Surplus wine to feed Europe's surplus sheep?

Press, 12 March 1984, Page 20

Surplus wine to feed Europe's surplus sheep?

From ‘The Economist,’ London

Alcohol causes headaches. Europe’s alcohol industry has three now: how to drain the European community’s surplus “wine lake”; how to cut fermentation feedstock costs; and, old story, how to deal with the French. France is annoying its neighbours, not only by pumping ever more wine into the lake, but also by erecting import barriers against pure alcohol and subsidising its own producers. Europe's wine lake now holds more than two million tonnes (2.7 billion standard bottles) and is still rising. If 1984 is an average season, Europe is expected to produce about 1.4 million tonnes more grape juice than it needs to satisfy the demand for wine. Here are five options for getting rid of that amount, with costs. • The most expensive solution would be to make wine and pour it down the drain. Cost to the common agricultural policy (C.A.P.): $341 million. • The cheapest way would be to persuade farmers not to pick so many grapes. That is so sensible that it is a political and bureaucratic non-starter. • The present system is to make wine and distil it into pure alcohol for industrial products — from boot polish to insecticide. The snag is that wine alcohol costs about $3OOO a tonne to make, synthetic alcohol about a quarter of that, and the latter is purer. Industry has not been dashing out to buy wine alcohol. The European commission wanted to prod it with subsidies. But late last year it agreed with the chemical industry’s lobby, Cefic, that this would be foolish. Not only would it flood an already soggy market, but it would need a massive subsidy to bring it down to the price of synthetic alcohol Total cost to the C.A.P.: $338 million. • Marginally better is Cefic’s suggestion to turn wine alcohol into motor fuel. Cost $334 million.

•BP chemicals, one of Europe’s four big synthetic-alcohol C reducers, has had a (slightly) etter idea. Instead of pouring grape juice into the wine lake or U*o cars, it suggests poking it down the throats of farm animals

such as lambs. Concentrated grape juice is rich in sugars and a digestible feed. The commission has allocated $430,000 to study such ideas in Britain, France and Italy. It is likely to make money available for a commercial trial soon. If the grape juice could compete with molasses, the main sugary feed for animals, the cost to the C.A.P. of disposing of 1.4 million tonnes need be only $299 million. That could reduce molasses imports by $5O million. However, synthetic and wine alcohols are not the only sorts made in Europe. About 400,000 tonnes a year are produced by fermenting molasses, sugar beet, potatoes and cereals. Much of it goes to make gin, vodka, and other high-proof drinks. Other fermentation industries, including those that produce citric acid for use in soft drinks, enzymes for detergents, antiobiotics and yeast extract, need similar feedstocks. Molasses alcohol is cheap to make, but cereal alcohol and cereal-derived drinks such as whisky suffer from the high price of grain under the C.A.P. The European fermenters cry foul, because they think that the

C.A.P. increases their costs and thus allows American competitors to steal the markets — a belief that has only the slightest justification, according to L. Hepner Associates, the London consultant that monitors feedstock prices. The real, bigger problem, it says, is trade barriers. The British government’s reluctance to lower the tax it levies on wine and raise it on beer is explained by what it sees as discrimination against spirits — notably whisky — in other European countries. France is the worst offender. It discriminates against imports of pure alcohol as well. Britain and West Germany have complained to the European commission that France not only imposes import tariffs on alcohol, but also subsidises its own exports. Last year, the French Government agreed to remove producer quotas. When it tried to' do so, French farmers raised such an outcry that the Government backed down. French winegrowers can turn nasty too. Recently, after four were fined for spilling a lorry-load of imported wine, 2000 of them went on the rampage in Carcassonne. Copyright — The Economist.