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EU delighted' with compromise on wine reform

Published:  23 July, 2008

Mariann Fischer Boel, the EU agriculture minister, is delighted with the compromise reached on the wine reform talks.

Following deadlocked talks late yesterday, and a 1 day extension to proceedings, a reformed Common Market Organisation (CMO) for wine was welcomed by the European Commission (EC) this afternoon (December 19).

Fischer Boel announced: "I am delighted that we were able to find a compromise and I'd like to thank the ministers for their willingness to solve tricky issues.

"Instead of spending much of our budget getting rid of unwanted surpluses, we can now concentrate on taking on our competitors and winning back market share. We didn't get everything we wanted, but we have ended up with a well-balanced agreement. I hope the Member States will make good use of the new tools available."

The EU remains positive the reform will bring greater balance to the European wine market and boost the competitiveness of the sector.

Among the restructuring plans is the inclusion of a voluntary, three-year grubbing up scheme plus greater environmental protection in wine growing region. The process of chaptalisation will also continue to be permitted (as reported exclusively by Harpers Magazine on Dec 7).

The reform will enter into force from August 1 2008.

Main points of the revised wine CMO

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

2.) 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.

3.) Planting rights: these are to be phased out by 2015, with the possibility to continue them at a national level until 2018.

4.) Phasing-out of distillation schemes: crisis distillation will be limited to four years at Member States' discretion until the end of 2012/13, 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.

5.) 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.

6.) 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.

7.) 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 OIV and incorporate some them into the list of accepted EU practices.

8.) 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.

9.) 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.

10.) 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 will be transformed into decoupled payments to wine producers.

Read our exclusive interview with Mariann Fischer Boel on the EU wine reform by clicking here.