Tuesday

30th Aug 2016

EU states clash over wine sector shake-up

European Commission plans to reform the bloc's troubled wine sector have suffered a major setback, as EU agricultural ministers rejected the reform package on Monday (16 July). The sector has been steadily losing consumers and its share of the world wine market to "new world" wines.

An overwhelming majority of EU capitals, reportedly led by France and Germany, objected to all core elements of the draft reform, such as the idea to end current restrictions on planting rights in order to allow competitive wine producers to expand their production.

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  • EU agricultural ministers reject wine reform package (Photo: Wikipedia.org)

"I object to the idea of a total liberalization," France's agriculture minister Michel Barnier said, according to AP. "I think that will directly lead to a loss of identity and authenticity of Europe's viticulture...The strength of this viticulture is the quality, the colour, the taste", he added.

The remarks were echoed by Portugal's minister Jaime Silva, whose country is now sitting at the EU's helm.

"There are proposals there that are very difficult for some member states, including Portugal", Mr Silva was cited as saying by AP. "For example, a total liberalization [of the sector] that risks posing enormous problems in certain regions".

According to German minister Horst Seehofer, the plans "need to be changed".

Germany, along with Austria, the Czech Republic, Slovakia or Luxembourg, particularly opposes the idea to ban the use of sugar for enriching wine, as northern wine makers produce wine under less sunny conditions.

"Sugar is permitted in agreements with the US, so we cannot explain to German wine cultivators why this should be forbidden in Europe", he said.

According to some media reports, only Italy and Spain have signalled their support for the reform, which Brussels hopes to have sealed and rubber-stamped by the 2008 harvest season.

"I know there are differences," EU agriculture commissioner Mariann Fischer Boel said on Monday (16 July), after she had presented her ideas to 27 EU ministers. But she warned "if we continue sitting on our hands, then we will damage European wine production".

The 27-nation bloc – although still the world's number one producer, exporter and consumer of wine, is being increasingly challenged by "new world wines" from the United States, Argentina, China, Australia, South Africa and Chile.

Wine consumption in Europe is falling steadily, while imports of wines are growing much faster than exports.

Given current trends, excess wine production is expected to reach 15 percent of annual production by the end of this decade – which would mean an enormous burden for EU coffers. The Union already spends around half a billion euro a year just getting rid of surplus wine for which there is no market.

Under its reform package, Brussels suggested shrinking the bloc's wine industry and grubbing-up 200,000 hectares of vineyards as well as scrapping aid linked to surpluses.

On the other hand, Brussels would lift current restrictions on planting rights from 2014 and allow competitive wine producers to expand their production.

If the bloc's wine sector "is not thoroughly overhauled in the very near future there is a strong chance that the whole system will slip into a crisis from which it cannot recover", Ms Fischer Boel argued when tabling her ideas earlier in July.

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