Policies

Committee on Agriculture and Rural Development

Vineyards are an integral part of the landscape in many European regions, and it is important to protect them. EPP-ED Group Members are particularly sensitive to the environmental impact of wine production, particularly with regard to soil erosion and contamination.

European wines are, without a doubt, the best known, oldest and best-quality wines in the world. However, European wine growers are losing their competitiveness to the advantage of other wine growers from the New World (in particular Australia, Argentina, the United States and Chile), which have more dynamic oenological practices but which, in some cases, do not fulfil the same quality criteria as European wines. Accordingly, the EU-15 vineyard area has been continually shrinking – from 4.5 million hectares in 1976 to 3.2 million hectares in 2006, rising to 3.65 million hectares since the accession of Romania and Bulgaria. The European Union has more than 2.4 million wine holdings over an area which represents 2% of the total agricultural area, accounting for 5% in value of all EU agricultural production in 2006. The consumption of EU wine is constantly decreasing, although the sales of quality wines are on the increase.

In spite of everything, the European Union is a leader on the international wine market; it has 40% of the world’s wine-growing areas, accounting for 65% of production. The EU is also the No 1 consumer, accounting for 57% of world consumption, as well as being the leading world exporter.

As far as international trade is concerned, in the period 1999-2006, exports of Community wine rose from 10.8 million hectolitres to 17.8 million hectolitres in 2006 – a growth rate of 65%. Over the same period however, imports grew even more, from 5.2 million hectolitres in 1999 to 11.7 million hectolitres in 2006 – a 125% increase. Nevertheless, the growth rate appears to have slowed down since 2004, as confirmed by the fact that in 2006 EU-27 imports rose by less than 0.3 million hectolitres in comparison with 2005.

It was against this background that on 4 July 2007 the Commission adopted the proposal to reform the common organisation of the market (CMO) in wine. The most significant innovation is that of making all vine-growing areas, per holding, eligible for the Single Payment Scheme, to offer producers a high degree of flexibility and ensure that they are on an equal footing with other farmers.

The rapporteur for the European Parliament on the legislative reform proposal was Mr Giuseppe Castiglione (an Italian member of the EPP-ED Group). In his report, he took account of Parliament’s previous opinion on the reform of the wine sector, in which the shadow rapporteur for the EPP-ED Group, Mrs Elisabeth Jeggle (Germany), had done the lion’s share of the work.

In Giuseppe Castiglione’s view:

We need a reform that looks beyond national and local issues. We are overproducing and consumption is falling, but export figures are encouraging. We must invest in the sector and boost competitiveness.

Moreover, the new labelling rules

must not sow confusion in consumers' minds.

Mr Castiglione considers it essential that the current budget for the CMO in wine be assigned entirely to the wine sector. If we wished to remain world leaders we needed a CMO in wine to keep up with market developments, allowing European companies and wines to be more competitive both on the internal market and on the external markets. The specific characteristics of the wine sector mean that long-term investments are called for (the average life span of a vine being 40 years), with the aim of protecting the economic vitality of certain regions.

The rapporteur agrees with the need to reform the sector with a view to boosting the dynamism and competitiveness of Community wines. While European producers may well be experiencing fierce competition from new producers, this is due not so much to the tailing-off in internal consumption as to exaggerated production costs, to over-rigid and complex regulations, which often limit the possibility of adjusting production to suit changes in demand, and to over-timid (or insufficiently aggressive) promotion and marketing policies.

It is very important to give consumers the information they need. The quality of the wine must be indicated on the labels of designation of origin and geographical indication wines. Our Group Members were in favour of setting aside a specific budget for responsible information campaigns to promote European wines, in order to open up genuine economic prospects for the wine sector, and not merely to focus its promotion policy on external markets. Our Group is aware that the foremost wish of the European consumer is for the best wine-making traditions to last, whilst taking advantage of the technological progress which enables us to improve the product’s quality, traceability and value for money.

The designation of origin system is the flagship of the European wine-making tradition. Geographical indications and designations of origin must therefore be defended, in Europe and in non-Member States, by establishing a multilateral register for wines and spirits in the context of the negotiations in the World Trade Organisation (WTO) and the TRIPS agreements (WTO agreements on trade-related aspects of intellectual property rights).

The great debate concerns production surpluses. According to the Commission, if current trends continue, surplus production will reach the level of 15% of annual production by 2010. At present, the wine CMO accounts for a total of €1,230 million, of which some €500 million are currently destined for the distillation of wine which no longer has a market outlet. Most European wine production is intended for direct human consumption. While the latter has slowed down in the key wine-producing Member States, the other Member States have, on the contrary, seen a growth in demand. It should be stressed, however, that the reduction in demand has mostly concerned so-called table wines, while over the same period the demand for quality wines has increased.

Our Group is convinced that wine-growers who are in economic difficulty should be able to receive financial assistance should they choose (voluntarily) to grub up their vines definitively before converting to other kinds of production. The Member States should, naturally, be allowed to limit, where necessary, grubbing-up in mountain areas and areas subject to specific environmental constraints, in order to prevent any negative impact on the environment.

Given the European wine sector’s diversity, an agreement to find local solutions should be reached, in order to meet local needs to promote wines on export markets and to establish a safety net for times of crisis. It is for that reason that the rapporteur, Mr Castiglione, and most Members of the EPP-ED Group advocated the granting of ‘national budget envelopes’, so that each wine-producing EU Member State could be allocated funds enabling them to finance measures tailored to local needs, in accordance with the subsidiarity principle; these measures could include vineyard restructuring, vine conversion, promotion measures in third countries and crisis management measures.

As far as environmental protection is concerned, since all wine-producing regions are to become eligible for the Single Payment Scheme, the environmental rules covered by the principle of cross-compliance will be more extensively applied. Furthermore, cross-compliance will apply to all grubbing-up areas.