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Wine sector needs more EU support in 'COVID winter' - farm group

·2-min read
FILE PHOTO: A glass of French red wine is displayed at the Chateau du Pavillon in Sainte-Croix-Du-Mont,
FILE PHOTO: A glass of French red wine is displayed at the Chateau du Pavillon in Sainte-Croix-Du-Mont,

PARIS (Reuters) - The European Union's wine sector will need more support measures to survive renewed coronavirus measures that are slashing out-of-home demand like earlier this year, farming lobby Copa-Cogeca said on Monday.

The Europe's wine sector has lost some 10-15% of demand volumes this year due to restrictions affecting bars, restaurants, events and travel, Thierry Coste, a French wine producer and chairman of Copa-Cogeca's wine committee, said.

Crisis measures this year, including subsidies to distil wine into industrial alcohol, and a recovery during summer when initial lockdowns were eased had generally averted excess supply on the EU market, he told reporters.

But with fresh closures of bars and restaurants around Europe, the wine industry was now seeing a similar drop in demand in spring, he said.

"We want to extend market support measures because we anticipate that COVID could last all winter," he told a press conference.

Faced with the dented demand, the EU was fortunate not to be heading for a bumper wine harvest, with 2020 production forecast at about 160 million hectolitres, below the average of recent years, he said.

Retail sales had absorbed some of the volumes elsewhere, but bulk "bag in box" formats had contributed to price pressure, he added.

The European wine sector has also endured in the past year U.S. tariffs imposed in a row over aviation subsidies, with French exporters estimating they have lost 500 million euros (£449 million) in sales.

As the EU prepared to impose its own tariffs on U.S. goods from Tuesday, producers wanted negotiations to resume, Coste said, adding they hoped the election of Joe Biden as U.S. president would facilitate dialogue.

But the transition period until Biden's inauguration in January, coupled with a lack of agreement so far between the EU and Britain, a big consumer of EU wine, over a new trade relationship from 2021 were adding to market uncertainty, he said.

(Reporting by Gus Trompiz; Editing by Marguerita Choy)