THE unquenchable desire of Britons for New World wines has forced Brussels to order nearly a billion bottles of French and Italian wine to be turned into fuel and disinfectant. The European Commission will then spend €2.4 billion (£1.65 billion) digging up vineyards across the continent.

The drastic measures to drain Europe’s swelling wine lake come as winemakers across the Continent face a seemingly unstoppable invasion of cheaper and more consistent wines from Australia, Chile, the US and South Africa. Wine critics say it is an inevitable result of French wine producers not adapting to demand.

The Commission’s announcement that it would spend €131 million to distil 430 million bottles of French wine and 371 million bottles of Italian wine into fuel was met with protests by French wine growers, who demanded that European taxpayers should buy 1.1 billion bottles of their produce.

Such “crisis distillations” are becoming increasingly common, with the commission spending about €500 million last year turning wine into petrol, and viticulturists now producing wine knowing that it will never be drunk. Nearly a quarter of all Spanish wine now ends up being used for industrial purposes.

“There is the equivalent of a year’s production of wine sitting in tanks which we will have to turn into petrol, which is pretty stupid. We need to make less wine,” said one Brussels official.

The Commission also pays for wine to be turned into brandy and sold in fancy bottles. “It is not a sensible use of public money,” the official said.

Mariann Fischer Boel, the European Agriculture Commissioner, said: “Crisis distillation is becoming a depressingly regular feature. While it offers temporary assistance to producers, it does not deal with the core of the problem — that Europe is producing too much wine for which there is no market.”

The crisis is partly sparked by changing tastes in Britain, which is the only significantly growing market in Europe and the largest importer of wine in the world. France may insist it makes the best wines, but next year it is expected to be pushed down to third position in British sales by surging exports from the US.

Australian wines, grown in vast mechanised vineyards backed by powerful marketing campaigns, have been the most popular in Britain for several years. Australian and Chilean exports to Europe are now about 20 times higher than they were a decade ago. In contrast, sales of French wine to Britain dropped by 3 per cent last year alone, with claret dropping by nearly a quarter.

In two weeks, the commission will propose reforms of the industry, including an attempt to improve competitiveness by paying farmers to put 400,000 hectares of vineyards under the plough from Rioja to the Loire Valley to Chianti.

Under the Common Agricultural Policy, the farmers will then be paid for not producing wine but for keeping up environmental standards on their land instead. Brussels, which for years paid people to set up vineyards, believes there are now too many small-scale wine-makers producing poor wine, and that the industry needs to consolidate. In France, there is one worker per hectare of vineyards; in Australia, one worker for every 50 hectares.

Previous attempts at reform have been blocked by the powerful French wine lobby, but the industry is probably now in such a crisis that it might accept change.

John Worontschak, a wine expert from Four Corner’s Consulting, said: “It’s inevitable that French and Italian wine makers have come to this impasse. They been making bad and inconsistent wine for some time and just flogging it off. Most people just want a decent wine and if you spend £4.99 on a French wine you don’t always get that.”