Global Economics

Watered-Down Wine Reform


The European Parliament voted to soften a Commission plan to regulate the winemaking industry, but the EC may not be willing to compromise

The European Parliament has severely watered down Brussels' plan to reform Europe's wine sector and make it more able to withstand the challenges of global competition.

In a vote on Wednesday (12 December), MEPs revised the proposal by the European Commission by dropping the elements which had sparked the strongest opposition by member states.

They rejected the commission's suggestion to ban adding sugar to wine, a practice traditionally used in some countries in northern and central Europe with less sunshine over the year.

At the same time, they called for subsidies to southern countries for using pure grape juice to be maintained and not scrapped as suggested by the commission.

The parliamentarians also rejected the idea of a full liberalization of planting rights for quality wine makers on areas previously not used as vineyards by 2014, seen as a way to allow competitive wine producers to expand their production.

However, the EU assembly's voice is purely consultative on this particular matter and national governments may vote against any of the adopted amendments.

But it was clear during the debate on Tuesday that MEPs were aware of the specific interests of their national wine producers so similar opinions on the reform plan blueprint are expected next week at a meeting of agriculture ministers to discuss the proposed reform.

Both the EU executive and Portuguese presidency aim to wrap up the wine reform package at the ministerial session so that its measures can already be applied during next year's harvest.

For her part, EU agriculture commissioner Mariann Fischer Boel suggested that the ban on wine sugaring might indeed be dropped from the list of proposed measures but she is still keen to save other key elements.

"I think that a deal is within our grasp but, of course, I say as well that it must be the right deal," she told MEPs during Tuesday in Strasbourg, adding "I will not allow the proposal to be watered down so far that the end product loses all its taste and all its value."

"The compromise that we find must give us a reform worthy of the name and it must give us a real chance of achieving the goals that we have set for ourselves," maintained the commissioner.

The Brussels plan includes measures to bring an end to the years-long practice of paying the producers to get rid of unsold wine which currently costs the bloc's taxpayers around €500 million every year.

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 financial burden.

Instead, farmers would be compensated for uprooting uncompetitive vineyards -- with the commission envisaging that 200,000 hectares of vineyards would go -- while EU aid would no longer be linked to production surpluses.

The commission has already watered down its earlier plans on this particular issue as it had originally suggested that double the amount of the vineyard area should be scrapped -- it has indicated it is not willing to compromise further on this.

Following protests by several countries, including France and Germany, commissioner Fischer Boel is also willing to delay the timetable for ending the current restrictions on planting rights -- in order to allow competitive wine producers to expand their 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.

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