THE European Commission yesterday called for a root-and-branch reform of the Common Market Organisation for wine.
The plan aims to increase the competitiveness of EU wine producers, strengthen the reputation of EU wines, win back market share, balance supply and demand and simplify the rules, while preserving the best traditions of EU wine production and reinforcing the social and environmental fabric of rural areas.
The Commission considers four options for reform, and comes out clearly in favour of a radical reform model specific to the wine sector. This would involve either a one or two-step approach. The two-step approach would begin with measures to bring supply and demand back into balance before focusing on improving competitiveness, including the abolition of the system of planting rights. Producers would be offered generous incentives to grub up uneconomic vineyards, outdated market support measures such as distillation would be abolished and the systems of labelling and wine-making practices would be updated and simplified. Money would be redirected towards rural development measures tailor-made for the wine sector and Member States would receive a national financial envelope to pay for measures decided at national level.
Under the one-step variant, the system of planting rights restrictions would be either allowed to expire in August 2010, or be abolished immediately, and the current grubbing-up scheme would also be abolished at the same time.
“European wines are the best in the world,” said Mariann Fischer Boel, Commissioner for Agriculture and Rural Development. “Our wine sector has huge potential for further growth, but we need to use this potential actively. Despite our history and the quality of so many EU wines, the sector faces severe problems. Consumption is down, and exports from the New World are making huge inroads into the market. We in Europe are producing too much wine for which there is no market. We spend far too much money disposing of surpluses instead of building our quality and competitiveness. Over-complex rules hold back our producers and confuse our consumers. I am not advocating cutting the budget, of about 1.2 billion euros a year, but we must use this money more intelligently. This is a great opportunity to put the EU wine sector back at the top where it belongs – we must not waste it.”
The EU has more than 1.5 million holdings producing wine, covering 3.4 million hectares, or two per cent of EU agricultural area. Wine production in 2004 represented 5.4 per cent of EU agricultural output, and more than 10 per cent in France, Italy, Austria, Portugal, Luxembourg and Slovenia.
EU wine consumption is falling steadily, although sales of quality wines are increasing.
Over the last ten years, imports have grown by 10 per cent per annum, while exports are only increasing slowly. On current trends, excess wine production will reach 15 per cent of annual production by 2010/11.
Cyprus is no exception to the EU’s crisis. The President of the Cyprus Wine Products Council, Yiannakis Georgiades, told the Cyprus Mail that, “the industry on the island is in a difficult transitional period following accession to the EU. Production conditions, trade opportunities, labelling, and the use of traditional and geographical indications are all aspects that need looking into.”
He added that a new legal framework for the production of regional wines is required along with the offering of incentives to producers to keep them in the sector.
“We must progressively upgrade the quality of our products and allow wine makers to be more competitive,” he said.
Cyprus has a vineyard area of 17,000 hectares, producing 400,000 hectolitres of wine annually, of which 95,000 hectolitres are exported (40 per cent to Greece and 25 per cent to Russia).
