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Wine Wars

  • April 14th, 2007
  • Posted by 7thmin

wine-pic-101.jpgThe government of India has blocked an action with the WTO by the European Union against its highly restrictive import duties on wine.

ACTION BEFORE THE WTO

A spokesperson for the European Commission said this week (12.4.07) that following the unsuccessful request for a voluntary process it would ask the World Trade Organisation to convene a panel to investigate its complaint.

The United States had followed the EU in asking for a change to the wine tariff regimen under WTO provisions.

A READY MARKET HARD TO GET INTO

The development extends a dispute that became evident during a visit to India last month by the European Agriculture Commissioner, Mariann Fischer Boel, and a large delegation from the food and beverages industry (See EUAustralia, Gourmet Pressure on India, 4.3.07).

Ms Fischer Bowel was aiming to promote gourmet standard European food and wine which has been increasing in popularity in India with economic expansion and the growth of a new, mostly younger class of potential consumers.

While there she criticised wine import taxes which can add up to 550% to the cost of a bottle of wine.

The taxes have been defended by Indian authorities as assisting the relatively small and new industry to get on its feet.

Indian vineyards and winemakers produce in small volumes, less than eight million bottles a year, though growth has been at 30% p.a.

European wine producers who do try their hand in the Indian market face additional problems such as poor storage at outlets and extensive government restrictions on trade in alcohol, e.g. the practice of declaring “dry” holidays with no sales allowed.

TIT FOR TAT

A tit-for-tat element has entered into recent debate about trade in wine, and also spirits.

Calls have been made in India for a reciprocal loosening of European import restrictions against Indian-made whisky – if wine tariffs should come to be reduced or abolished.

It sells well in its home market.

Such arguments have been going on within Europe itself.

East European and Scandinavian interests (from Poland, Sweden and the Baltic states) have objected to the European Commission’s restriction of the naming of fruit-based wine, e.g. from red currants or apples.

It is doubly galling for them as the Commission has been moving at the same time to allow intrusions into their market for “traditional” vodka made from wheat, potatoes or beet sugar. It has initiated a legislative process to permit free sale of vodka from the United Kingdom or Spain, from cane sugar, grapes or rice.

SUPERMARKET SKIRMISHES

French wine producers have in the meantime continued to experiment with more generic regional products and the labelling to match, (see EU Australia, Vignobles de France, 11.2.07).

The artefacts may not show great belief in the model as yet, but supermarkets in other EU countries for instance will carry promotions of a product identified by grape variety, year and broad region, like: “La Belle Terrace (image of provencal garden), Syrah, 2004, South of France”. A legend discusses the bouquet, spiciness and tannin quality, and gives advice on accompanying dishes. The far-from-offensive product sells at EU 6.90 a single bottle (A$11.20; dcerates.com,13.4.07).

Similarly a bottle principally and prominently labelled “Bourgogne“, then, “appellation controllee, 2005, gives its provenance as a well-established winery at Beaune and is priced at EU 8.39, (A$12.30).

Reference:

Parlement Europeen, Appellation d’Origine:Les Polonais recusant la vodka fabriquee avec … du raisin” (European Parliament, debate on name of origin: the Poles object to vodka made from grapes); Le Monde, Paris, 15.3.07, p 9

Amelia Gentleman, Letter from India, “Days of wine and roses, sobered by high tariffs”, International Herald Tribune, Paris, 16.3.07, p2

Mariann Fischer Boel, European Commissioner for Agriculture, “EU-India Trade and Doha Round of WTO”, conference organised by FICCI (Federation of Indian Chambers of Commerce and Industry), New Delhi, 6.3.07, SPEECH/07/120

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