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“Wallets Out” in Wars over Wine?

  • October 24th, 2006
  • Posted by 7thmin

australian-wine-reduced.jpgWine exporters can stand by for a very aggressive, state-financed push by European competitors wanting to get back market share from successful producers in places they call the “New World”.

Agriculture Ministers of the European Union were set to meet this week (Tuesday 24.10.06, at Strasbourg) to debate plans for a renovation of their industry, focused on clearing out inefficient vineyards, and modernising wine-making and marketing.

The business of the meeting is set out in a report written last June entitled: Towards a Sustainable European Wine Market, calling for a “root and branch” renovation of the EU’s Common Market Organisation (CMO) for wine.

“Root and branch” is a literal theme; the plan for changes would authorise a new phase of grubbing out uneconomic plantations.

A summary from the European Commission set out the overall goals:

The plan aims to increase the competitiveness of EU wine producers, strengthen the reputation of EU wines, win back market share, balance supply and demand and simplify the rules, while preserving the best traditions of EU wine production and reinforcing the social and environmental fabric of rural areas.

A certain confusion of social goals and economic realities is de rigeur in European marketplaces where the answer is frequently an application of taxpayer money; the trouble with wine being no exception.

Ways of achieving the goals, proposed to the Agriculture Ministers by the European Commission, would begin with abolition of present regulations that allocate planting rights.

Also:

Producers would be offered generous incentives to grub up uneconomic vineyards, outdated market support measures such as distillation would be abolished and the systems of labeling and wine-making practices could be updated and simplified.

Money would be redirected towards Rural Development measures tailor-made for the wine sector and Member States would receive a national financial envelope to pay for measures decided at national level

One starting date proposed for a set of large-scale changes is 2010.

European Union farm support under the Common Agricultural Policy (CAP) has moved away from production-related payments and export subsidies, but retains direct grants and development money for regions – aimed at boosting competitiveness.

The European Agricultural Commissioner, Mariann Fischer Boel, has announced (19.10.06) new annual support for the industry totaling EU450-million (A$ 744.6-million – Dcerates 23.10.06), promising that improvements in the quality of European wine would help fend off challenges from “New World” producers.

Postscript: What is vodka? It’s another question for the Agriculture Ministers, who may have to broker the claims of traditional producers using potatoes, and those using grains or other base products in their distillation.

Reference:

http://ec.europa.eu/agriculture/capreform/wine/index_en.htm (23.10.06)

Commission of the European Communities; Towards a Sustainable Wine Sector: Communication from the Commission to the Council and the European Parliament. Brussels, 22.06.06. COM(2006) 319 final.

Picture: Part of the “New World” range, finding favour world-wide.

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