§ Lord Gallacherasked Her Majesty's Government:
What was the cost to European Community funds in 1990 of sale of stocks of wine alcohol to Brazil for use as motor fuel.
§ Baroness TrumpingtonSales of wine alcohol to Brazil totalled 6 mhl in 1990 at an average price of 7.4 ecu/hl. It is not possible precisely to match up these sales against the original buying-in prices, thereby identifying the exact costs.
However, by way of illustration, some 361 mecu (£252 million) was allocated under the 1990 EC budget for the full depreciation of wine alcohol stocks totalling 3.67 mhl. This depreciation, which accounts for the loss resulting from the difference between buying-in and selling-out prices, is the main cost of intervention, but there are also costs attached to the intake, storage and exit of the alcohol, as well as financing costs.
Since sale of wine alcohol began in 1989, some 13.4 mhl have been disposed of, effectively disposing of the surplus. Nevertheless, the loss on sales outlined above demonstrates why the UK Government have consistently pressed for sensible containment of the costs of the wine regime, and reform for the CAP.