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Call for greater competitiveness in EU wine industry

“standfirst”>The House of Lords European Union Committee has published its final report on the EU wine industry. The document called European Wine: A Better Deal for All (Final Report) calls for a "greater sense of competitiveness in many parts of the wine industry".

The committee argues that there has been insufficient recognition of changes in wine drinking habits and tastes in recent years and that too many EU wine producers are not responding to the demands of newer wine consumers. The Committee also point out that the EU’s attempts to subsidise a European wine industry based on small-scale production is unsustainable in a global wine market and that Europe should be looking to secure greater scale of production, whether from cooperative or corporate farming. Such structural changes should be market-led and consumer-focused.

Further, the committee reasserts the conclusions of its interim report (published in July) on the European Commission’s recent proposals for legislative reform of the EU wine sector. These are:

  • The Commission is right in its proposal to end all distillation subsidies.
  • The proposed extension of the ban on new plantings within the EU, however, is a step in the wrong direction. A ban is unnecessary, say the Committee, if distillation subsidies are removed and it would damage the industry as a whole by shutting out entrepreneurial new producers.
  • There should not be a ban, as is proposed, on using sucrose rather than grape must to enrich wine as this will put European producers at a competitive disadvantage in relation to New World growers.
  • The proposed reforms to the system by which EU wines are classified and labelled are a step in the right direction but they do not go far enough – because they maintain the increasingly artificial distinction between ‘quality’ and ‘table’ wines and are not sufficiently geared to the needs of the mass consumer.

"We welcome this report into the EU wine industry, which reflects the evidence we gave to a meeting of the House of Lords Committee in February," said John Corbet-Milward, head of technical and international affairs for the WSTA.

"During an evidence session, we made it clear that although the best traditions of European wine making must be preserved, radical reform is needed. The European regime has long been hampered by over-production, subsidies and complex rules on classification and labelling. We hope that the planned reform of the regime, supported by this House of Lords report, will allow market forces to operate effectively and have a beneficial impact on consumers."

Lord Sewel, chairman of the Lords EU Sub-Committee on Environment and Agriculture, said: "The Commission has put forward serious and long-overdue proposals for reform of a wine sector which faces ever-increasing competition from New World producers. The present system is not only a burden on the EU tax payer, it is also damaging the industry.

"EU wine producers still produce some outstanding wines but many of them have lost touch with the demands of their consumers. New World wine-makers are much more consumer-focused and move quickly to meet changing demands. That is why EU wine is losing ground in the market.

"The EU wine industry can still thrive in the global market but it must take steps now to make itself more competitive and consumer driven. Legislative reform is certainly needed, but there is a need also for a change in mind-set on the part of many producers."

Patrick Schmitt, 31.10.07

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