French wine and cheese makers ask EU for help

Plummeting demand could see prices collapsing and produce dumped, say French farmers.

France wine - reuters
France's wine industry was already hit hard by US tariffs even before the coronavirus lockdown forced restauarants to close, contributing to falling demand [Benoit Tessier/Reuters]

France has called on the European Commission to help milk and wine producers who face a surplus of production due to slack demand caused by the coronavirus crisis that has cut off vital restaurant and export trade.

French dairy farmers fear the demand drop will lead to a significant surplus of milk just as the spring grazing season boosts cows’ productivity, with the risk of prices collapsing.

“We have worked to reduce milk production and we ask the European Union to take its responsibilities. Today it is absolutely necessary to store milk, store powder, see how things can be done to ensure that this sector lives as well as it can,” French Agriculture Minister Didier Guillaume told reporters on Wednesday.

“We are in an extraordinary crisis, we need responses that are not ordinary. The [European] Commission, the EU, the European Commissioner must move.”

Guillaume was having a video conference call with his German counterpart in the afternoon to discuss the matter, he said.

French milk industry body CNIEL has asked the commission to allow it to set up a temporary solidarity fund to compensate farmers who limit output.

At the end of last month, 40 million litres of milk, or 18 percent of the total volume collected weekly, were in surplus and would have to be redirected towards storage for butter and milk powder or else dumped, farm union Cooperation Paysanne said, also calling for a milk output cut.

Weaker demand and staff absences due to the coronavirus pandemic have also disrupted factories in the dairy sector and elsewhere in the food industry.

Ice cream maker Froneri, part-owned by Nestle, said it had suspended output at its three French plants for two weeks up to Easter.

For French wine producers, meanwhile, the loss of demand from shuttered restaurants and disrupted export markets comes after they were hit with US tariffs of 25 percent as part of Washington’s response to illegal EU aircraft subsidies.

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“The wine sector has already suffered a lot with the US taxes,” Guillaume said.

“Europe must move forward, if Europe does not move in this direction for market support it would really be a problem.”

The EU’s chief agriculture official said on Tuesday that billions of euros in unspent rural development funds could be diverted to farmers and that a sustainability overhaul to EU farm policy might be delayed.

However, EU Agriculture Commissioner Janusz Wojciechowski resisted calls from some farmer groups to use import curbs to protect sectors during the coronavirus crisis.

France would also seek to provide additional support for the fishing industry, which is particularly reliant on restaurant trade, Guillaume added.

Source: Reuters