Introducing a minimum price per alcoholic unit, even for wine: the proposal to the Senate in France

Setting the minimum, or even average, price of an agricultural product, or a liter of wine, by law, is not a simple thing. First of all from a regulatory point of view, because European rules on free competition explicitly prohibit it. But also from a practical point of view, because there are many variables to consider. In any case, it has been a topic that has been debated for some time, especially looking at supply chains that live on very low margins, and made up of companies that, due to their size, have limited bargaining power with respect to distribution. In any case, if the theme of the definition of average prices has been introduced in Italy, still to be developed, with the latest Agriculture Decree (as explained here, to WineNews, by the lawyer Marco Giuri of the Giuri firm of Florence), in last February, also under pressure from the farmers’ protest, which in France had intertwined with that of the Bordeaux winemakers precisely on the wine prices front, the French President Emmanuel Macron had gone further, announcing, face to face with the farmers at the Sial, the Paris Agricultural Show, which would have introduced “the minimum price on agricultural products”. To date, nothing has been done, at least from an economic point of view. But now, beyond the Alps, focusing on the health aspect (as France has done to justify support for the clearing of 9,000 hectares of vineyards in Bordeaux), we are considering whether to introduce the minimum price per alcoholic unit, or for the “standard glass ”, on the model of what has already been done in some Northern European countries, such as Scotland. The proposal is contained in the “Mission d’évaluation et de contrôle des lois de financement de la sécurité social”, filed on 29 May 2024, which considers the damage related to tobacco, alcohol and obesity, and according to which alcohol-related problems , in France, cost the state coffers 3.3 billion euros, and are responsible for 40,000 deaths. And, among other things, therefore, it is proposed to set a minimum price per alcoholic unit, also working in concert with the wine supply chain, which in some way would set a limit capable, perhaps, of discouraging the consumption of cheaper products and therefore of lower quality drunk more for the search for a “high” than for anything else, and on the other hand also to find an economic threshold below which it does not go to protect, at least in theory, those who produce wine. As long as the distribution cooperates.
But in any case, the proposal is controversial, also because among the documents cited by the Senate report, “Vitisphere” reports, there is a 2022 study that explains how, a minimum price of 0.5 euros per standard glass of alcohol pure (i.e. 10 cl of wine with 12% alcohol content, for a minimum price per bottle of the same wine estimated at 3.75 euros), would lead to a drop in wine consumption of -18% in volume, and -25 % of profits, effectively subtracting resources from general taxation. In addition to the fact that, according to some, with a sort of regulatory “acrobatics”, the minimum price of an agricultural product would be set with a regulation that instead concerns the health area. In any case, “the vine and wine industry is alarmed by the report’s proposals, in particular by the introduction of a minimum selling price per unit of alcohol, a proposal that addresses neither public health problems nor the real challenges that the sector must face,” explains a note from Vin & Société, which represents over 500,000 wine producers and shop owners. According to the president, Samuel Montgermont, “this report makes wrong proposals. Instead of fighting excessive consumption, it aims to target the consumption of all French people, even if the vast majority of them are moderate consumers. If, as they seem to say, the senators want to help the wine industry, let’s talk about paying the producers and not a disguised tax on the French, which has never been effective in terms of public health.”
For Bernard Farges, president of the Cniv (Comité National des Interprofessions des Vins à appellation d’origine et à indication géographique), “the question of a remunerative price for producers has been at the center of the political debate for several months. We accept the challenge of launching a consultation as proposed by the rapporteur. We ask for a concrete solution to guarantee fair remuneration at all levels of the sector.”
“Why would we want to limit access to a product whose consumption has already decreased by 70% in 60 years, without any increase in taxation? We are warning of an unacceptable trajectory that deeply stigmatizes wine and could, in the long term, see it disappear from our tables and our culture,” conclude the industry leaders. According to Vin & Société, moderation is a consolidated habit among the French: more than 8 out of 10 drink less than 2 glasses a day and 9 out of 10 do not drink every day.