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Brussels, 19 December 2007

CAP reform: Wine reform will boost competitiveness of European wines

The European Commission welcomed today's agreement by European Union agriculture ministers to reform the Common Market Organisation for wine. The changes will bring balance to the wine market, phase out wasteful and expensive market intervention measures and allow the budget to be used for more positive, proactive measures which will boost the competitiveness of European wines. The reform provides for a fast restructuring of the wine sector in that it includes a voluntary, three-year grubbing-up scheme to remove surplus and uncompetitive wine from the market. Subsidies for crisis distillation and potable alcohol distillation will be phased out and the money, allocated in national envelopes, can used for measures like wine promotion on third country markets, innovation, restructuring and modernisation of vineyards and cellars. The reform will ensure environmental protection in wine-growing regions, safeguard traditional and well-established quality policies and simplify labelling rules, for the benefit of producers and consumers alike. The reform, which is budget neutral, will enter into force on 1 August 2008.

"I am delighted that we were able to find a compromise and I'd like to thank the ministers for their willingness to solve tricky issues," said Mariann Fischer Boel, Commissioner for Agriculture and Rural Development. "Instead of spending much of our budget getting rid of unwanted surpluses, we can now concentrate on taking on our competitors and winning back market share. We didn't get everything we wanted, but we have ended up with a well-balanced agreement. I hope the Member States will make good use of the new tools available."

Main points of the revised wine CMO

National financial envelopes: these will allow Member States to adapt measures to their particular situation. Possible measures include: promotion in third countries, vineyard restructuring/conversion, modernisation of the production chain, innovation, support for green harvest, and new crisis management measures.

Rural Development measures: some money will be transferred into RD measures, ring-fenced for wine regions. Measures could include setting-up young farmers, improving marketing, vocational training, support for producers' organisations, support to cover additional costs and income foregone in maintaining cultural landscapes, early retirement.

Planting rights: these are to be phased out by 2015, with the possibility to continue them at a national level until 2018.

Phasing-out of distillation schemes: crisis distillation will be limited to four years at Member States' discretion until the end of 2012/13, with maximum expenditure limited to 20 percent of the national financial envelope in year one, 15 percent year two, 10 percent in year

Three and 5 percent in year four. Potable alcohol distillation will be phased out over four years, with a coupled payment for the transitional period, being superseded by the decoupled Single Farm Payment. Member States will have the option to require by-product distillation, paid for out of the national envelope and at a significantly lower level than at present, covering collection and transformation costs of the by-products.

Introduction of Single Farm Payment: Decoupled SFP to be distributed to wine grape growers at Member States' discretion and to all growers who grub up their vines.

Grubbing-up: A three-year voluntary grubbing-up scheme for a total area of 175,000 hectares with a decreasing level of premium over the three years. A Member State can halt grubbing-up if the area would be more than 8 percent of that Member State's total vineyard area or 10 percent of a region's total area. The Commission can halt grubbing-up if the area reaches 15 percent of a Member State's total vine area. Member States can also exclude grubbing-up in mountain and steep slope areas and for environmental reasons.

Wine-making practices: responsibility for approving new or modifying existing oenological practices will be transferred to the Commission, which will assess the oenological practices accepted by the OIV and incorporate some them into the list of accepted EU practices.

Better labelling rules: the concept of EU quality wines will be based on wines with Protected Geographical Indications and those with Protected Designation of Origin. Well-established national quality policies will be safeguarded. Labelling will be simpler and, for example, will allow EU wines without GIs to indicate variety and vintage on the label. Certain traditional terms and bottle shapes can continue to be protected.

Chaptalisation: this will continue to be permitted, although maximum levels of enrichment with either sugar or must will be reduced. For exceptional climatic reasons, Member States may request the Commission to increase the level of enrichment.

Aid for the use of must: must aid may be paid in its current form for four years. After this transitional period, expenditure on must aid will be transformed into decoupled payments to wine producers.

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