hope for a turnaround in the second trimester.”
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