EU wine market reform - guide

01 May 2008
by eub2 -- last modified 02 May 2008

The Council of Ministers on 29 April formally adopted a wide-ranging reform of the Common Market Organisation for wine, on which agriculture ministers reached a political agreement in December. The changes will bring balance to the wine market, phase out wasteful and expensive market intervention measures and allow the budget to be used for more positive, proactive measures which will boost the competitiveness of European wines. The reform provides for a fast restructuring of the wine sector in that it includes a voluntary, three-year grubbing-up scheme to provide an alternative for uncompetitive producers and to remove surplus and uncompetitive wine from the market. Subsidies for crisis distillation and potable alcohol distillation will be phased out and the money, allocated in national envelopes, can be used for measures like wine promotion on third country markets, innovation, restructuring and modernisation of vineyards and cellars. The reform will ensure environmental protection in wine-growing regions, safeguard traditional and well-established quality policies and simplify labelling rules, for the benefit of producers and consumers alike. The very restrictive planting rights system will also be abolished at EU level from 1 January 2016 onwards. The European Commission will now begin the process of adopting the detailed implementing regulations to allow the reform to enter into force on 1 August 2008.

Main points of the revised wine CMO

National financial envelopes: these will allow EU Member States to adapt measures to their particular situation. Possible measures include: promotion in third countries, vineyard restructuring/conversion, investments in modernisation of the production chain and in innovation, support for green harvest, new crisis management measures, and simple decoupled support.

Rural Development measures: some money will be transferred into RD measures, ring-fenced for wine regions. Measures could include setting-up young farmers, improving marketing, vocational training, support for producers' organisations, support to cover additional costs and income foregone in maintaining cultural landscapes, early retirement.

Planting rights: these are to be abolished by the end of 2015, with the possibility to continue them at a national level until 2018.

Phasing-out of distillation schemes: crisis distillation will be limited to four years at Member States' discretion until the end of 2011/2012, with maximum expenditure limited to 20 percent of the national financial envelope in year one, 15 percent year two, 10 percent in year three and 5 percent in year four. Potable alcohol distillation will be phased out over four years, with a coupled payment for the transitional period, being superseded by the decoupled Single Farm Payment. Member States will have the option to require by-product distillation, paid for out of the national envelope and at a significantly lower level than at present, covering collection and transformation costs of the by-products.

Introduction of Single Farm Payment: Decoupled SFP to be distributed to wine grape growers at Member States' discretion and to all growers who grub up their vines.

Grubbing-up: A three-year voluntary grubbing-up scheme for a total area of 175,000 hectares with a decreasing level of premium over the three years. A Member State can halt grubbing-up if the area would be more than 8 percent of that Member State's total vineyard area or 10 percent of a region's total area. The Commission can halt grubbing-up if the area reaches 15 percent of a Member State's total vine area. Member States can also exclude grubbing-up in mountain and steep slope areas and for environmental reasons.

Wine-making practices: responsibility for approving new or modifying existing oenological practices will be transferred to the Commission, which will assess the oenological practices accepted by the International Organisation for Vine and Wine (OIV) and incorporate some them into the list of accepted EU practices.

Better labelling rules: the concept of EU quality wines will be based on wines with Protected Geographical Indications and those with Protected Designation of Origin. Well-established national quality policies will be safeguarded. Labelling will be simpler and, for example, will allow EU wines without GIs to indicate variety and vintage on the label. Certain traditional terms and bottle shapes can continue to be protected.

Chaptalisation: this will continue to be permitted, although maximum levels of enrichment with either sugar or must will be reduced. For exceptional climatic reasons, Member States may request the Commission to increase the level of enrichment.

Aid for the use of must: must aid may be paid in its current form for four years. After this transitional period, expenditure on must aid may be transformed into decoupled payments to grape producers.

Source: European Commission