On Tuesday 15 July, the European Commission deemed that a sustainability agreement in the French wine sector was compatible with Community competition rules (see EUROPE 13309/16).
This opinion concerns an agreement on the setting of indicative prices for wine produced in accordance with the standards for organic and for ‘Haute Valeur Environnementale’ (HVE) wines in the French region of Occitanie.
The envisaged agreement, which will be concluded between producers of wine meeting these standards and buyers of such wine, is intended to guide bulk wine transactions. Producers of wine meeting the organic and HVE-standards and active in Occitanie asked the Commission to provide an opinion on the compatibility of the envisaged agreement with buyers of such wine on indicative prices with the provisions of Regulation 1308/2013 on the common organisation of markets. The French wine sector is facing difficulties.
As a result, organic and HVE wine production is often less profitable than conventional wine production.
To incentivise producers to continue producing sustainably, the orientation prices will be set at a level covering the costs of producing in accordance with one of the two relevant sustainability standards (organic or HVE), in addition to incorporating a profit margin (up to 20% of such costs).
Orientation prices will be set for six grape varieties. The agreement will remain in place for two years. The Commission found that the agreement complies with all the conditions of Article 210a of the CMO Regulation. (Original version in French by Lionel Changeur)