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Wine: Parliament sets out its position on reform plans

Agriculture - 12-12-2007 - 14:09
Plenary sessions
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Parliament adopted a non-binding report, under the consultation procedure, on the Commission's plans to overhaul the rules governing the wine sector. The aim of the reform is to bring the EU wine sector more into line with market trends such as shifting consumption patterns, enabling European wines to become more competitive on internal and world markets.

MEPs adopted the draft report by Giuseppe Castiglione (EPP-ED, IT), with 497 votes in favour 109 against 89 abstentions setting out a series of compromises on most of the issues considered sensitive by producers.
 
The House voted against the automatic liberalisation of planting rights in 2014 and the transfer of funding to rural development. It also voted in favour of a grubbing up campaign limited to three years (instead of five); the retention of sugaring as well as aid for grape must; increased sales promotion and stricter rules for wine names and labelling.
 
Main points of the report adopted by European Parliament
 
- Planting rights. MEPs opposed the Commission's plan to fully liberalise planting rights as of 1 January 2014 for wines protected by designations of origin and geographical indications. For other wines, it believes the decision to liberalise should be taken in the light of a report, to be produced by 2012, on measures for balancing the market.  However, the House wants to introduce, through the "national reserves", the free movement of rights throughout the EU so that competitive producers can respond freely to market signals.  MEPs also make it clear that the possible transfer of planting rights within Member States should be allowed in the same region. 
 
Furthermore, the restrictions on planting rights should not apply, say MEPs, to Member States whose production is less than 50 000 hectolitres such as the United Kingdom.  The European Commission had proposed 25 000 hectolitres.
 
- Grubbing up. MEPs backed the rapporteur's view that the package of subsidies planned by the European Commission over five years should in fact be distributed in three years, so as to allow winegrowers wishing to stop production to do so as quickly as possible.
 
- Sugaring and grape must. The European Parliament voted against the Commission's plans to ban sugaring (the adding of sugar to wine to increase alcohol content, as practised in northern Europe) and to abolish aid for grape must (granted to southern European producers to offset the competitive disadvantage of using must).  At the same time, MEPs want to keep aid for concentrated or rectified grape must used to increase the alcoholic strengths of wine products as well as the possibility of adding sucrose in wine-growing areas where this is traditionally permitted because of adverse climate conditions.
 
- Spirits. MEPs also want to preserve aid for distilling "potable alcohol", which could be granted via national budgetary envelopes under the guise of quality improvement.
 
- Crisis prevention. To replace the current distillation crisis aid, which the Commission wishes to abolish, MEPs propose that, to compensate for measures designed to prevent overproduction, aid may be established in the form of a payment proportionate to the reduction in the quantities of grapes or wine produced.
 
- By-products. For reasons of quality and environmental protection, the European Parliament wants the compulsory collection and distillation of all winemaking by-products to be kept in the regulation. Only distillers should benefit from subsidies for this service, thus allowing a considerable reduction in Community intervention pay-outs.
 
- Designations. The House considers it essential that the production, including processing and preparation - and, where appropriate, refining and bottling - of "protected designation of origin" (PDO) wines and "protected geographical indication" (PGI) wines should take place in the geographical areas in question.
 
- Labelling. The House does not support the proposal to allow the harvest year and wine grape variety and other traditional details to be indicated on labels for table wines, on the grounds that this option must be reserved for quality wines in order not to confuse consumers. However, MEPs believe it should be compulsory for the bottler's name and district to appear on the label of PDO and PGI quality wines.
 
- Wine-making practices. The European Parliament suggests a positive list of authorised wine-making practices and rejects the idea of transferring the power to authorise new practices from the Council to the Commission. It is also opposed to applying the wine-making practices of the International Organisation of Vine and Wine - which are less restrictive than those of the EU - to European wines intended for export.
 
- National budgets and promotion. The European Parliament says that national aid programmes should be used to finance promotional measures within the EU (and not only in third countries) as well as other measures such as restructuring  the sector, crisis prevention, research and development and quality improvement, with producers being able to benefit from several measures in any marketing year.
 
- Rural development. The House is against redirecting part of spending previously allocated to the wine sector to rural development.
 
- Cross-compliance. Since the regulation on cross-compliance of aid will apply to winegrowers as soon as they are subject to the single payment system, the House is against specific rules involving reductions in restructuring and conversion aid or grubbing premiums being added to the regulation.
 
- Implementation of the reform. The European Parliament considers that the timetable suggested by the Commission - i.e. 1 August 2008, the opening date for the next marketing year - is unachievable, in particular as Member States have to set up their national programmes beforehand. It therefore suggests that this date should be deferred until 1 August 2009.
 
As Parliament is only being consulted on this legislation, it plenary vote is not binding on the Council, which meets on 17-19 December to discuss the outstanding issues.
 
Background
 
The European Union is the world’s leading producer, consumer, exporter and importer of wine. The EU wine sector is a vital economic activity, especially as regards employment and export revenue. With more than 1.5 million holdings using 3.4 million ha (2% of the EU-25 agricultural area), wine production in 2004 represented 5.4% of agricultural output. Wine production accounts for around 10% of the value of agricultural production in France, Italy, Austria, Portugal, Luxembourg and Slovenia, and a little less in Spain.
 
Since 1996 the volume of wine imports into the EU-25 has been growing at a rate of 10% a year, reaching almost 11.8 million hl in 2005.  New world wines have gained considerable market share from EU wines. The volume of wine exported from the Community has been increasing since 1996 but at a much slower rate than imports, to reach about 13.2 million hl in 2005. Overall, the EU remains a net wine exporter
 
EU wine consumption has fallen significantly and steadily in recent decades, a trend which has particularly affected table wine, whereas consumption of quality wine is growing, so that now the two have almost equal shares.
 
The mid-term outlook for the EU wine sector until 2010/2011, on the assumption that the common market organisation for wine is unchanged and on the basis of expected trends in production, consumption and trade dynamics, is that excess wine production will increase up to 27 million hl (15% of production), or to 15 million hl (8.4% of production), if the quantities distilled with aid to the potable alcohol sector are not considered surplus. The surplus is a particularly serious problem for table wine but the situation of quality wines has also deteriorated.
 
World wine production (tonnes)
 
2004
 
2005
 
France
5 903 101,00
19 %
5 329 449,00
18 %
Italy
5 313 517,00
17 %
5 056 648,00
17 %
Spain
5 006 230,00
16 %
3 934 140,00
14 %
United States
2 232 000,00
7 %
2 232 000,00
8 %
Argentina
1 564 000,00
5 %
1 564 000,00
5 %
China
1 300 000,00
4 %
1 300 000,00
4 %
Australia
1 381 064,00
4 %
1 274 000,00
4 %
South Africa
1 015 697,00
3 %
1 157 895,00
4 %
Germany
1 014 700,00
3 %
1 014 700,00
3 %
Chile
630 073,00
2 %
788 551,00
3 %
Portugal
720 300,00
2 %
576 500,00
2 %
Romania
616 600,00
2 %
575 000,00
2 %
Russia
512 000,00
2 %
512 000,00
2 %
Greece
454 051,00
1 %
437 178,00
2 %
Hungary
527 000,00
2 %
347 000,00
1 %
Brazil
320 000,00
1 %
320 000,00
1 %
Canada
52 220,00
 
50 400,00
 
Other countries
2 592 252,83
8 %
2 603 474,32
9 %
Total
31 102 585,83
100 %
29 022 535,32
100 %
Source: FAO
 
EU total wine production
(1,000 Hl)
Vintage year
 
2004/2005
2005/2006
provisional
2006/2007
estimates
Rank 2006/2007
Belgium
2
2
2
16
Germany
10.107
9.256
8.995
4
Greece
4.282
3.997
3.909
6
Spain
43.168
35.505
37.896
3
France
57.386
51.344
51.600
2
Italy
53.135
50.462
52.036
1
Luxembourg
156
135
124
13
Austria
2.685
2.264
2.269
8
Portugal
7.481
7.254
7.532
5
United Kingdom
19
17
19
15
Czech Republic
580
439
432
10
Cyprus
278
191
185
12
Hungary
5.272
3.567
3.271
7
Malta
70
70
65
14
Slovenia
944
882
829
9
Slovakia
410
302
320
11
EU
185.975
165.687
169.484
 
Source: European Commission
 
 
British speaker in the debate - Tuesday 11 December 2007
 
Struan STEVENSON (EPP-ED, UK) speaking on behalf of Neil PARISH (EPP-ED, UK) who had to attend a meeting with Mr Michel Barnier in Paris, and on behalf of the UK wine sector, which Members know is very small – it represents 0.01% of the whole of EU wine production – but which seeks no subsidy or financial assistance from Europe at all. However, unless there is an increase in the de minimis level of production to 50 000 hl, the UK, he said,  would have to impose a planting ban up until 2014. In a tiny sector like this, where there is some need for expansion, it would, he said, be deeply unfair if we were to do that. Even if the UK sector expanded fourfold by the end of the planting rights system, which is highly unlikely, it would still only represent 0.05% of total EU production, which is one 2000th of entire EU wine production.
 
Mr Stevenson hoped that Members will be sympathetic to Mr Parish’s amendments. "I am not trying in any way to undermine the compromise. Mr Castiglione has done a wonderful job – we had 795 amendments – and, by seeking a compromise, has got the amendments down to manageable levels. I do not want to do anything to upset that, but I hope there will be sympathy for the UK position."
 
REF.: 20071211IPR14760