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Growers' promotional levies ruled legal

25 Jun 2014 by Michael Schmidt

Yesterday the German Constitutional Court at Karlsruhe finally rejected a complaint from several growers and wineries against the mandatory levy they have to pay to the German Wine Institute (Deutsches Weininstitut) to support a fund for the promotion of German wine. The decision by the court ends a legal battle of significance to all European vine growers and wine producers that has lasted several years.

The court furthermore decided that another levy, which winegrowers have to pay to the state of Rheinland-Pfalz to fund the promotion of local wines, is also legal. According to a government directive for the promotion of wines of the federal state of Rheinland-Pfalz, which includes the regions of the Nahe, Rheinhessen, Pfalz, Ahr and most of the Mosel, producers have to pay between 0.77 and 0.88 euros for every 100 square metres of vineyard. This money is used solely to support the promotion of wines produced within the boundaries of Rheinland-Pfalz.

The decision was welcomed by the German Winegrowers' Association (Deutscher Weinbauverband), as well as the State Secretary of the German Ministry of Economic Affairs, as a measure that will benefit in particular small and medium-sized wineries. It ends years of uncertainty in which funds were frozen and could not be spent until a legally binding final clarification of the matter.

The complaint had been brought by 16 larger wineries who argued that they did not receive any benefits from the promotional fund themselves and that, being able to finance their own marketing campaigns, they were not willing to accept a financial obligation to support other growers.

In its judgement, the court took into consideration the particular situation of the German wine industry, which, it stated, still suffered from an inferior image abroad caused by the poor quality of exports in previous decades. In the opinion of the court, it was beyond the financial and marketing capabilities of individual growers to change this image.

The German Wine Fund (Deutscher Weinfond) is a marketing alliance for the promotion of German wine and counts among its members the German Wine Institute, the German Wine Academy and the Weinwerbe GmbH (wine advertising organisation). The total value of contributions amounts to approximately 11 million euros annually and goes, however indirectly, to fund such promotional activities as the Wines of Germany generic website, from which the image above was taken, for example.

[There have been similar objections to the levies imposed on growers in Bordeaux to fund the activities of the generic organisation there, the CIVB - JR]

Tags:  Germany
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