In France, the wine industry is getting their own stimulus package. French producers suffered a one-two punch from Trump’s 25% retaliatory tariffs followed by COVID-19 pandemic. On Monday (5.11), ministers announced measures including tax exemptions and a distillation program.
The relief was described as Phase One of a larger program at a presser featuring French Finance Minister Bruno Le Maire and Minister of Agriculture and Food, Didier Guillaume.
Producers will receive a 100% exemption from payroll taxes (MSA and URSSAF) and social taxes specifically related to manual labor (AMEXA).
In addition, the notoriously strict French regulations on wine will be temporarily relaxed. Producers will be allowed to distill up to 1.7 million barrels of their excess stock into ethanol. That ethanol can then be converted into hydroalcoholic gel aka hand sanitizer. The government also guaranteed the purchase of $152m in hand sanitizer at a fixed rate.
Back in October 2019, the Trump administration imposed a 25% tariff on French wines resolving a long running dispute over unfair European subsidies to Euro plane manufacture Airbus. The tax battered the industry which reported double digit decreases in profits. The pandemic quarantines dealt a second blow; while production continues, distribution and on-premise sales are at a virtually standstill.
The French viticultural community has been petitioning for relief since the implementation of the tariffs. (Fellow targets like Airbus already received relief.) Last week, the powerful union Fédération Nationale des Syndicats d’Exploitants Agricoles (FNSEA) released their own proposed plan. That called for both distillation exemptions and relief funds totaling over twice the size announced by the government.
Likewise, Louis-Fabrice Latour, head of the BIVB growers’ association told the Agence France-Presse that the measure would not help his constituents in Burgundy.
“We don’t have any excess production in Burgundy. We only have two years’ worth of stocks, so we don’t distill,” he said. “What we want is help for our exports.”
LeMaire and Guillaume urged patience noting that the plan will include additional, unannounced phases.