Comment - The Grubby EU Row over Grubbing Up
The European Commission is taking predictable flak for chickening out of bolder efforts to drain Europe's wine surplus, but Brussels cannot fix all winemakers' woes.
It comes as little surprise to me that the European Court of Auditors has labelled a key plank of the Commission's wine sector reform as broadly 'insufficient'.
When Commission officials emerged from sleepless nights of hard-fought talks on wine reform in late-2007, those of us hacks who'd been following the saga knew the question would not be 'did they water down their proposals', but 'how much ground have they yielded'?
The grubbing-up scheme was always a key issue. Europe was producing too much wine that it couldn't sell, having spent some EUR581m (US$731m) on so-called 'crisis distillation' of plonk into industrial alcohol since 2000. So, officials proposed to uproot around 400,000 hectares (ha) of vines in return for compensation.
Key producer nations, of course, refused to swallow such a sour pill and the target was reduced in the final days of wrangling to just 175,000ha. It was justified on the basis that other measures would help to reduce the EU's wine surplus, while a bigger marketing budget would increase sales abroad.
To me, the final grubbing-up figure is symbolic, because it represents how some of Europe's biggest wine producer nations and regions were dragged begrudgingly to the negotiating table.
That's a fundamental point, because Brussels bureaucrats were always going to struggle unless enough people in the wine sector were willing to take difficult decisions for themselves.
I have a certain sympathy with sixth-generation winemakers who know nothing else and are under intense pressure from multiple retailers, in particular. Yet, it's fair to say that a lot of winemakers were caught napping by their more consumer-conscious New World cousins.
Then, faced with the double whammy of losing export share and seeing domestic wine consumption wane, a number of producers showed more interest in inter-regional political squabbles and requesting government protection than developing marketing nous.
In the event, the Court of Auditors say that 160,000ha of vines have actually been uprooted across the EU. Auditors consider the resultant 56% drop in the EU's structural wine surplus in the three years since the grubbing-up scheme began as a relatively meagre effort. Despite this, EU wine exports are at their highest level for at least a decade, having broken the 20m-hectolitre barrier last year.
Auditors said that the Commission also offered too much compensation to winemakers, allocating a EUR1.1bn budget for grubbing-up. In some cases, this led to modern, competitive winemakers uprooting vines and taking the cash.
Meanwhile, there emerged a constant tension between grubbing-up and vineyard restructuring, which involved uprooting vines and planting more palatable grape varieties. In short, average yields on restructured vineyards rose, hampering efforts to cut overall EU production.
The Commission, naturally, "does not share" the Court's assessment, according to its official response. It said there will be no more grubbing-up schemes and that its latest data shows "equilibrium" between supply and demand for EU wines.
There will be more arguments when the Commission releases its official review of wine reform later this year. Then, we can look forward to another round of sniping over the planned liberalisation of vine planting rights.
All of this, though, should really be a sideshow. Europe needs its forward-thinking winemakers - and there are more and more of them - to redouble efforts to bring a greater sense of clarity and quality to consumers.
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