Global Economics

Countries Resist EU's Wine Reform Plan


Europe's main wine producing countries on Tuesday gave a hint at the bitter fight that is likely to ensue over Brussels' proposed over-haul of the ailing sector.

EU agriculture ministers gathered in Brussels to begin formal discussions on European Commission-proposed plans for a "deep-rooted" wine reform.

But months of talks lie ahead before member states are likely to to reach an agreement.

Major wine producing countries are unhappy with the plan to dig up 400,000 hectares ? or 11.8 percent - of vineyards across the bloc to curb over-production.

French diplomats called the plan "clumsy" and "unacceptable," while Spain warned "grubbing up" the plants would lead to mass desertification in hot parts of Europe, according to press reports.

"This reform lacks the ambition needed in the sector," said French agriculture minister Dominique Bussereau, when the commission announced the plan last month.

"If changes to the common market for wine are necessary, several options put forward by the Commission can only be rejected by France," he added according to Beverage Daily.com.

A clear distinction lies between the producing countries like France, Italy, Cyprus, Luxembourg, Malta, Hungary, Portugal and Austria, and the consuming countries such as the UK and the Scandinavian member states.

Denmark and Sweden argue that state funds for the sector should be stopped to make it more competitive.

The EU's some 1.5 million wine producers make far more wine than there is a market for leaving millions of litres of wine to be re-distilled into industrial alcohol or bio fuels, costing the bloc nearly ?500 million each year.

On top of this, wine imports have grown by 10 percent a year in the last ten years while exports are only slowly increasing, according to the commission.

Wine producers from the "new world", - such as Australia, Chile, South Africa and the US - have increased their global market share by 19-fold in some cases.

Europe wants to win back market share, strengthen the reputation of its wines and boost the competitiveness of EU wine producers.

"A more pro-active approach is necessary," Dusan Brejc, head of the Commercial Union for Viticulture and Wine of Slovenia, told BeverageDaily.com.

"Measures like distillation obviously do not bring any solution to the EU wine industry. The only way to go on and upward is to be consumer-driven."

Under the commission plan, the 25-nation bloc would divert the ?500 million spent annually on crisis distillation of unwanted wine to compensate farmers who dig up their vineyards.

"If we do not make a bold reform proposal, there will be wine producers in Europe who will suffer a painful death," EU farm commissioner Mariann Fischer Boel said.

Ministers are set to take up the subject again in September, with the commission expected to present a formal plan in December or January next year.


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