PARIS (Reuters) – France will provide subsidies to wine producers in regions like Bordeaux to offload surplus supplies, the agriculture ministry said on Monday, as the renowned industry struggles with declining consumption.

Falling demand for red wine, as French consumers drink less alcohol or turn to other wine categories, has hammered the sector in Bordeaux, even as champagne makers have been toasting record sales.

As a short-term measure, the government will channel up to 160 million euros ($172.03 million) of national and European Union aid this year for distilling surplus stocks into alcohol, the ministry said in a statement after a meeting with industry representatives.

A similar step was taken three years ago to absorb excess supplies caused by the closure of French bars and restaurants during the COVID-19 pandemic.

The government will also study longer-term measures for the wine industry to adapt to climate change, consumer trends and export demand, the ministry said.

A crisis committee has been set up in Bordeaux by the local prefect (regional administrator) to look into steps including pulling up some vineyards to counter disease, it added.

(Reporting by Gus Trompiz; Editing by Mark Heinrich)

FILE PHOTO: A worker selects grapes as the traditional harvest starts at the Chateau Haut-Brion vineyard in Pessac, near Bordeaux, France, September 18, 2019. REUTERS/Regis Duvignau/File Photo