Great Moments in Foreign Government: Wasted French Wine

When I write about bad French policy, I’m usually referring to fiscal problems such as excessive spending and onerous taxation.

Such as a retirement system with full benefits available at an absurdly low age (even after the recent reform).

Or the 8,000 households back in 2012 that had to pay at least 100 percent of their income to the French tax police.

This system is a nightmare for the private sector, though very lucrative for cossetted government officials.

But let’s not forget that Europe has foolish agriculture subsidies (as does the United States), and this is leading the wine-loving French to actually destroy wine.

Here are some excerpts from a Washington Post report by Caroline Anders.

France is about to destroy enough wine to fill more than 100 Olympic-size swimming pools. And it’s going to cost the nation about $216 million. Ruining so much wine may sound ludicrous, but there’s a straightforward economic reason this is happening…people are drinking less of it. That has left some producers with a surplus that they cannot price high enough to make a profit. …In June, the European Union initially gave France about $172 million to destroy nearly 80 million gallons of wine, and the French government announced additional funds this week. …Costs are so high and demand is so low that some producers cannot turn a profit. While this year’s subsidy is getting a lot of attention, French government intervention is not a new phenomenon… The nation has long regulated the wine market intensely, in some cases telling producers how many vines they can grow and how far apart they have to be, in an effort to prevent the market from being flooded.

I can’t resist complaining about a bit of that wording.

There is not “a straightforward economic reason” for destroying the wine. After all, the free market does not lead people to do crazy things or make inefficient choices.

The article should be changes to say that there’s “a straightforward political reason” for destroying the wine.

After all, free markets are guided by consumer preference while government policy is driven by vote-buying politicians.