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SPEECH/ 09/334

Mariann Fischer Boel

Member of the European Commission responsible for Agriculture and Rural Development

The EU wine reform

Figures and graphics available in PDF and WORD PROCESSED

CEEV (Comité européen des Entreprises Vin) Board meeting

Santorini, Greece, 8 July 2009

[Ladies and gentlemen],

It's a great pleasure to join you here in Santorini.

One year, six months and 21 days after European agriculture ministers reached a political deal on an essential reform of the European wine sector, that reform is still making the headlines.

At a time of recession and considerable unrest around the world, the issue of wine still has enough emotional power in Europe to get close to the front page – or even onto it.

This just confirms what I’ve said since that day in December 2007. The wine reform has been the toughest negotiation which I’ve undertaken since I became a Commissioner in 2004.

Our wine sector was like a Champagne bottle which had been standing in the sun. The pressure was building higher and higher. When we began the debate on the sector’s future, we let the cork out. And how it shot out of the bottle! Dare I say that quite a lot of people were trying to get out of its way?!

But let’s make no mistake: those pressures in the bottle were real, and we had to do something about them.

  • There was the pressure of falling wine consumption in the European Union.

  • There was the pressure from very impressive competitors from around the world, who were snapping at our heels.

  • There was the pressure of burdensome wine alcohol stocks.

  • And there was the pressure of public opinion, which would no longer tolerate spending hundreds of millions of euros on distilling a product designed to be drunk from a glass – not burned as fuel.

Those of us who believed in the need for reform had to fight tooth and nail to make that need clear. Then, of course, we had to look for compromises.

I firmly believe that history will judge the final compromise to be a turning-point for our wine sector. The medicine seemed strong to some; but sometimes it's the medicines which don't taste good that actually bring a person back to full health.

  • Freeing up our system of vineyard regulation will give new opportunities to our wine-makers who can produce more wine that people want to drink.

  • The grubbing-up scheme has given a valuable exit door to producers who had been in difficulty for years.

  • The re-ordering of the budget has brought it in line with solid principles of sustainability and with the expectations of the public.

  • And various changes to our wine-making practices and labelling rules will enable European producers to compete with other suppliers on much more equal terms.

The principles of this reform are good ones. Now, of course, we’re in the phase of implementation – getting the implementing rules right, and making sure that the reform delivers in practice.

I’d like to address several aspects of these issues today.

First, I'll make a quick comment on the grubbing-up scheme.

What a contrast between the view of the critics and the view of actual producers! The popularity of the grubbing-up scheme has been enormous: applications were double what we could actually grant.

Clearly, as I suspected, a lot of producers out there needed a rest!

But as I stressed before, this is a scheme with strong safeguards in place – economic, environmental and social – and the evidence suggests that these are doing their job.

However, leaving this scheme to one side: in terms of Member States’ implementation of the reform in general (especially through their national envelopes), I must say I have concerns.

By the end of May this year, with more than half the financial year over, on average Member States had spent only about 20 per cent of their national envelopes. Some had spent nothing at all.

As you know, if this money is not spent by 15 October, it will simply disappear. That would be a small tragedy for a sector which certainly needs to invest in the future!

So, to those Member States which haven’t yet got out of the starting-blocks, I say: Lace up your running shoes quickly and get going!

But this is not just a task for national governments. It’s also up to the sector to come up with projects which could put the funding to good use. And I'm thinking especially about promotion!

During the reform discussions, with regard to promotion in particular, I always said: Yes, maybe we can find some money for this, but if we do, you’ll have to get up out of your chair and use it.

Well, that time is now here. So let's see some more ideas, please!

Alongside the task of implementation which is already taking place, of course we’ve been fixing various implementing rules for the reform. And I wonder when was the last time that European Union implementing rules stirred up so much excitement….

Rosé wine – no, I’m not going to avoid talking about it today! The issue is now being put to bed, but even so, a few words must be said.

As you know, under European Union rules, producers were always allowed to make "quality" wines by blending white and red wines – and in fact, at least in the case of Champagne, this was done. The prohibition applied to table wines only.

As you also know, this prohibition had nothing to do with "protecting" rosé wine – which has never been defined in the European and international systems.

The prohibition was in place mainly because we paid different rates of export refund for white and red wines!

Since we were going to abolish export refunds under the reform deal, the original justification for the rule no longer applied.

With this in mind, there were arguments in favour of allowing blending for white and red table wines – especially, the fact that this technique is allowed by the OIV and that third-country competitors can use it .

Well, in the end, there were arguments in favour - but there were also arguments against. Various producers had invested heavily in the production of rosé wines by traditional methods and in telling consumers about that practice – and they had done this on the assumption that blending would remain prohibited for table wines.

This argument was made with considerable force – though late in the day! It suddenly became clear that this was an extremely sensitive issue for a critical mass of producers. In that situation, I couldn't possibly turn a deaf ear: I had to listen carefully to everyone's concerns, and weigh up the question again.

You know the result. We have kept the prohibition on blending white and red wines which don’t have a geographical indication. A consensus emerged that, at present, this was the most sensible path to take.

Of course, some parties are disappointed by this result. I would like to thank them for the reasonable attitude which they have taken, and I'm certain that other aspects of the wine sector reform will bring them clear benefits.

Another debate about the implementing rules has concerned de-alcoholisation.

I think we've reached a fair compromise on this.

On the one hand, I understand some Member States' attachment to a "traditional" concept of wine.

On the other hand, the freedom to remove two percentage points of alcohol – as long as the final level does not drop below a certain threshold – is in line with the rules of the OIV.

Also, we really have to be serious about the health problems related to alcohol.

No, wine is certainly not "responsible" for these problems: people are responsible. But if some people would like to enjoy wine while also being careful about alcohol consumption, we shouldn't deny them the option of buying high-quality wines containing less alcohol.

Or rather, to be more accurate: we should allow our producers to cater for this need, instead of leaving that part of the market to non-European competitors.

Let me finish with a point about an issue which reaches well beyond the wine sector: our policy for agricultural product quality.

As you're aware, we're looking into the possibility of creating a single register for geographical indications for wines, spirits, and food and agricultural products. And we're looking at harmonising the three legal systems to some extent.

I'm aware of the wine sector's concerns on this issue. Certainly, it is important that we take full account of the individual aspects of the wine sector.

The intention is to make our rules for GIs work better, not less well. There would be no point in pushing through any kind of simplification which looked good on paper but actually undermined our policy.

On the other hand, I can see possible gains to be made from harmonisation. Where there are slight differences of terminology and process, legal rights of product protection are sometimes less clear. And where rights are less clear, this opens the door very wide to disagreement, delay and legal cases.

This is why I say we are looking into the issue of harmonisation. But the Commission has no intention of rushing in: we'll tread carefully.

Overall, I'm sure that we did the right thing in "letting the cork out of the bottle" and reforming our wine sector.

Yes, the cork made a lot of noise – almost like a pistol shot! For some, this was quite alarming.

But the noise was loud and the debate was fierce partly because pressures in the sector had been allowed to build up for so long.

Now, that pressure has been released. Our wine sector is getting new opportunities to put its spirit of enterprise to use – with sensible rules, with safeguards, with financial support. This can only be a good thing.

The day the reform was agreed, corks were popping in the Council building in Brussels, and later in my office.

Years from now, corks will still be popping from bottles of European wine all over the world. And I believe that, because of this reform, we'll be hearing more of that sound – not less.

Thank you.

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