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Wine revolving pledge: agreement between Mps and the Franciacorta Consortium

Opening of current account credit to give liquidity to wineries with an innovative tool

Banca Monte dei Paschi di Siena and Consortium for the Protection of Franciacorta Wine recently signed an agreement for the revolving pledge on wine to facilitate investments by member companies at a time when it is essential for the wine sector to continue investing, despite the Covid-19 emergency which caused a serious liquidity crisis of agricultural enterprises. The operation - explains a note - confirms Banca Mps's commitment to enhance the agrifood sector, also strengthened with the recent launch of the MPS Agroalimentare project, aimed at accompanying Italian agri-food companies towards change with solutions aimed at innovation and to sustainability.

With the revolving pledge, the Franciacorta PDO wine can be easily financed with a positive impact on the companies in the territory of the denomination, with reference to the stocks of Franciacorta wine owned by the consortium member, whether it is wine suitable for becoming or wine certified by the body of Valoreitalia srl certification. Thanks to the new agreement, in fact, Banca Mps will be able to grant producers a credit line for an amount equal to 80% of the value of the wine pledged as guarantee, calculated through the Franciacorta Economic Observatory.

A current account credit facility is available to producers to provide liquidity to wineries with an innovative tool that enhances the important asset of the wine being aged. The agreement has an annual duration and guarantees stable interest rates for the entire period in order to favor the valorisation process of Franciacorta wine production. The Consortium, on the other hand, has the task of guaranteeing the stability of the value of the wine to support the demand for the product, maintaining its reputation and the value associated with a quality brand.

"Support for local companies has always characterized the activity of Banca Monte dei Paschi di Siena - said Marco Tiezzi , General Manager of the North West Territorial Area of Banca MPS - and is even more valid for the wine sector, an expression of quality and symbol of Italian excellence in the world. The traditional commitment of the Bank alongside companies in the sector can only be further strengthened in the current emergency context linked to Covid-19, also with extraordinary instruments. The agreement with the Franciacorta Consortium for the revolving pledge goes in this direction and reaffirms the support of Banca Mps for the sector, with the search for innovative financial solutions, always with a view to constantly enhancing quality production".

Silvano Brescianini, President of the Franciacorta Consortium declares: “We are very satisfied because we have signed an agreement that can be a growth tool for our members. Thanks to the support of Banca Monte dei Paschi di Siena with the introduction of the revolving pledge, wineries that have long-aged products in stock, such as Franciacorta, will be able to finance the warehouse at favorable conditions. I trust it will be a service of common interest for all in such a difficult period".

The revolving pledge on agricultural and food products with Protected Designation of Origin (PDO) or Protected Geographical Indication (PGI) is a financial instrument aimed at the wine sector, introduced by the 2020 Cura Italia Decree and prepared with the issue of the Implementing Decree of Mipaaf (Ministry of Agriculture, Food and Forestry Policies) to cope with the serious liquidity crisis of individual or associated agricultural companies due to the health emergency that exploded in 2020 and is still ongoing. Financial measure now well established in the dairy and quality hams sector, the revolving pledge is now also extended to wine products to manage the emergencies in the sector deriving from the Covid-19 crisis. According to the new legislation, the producer can replace the pledged goods with others without the need to renegotiate the loan, focusing on the quality of the certified wine. A "revolving" pledge, therefore, where the ownership of the asset is not sold, but remains with the winegrower.

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EFA News - European Food Agency