Strands #290 “You Say You Want A...
Quizzes & Puzzles5 mins ago
Anything But That France.....
12 Answers
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....sacre bleu! Send it over the channel with migrants at least they'll have a gift for the customs men!
....sacre bleu! Send it over the channel with migrants at least they'll have a gift for the customs men!
Answers
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//France to spend €200m destroying wine as demand falls// My first reaction was “How does cost France €200m to pour a few vats of wine down the drain?” But on closer reading that isn’t what they’re doing at all (and it isn’t France that’s mainly paying for it): “Most of the €200m will be used to buy excess stock, with the alcohol sold for use in items such as hand...
10:09 Sat 26th Aug 2023
This reveals the reality of economics. We are told that if demand drops that means prices come down from the supplier. Like heck it does.
The supplier will even rather destroy decent products first to keep the cost high for the buyer. Anything but actually do what we are informed the market does.
It's a disgusting waste, and we should instead purchase home grown/made wine first, and top up any additional that's required from countries not indulging in such destruction instead.
The supplier will even rather destroy decent products first to keep the cost high for the buyer. Anything but actually do what we are informed the market does.
It's a disgusting waste, and we should instead purchase home grown/made wine first, and top up any additional that's required from countries not indulging in such destruction instead.
//France to spend €200m destroying wine as demand falls//
My first reaction was “How does cost France €200m to pour a few vats of wine down the drain?” But on closer reading that isn’t what they’re doing at all (and it isn’t France that’s mainly paying for it):
“Most of the €200m will be used to buy excess stock, with the alcohol sold for use in items such as hand sanitiser, cleaning products and perfume.”
God knows how much it will cost to extract the 10%-15% alcohol content from the wine to turn it to other uses.
“In a bid to cut back on the overproduction, money will also be available for winegrowers to change to other products, such as olives.”
Normal industries in normal countries have to invest their own money to diversify when demand for their core products reduces. But of course France is not a normal country (it’s an EU member) and its wine industry is heavily protected courtesy of both French and EU legislation.
“In funnelling the money into the industry, the French government aims to stop "prices collapsing...”
So really it’s more about price control and protection.
But here’s the rub:
“…an initial EU fund of €160m which the French government topped up to €200m…”
So 80% of the funds from this scheme comes from EU coffers. Those coffers are filled by the small number of EU countries which are net contributors to the EU budget. They include France but also include Germany (which pays twice the contributions of France) and Italy. Both these countries have large wine industries (Italy being the largest wine producer in the world). I wonder if their wine producers are similarly suffering? If they are, I wonder whether their producers are quite happy that their governments are paying towards protecting French wine prices from collapse?
Of course in any normal business, the reaction to falling demand is to either reduce production or reduce prices to stimulate demand (or a bit of both). Not in the La-La Land that is the EU (and especially not in France).
It could be worse. If the UK was still an EU member, UK winegrowers would have watched whilst their taxes were used to support an ailing French competitive industry. That’s because the EU is a protectionist organisation. And that’s why we took the right decision to leave.
My first reaction was “How does cost France €200m to pour a few vats of wine down the drain?” But on closer reading that isn’t what they’re doing at all (and it isn’t France that’s mainly paying for it):
“Most of the €200m will be used to buy excess stock, with the alcohol sold for use in items such as hand sanitiser, cleaning products and perfume.”
God knows how much it will cost to extract the 10%-15% alcohol content from the wine to turn it to other uses.
“In a bid to cut back on the overproduction, money will also be available for winegrowers to change to other products, such as olives.”
Normal industries in normal countries have to invest their own money to diversify when demand for their core products reduces. But of course France is not a normal country (it’s an EU member) and its wine industry is heavily protected courtesy of both French and EU legislation.
“In funnelling the money into the industry, the French government aims to stop "prices collapsing...”
So really it’s more about price control and protection.
But here’s the rub:
“…an initial EU fund of €160m which the French government topped up to €200m…”
So 80% of the funds from this scheme comes from EU coffers. Those coffers are filled by the small number of EU countries which are net contributors to the EU budget. They include France but also include Germany (which pays twice the contributions of France) and Italy. Both these countries have large wine industries (Italy being the largest wine producer in the world). I wonder if their wine producers are similarly suffering? If they are, I wonder whether their producers are quite happy that their governments are paying towards protecting French wine prices from collapse?
Of course in any normal business, the reaction to falling demand is to either reduce production or reduce prices to stimulate demand (or a bit of both). Not in the La-La Land that is the EU (and especially not in France).
It could be worse. If the UK was still an EU member, UK winegrowers would have watched whilst their taxes were used to support an ailing French competitive industry. That’s because the EU is a protectionist organisation. And that’s why we took the right decision to leave.
“European Commission data for the year to June shows that wine consumption has fallen 7% in Italy, 10% in Spain, 15% in France, 22% in Germany and 34% in Portugal, while wine production across the bloc - the world's biggest wine-making area - rose 4%.”
Meanwhile, consumption has risen by 600% at Casa Racoon
Meanwhile, consumption has risen by 600% at Casa Racoon
11:13, UK consumption as a whole remains pretty consistent:
https:/
https:/
“European Commission data for the year to June shows that wine consumption has fallen 7% in Italy, 10% in Spain, 15% in France, 22% in Germany and 34% in Portugal, while wine production across the bloc - the world's biggest wine-making area - rose 4%.”
Quite. So why would any major industry continue to increase production when demand for its product is in decline? It's a bit like car manufacturers continuing to produce the same number of IC cars when many people are switching to EVs. Should they then expect the taxpayer (mainly of other nations) to pay to have those cars dismantled and the parts melted down to make EVs?
This scheme is typical of the EU's philosophy that protects its producers from competition from outside the bloc and even from competition within it. Why on Earth should taxpayers' money be used to support an industry that cannot react to varying demand.
Quite. So why would any major industry continue to increase production when demand for its product is in decline? It's a bit like car manufacturers continuing to produce the same number of IC cars when many people are switching to EVs. Should they then expect the taxpayer (mainly of other nations) to pay to have those cars dismantled and the parts melted down to make EVs?
This scheme is typical of the EU's philosophy that protects its producers from competition from outside the bloc and even from competition within it. Why on Earth should taxpayers' money be used to support an industry that cannot react to varying demand.
I have not purchased French wine for decades, apart from a bottle of Châteauneuf-du-Pape at Christmas if we are home for lunch. That is even becoming rare as we have taken to booking an Hotel or lunch at a restaurant. I do hope that I have contributed to the embarrassing glut of unsold plonk. I have though got a couple of very nice bottles of Pebblebed Devonshire red tucked away. Drank two earlier this summer and they were lovely. Bring on the glow bulls.
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