France and Italy, Europe's two leading wine producers, face a rebuff from Brussels this week over their demands for EU subsidies to turn surplus wine "lakes" into fuel or industrial alcohol.

France has asked for the European Union's executive to subsidise the so-called "crisis distillation" of 2m hectolitres of table wine and 2m hectolitres of quality wine, while Italy is seeking similarly to transform 3m hectolitres of table wine and 100,000 hectolitres of quality wine. However, despite recent lobbying by Dominique Bussereau, French agriculture minister, the European Commission is set on Wednesday to approve distillation of lower quantities and at lower prices than the two countries demanded.