Brussels, 18/07/2006 (Agence Europe) - The agriculture ministers of the Member States all admitted, on 18 July, that it was necessary to reform the wine-producing sector, but they were divided over the measures to be taken to strengthen competitiveness in the sector. The Agriculture Council will continue its debate till the end of the year on the 22 June communication on reform options in the wine sector, and, early 2007, the European Commission will present a legislative proposal for amending rules in the sector.
Generally speaking, Germany, Belgium, the United Kingdom, Denmark, Sweden, the Netherlands, Latvia, Estonia, Lithuania, and the Czech Republic backed the Commission in its resolve to thoroughly reform the common market organisation (CMO) for wine. Most agree with the solution preferred by the Commission for radical reform (abolition of plantation rights and market management measures, as well as the grubbing of 400,000 hectares of vines in five years). Nonetheless, Sweden and Denmark prefer the scenario of single payment per farm (breaking the link between aid and the level of production). Luxembourg and Malta suggested combining the uncoupling solution with that of radical reform.
Several Member States, most of whom are large EU producers (France, Italy, Spain, Portugal, Austria, Greece, Cyprus, Malta, Hungary …) were opposed to the grubbing of vines as proposed by the Commission. France has nonetheless pointed out that it is not against a “reasonable” grubbing programme. Spain urged for a “gentle” change with a longer transitional period. Also, producer countries like France, Italy, Spain, and Portugal were opposed to the Commission's wish to do away with all the market management measures. Italy called for aid to distillation to be maintained (to get rid of surplus quantities of bad quality wine) as well as aid for must. France called for greater flexibility in order to be able to make the distillation of wine compulsory and protested against any budgetary reduction of the CMO, given the arrival of new producer countries into the EU.
When it comes to oenological practice, France, Italy, Spain, Portugal, Greece and Luxembourg voiced strong protest against the intentions of the Commission to want to authorise imports of must from third countries and the blending of Community wine with foreign wines. Hungary and Austria refused the Commission's proposal to ban the use of sugar for enriching wine (chaptalization). Spain and Italy on the other hand urged for this practice of adding sugar to be banned. The United Kingdom and Spain spoke out in favour of amending the rules on wine labelling with a view to simplification.
According to Mariann Fischer Boel, Agriculture Commissioner, the debate showed that reform is needed and that, without change, European wine producers will not be able to face up to the competition. By way of an introduction, she said that, after the debate on the communication on reform options for the wine-producing sector, the Commission will adopt the “concrete” legislative proposal for recasting of this CMO early 2007. She recalled the objectives of the reform (strengthening the competitiveness of wine producers in the EU, setting up a regime based on clear and simple rules, safeguarding the best traditions of European wine production and strengthening the social fabric in rural areas) as well as the Commission's analysis on the difficulties encountered by the sector (fall in wine consumption in the EU and risk of seeking the EU become a net importer, structural surpluses that could reach 15% of the production by 2011 without changes to the regime, and distillation measures that cost €500 million each year). Ms Fischer Boel went on to speak of the solutions that the Commission prefers, namely two variants of the same fundamental reform, and defended her controversial strategy of grubbing for 400,000 hectares in five years (out of 3.4 million hectares total in EU at present time). According to the Commissioner, this measure (optional and accompanied by aid of €2.4 billion in total) would allow the production surplus to be eliminated and would contribute to restoring market balance. The surface areas of grubbed vines would become eligible for single farm payment. Once the market has regained a balance between supply and demand, restrictions in plantation rights will be abolished and producers will be able to focus their efforts on competitiveness and quality, Ms Fischer Boel said. The Commission also hopes to do away with distillation measures and aid to private storage. Community funding thus made available will be used to add to national budgets of Member States. Part of the current CMO budget may also be transferred to rural development programmes. (See EUROPE 9234 on the EP's audition on this subject).