The European Commission’s objectives are to simplify existing rules, making labelling clearer and encourage better quality production.
Annually, the EU produces a surplus of wine which is likely to increase since European producers have lost market to ’new world’ competitors (eg the USA, Australia, Chile, South Africa)
Besides, the EU must get rid of the unsold wine, which costs the EU around 500 million Euros per year (transformed into bio fuels and industrial alcohol). It must be noted that the wine sector gets 1.3 billion Euros per year from the EU budget. As a comparison, the budget for public health has been proposed up at 365.6 million Euros for 7 years.
Main proposals
The European Commission proposes to maintain an equal wine budget and would implement measures to bring supply and demand into balance first through the following measures (unexhaustive list):
One of the proposals is to encourage some producers to leave the market, thus reducing the hectares over a five-year period (reduction by 400 000 hectares) through early retirement schemes or a 2.4 billion Euros compensation system for example.
Notably, environmental requirements will be requested to receive EU grants, under the Single Farm Payment.
Market management tools (eg support for distillation, private storage aid) will be abolished
New quality policy and simpler labelling rules
A ban on the use of sugar for enriching the alcohol content of wine.
The Commission proposal needs to be agreed by the European Parliament and the Council of Ministers before entering into force. The Commission plans an adoption in 2007.
France and Spain - two of the biggest producers of wine in the EU - have already rejected the proposal.
2007: The Parliament report
Drawing upon the Commision proposals agreed in 2006 the European Parliament has recently voted the wine reform report -drawn up by the Greek MEP Katerina Batzeli The report adopted by the European Parliament with 484 votes in favour to 129 against recommends retaining distillation measures for now, empowering Member States to restrict grubbing-up of vines, and liberalising planting rights only gradually. It also remarks that it is essential that each Member State could set a flexible upper limit for grubbing-up for each region.
The 2006 proposals were focused on reducing wine surpluses by reducing production. To do so the EU should promote the production of better quality wines and the grubbing up of vineyards (giving money to winegrowers to turn vineyards over to other use). This has been the most controversial and long discussed issue ending in a rejection of the Commission proposals for such a widespread grubbing-up exercise.
Official press releases:
Wine reform: MEPs propose caution and protection of vineyards
Cautious approach to reforming the wine sector, say MEPs
Source: the European Commission and Eurocare
For more information:
EPHA section on making CAP healthier
DG Agriculture dedicated webpage on the reform of the wine market
Alcohol Policy Network in the Context of a Larger Europe: Bridging the Gap
