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The reform of the EU's wine sector - Unleashing its potential

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Wine labels – giving consumers the information they need

Europe is home to the world’s greatest wines and also offers the largest selection. Grown in more than half of the 27 EU Member States, they range from high quality wines from regions such as Bordeaux, Chianti, Rioja, Franken, Douro, Tokaj to name but a few, to many fine wines from other regions.

Europe offers wines for all tastes and budgets – in fact, the choice is so vast that many consumers are unfamiliar with most and look for guidance on the label. But the current labelling rules do not allow all wines to indicate some basic and truthful information such as harvest year and type of grapes used – indications that consumers expect to find, and which are displayed on New World wines.

Other consumers look for wines from a known wine district. Market studies have shown that the consumers find the existing multitude of geographical indications difficult to understand and are discouraged from discovering the rich diversity of European wines.

The Commission proposes to:
  • Apply the same basic rules for labelling to all wines
  • Ensure that all wines can indicate vine variety and vintage year
  • Establish a clear and consistent EU-wide framework for Geographical Indications
  • Dedicate a specific budget to information campaigns explaining these European geographical indications to consumers in the EU and in third countries

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Meeting consumer demand: Quality, origin and the best of wine-making practices

Food quality, origin and safety are high on the consumer's agenda. This includes knowledge of what goes into a wine and how it is made. European consumers also want to see the best wine-making traditions preserved whilst embracing technological developments that improve quality, traceability and often also provide better value for money.

Origin must be clearly indicated and underpinned by traceability and control systems to avoid cheating.

Another challenge is for producers to adapt to evolving consumer tastes and follow the latest best practices in wine making. However, the current system puts our wine producers at a disadvantage. Whilst producers outside the EU can modernize their wine making practices once new methods have been recognised unanimously at the International Organisation for Vine and Wine, EU producers have to wait for Ministers of Agriculture to accept them at EU level – sometimes years later. Meanwhile, their competitors from third countries are gaining market share as they adapt faster to consumer demand.

The Commission proposes to:
  • Ensure control instruments and traceability in managing wine quality
  • Maintain the ban on overpressing grapes to ensure wine quality
  • Authorise EU wine makers to use wine making practices already agreed internationally straightaway for export wines, and after a simplified EU approval procedure for wine to be marketed in the EU
  • Maintain the ban on using imported must when making wine in the EU or blending imported and EU wines, as the control of such practices would be technically difficult to ensure

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Enjoying wine – in moderation

Wine is a wonderful drink, with bewitching aromas and wonderful tastes – but it is also an alcoholic beverage which deserves to be enjoyed in a responsible manner. A new generation of wine consumers focuses on taste and does not associate wine quality with a higher alcoholic content. Market research also shows that there is demand for more low alcohol wines which is also in line with concerns about alcohol consumption for public health reasons.

The Commission proposes to:
  • Co-finance information campaigns encouraging responsible and moderate wine consumption

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Vineyards – preserving some of Europe's most beautiful landscapes

European wines are often associated with the beautiful landscapes in which they grow. Vineyards have shaped their environment and become an integral part of what makes many regions so special.

Preserving that environment is important. This is why the Commission wants to ensure that the reform of the wine regime improves the environmental impacts of wine production, in particular as regards soil erosion and contamination, the use of herbicides and pesticides and waste management.

Minimising the environmental impact of grubbing up vines is another important aspect. Ceasing production should respect environmental standards and ensure the land is cared for and kept in good agricultural condition. In some particularly vulnerable regions, grubbing up vineyards can pose a threat to the environment, and should therefore be limited or even excluded.

The Commission proposes to:
  • Include all vine-growing areas in the scheme already applied to other agricultural products which makes financial support conditional upon respecting minimum standards, in particular environmental ones
  • Place strict environmental requirements on grubbing up of vines and enable national authorities to restrict grubbing up in particularly vulnerable regions
  • Where regions consider vine-growing areas as landscapes that from part of their cultural heritage, financial support can be given to maintaining vineyards

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Why do all agree that the EU wine sector must be reformed?

Europe is by far the biggest wine producer, exporter and importer in the world. Yet we cannot afford to be complacent because despite the fantastic expertise and hard work that have earned European wines this success, all is not well within the EU's wine sector.

While European exports are still growing, New World exports are booming. In countries where more and more people are discovering the pleasures of wine, European producers are not gaining sufficiently large shares of the market. At the same time, Europe is left with large quantities of wine for which there is no outlet. As a result, the EU spends too much money – around half a billion euros a year – on disposing of, storing and distilling wine surpluses into alcohol. This money could be spent better on improving market balance, boosting quality and promoting European wines abroad.

The Commission proposes to:
  • Increase the competitiveness of EU wine producers, strengthen the reputation of EU quality wine as the best in the world, recover old markets and win new ones in the EU and worldwide
  • Create a wine regime that operates through clear, simple rules – effective rules that encourage balance between supply and demand
  • Create a wine regime that preserves the best traditions of EU wine production and reinforces the social and environmental fabric of many rural areas

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Since June 2006: A year of intense dialogue and listening

When preparing the proposal for a wine reform, the Commission consulted independent experts, governments, winegrowers and other stakeholders. During the last year, Mariann Fischer Boel, the Commissioner for Agriculture and Rural Development, has visited many wine growing regions to listen, learn and share her views.

The vast majority of these stakeholders agrees on the need for a profound reform, the objectives of the reform and shares the analysis of the root causes of the market imbalance.

The main concerns expressed were:

  • Social and economic risks in case of too rapid and too large-scale grubbing-up of vines
  • The urgent need to enhance marketing and promotion of European wines
  • The risk for quality if the bans on imported musts for wine-making were lifted or if EU and imported wines could be blended
It is with these views and concerns in mind, and following the adoption of the European Parliament's report on the wine reform in February 2007, that the Commission has developed its present proposal.

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Tackling the root causes of wine surpluses

One of the key objectives is to rebalance the market by reducing the chronic wine surpluses. However, the current financial aids have not proved effective.

To free up funds for constructive measures, the Commission proposes to abolish all financial aids for distillation, storage and use of must that have proven ineffective in reducing wine surpluses.

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Constructive measures adapted to the local wine growers' needs

There are a number of constructive measures that can strengthen the competitiveness of European wine growers. This includes modernising production, improving quality and market orientation through replanting or converting to different vine varieties and promoting wines on export markets as well as providing a safety net for crisis situations. Due to the diversity of Europe's wine sector, the challenge is to tailor local solutions to local needs.

The Commission proposes to:
  • Allocate funds to each EU producer country, a so-called national envelope, to enable the financing of measures responding to local needs
  • Limit the use of these funds to constructive measures from a set menu such as restructuring of vineyards and/or variety conversion, promotion in third countries as well as managing crisis situations
  • Set common rules to avoid distortion of competition

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Granting alternatives to less competitive producers

Many producers are already or will become competitive by taking advantage of the proposed wine reform. However, some producers have grown dependent on their wine being stored and ultimately destroyed by the EU. In an increasingly competitive market where support is given to constructive measures rather than spent on getting rid of surpluses, they might find it impossible to carry on as before.

In an economically difficult situation, wine growers should have the possibility to receive financial support for grubbing up their vines definitely if they choose to do so. They can thereafter convert to other crops of their choice.

However, many people have expressed concern about leaving it up to wine makers to decide on the future of vineyards, particularly in environmentally sensitive areas.

The Commission proposes to:
  • Set up a temporary system from 2008 to 2013 providing financial aid for wine growers to give up definitely their vineyard for a total of around 200,000 hectares
  • Maintain restrictions on setting up new vineyards until 2013 to avoid any abuse of this system
  • Enable Member States to limit grubbing up in mountainous areas and in areas with specific environmental constraints to avoid adverse environmental impacts

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Give competitive producers the means to achieve their ambitions

Successful wine makers are currently hamstrung by their inability to expand their vineyards – an expansion that would greatly increase their competitiveness by offering economies of scale. Whilst restrictions linked to Geographical Indications make sense, preventing successful wine makers from expanding does not. Since the EU will no longer buy up surplus wine, growers are expected to be more cautious and market orientated when planning their production.

The Commission proposes to:
  • Allow planting of vines freely from 1 January 2014 onwards to put EU wine growers on an equal footing with their competitors
  • Maintain restrictions on areas and production conditions covered by Geographical Indications.

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Use existing tools to strengthen the European wine sector

Since 2000, the Commission is co-financing programmes for the development of rural areas with Member States, under which it is possible to support the modernisation of the wine sector. Yet so far, they have not been much used for this purpose. They include start-up aid for young farmers, measures for reducing environmental damage and preserving the countryside, investment aid, processing and marketing support as well as support for older producers' early retirement.

In order to encourage wine-growing regions to make use of these rural development measures, the Commission proposes to transfer part of the wine sector's funds to rural development, where it will be earmarked for wine producing regions.

 

 

 

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