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New Warning On “New World” Wine Invasion

  • May 31st, 2007
  • Posted by 7thmin

wine-off-site1.jpgRestructuring and reform of the European Union wine industry has been stumbling under the stress of differences among wine-producing countries.

VENTURE INTO TIGER COUNTRY

The EU Agriculture Commissioner, Mariann Fischer Boel this month (22.5.07) went to the Rhine valley, home-base of resistance coming from the industry in Germany, conferring with national political leaders and making a tour of vineyards.

She was quoted in media reports, warning that Australian and Chilean wine were set to make big new inroads into market share, if changes in Europe did not go ahead.

That day at nearby Strasbourg she told members of the European Parliament there had been a European exports increase and stabilisation of imports in 2006, but the outlook was unchanged, along with the level of surpluses of wine.

RETREAT FROM REFORMS

The Commissioner has had to retreat from the full set of reforms she has been proposing, and there have been delays in the timetable, with new changes not expected before the latter part of this year.

Resistance form the German government has been the latest delaying factor — its influence enhanced while occupying the Presidency of the EU during the present half-year.

This resistance has forced a 50% reduction in planned grubbing out of less productive vineyards, to 200 000 hectares; a response to claims by producers to be defending tradition in heritage areas, and even saving the environment.

Ms Fischer Boel:

“I have visited wine regions with steep slopes and mountainous regions. It is for me evident that allowing grubbing-up in these regions would do more harm than good. In some regions the wine sector is of fundamental socio-economic importance. While I insist that grubbing-up must ultimately be the choice of the vine-grower, I also accept that member states cannot simply allow the socio-economic fabric of some of their regions to disappear. We are therefore considering how best to allow member states to influence – and even stop – grubbing-up when it reaches a certain level… I have received a lot of sound advice and I have drawn the conclusion that the magnitude of grubbing-up originally foreseen might not be necessary.”

German interests have also been demanding retention of the right to add sugar to bring on alcohol content, consistent with their Northern location where there’s less sun to ripen the grapes.

However the Commissioner has held out on that one, saying at Strasbourg she was directly opposed to the practice, because it was drawing away subsidy money, and because using sucrose went against both community definitions and World Trade Organisation standards for wine.

“Although this might not be a popular decision my intentions are therefore to propose to abolish the aid for enrichment and to prohibit the use of sucrose …”, she said.

There was agreement in Germany that support should be withdrawn from distilling of surplus wine, for industrial or medical alcohol – costing so far some EU 500 000 p.a. (A$817 120; decrates.com, 30.5.07).

OTHER CHANGES TO TAKE ON THE “NEW WORLD”

Other changes in the program:

Planting restrictions imposed by governments, protecting industry in some cases but also preventing flexibility, are to be abolished, but by 2013 – three years later than first put forward.

As money is withdrawn in fields like distillation, financial support for “genuine market oriented actions” is to be made available to industry through member governments — in “national financial envelopes”.

More is to be spent on promotion in third country markets to take on the “New World” producers.

FOLLOWING OTHERS

Flexibility in wine-making practices remains on the agenda, together with qualifications, under the slogan: “helping with competitiveness without damaging the quality or image of wines.”

“Wine shopping must become customer friendly – today it is a bewildering experience”, said Commissioner Fischer Boel.

“We will therefore propose a simple and clear categorisation and classification of wines at Community level.But the multitude of national classification systems will remain. And I believe that marketing personnel will welcome the indication of wine variety and vintage on labels. This has been a source of success of third country wines on the EU and world markets.

“We may be following others here but we cannot afford not to.”

PROMOTING RURAL REGIONS – GENERAL POLICIES ON AGRICULTURE

The EU Agriculture Commissioner has also continued a campaign for diverting more funds from traditional subsidies to agriculture in general, towards other forms of support including development money for rural regions.

With again resistance from national politicians, this time German Ministers, she has demanded more assistance to new industries in theses regions, and also, in farming, removal of support from uncompetitive areas :

“Member states are still reluctant to promote innovative investments outside the agricultural sector –- to move from a narrow agricultural to a wider rural perspective …

“We need to continue promoting competitiveness to offer opportunities for those who have strengths in agricultural production.

“Out policy should therefore favour investments instead of subsidies,” she told the 27 European Agriculture Ministers, at Mainz.

Reference:

Mariann Fischer Boel, European Agriculture Commissioner, “Wine Reform”, EP Wine Inter-group, Strasbourg, 22.5.07, SPEECH/07/328

Mariann Fischer Boel, European Agriculture Commissioner, “The Future of Rural Regions”, Informal Agriculture Council, Mainz, 22.5.07, SPEECH/07/322

“Warning that wine imports may swamp Europe soon”, New Europe, Brussels, May 27-June 2, 2007. p 9

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