Brussels, 17/07/2006 (Agence Europe) - At a hearing on the future of the wine sector organised by the Parliamentary agriculture committee on 12 July, the majority of MEPs and those taking part protested strongly about the proposal to grub up 400,000 hectares of vineyards, and, in more general terms, about the liberalisation of the market. All present acknowledged the need for a radical reform of the sector, in particular current market organisation. EP rapporteur Katerina Batzeli (Socialist, Greece) said that the new common market organisation on wine must not “under any circumstances” depart from the new approach of the 2003 reform of the Common Agricultural Policy (CAP), particularly in the light of WTO constraints, which have caused the EU to classify a number of Community interventions in the “green box” (aid with little or no trade distorting effect). Ms Batzeli especially criticised the proposal to grub up vineyards, risking, she said, a strong reduction in EU production and reducing the competitiveness of the European sector, creating environmental problems and affecting the economic and social fabric of rural areas with “irreversible economic consequences”. The danger is that European consumers' needs will be met by increasing wine imports from third countries. The agriculture committee will vote on the report on 23 October and it will then be considered in plenary session on 14 November. The Commission will present legislative proposals in December or early 2007.
Lars Hoelgaard, Deputy Director General at DG Agriculture, justified the reform options proposed by the Commission, saying that, with the current measures, the European sector was not “able to meet the challenges”. With the opening of markets and the reduction in tariff protection, “we are witnessing” an increase in purchases of wine from third countries, particularly in non wine-producing EU Member States. Mr Hoelgaard pointed out that, in the EU, wine consumption was falling by 750,000 hectolitres per year. “We have to let our producers compete with third countries,” he said, stressing the natural advantages of the EU regions (climate, soil, temperature, rain etc.). The Commission believes that rural development programmes offer various possibilities to aid the sector and suggests removing current market measures (distillation) which “are generally ineffective”. The €500 million spent every year on this kind of measure would go into the national budget allocations of Member States which could decide how best to use these funds according to their own priorities. Mr Hoelgaard recalled the two radical reform options put forward by the Commission: - the first would see the one-step abolition of plantation rights from 2010, the removal of market measures and the transfer of money saved to national budget allocations and rural development programmes, - the second, in two steps would consist of clearing the market before letting market forces work, by offering those producers who so wish to grub up 400,000 hectares in five years, with €2.4 billion in aid for the period.
Patrick Agrain, representing VINIFLHOR, said that European wine production had stopped declining since 1995 and that Community production was increasing (+300,000 hl per year in the EU. This rate of increase, he said, was not incompatible with the increase in world demand. “Our problem perhaps is not producing too much, but the need to sell more.” He accepted that the sector faced reduced consumption inside the EU but, according to his estimates, of less than 700,000 hl per year, and more of the order of 200,000 hl per year. He said the main factor in this worsening of the Community balance sheet was the import-export balance with third countries: we are continuing to export more than we import, but, by volume (not by value), the import level is approaching that of our exports. Over the last few years, we have been losing roughly 400,000 hl per year in import-export balance with third countries, and our problem is not the fall in internal consumption, but the lack of competitiveness, “because we are not producing what the consumer wants”, especially wines of average quality, he added. “How can it be checked that the hectares that will go will be the only hectares not adapted to the market?” he concluded.
The agriculture minister of the Spanish Castilla-La Mancha region Mercedes Gomez Rodriguez also opposed the philosophy of the proposed reform options. She said that the Commission proposals could result in the relocation of companies. “We want to continue the support granted to companies which produce must and spirit distilled from wine, two products which are not being overproduced, to provide sufficient resources for the promotion of quality wines, modernise wine making practices and provide information for consumers,” she said.
Admitting that radical reform is necessary, she explained that “this was why we are going to propose other solutions”. Francisco Javier Ero, the regional minister for Rioja in Spain said that reform should not be limited to vine grubbing. The minister concluded that “competitiveness needs improving, as well as increased sales and winning new markets”, which were all part of their vision of reform in the sense of promotion and quality.
Joao Vieira from the Portuguese National Agricultural Confederation (CNA) said that the Commission's proposal was unacceptable. José Ramon Fernànez Barrero the Secretary General of the Comité Européen des Enterprises Vins (CEEV) affirmed that the challenge was to “enhance competitiveness in the sector in an open and global market”. He also asserted that there was no longer any European protectionist bubble and that they had to rely on themselves. He noted that there would not be any competitiveness “if consumers do not like us”. The CEEV shares the reform objectives as they stand in the Commission's communication, explained Mr Barrero but “the Commission is mistaken” in thinking that grubbing vines is a fundamental measure. The CEEV believes they should: maintain the objective of competitiveness in all sectors of the market; improve product quality in ranges where strong competition exists with third countries; make the rules more flexible in presenting products to European consumers. Rudolf Nickening from the Deutscher Weinbauverband (German wine producers) shares the Commission's analysis, “market share and new markets need conquering”. But he was against grubbing vines because this would lead to an increase in imports.
Speaking for MEPs, Maria del Pilar Ayuso Gonzalez (EPP-ED, Spain) considers that if vine grubbing is pursued it would mean that they had finally left the field open to wine producing competitors from third countries. She asserted that, “in order to reinforce competitiveness, we need to find new markets”. The MEP said vine grubbing was expensive and they would be obliged to process the must from third countries on fallow land. She also opposed the use of rural development programmes to help wine producers. Rosa Miguélez Ramos (PES, Spain) was critical of the vine grubbing measures outlined and recognised the current shortcomings of the current CMO on market measures. Maria Isabel Salinas Garcia (PES, Spain) believed that it would not be logical to put a third of the budget into grubbing and that it would be better to focus on wine quality and promotion. Astrid Lulling (EPP-ED, Luxembourg) was “aghast” at the Commission's contradictions in the proposal. According to her, authorising wine production with imported must concentrate or a mix of Community wines with that of imported wines, threatened to make EU surpluses even greater. She opposed subsidised vine grubbing, “do we want a situation in Europe where it is more profitable to tear up vine rather than grow it?” Elisabeth Jeggle (EPP-ED, Germany) appealed for a pro-active and ambitious policy by way of CMO revision on wine. Christa Klass (EPP-ED, Germany) asked for the possibility of regional budgets to be explored (within the national envelopes) to support wine producers. Vincenzo Lavarra (PES, Italy), underlined the need to value the European wine growing heritage (as well as quality and table wines). He believed that they should set precise limits on oenological practices. Mr Lavarra said that “must imports from third countries helped weaken our producers' businesses”. He also thought it the Commission's proposal on vine grubbing far too severe.