'New Europe' up in arms over EU wine reform plan

(TOKAJ) - Wine producers from new European Union members in central and eastern Europe say that EU's plans to reform the wine sector will come at their expense and could have "dramatic" implications.

The EU's executive arm, the European Commission, presented proposals last week to re-allocate funds from the bloc's 1.3-billion-euro (1.8-billion-dollar) wine budget and uproot 200,000 hectares (494,000 acres) of vines under an ambitious new wine industry strategy.

The aim is to make European wines more competitive by clamping down on the practice of producing surplus wine -- which was until now generously funded by the EU and led to falling prices -- and bolstering marketing to compete with so-called New World wines from places like Chile or South Africa.

But vine growers and wine producers in new EU member states worry that they will lose out under these new measures, although they say they favour reforms.

Speaking on the gentle slopes of eastern Hungary's famed Tokaj region, Laszlo Kiss, president of Hungary's National Council of Wine Communities, told AFP: "If this EU reform is passed, I think the size of the vineyards under cultivation in Hungary will be halved. It could create a dramatic situation."

According to Kiss, poorer farmers in eastern Europe are more likely than big southern producers to dig up their vines in exchange for EU money, even if surplus production is not a major concern here.

Laszlo Toth, 60, is a case in point. He has been growing grapes in the central Hungarian town of Nagyrede since he was 10 years old, learning the trade from his father.

Now he is giving up half of his three-hectare area of cultivation, saying the rising costs of the upkeep and falling income from the grapes means he can no longer earn a decent living from the vines.

"I've been doing this for 50 years and I still love grapes. My heart aches" at giving it up, Toth said, pointing to his vineyard behind him.

According to the director of Nagyrede's wine council, Istvan Csernyik, a fourth of the town's 1,000 hectares of vines will be eliminated under the EU's "grubbing-up scheme."

Wine producers elsewhere in the region also oppose the EU's new measures, fearing the loss of big swaths of vineyards.

"This is a catastrophic proposal. It does nothing to improve the quality or sales of European wine. It will favour the big countries and big producers." Jaroslava Patkova of the Slovak Union of Wine and Grape Producers said.

The director of Romania's Organisation of Vine Growers and Wine Producers, Petre Calin Mocanu, added that he was "not in agreement with the elimination of the vines, whose area was at any rate reduced recently," independently of the reforms.

Another major concern in these parts is the future financing of the national wine sector, which will be at least partly determined by how much EU funds a country received in the past.

New members have tapped less EU money and have lost out on extra funding by not producing large quantities of surplus wine. The EU spends half a billion euros every year just getting rid of surplus wine.

"Hungary could actually see its EU funded wine budget shrink in the future, at a time when money is crucial to invest in restructuring the sector, planting new vines and modernising technology in order to be competitive," Kiss said.

At the same time, new members are hailing EU efforts to promote European wines more aggressively and counter imports which have risen by 10 percent annually over the past 10 years.

"Advertising is what our competition benefits from. Chile, Argentina, Australia, New Zealand, the US state of California and South Africa, these countries all have national strategies on how to sell their wines," said Lilia Stoilova, the executive secretary of Bulgaria's National Vine and Wine Chamber.

"Lack of money to promote Bulgarian wine is a problem for producers now," Stoilova added.

Reform of the EU wine market - EU guide