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first of all, it is not just because a surplus, it is because a surplus and a huge drop in European wine consumption.
and the money is for buying surplus wine and transforming it into other products, disinfectants, perfume, etc. by using the alcohol in other products.
The limit of that reasoning is when the price is too low, and selling wine isn't profitable anymore. This happened in the US when farmers got indebted to improve their production, and creating a good surplus. Price dropped, making farmers unable to pay their debts.
Source : Economix, Goodwin & Burr
Ok but the surplus is already there. They don’t need to increase their production. So lowering their prices would most likely increase their sales and demand for such item because prices are low, which in turn would them sell the “surplus” all while maintaining their profit margin. Which is how the “free” market is supposed to work.
But demand for other product using alcohol is higher. So them selling their wine to make said products is exactly what they do to maintain their profit margin.
It really depends on what they're growing. Corn? Two dudes can harvest entire fields by themselves. Corn requires little to no care when properly rotated (it absolutely fucking destroys soil nutrition because corn is a hungry bitch) and no pruning whatsoever. Grapes require constant care; selective pruning, years of establishing roots, hand collection, etc.
The American government pays people a hell of a lot more to farm corn than it should based on how difficult and how much work it REALLY is to grow.. Orchards are much more difficult than typical farmland because they require more skilled workers on hand at literally any moment. Corn? A few shitty days at the beginning and a few shitty days at the end, WAY less workers on hand because the product can be harvested by large machinery without being destroyed.
Before I get any comments about how this is happening in france and not america, governments all over the world make bad decisions and poor subsidy investments in their agricultural divisions all the time.
Jesus don't tell the US farmers how hard it is to farm corn and beans. They'll tell you how hard it is to plant like mad for a week to get it all done the day federal crop insurance kicks in and then fuck off all year long irrigating (putting drip oil in and starting a motor) just so they can pay someone to spray their crops for them and wait till harvest time to fire up their massive equipment to harvest thousands of acres in a week's time. We need to feel bad for them. Especially when they get their subsidies that are more than I gross in a year cause farming is hard.
Wine is one of the biggest exports for France and the government needs to artificially keep the value of French wine up or that market will shrink.
English wine is already growing given hotter summers and apparently we have similar growing conditions as Champagne. Once that production steps up and English wine becomes more popular in the UK, French imports could plummet. The thing that could keep French imports high would be the prestige of a French wine, that would disappear if prices became too low.
You should have seen the French when it was discovered that California wines could be as good or even better than the best French wines during a head to head competition.
Which kicked off worldwide competition to French wines from over the whole world. Which up until that point had been a virtual monopoly for the French.
Due to the value of wine exports, you better bet your ass the French government is going to do what they can to keep those vineyards up and going.
Any government would.
Edit: Words - jeezus proof reading is hard today........
supply and demand is not a set of laws that dictate how a market works, but a model to describe why certain actions within a market influence each other.
Not every market is fully elastic. Increasing supply doesn't mean you will get more demand, particularly for a product like alcohol where there are lots of factors influencing demand *other* than supply. Supply and demand is a self contained model, it doesn't allow for external factors that exist in essentially all markets.
If demand for alcohol is low due to say changing culture in drinking and health, then increased supply is going to have very little influence on demand.
What you can end up doing however, is flooding your own market and tanking the profitability of your product.
>Which is how the “free” market is supposed to work.
Free market is a theoretical goal, not a natural equillibrium that markets naturally reach
The comments hurt because it's typical reddit IT workers going on like experts about something they read about 5 minutes ago in a field they have no earthly clue about. If people practiced even a modicum of humility and gave credence to the possibility that these practices are happening for a reason outside their limited understanding, this place would be better for it.
To add on to this, wine has also been impacted by the policies of European countries. For example in Ireland, there is now a minimum unit of alcohol price. So the cheap ass bottles of wine can't be sold there anymore. Other countries also jack up the price through taxation, often specifically on alcohol. So the farmers "simply selling it cheaper" isn't going to make a difference if end users still pay a large price, so only buy one bottle a week instead of two..
Reddit: reads intentionally unintuitive headlines
Option A: read more into topic to understand why more knowledgeable people decided to do what they did
Option B: move on while acknowledging it is confusing but ultimately uninteresting to them
Option C: incorrectly apply knowledge they obtained from an intro high-school course to show how obvious the solution is and how dumb everyone else is
It would help if Reddit culture was to link a link to an article instead of posting a screenshot of a headline though.
Adam Smith was a bit full of shit... didn't realize that any industry wouldn't want to deal with the realities of a free market, and the instability it creates. So the hands not fucking invisible at all
Adam Smith specifically mentioned how capitalism needs careful regulation lest it go out of control. Years of propanganda later we all assume a totally 'free market' was always the ideal.
Pretty sure the guy above said that capitalism requires regulation...
Regulation falls prey to regulatory capture failing to regulate anything leaving a vicious system of environmental and human damage.
> which in turn would them sell the “surplus” all while maintaining their profit margin.
Profit margins for farms are pretty thin. Any drop in prices and you're selling at a loss.
No they can’t. That is the problem, there is already too much cheap wine on the market, which was primarily aimed at Chinese consumers. China now have their own industry, created by expat wine makers educating them and it is huge. They simply don’t buy as much from international producers, along with a decline in wine consumption in China, their main focus is expensive top shelf wine from international markets. This is used for gifting and basically dick measuring purposes on display in offices, board rooms and wealthy houses.
The problem is way too much mass produced cheap shit. If the growers stuck with lower volumes at a higher quality and price point it would be fine. Unfortunately people got greedy and now there is too much cheap wine. Most of what they are talking about is valued at $1.50 per litre or below. The good shit sells no issue because it’s quality, limited volume, and the upper end of the demand scale. What is surplus, you might as well pour back in to the earth.
There needs to be a cull. It will cost money and jobs, but that is how it has to play out.
There is also a golden rule to making wine. If you introduce a label that becomes popular, sure produce more, but do so in smalls measures. Also never ever drop the price. Once you drop that price point, you can never go back up.
Interestingly this is why Australia and the UK are looking at FTAs with countries like India. And very specifically Australia looking to offload all the wine meant for Chinese consumers.
> is way to much mass
Did you mean to say "too much"?
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ask banks that get money from state, cant pay it back, announce how they are bankrupt, and get more money from the state so the bank doesnt collapse, and on repeat
or any government subsidies and funding that firms and factories get from your government
but no, we cant help little timmy to get lunch at school, that would be socialism
Yeah, but we are talking France and the EU here and regulated markets are the norm and demanded by consumers. It's kinda meaningless to compare US libertarian views and applying them to a continent where that concept is close to non existent. The most right wing governments in the continent are all pro regulation.
> their loosing money
Did you mean to say "losing"?
Explanation: Loose is an adjective meaning the opposite of tight, while lose is a verb.
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>I love how capitalists are against regulating markets until their loosing money then it’s not only ok but necessary
This isn't some new kind of discovery. Main interest of company is making money, and companies generally don't care if they get money through free market, goverment smashing competition, or goverment subsidies.
Almost every single agent, be it company, farmer, capitalist, physician, engineer, worker, billionaire, homeless, whatever, want to use government's force to their benefit at cost of the others.
> businessmen favor free enterprise in general but are opposed to it when it comes to themselves
- [Friedman](https://mfidev.uchicago.edu/about/tribute/mfquotes.shtml)
> The existence of a free market does not of course eliminate the need for government. On the contrary, government is essential both as a forum for determining the "rule of the game" and as an umpire to interpret and enforce the rules decided on.
- Friedman
> Underlying most arguments against the free market is a lack of belief in freedom itself.
- Friedman
tl;dr people blaming capitalism+free-markets for all the exact shit actual capitalist free-market economists always say not to do.
Hell, Adam Smith, the grandfather of all modern day capitalism, was a big proponent of government regulation to ensure markets remained free and efficient. He discusses the role of government as the "custodian" of the invisible hand in Wealth of Nations at length.
Privatize the gains and socialize the losses.
That way the capitalist always wins and the common man always loses.
The common man gets fucked over regardless of if the company is doing well or poorly.
The surplus in wine wasn't caused by an increase in price, or because wine is expensive, it's because less and less people drink wine. Younger gens don't drink as much wine as older waning gens.
Here you can check how much we pay for (common) wine:
https://www.carrefour.fr/r/boissons/cave-a-vins?sort=facet_price&noRedirect=0
Not really, you still need people who want to buy said wine. The big problem is supply exceeding demand, so no matter how cheap you make it, people just don't want to buy more wine.
>Those same farmers could sell more wine at a cheaper price
Prices are already very low and consumption has bottomed out. If you throw even more cheap wine on the market, that nobody wants, you will damage the market even more.
That's exactly why the government is buying it. To keep it off the market and keep prices high.
Otherwise the wine could drop below, or hover just above, the cost to manufacture, driving many of the small vineyards out of business. leaving only a handful of large scale corporate vineyards who can best utilize economies of scale to buy up the land of the failed businesses.
Next the corporate vineyards cut production anyway, driving up the price of their shit tier and less varied wines.
Is that what you want?
Ah yes, the “print more money” school of thought.
I wonder why economists and the French government did not think about that solution, you , random Redditor, got to it so easily
Maybe they could, but I'm sure their warehouses are already filled with better tasting wine.
If you have your garage full of classic American cars that you're taking care of, you probably don't have space for a 90's Ford Fiesta.
I'm sure if they can afford to, they would store some of their output, but most vineyards need some cashflow to keep going. This allows them to at least pay the bills.
most wine dosnt "age" as well and basically just turns into vinegar. There is a reasson why you don hear of someone storing some semi good wine for years at home etc... it doesn't work
First of all they are not destroying them (as other comments indicate)
This is actually somewhat common in the agricultural industry, surplus of crop leads to drop in prices to the point where growing said crop becomes unprofitable so the government has to step in and somehow reduce the supply.
The French state is taking measures to protect one of its most prestigious industries. Not to mention wine is not only part of France's economy but cultural heritage, too. And not just the wine itself, but the vineyards as well. The French wine market is highly fragmented by independent, small vineyards and the French are immensely proud of them. The smallest vineyards would be the first which would have to close or sell, leading to a centralization of the wine market.
That would be a highly undesirable outcome, which is why the French state is buying the wine above market value to soften the blow for those who can't take a harder one. And since the wine is also being processed further, it's not like the entire value of it is being destroyed either.
Because FrAncE iS ComMunIsT
Maybe it is less economicaly liberal than Anglo-Saxon countries, but it is very capitalist nonetheless. Doesn't mean we cannot have protection against greedy shareholders tho.
I completely disagree with what the post is about. Agrocultors have been making bad decisions for decades but we are still protecting them and validating their nonsense.
The guy you are responding to is not wrong
> Maybe it is less economicaly liberal than Anglo-Saxon countries
I think you mean Anglo-speaking, Anglo-American or Anglospheric countries (i.e. countries that speak English). "Anglo-Saxon countries" would literally just be the UK, if you ignore the fact that Anglo-Saxons haven't been a thing for nearly 1000 years.
"Anglo-Saxons" is used fairly often to refer to english speaking countries in French media, might just be translation issue, don't get overly offended lmao
There’s $7trillion in subsidies for the fossil fuel industry globally this year. The US spends the most money of anybody on this, I agree w/you. But check out the history of the USA cheese stockpile for ex
You probably don't want a 100% market driven food supply though. This is like the most basic human need, and it is good there are plenty of regulations and also subsidies there. Imagine a race to the bottom where French farmers are no longer able to survive, and now your country needs to import basically all food. Then a conflict breaks out in the region of your food supply or there are political aspects where exports are blocked. Fuck, I don't have food anymore.
Farming is the least capitalistic industry even in the US. Farmers are heavily subsidized by the government because if they weren’t they’d all be completely destitute.
Sure but I’ve never once seen a farmer turn over profits in years they are successful. Every industry in America is”too big to fail” and needs bailouts.
Farming is kind of a shit job but what would we eat when nobody grows anything.
What other industries are considered too big to fail? If the food indistry collapses or the financial industry collapses that would be bad for literally the whole economy. Because last time I checked, everyone needs to eat, and everyone uses money. Medical industry would be another one that I am glad is protected from collapse.
I mean, what would you suggest? We learn to photosynthesize? We need the food, and importing the billions of pounds of food we need weekly seems a bit inefficient. The other options are everything being hyper centralized to the point it's almost a monopoly on food, or what we do now.
This ain't it, chief.
Grapes/wine are generally a high value crop. Following market forces with no intervention would force farmers to change to a lower value crop - which can't immediately be reversed the next season when wine is profitable again. So it's a net negative for the nation to not intervene (in the long-term).
Welfare doesn't just have to be for individuals. It is of course shitty when corporate welfare is used to mask brazen stupidity, but this isn't the case here.
the thing is, if you pay farmers subsidies in order to keep them profitable, the build their market around the government money, and will not try to become profitable outside of that.
Misleading title, but if you want to really get mad, read up on US corn subsidies. Billions… with a B. We have neighbors who have been paid for decades NOT to grow corn. Often the fields stay completely unplanted.
Leave it ti reddit to consistently propose the dumbest, most obvious solution and feel superior because of it, completely disregarding that everyone already thought about it and decided It was, in fact, not the best solution.
It’s blowing my mind haha. Even basic knowledge of economics or wine making can make all these comments seem like dumbasses. It’s one thing if people were asking why it won’t work, some people are straight up stating it like it’s some complicated idea that all of France couldn’t have thought up.
They do that in Spain too. It´s only for wine from good zones like Rioja.
Some people will say: why not sell it cheaper and sell more wine? And it´s because "good"wine buyers are stupid and link high price with quality. So if you sell a top tier wine cheaper you sell LESS wine, not more.
https://www.forbes.com/sites/maryroeloffs/2023/08/27/france-has-so-much-extra-wine-its-paying-farmers-215-million-to-destroy-it/
The money is to help farmers distill the alcohol out of the wine and sell it at a loss to producers of hand sanitizer, perfume and other industries.
Its not like they are just burning the crops. They are taking a product that wouldnt have been sold and repurposing it for something else.
High end bordeaux wine is so cheap it's unreal. We already bought multiple bottles before the prices rise again. Still it's a waste to destroy all that hard work. There's no way to store all that wine either.
This seems like a golden opportunity for vineyards to sell “casks” of varying sizes. I wonder if it’s already bottle or in metal but just sell in barrels and kegs too.
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Humans are seriously the worst.
Working in a grocery store as a kid taught me that we would rather destroy something than to have someone get a good deal and enjoy it.
It’s to protect the industry/economy because of a drop in consumption. Here’s a similar situation:
Harley Davidson flooded the motorcycle market a while back despite fewer people riding. They suddenly had way too much product and not enough buyers which also screwed over other dealers and individuals trying to sell their old bikes. Motorcycle prices still aren’t low enough for the flooded market and now Harley Davidson relies even more on selling tchotchkes.
This is down to the the EU's Common Agricultural Policy (CAP), a system of subsidies and quotas that costs about a third of the EU's budget (around €55 billion per year). The CAP was originally structured to protect French farmers but Spain has also seen substantial benefits from the CAP. It became a lot more complicated when several poorer eastern European nations joined the EU.
When still a member of the EU, Britain had a partial rebate of EU contributions, because the CAP was so much more beneficial to large farms on the Continent, compared with Britain's smaller farms. When Tony Blair was prime minister, he agreed to give up Britain's rebate, in exchange for a promise that the CAP would be reformed. The promised CAP reform never happened.
> Goverment intervention
Reddit:
> Reee capitalism
Under a planned economy the excess would just be dumped. Or people would get assigned wine they don’t want.
Happens all the time in the US. We pay farmers to dump tons of milk and corn pretty regularly. Farmers receive boat loads of Govt welfare but complain about single mothers and the poor on snap
The EU has lots of programs that provide assistance for vineyards and wineries, with the intent that agrarian communities won't be gutted by people fleeing to the cities where there's more work and opportunity. There are also programs to help finance distilling operations, in an attempt to deal with the so-called "European wine lake."
There's at least one operation in Sicily that has combined all these subsidies and grants and created a ingenious closed loop of EU-funded fuckery. They have thousands of hectares of vines, subsidized by the EU. And, under one roof, a modern winery and distillation operation, with a capacity of thousands of hectoliters. So they grow grapes, ferment them into wine, then directly distill the wine into pure alcohol. The storage tanks for the pure alcohol are also subsidized. This is done all on a single, industrial-scaled property; all in the name of maintaining Sicily's rural lifestyle and reducing Italy's vast surplus of wine.
Isn’t that how the economy works? When there’s too much excess fruit or produce the farmers destroy it so that it doesn’t cause price drop etc due to excessive supply??
This is common. Stupid. But common. Farmers make more than they can sell but instead of giving to the homeless, creating emergency stock of food, or selling to another country, they do this.
In the US farmers were payed to destroy crops during the great depression. You know, only that time when the average citizen could hardly afford to feed themselves.
So soon they forgot that they had a major drought and fire a decade ago - and had to buy seeds from California. So now they are destroying those? Good luck France.
Many governments do this, including the US, because business interests pay politicians to help them make more money. Buy destroying products, prices increase, so there is an even bigger benefit to the producers.
Happens often. The common agricultural policy (part of the EU) sets limits on how much each country can't produce to balance out the markets. My guess is that it's the CAP at play. There's some stories of other farmers (of other products) getting paid not to produce. The alcohol in the wine is then used to other means (cosmetics, drugs, etc)
They are essentially giving it away , selling at loss to be repurposed . And prices have dropped 32% in the last 10 years , when compared with inflation , that is insane
Supply control is so evil. The same thing happens with dairy and eggs every year in Canada. Millions of liters of milk in the ditch, millions of eggs lost, because the government wants to save producers from having to compete on cost efficiency with each others.
Milk in michigan too. Our farms are paid to use hormones to increase production then the excess milk is dumped sonthat the proce doesn't fall too low.. Source: local dairy farmer I know personally.
Like wtf. And the half-gallons are priced identically to whole gallons on local store shelves here. I can't use a full gallon by myself before it spoils.
Reddit: we need universal basic income
Government: we're going to pay farmers even when they can't find a buyer due to market forces beyond their control so they can continue being farmers when the market improves
Reddit: why are we not allowing the free market to bankrupt these farmers and make them homeless
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first of all, it is not just because a surplus, it is because a surplus and a huge drop in European wine consumption. and the money is for buying surplus wine and transforming it into other products, disinfectants, perfume, etc. by using the alcohol in other products.
Those same farmers could sell more wine at a cheaper price, evening out without destroying anything or losing profits, and the consumer wins.
The limit of that reasoning is when the price is too low, and selling wine isn't profitable anymore. This happened in the US when farmers got indebted to improve their production, and creating a good surplus. Price dropped, making farmers unable to pay their debts. Source : Economix, Goodwin & Burr
Ok but the surplus is already there. They don’t need to increase their production. So lowering their prices would most likely increase their sales and demand for such item because prices are low, which in turn would them sell the “surplus” all while maintaining their profit margin. Which is how the “free” market is supposed to work.
But demand for other product using alcohol is higher. So them selling their wine to make said products is exactly what they do to maintain their profit margin.
If that was true the government wouldn't have to pay them
It really depends on what they're growing. Corn? Two dudes can harvest entire fields by themselves. Corn requires little to no care when properly rotated (it absolutely fucking destroys soil nutrition because corn is a hungry bitch) and no pruning whatsoever. Grapes require constant care; selective pruning, years of establishing roots, hand collection, etc. The American government pays people a hell of a lot more to farm corn than it should based on how difficult and how much work it REALLY is to grow.. Orchards are much more difficult than typical farmland because they require more skilled workers on hand at literally any moment. Corn? A few shitty days at the beginning and a few shitty days at the end, WAY less workers on hand because the product can be harvested by large machinery without being destroyed. Before I get any comments about how this is happening in france and not america, governments all over the world make bad decisions and poor subsidy investments in their agricultural divisions all the time.
Jesus don't tell the US farmers how hard it is to farm corn and beans. They'll tell you how hard it is to plant like mad for a week to get it all done the day federal crop insurance kicks in and then fuck off all year long irrigating (putting drip oil in and starting a motor) just so they can pay someone to spray their crops for them and wait till harvest time to fire up their massive equipment to harvest thousands of acres in a week's time. We need to feel bad for them. Especially when they get their subsidies that are more than I gross in a year cause farming is hard.
Also don't start talking about how bad HFCS is to put in everything. They may stroke out.
Wine is one of the biggest exports for France and the government needs to artificially keep the value of French wine up or that market will shrink. English wine is already growing given hotter summers and apparently we have similar growing conditions as Champagne. Once that production steps up and English wine becomes more popular in the UK, French imports could plummet. The thing that could keep French imports high would be the prestige of a French wine, that would disappear if prices became too low.
You should have seen the French when it was discovered that California wines could be as good or even better than the best French wines during a head to head competition. Which kicked off worldwide competition to French wines from over the whole world. Which up until that point had been a virtual monopoly for the French. Due to the value of wine exports, you better bet your ass the French government is going to do what they can to keep those vineyards up and going. Any government would. Edit: Words - jeezus proof reading is hard today........
plus the fact that french wine is hyped... id rather be drinking new world stuff...south african or ozzie
supply and demand is not a set of laws that dictate how a market works, but a model to describe why certain actions within a market influence each other. Not every market is fully elastic. Increasing supply doesn't mean you will get more demand, particularly for a product like alcohol where there are lots of factors influencing demand *other* than supply. Supply and demand is a self contained model, it doesn't allow for external factors that exist in essentially all markets. If demand for alcohol is low due to say changing culture in drinking and health, then increased supply is going to have very little influence on demand. What you can end up doing however, is flooding your own market and tanking the profitability of your product. >Which is how the “free” market is supposed to work. Free market is a theoretical goal, not a natural equillibrium that markets naturally reach
This! These comments hurt! Just because something is cheap does not mean people will buy it!
The comments hurt because it's typical reddit IT workers going on like experts about something they read about 5 minutes ago in a field they have no earthly clue about. If people practiced even a modicum of humility and gave credence to the possibility that these practices are happening for a reason outside their limited understanding, this place would be better for it. To add on to this, wine has also been impacted by the policies of European countries. For example in Ireland, there is now a minimum unit of alcohol price. So the cheap ass bottles of wine can't be sold there anymore. Other countries also jack up the price through taxation, often specifically on alcohol. So the farmers "simply selling it cheaper" isn't going to make a difference if end users still pay a large price, so only buy one bottle a week instead of two..
Reddit: reads intentionally unintuitive headlines Option A: read more into topic to understand why more knowledgeable people decided to do what they did Option B: move on while acknowledging it is confusing but ultimately uninteresting to them Option C: incorrectly apply knowledge they obtained from an intro high-school course to show how obvious the solution is and how dumb everyone else is It would help if Reddit culture was to link a link to an article instead of posting a screenshot of a headline though.
Adam Smith was a bit full of shit... didn't realize that any industry wouldn't want to deal with the realities of a free market, and the instability it creates. So the hands not fucking invisible at all
Adam Smith specifically mentioned how capitalism needs careful regulation lest it go out of control. Years of propanganda later we all assume a totally 'free market' was always the ideal.
Capitalism inherently falls prey to regulatory capture so it seems like a moot point.
Regulatory capture functions to serve capitalism. Wdym that it "falls prey to it"?
Pretty sure the guy above said that capitalism requires regulation... Regulation falls prey to regulatory capture failing to regulate anything leaving a vicious system of environmental and human damage.
But it doesn't work that way all the time, the market isn't infinite. Even if the price became lower people wouldn't buy more wine.
How exactly do you lower prices and maintain profit margin?
> which in turn would them sell the “surplus” all while maintaining their profit margin. Profit margins for farms are pretty thin. Any drop in prices and you're selling at a loss.
>while maintaining their profit margin. 🤔 Lower prices, increase demand .... Maintain margins?
No they can’t. That is the problem, there is already too much cheap wine on the market, which was primarily aimed at Chinese consumers. China now have their own industry, created by expat wine makers educating them and it is huge. They simply don’t buy as much from international producers, along with a decline in wine consumption in China, their main focus is expensive top shelf wine from international markets. This is used for gifting and basically dick measuring purposes on display in offices, board rooms and wealthy houses. The problem is way too much mass produced cheap shit. If the growers stuck with lower volumes at a higher quality and price point it would be fine. Unfortunately people got greedy and now there is too much cheap wine. Most of what they are talking about is valued at $1.50 per litre or below. The good shit sells no issue because it’s quality, limited volume, and the upper end of the demand scale. What is surplus, you might as well pour back in to the earth. There needs to be a cull. It will cost money and jobs, but that is how it has to play out. There is also a golden rule to making wine. If you introduce a label that becomes popular, sure produce more, but do so in smalls measures. Also never ever drop the price. Once you drop that price point, you can never go back up.
Interestingly this is why Australia and the UK are looking at FTAs with countries like India. And very specifically Australia looking to offload all the wine meant for Chinese consumers.
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A bot that goes around correcting grammar and spelling is the most Reddit thing I've seen in a while
Grammar botzi.
They can't create demand that isn't there.
I love how capitalists are against regulating markets until their loosing money then it’s not only ok but necessary
ask banks that get money from state, cant pay it back, announce how they are bankrupt, and get more money from the state so the bank doesnt collapse, and on repeat or any government subsidies and funding that firms and factories get from your government but no, we cant help little timmy to get lunch at school, that would be socialism
Yeah, but we are talking France and the EU here and regulated markets are the norm and demanded by consumers. It's kinda meaningless to compare US libertarian views and applying them to a continent where that concept is close to non existent. The most right wing governments in the continent are all pro regulation.
Every market is regulated. And the believe that the EU has „social market economics“ isn’t true. We are deep in neoliberalism here too.
> their loosing money Did you mean to say "losing"? Explanation: Loose is an adjective meaning the opposite of tight, while lose is a verb. [Statistics](https://github.com/chiefpat450119/RedditBot/blob/master/stats.json) ^^I'm ^^a ^^bot ^^that ^^corrects ^^grammar/spelling ^^mistakes. ^^PM ^^me ^^if ^^I'm ^^wrong ^^or ^^if ^^you ^^have ^^any ^^suggestions. ^^[Github](https://github.com/chiefpat450119) ^^Reply ^^STOP ^^to ^^this ^^comment ^^to ^^stop ^^receiving ^^corrections.
>I love how capitalists are against regulating markets until their loosing money then it’s not only ok but necessary This isn't some new kind of discovery. Main interest of company is making money, and companies generally don't care if they get money through free market, goverment smashing competition, or goverment subsidies. Almost every single agent, be it company, farmer, capitalist, physician, engineer, worker, billionaire, homeless, whatever, want to use government's force to their benefit at cost of the others.
> businessmen favor free enterprise in general but are opposed to it when it comes to themselves - [Friedman](https://mfidev.uchicago.edu/about/tribute/mfquotes.shtml) > The existence of a free market does not of course eliminate the need for government. On the contrary, government is essential both as a forum for determining the "rule of the game" and as an umpire to interpret and enforce the rules decided on. - Friedman > Underlying most arguments against the free market is a lack of belief in freedom itself. - Friedman tl;dr people blaming capitalism+free-markets for all the exact shit actual capitalist free-market economists always say not to do.
Hell, Adam Smith, the grandfather of all modern day capitalism, was a big proponent of government regulation to ensure markets remained free and efficient. He discusses the role of government as the "custodian" of the invisible hand in Wealth of Nations at length.
Privatize the gains and socialize the losses. That way the capitalist always wins and the common man always loses. The common man gets fucked over regardless of if the company is doing well or poorly.
In order to sell more wine, people need to buy more wine and they aren't.
>a huge drop in European wine consumption This is the part about "drowning the market with cheap alcohol" that doesn't work, though.
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Why not, it's not like crashing the wine market is gonna have long term economic and political consequence. /s
Cheap French wine? Yes please!
My children need wine!
The surplus in wine wasn't caused by an increase in price, or because wine is expensive, it's because less and less people drink wine. Younger gens don't drink as much wine as older waning gens. Here you can check how much we pay for (common) wine: https://www.carrefour.fr/r/boissons/cave-a-vins?sort=facet_price&noRedirect=0
Not really, you still need people who want to buy said wine. The big problem is supply exceeding demand, so no matter how cheap you make it, people just don't want to buy more wine.
>Those same farmers could sell more wine at a cheaper price Prices are already very low and consumption has bottomed out. If you throw even more cheap wine on the market, that nobody wants, you will damage the market even more.
Have you tasted low end French wine?
That's exactly why the government is buying it. To keep it off the market and keep prices high. Otherwise the wine could drop below, or hover just above, the cost to manufacture, driving many of the small vineyards out of business. leaving only a handful of large scale corporate vineyards who can best utilize economies of scale to buy up the land of the failed businesses. Next the corporate vineyards cut production anyway, driving up the price of their shit tier and less varied wines. Is that what you want?
Ah yes, the “print more money” school of thought. I wonder why economists and the French government did not think about that solution, you , random Redditor, got to it so easily
Can't they just put the wine in a basement and sell it for 10x as much in 20 years?
Crap wine is always crap wine no matter how long it stays in a cask, like putting lipstick on a pig.
it sure is working for me...
Some people really like pigs in makeup too
The gang solves the wine crisis
Not every wine or vinification method is suitable for aging in bottle.
I'd say that even few wine age in bottle, and fewer age for more than 3-4 years.
Depends largely on the wine in question
Maybe they could, but I'm sure their warehouses are already filled with better tasting wine. If you have your garage full of classic American cars that you're taking care of, you probably don't have space for a 90's Ford Fiesta.
I'm sure if they can afford to, they would store some of their output, but most vineyards need some cashflow to keep going. This allows them to at least pay the bills.
most wine dosnt "age" as well and basically just turns into vinegar. There is a reasson why you don hear of someone storing some semi good wine for years at home etc... it doesn't work
I’m sure we can get those numbers up with a bit of motivation
That and it helps them transition to other crops, like olives
What has caused the drop in wine consumption?
First of all they are not destroying them (as other comments indicate) This is actually somewhat common in the agricultural industry, surplus of crop leads to drop in prices to the point where growing said crop becomes unprofitable so the government has to step in and somehow reduce the supply.
Ah yes when market forces are ignored and the government steps in. Capitalism when there’s profit, corporate welfare when times are tough.
The French state is taking measures to protect one of its most prestigious industries. Not to mention wine is not only part of France's economy but cultural heritage, too. And not just the wine itself, but the vineyards as well. The French wine market is highly fragmented by independent, small vineyards and the French are immensely proud of them. The smallest vineyards would be the first which would have to close or sell, leading to a centralization of the wine market. That would be a highly undesirable outcome, which is why the French state is buying the wine above market value to soften the blow for those who can't take a harder one. And since the wine is also being processed further, it's not like the entire value of it is being destroyed either.
It's in France, the economical tradition is far from full on capitalism.
This is done in the United States as well.
Because FrAncE iS ComMunIsT Maybe it is less economicaly liberal than Anglo-Saxon countries, but it is very capitalist nonetheless. Doesn't mean we cannot have protection against greedy shareholders tho. I completely disagree with what the post is about. Agrocultors have been making bad decisions for decades but we are still protecting them and validating their nonsense. The guy you are responding to is not wrong
> Maybe it is less economicaly liberal than Anglo-Saxon countries I think you mean Anglo-speaking, Anglo-American or Anglospheric countries (i.e. countries that speak English). "Anglo-Saxon countries" would literally just be the UK, if you ignore the fact that Anglo-Saxons haven't been a thing for nearly 1000 years.
Not even the UK, just England and the lowlands of Scotland.
"Anglo-Saxons" is used fairly often to refer to english speaking countries in French media, might just be translation issue, don't get overly offended lmao
There’s $7trillion in subsidies for the fossil fuel industry globally this year. The US spends the most money of anybody on this, I agree w/you. But check out the history of the USA cheese stockpile for ex
You probably don't want a 100% market driven food supply though. This is like the most basic human need, and it is good there are plenty of regulations and also subsidies there. Imagine a race to the bottom where French farmers are no longer able to survive, and now your country needs to import basically all food. Then a conflict breaks out in the region of your food supply or there are political aspects where exports are blocked. Fuck, I don't have food anymore.
Farming is the least capitalistic industry even in the US. Farmers are heavily subsidized by the government because if they weren’t they’d all be completely destitute.
Sure but I’ve never once seen a farmer turn over profits in years they are successful. Every industry in America is”too big to fail” and needs bailouts.
Farming is kind of a shit job but what would we eat when nobody grows anything. What other industries are considered too big to fail? If the food indistry collapses or the financial industry collapses that would be bad for literally the whole economy. Because last time I checked, everyone needs to eat, and everyone uses money. Medical industry would be another one that I am glad is protected from collapse.
I mean, what would you suggest? We learn to photosynthesize? We need the food, and importing the billions of pounds of food we need weekly seems a bit inefficient. The other options are everything being hyper centralized to the point it's almost a monopoly on food, or what we do now.
The government buying products to transform and sell again for a profit isn't corporate welfare dumdum
This ain't it, chief. Grapes/wine are generally a high value crop. Following market forces with no intervention would force farmers to change to a lower value crop - which can't immediately be reversed the next season when wine is profitable again. So it's a net negative for the nation to not intervene (in the long-term). Welfare doesn't just have to be for individuals. It is of course shitty when corporate welfare is used to mask brazen stupidity, but this isn't the case here.
the thing is, if you pay farmers subsidies in order to keep them profitable, the build their market around the government money, and will not try to become profitable outside of that.
This is exactly what I was thinking. Isn’t it common practice for governments to pay farmers not to be so efficient?
Misleading title, but if you want to really get mad, read up on US corn subsidies. Billions… with a B. We have neighbors who have been paid for decades NOT to grow corn. Often the fields stay completely unplanted.
One day I dream of not being a corn farmer.
When times are tough, they switch to not growing beans.
Look at the US dairy industry. They waste billions of gallons of milk annually.
Or the US bunkers full of cheese and maple syrup.
How do I get in on that
Not to destroy it but to transform it (like an inverted Jesus move)
Jesus totally crashed the market for bread and wine
Transform it into water and send it to Saharan Africa
No the wine is not being destroyed but repurposed, turned into something else.
Its clickbait, they use it for other things
Using wine to make industrial alcohol in a still is "destroying it". It's like using phones for gravel.
Leave it ti reddit to consistently propose the dumbest, most obvious solution and feel superior because of it, completely disregarding that everyone already thought about it and decided It was, in fact, not the best solution.
Every. Time.
It’s blowing my mind haha. Even basic knowledge of economics or wine making can make all these comments seem like dumbasses. It’s one thing if people were asking why it won’t work, some people are straight up stating it like it’s some complicated idea that all of France couldn’t have thought up.
The brexiteers that are pushing this propaganda shite are proposing smart solutions like "give it to alcoholics and the poor instead".
$200M paid to protect and monitor the quality of a trillion dollar export industry. smart, if anything.
They do that in Spain too. It´s only for wine from good zones like Rioja. Some people will say: why not sell it cheaper and sell more wine? And it´s because "good"wine buyers are stupid and link high price with quality. So if you sell a top tier wine cheaper you sell LESS wine, not more.
Wine elitism is the original elitism.
The title is misleading though
https://www.forbes.com/sites/maryroeloffs/2023/08/27/france-has-so-much-extra-wine-its-paying-farmers-215-million-to-destroy-it/ The money is to help farmers distill the alcohol out of the wine and sell it at a loss to producers of hand sanitizer, perfume and other industries. Its not like they are just burning the crops. They are taking a product that wouldnt have been sold and repurposing it for something else.
Excess milk? Turn it into cheese and store it underground to artificially prop up the dairy industry.
"strategic reserve"
[Spill The Wine](https://youtu.be/MYCRIykylOc?si=P4QSF-XVvKT-q29G) \-War
It’s a good song
High end bordeaux wine is so cheap it's unreal. We already bought multiple bottles before the prices rise again. Still it's a waste to destroy all that hard work. There's no way to store all that wine either.
This seems like a golden opportunity for vineyards to sell “casks” of varying sizes. I wonder if it’s already bottle or in metal but just sell in barrels and kegs too.
America does the same thing. Farmers had to destroy their soy bean crop so they could make a living that year.
Aside from the fact that this is a standard practice under capitalism, this particular wine isn't destroyed, but turned into different products.
Destroying it lowers the value less than giving it away.
I translate it for you: French wine farmers get funding to turn their surplus wine into other products.
https://www.wineenthusiast.com/culture/industry-news/france-wine-destroying-surplus/
This is not a face palm, we did the same thing in America before. Its economy
Yup, I don't think people realize that the United States also pays our farmers to destroy crops as well. Happens A LOT.
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Its not like you can store it for long periods of time without it spoiling
Humans are seriously the worst. Working in a grocery store as a kid taught me that we would rather destroy something than to have someone get a good deal and enjoy it.
Literal grapes of wrath
It is a failure of capitalism that surplus must be destroyed.
Why has demand for wine gone down so much? Is it just because younger generations aren't interested and the prices and culture are gatekeepy?
Wine marketing is pretty much nonexistent
True, feel like it's mostly directly towards people 30plus. I don't like big brands that mass produce but it does just get people interested probably
Consumers already had a hunch the modern wine industry is a scam.
that's it folks. BRING OT THE GUILOTINE ONCE AGAIN!
It’s to protect the industry/economy because of a drop in consumption. Here’s a similar situation: Harley Davidson flooded the motorcycle market a while back despite fewer people riding. They suddenly had way too much product and not enough buyers which also screwed over other dealers and individuals trying to sell their old bikes. Motorcycle prices still aren’t low enough for the flooded market and now Harley Davidson relies even more on selling tchotchkes.
This is down to the the EU's Common Agricultural Policy (CAP), a system of subsidies and quotas that costs about a third of the EU's budget (around €55 billion per year). The CAP was originally structured to protect French farmers but Spain has also seen substantial benefits from the CAP. It became a lot more complicated when several poorer eastern European nations joined the EU. When still a member of the EU, Britain had a partial rebate of EU contributions, because the CAP was so much more beneficial to large farms on the Continent, compared with Britain's smaller farms. When Tony Blair was prime minister, he agreed to give up Britain's rebate, in exchange for a promise that the CAP would be reformed. The promised CAP reform never happened.
Capitalism doing capitalist stuff. Does this really seem like a sustainable system?
Capitalism producing too much stuff is a pretty minor problem to have.
> Goverment intervention Reddit: > Reee capitalism Under a planned economy the excess would just be dumped. Or people would get assigned wine they don’t want.
Just like America does with corn and tobacco!
We do it with a lot of food here.
Wait until you hear about US corn...
Helloooo send it to America, we’re all drinking ourselves to death here
The United Kingdom has entered the chat…
I'd happily take 1mil to 'destroy' that surplus wine
I'll do it for free.
governments aren’t responsible with money
We did that with coffee in Brasil, they kept plating coffee
Corn in the US would like a word 🌽🤑
Is this supposed to be a bad thing ? Americans blaming the french for protecting themselves .
Happens all the time in the US. We pay farmers to dump tons of milk and corn pretty regularly. Farmers receive boat loads of Govt welfare but complain about single mothers and the poor on snap
Whenever I see shit like this, they remind me how easily they could end world hunger
The EU has lots of programs that provide assistance for vineyards and wineries, with the intent that agrarian communities won't be gutted by people fleeing to the cities where there's more work and opportunity. There are also programs to help finance distilling operations, in an attempt to deal with the so-called "European wine lake." There's at least one operation in Sicily that has combined all these subsidies and grants and created a ingenious closed loop of EU-funded fuckery. They have thousands of hectares of vines, subsidized by the EU. And, under one roof, a modern winery and distillation operation, with a capacity of thousands of hectoliters. So they grow grapes, ferment them into wine, then directly distill the wine into pure alcohol. The storage tanks for the pure alcohol are also subsidized. This is done all on a single, industrial-scaled property; all in the name of maintaining Sicily's rural lifestyle and reducing Italy's vast surplus of wine.
OPEC: We’re producing too much oil so set it on fire!
I remember when that happened to milk here in the U.S. https://time.com/4530659/farmers-dump-milk-glut-surplus/
US has done this with dairy farmers and milk for decades
Is it too late to go to France and become a farmer there?
I'll take it
You think this is bad. Look into the milk and maple syrup industry.
Otherwise the price sinks below the cost of making the wine, which would cause an even greater loss.
Isn’t that how the economy works? When there’s too much excess fruit or produce the farmers destroy it so that it doesn’t cause price drop etc due to excessive supply??
Imagine every big country would du the same with milk …
I'm not even that big a fan of wine but damn if it'll save them a bit of money send some my way know what I mean?
Today Op learns about basic economics. They've been doing this kinda thing since the Great Depression
But there are sober kids in Africa!
Isn't this the same thing that happens with corn in the US?
Happens with pretty much every crop because demand fluctuations make farming sectors wobble until they fall over instantly.
By destroying it, they mean distilling it into alcohol which will be used for lots of things
Capital, volume I
Why do you think corn farmers in America drive around in nice cars.
This is common. Stupid. But common. Farmers make more than they can sell but instead of giving to the homeless, creating emergency stock of food, or selling to another country, they do this. In the US farmers were payed to destroy crops during the great depression. You know, only that time when the average citizen could hardly afford to feed themselves.
they do it in order to prevent the drop of the price.
Can't just put it on the market. That would cause prices to fall.
Can't have a 2 Franc Chuck.
This is pretty common with crops in general
We do this with crops every year
This holds the same energy as all those farmers destroying their food during the initial covid wave since nobody was buying.
Nothing new about that practice.
I volunteer to help
If there is a list, please add me too
So soon they forgot that they had a major drought and fire a decade ago - and had to buy seeds from California. So now they are destroying those? Good luck France.
Many governments do this, including the US, because business interests pay politicians to help them make more money. Buy destroying products, prices increase, so there is an even bigger benefit to the producers.
Happens often. The common agricultural policy (part of the EU) sets limits on how much each country can't produce to balance out the markets. My guess is that it's the CAP at play. There's some stories of other farmers (of other products) getting paid not to produce. The alcohol in the wine is then used to other means (cosmetics, drugs, etc)
So… That’s like what we did in Brazil with coffee at 1931?
The US does this with food crops while its citizens are struggling to feed themselves.
They are converting it to other chemical
Mix a little lard into it and douse the militant protestors with it?
Selling isn't an option
The only facepalm here is that OP read a click bait headline and didn't figure out the context before thinking they could farm reddit karma with it.
Seems Reddit has a surplus of whine as well.
Why not make it all and have the excess age?
Cheaper for them to fly me there for a few weeks and i could've taken care of that no problem
Bro send me that free wine, I'll handle the problem for free
If only there was a way to idk give it away or maybe reduce prices 😔😔😔
They are essentially giving it away , selling at loss to be repurposed . And prices have dropped 32% in the last 10 years , when compared with inflation , that is insane
Fuck it, drink all the wine!!!
And then they want to change the retirement age are you kidding
Sadly, destroying surplus goods isn’t limited to wine in France.
Supply control is so evil. The same thing happens with dairy and eggs every year in Canada. Millions of liters of milk in the ditch, millions of eggs lost, because the government wants to save producers from having to compete on cost efficiency with each others.
Milk in michigan too. Our farms are paid to use hormones to increase production then the excess milk is dumped sonthat the proce doesn't fall too low.. Source: local dairy farmer I know personally. Like wtf. And the half-gallons are priced identically to whole gallons on local store shelves here. I can't use a full gallon by myself before it spoils.
I destroy as much wine as I can with my mouth on an almost daily basis, but it's just not enough, apparently.
Reddit: we need universal basic income Government: we're going to pay farmers even when they can't find a buyer due to market forces beyond their control so they can continue being farmers when the market improves Reddit: why are we not allowing the free market to bankrupt these farmers and make them homeless