Winemakers receive an additional 13 million kuna for crisis distillation and wine storage

The Chamber emphasizes in a statement that the proposal for the National Program of Assistance to the Wine Sector for the period 2019 – 2023, the so-called wine envelope, is in public discussion, which significantly increases funds for crisis distillation and crisis storage. Instead of the originally planned 43 million kuna, the Ministry of Agriculture has secured an additional 13 million kuna, bringing the total support for stabilizing the wine market to 56.5 million kuna, according to HGK.

– The HGK Wine Association welcomes such a decision which foresees a significant increase in funds for crisis distillation and crisis storage measures from 43 million kuna to 56.5 million kuna – said Dragan Kovačević, Vice President of HGK for Agriculture and Tourism.

For the crisis distillation measure, as he states, funds have been increased from 38 million kuna to 46.5 million kuna, and for the crisis storage measure from 5 million kuna to 10 million kuna. Crisis distillation and storage are measures taken due to the decline in wine consumption, which is linked to the underperformance of the tourist season due to the coronavirus. This results in wine surpluses, which are distilled and converted into medical alcohol and other products.

– I believe that the funds will be fully utilized and will significantly mitigate the consequences of the pandemic and the decline in tourist consumption, as it should not be forgotten that our winemakers sell about 70 percent of total production through tourism and HORECA channels – emphasized Kovačević.

HGK points out that the crisis caused by the coronavirus has severely affected the viticulture and winemaking sector, which is why the Chamber previously proposed changes to the wine envelope to the Ministry of Agriculture.

Wine sales in Croatia have a distinctly seasonal character, meaning they are significantly tied to the tourist season, which this year will be at 30 percent of previous years’ levels, which has already led to an 80 percent drop in wine sales in the pre-season and the first half of the year, and an average annual decline of 50 percent is expected, warn the Chamber.

They believe that the crisis distillation and storage programs will help the winemaking sector bridge current liquidity, preserve employment, and prepare for the purchase of the 2020 grape harvest, not only through financial support but also by removing wine surpluses from cellars.

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