EU acts to support wine sector as COVID-19 saps demand

Slideshow ( 3 images )

BRUSSELS (Reuters) - The European Commission proposed measures on Tuesday to increase support for the wine industry, one of the agriculture and food sectors hardest hit by the COVID-19 pandemic.

Producers will be exempt from certain European Union antitrust rules for up to six months, allowing them jointly to plan production, storage or promotional activities.

The EU executive will increase the EU contribution to funding national support programmes to 70% from 60%.

The Commission said it would also allow EU countries to provide advance payments to cover the costs of storage and to allow producers to distil wine further into alcohol for industrial or biofuel use.

Wine consumption in Europe is set to fall by 8% this year, with a particular hit for higher priced sparkling and vintage wines, the European Commission forecast in April, as home consumption is not expected to make up for lost sales in restaurants and bars.

Wine exports were seen down 14%, hit by falling demand and extra tariffs in the United States.

The Commission had already allowed existing market support programmes to be applied more flexibly and funds to be re-oriented towards crisis management.

Reporting by Philip Blenkinsop; editing by Marine Strauss and Barbara Lewis