You may remember that Europe’s Agriculture Commissioner Mariann Fischer Boel promised to really get to grips with reforming Europe's wine headaches about a year ago (see Europe’s new Agriculture Commissioner urges EU to make New World style wines). She is getting ready to report in full on her findings and proposals on July 4 but on Tuesday she told her colleagues what is principally in store:
We have had a year of intense debate. Much has been written. Much has been said. I have travelled around many of Europe's wine regions including visits to several of your constituencies to familiarize myself with the history, culture and technology of the sector as well as with its people and their dedication, the issues and the sensitivities. I have seen the many faces of the European wine sector and its traditions, mixed with modernity in some cases but only tainted by it in others. It has been a fascinating journey for me.
There has been plenty of input. Not least from the European Parliament. In the past few months we have been busy “distilling” all these views and impressions. On July 4 you will see the result of these efforts when the Commission will adopt its draft legislative proposal for the wine reform. Today I am happy to give you an impression of where we are heading.
But firstly I think we need to ask if anything has changed since we published our Communication on the 22 June 2006? Yes and no.
We have indeed seen an improvement in the conjunctural situation due in particular to the improvement in exports in 2006 and the stabilising of imports. But the outlook and the structural surplus remain practically unchanged. And consequently so do our objectives.
In summary we want to have a competitive and modern wine sector; one with clear and simple rules. Our wine policy must preserve the best traditions of EU wine production and reinforce the social fabric of our rural areas. It must ensure respect of the environment and respond to the increased concerns of society on health and consumer protection. These are objectives that are widely shared by stakeholders of the wine sector.
In the Communication we made the case for a profound reform of the existing Common Market Organisation. One year later I remain convinced that this is necessary.
Many have argued for a two-step approach. So did the EP in the Batzeli report. And a two-step approach is indeed what we intend to propose. It will allow us first to address the need for structural changes of the sector. And then in a second phase to put in place the framework needed to keep the sector competitive and sustainable.
A first important element will be the planting restrictions. These are set by Council to expire in 2010. It was never the intention that these would be prolonged inevitably. But we have come to the conclusion that it makes good sense to maintain the status quo a few more years to allow the structural changes to take place. We are therefore considering to abolish planting restrictions only in 2013.
It is important that we get it right in the period of structural changes. From the outset grubbing-up was intended to have a pivotal role in driving forward these changes. If there is one issue that has been debated in the past year it is grubbing-up. I remain convinced that grubbing up will still be necessary in order to drive change and as an attractive solution for those vine growers who are unable or will be unable to compete in the new environment.
But 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. I have also listened carefully to those that have said that grubbing-up cannot take place in a vacuum. We need to set out a clear regulatory framework – allowing environmental and social conditions their right place. 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.
All in all we intend to put together a measured, responsible and well targeted grubbing–up scheme. And of course a scheme that will be sufficiently attractive for some vine growers to decide to join in.
We will also right from the outset need to take a decision on distillation. I have made the case for abolishing these support measures from day one. And I am yet to be convinced otherwise. Removing these instruments would immediately generate a new dynamic in the organisation of the sector. And not to be neglected it would free up considerable funds that I think can be invested more efficiently in the wine sector.
And I do think there is a strong case for spending our funds more efficiently – even more wisely. But in order to do so, we also need to accept that there is no one-size-fits-all for the European wine sector. In a sector where “variety” is a trademark we need to accept that some problems are local and will need local solutions.
I am therefore prepared to take an important step towards greater subsidiarity by proposing new and national financial envelopes which may be used for support programmes which include genuine market oriented actions. The idea of national envelopes has been widely debated. Recently member states have even started arguing on the distribution of funds for these envelopes. I take this as an indication that at least they accept the concept of national envelopes.
The list of instruments to be financed through these national envelopes is long. Some indications were already provided in the Communication. Today I would highlight just one novelty: promotion.
European wine needs to do better in third country markets. I think we all agree. In order to do so, many – including the EP – have for long called for more ambitious funding for third country promotion. During my recent visit to India, where I was leading an important EU business delegation, I saw the merits of aggressive promotion on our export markets. And I am prepared to take up the challenge. I therefore intend to make substantial funds available for third country promotion in the national envelopes. It will then be up to the wine sector in collaboration with the national authorities to show that this can make a real difference.
As another funding innovation I intend to propose the transfer of funds from the European Agricultural Guarantee Fund to the European Agricultural Fund for Rural Development. The rural development programmes should be useful for restructuring and modernising the wine sector – upstream and downstream. I am fully aware that many people are not convinced that this is a good idea. But the reality is that the rural development tool box contains a number of instruments that can be very valuable for the wine sector.
I envisage flexibility in wine-making practices which contribute to competitiveness without damaging the quality or image of wines. Wine shopping must become customer-friendly – today it is a bewildering experience. We will therefore propose a simple and clear categorization 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 vine 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.
Finally a word on enrichment and the use of sugar [chaptalisation]. I realise that this is a very sensitive issue. And I realise that the current system is very delicately balanced. Let me be absolutely clear. I fully intend to respect this balance. But in recent years we have been witnessing an ever increasing budget for enrichment aid. This was never the intention. Not only does this raise issues of WTO conformity, but I truly believe that these funds can be better spent in the sector. Equally the use of sucrose raises issues of conformity not only with OIV definitions of wine – but even with our own community definition. 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 – thereby not off-setting the delicate balance that we have on these issues in the existing CMO.
These were some of the elements that you will find in our reform proposal on July 4. Obviously there will also be many more elements. But altogether I believe that we will manage to present a comprehensive and adequate response to the challenges faced by our wine sector today. I will then be looking forward to an intense – and I am certain constructive – debate. Here in the European Parliament as well as in Council.