EU ministers take wine reform plunge
vines last night after European agriculture ministers agreed in
principle to radical reform of the wine sector.
A bloc of ministers from several member states, including big wine producers France, Spain and Italy, provisionally agreed to the European Commission's plan to rip up 400,000 hectares of vines to drain the EU's 1.5bn-litre wine lake.
The move came at an informal discussion of impending EU wine reform at Monday's Council of EU Agriculture Ministers. No legislative proposal on reform is expected before January 2007.
The agreement in principle signals a growing acceptance in wine producing nations that something must be done to help EU wines, which have suffered from falling consumption in the EU, overproduction and rising competition from New World producers.
Still, the bloc of ministers, also including Germany and Austria, warned that ripping up vines was too negative to be the key part of EU wine reform.
And, they said member state authorities should decide where to get rid of vines, instead of leaving the decision to individual producers as the Commission has proposed.
The European Commission in June called for "deep-rooted reform" of Europe's wine sector. It said it wanted to stop paying nearly half the annual wine budget, €500m, to distil wines that won't sell into undrinkable, industrial alcohol.
France, the largest producer, initially reacted coldly to the plans.
"This reform lacks the ambition needed in the sector," said agriculture minister Dominique Bussereau, hours after the Commission announcement.
More winemaker protests are likely as EU wine reform rises up the agenda.
France's Languedoc Roussillon wine region and Spain's La Mancha wine region would be worst hit by reforms, research by banking group Rabobank found. Both of these areas already have the lowest income, €650 per hectare of vines, and are possible targets for any vine grubbing-up scheme.
Falling prices and mounting debts in Languedoc Roussillon have already prompted the re-emergence of militant winemaker group CRAV, which has attacked foreign wine transports and government buildings over the last 18 months. The shadowy group boasts more than 800 members.
"Things have not got better and they have not got worse," Denis Verdier, head of France's Wine Co-operatives' Union, told BeverageDaily.com.
Verdier has told French wine co-operatives they must either 'reform or die', but admitted many in Languedoc were "desperate". Wine is the region's third largest export product.
