(BRUSSELS) - The European Commission is to propose at least 120 million euros (160 million dollars) be spent each year on promoting European wine worldwide, according to a letter seen by AFP Thursday.

The proposal, to cover the years 2009-2015, will form part of wider reform of the wine sector to be unveiled by the EU's executive arm on July 4 in a bid to deal with a production glut throughout the Union. Another main plank of the scheme will be a proposal to uproot 200,000 hectares of vines.

Also the technique of distilling unsold wine for use as bio-fuel is to be scrapped as the process is too costly.

The new plan scales back a package from last year that called for 400,000 hectares of vines to be uprooted, which found little favour with some member states and the industry.

In the letter the Commission says that the 120 million euro figure should be a "minimum for promotion".

EU Agriculture Commissioner Mariann Fischer Boel told AFP last week that she envisaged "very significant figures for promotion outside Europe, ... people will be very surprised," she said, giving no figures.

The campaign will help European exports at a time when the world market is increasing steadily, she said.

That approach is contested by winegrowers who would prefer to centre promotional campaigns within Europe where 75 percent of the world's wine is drunk, according to CNAOC and FEDERDOC, the two biggest organisations for appellation producers.

Winegrowers also oppose another part of the reform package which would liberalise the strictly controlled area of vineyard planting from 2013, fearing new growers would destabilise the market.

EU farm ministers, who met in Mainz, Germany this week, were divided over the Commission's plans.

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