European Wine Glut

The idea of turning quality French and Italian wines into fuel and disinfectant would have been considered sacrilege decades ago, but not now.

From Scotsman.com:

The EU agriculture commissioner yesterday announced plans for a radical shake-up of the wine market to prevent over-production. In the meantime, it was agreed that the EU will finance the conversion of millions of bottles of French and Italian wine into industrial alcohol.

The growing popularity of wines from the New World has been blamed for the decline in the appetite for traditional European produce.

"Europe is producing too much wine for which there is no market," the commissioner, Mariann Fischer Boel, said.

"That is why a deep-rooted reform of the sector is urgently needed."

Buying large quantities of wine for conversion to fuel and disinfectant bolsters the market price of the wine that is sold. The process, which is becoming more common, is called "crisis distillation" and it's costing EU taxpayers very large amounts of money. Last year, an estimated $600 million in EU funds were allocated for crisis distillations.

Critics blame European wine producers for not adapting to the market which has been flooded with cheaper and more consistent wines from Australia, Chile, the U.S. and South Africa.