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06.2008

Massachusetts Beverage Business

archivedOnWineReport

Wine Sector Reform

THE EUROPEAN COMMISSION formally adopted new EU wine sector reforms as a way to take back share from new world wine producers. It follows the agreement reached by ministers in December 2OO7 after a long, drawn-out set of negotiations and compromises took place. The reform will take effect August 1.
One of the most controversial elements of the package is that the government will pay less-successful wineries to dig up vineyards and voluntarily leave the business. The scheme will last for three years and apply to a maximum of 175,OOO hectares of vineyard in the EU.
The reform will also put an end to crisis distillation spending beginning in 2O12. In the past, the EU paid for thousands of liters of unwanted wine to be turned into industrial ethanol. The system cost about €1.269 billion annually and soaked up two-fifths of the EU’s wine budget.
Under the new plan, the EU will give national governments an allocated sum of money to spend on their wine sectors. The money can only be spent on promoting EU wines abroad, modernizing the production chain and other measures including harvest insurance plans.
Northern producers have also agreed to reduce the amount of sugar they use to fortify their wines.
A council statement said: “The reform provides for a fast restructuring of the wine sector in that it includes a voluntary, three-year grubbing-up scheme to provide an alternative for uncompetitive producers and to remove surplus and uncompetitive wine from the market.”
“The reform will allow us to concentrate on taking on our competitors and winning back market share,” said Mariann Fischer Boel, Commissioner for Agriculture and Rural Development and mastermind behind the reform plan.
In the past decade, EU wines have lost share of the world wine trade and are hoping to make a comeback. In 2OO7, the EU held 62% of the global market share, down from an average of 79% between 1986 and 199O, according to the Organisation International de la Vigne et du Vin.
“Now we can get on with the final preparations for the entry into force of the new system in August. Instead of wasting money getting rid of unwanted surpluses, the reform will allow us to concentrate on taking on our competitors and winning back market share. I hope the Member States will make good use of the new tools available,” Fischer Boel continued.
                                                                                  -WINE & SPIRITS DAILY

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