PARIS (Reuters) – France must step up support for winemakers hit by a slump in demand because of restaurant and bar closures due to the coronavirus pandemic and lower exports because of U.S. tariffs, French Prime Minister Jean Castex said on Wednesday.

Castex is on a visit to the Menetou-Salon and Sancerre vineyards in the Cher department in the centre-Val de Loire region.

“The international situation, the health crisis, a drop in exports: our wine sector faces major difficulties. State support must continue and intensify,” Castex said on Twitter.

France has already provided some support, but the wine industry has called for more action.

In May, France cleared a 140 million euro ($165.87 million)crisis mechanism to distil surplus wine into industrial alcohol to be used to produce hand sanitizers.

Then in June the government unveiled an additional 30 million euros of support the wine industry, including 15 million for the launch of a private storage aid scheme for two million hectolitres of surplus wine, an alternative to distilling.

In addition to COVID-19, France’s wine industry has been hit by U.S tariffs on imports imposed as part of the trade dispute between the European Union and the United States over aircraft subsidies.

In April, the European Commission decided it would support crisis management measures in wine and other agriculture sectors hurt by the coronavirus crisis.

(Reporting by Dominique Vidalon, editing by Louise Heavens and Jane Merriman)

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