Brussels, Sep. 20 - French wine producers benefitted from illegal state aid in reviving a flagging Rivesaltes and Grand Roussillon wine varieties, a European court ruled Thursday.
The case involved a vine conversion project to revive the two wine appellations in the Pyrenees-Orientales region of France.
The plan included promotion of the brands, replanting vineyards with higher quality grapes, and paying farmers growing the older grapes to stop using the Rivesaltes name.
The project was developed to deal with a sharp drop in sales of Rivesaltes wines in 1996-2000, and was funded partially by the French government and partially by levies raised by wine producer groups.
The European regulator ordered the repayment of aid that had been paid per hectare to convince farmers to sell their wine as lower quality table wine. The regulator also ordered the repayment of aid for converting vineyards.
Because of the inadequacy of financial records, the commission could not put a total figure on the amount of aid, but ordered France to recover it nonetheless.
The Court of First Instance upheld the commission decisions. All these subsidies had been financed from state resources, it concluded.