EU budgets, ageing drinkers, warning labels: CEEV on wine’s challenges

Founded in 1960, the Comité Européen des Entreprises Vins (CEEV) calls itself “the voice of EU wine companies”.

The businesses represented by the trade body, which are mostly SMEs, make up more than 90% of EU wine exports, according to the group’s website.

Just Drinks met with CEEV’s secretary general Ignacio Sánchez Recarte in Brussels this week to discuss the association’s push to secure sector funding under the EU’s next Common Agricultural Policy, the efforts to improve wine’s “competitiveness” and why producers need to find ways to “modernise” for younger consumers.

Fiona Holland (FH): What are some of CEEV’s main goals over the next 12 months? What are you lobbying for specifically?

Ignacio Sánchez-Recarte (ISR): One of the main workstreams now is the reform of the Common Agricultural Policy (CAP) [for 2028-2034]. Within the CAP, the wine sector is treated specifically. We used to have a special envelope of money and, more importantly, of measures that have helped improve the competitiveness of the wine sector since 2008.

Instead of receiving just money for producing, we are receiving money for certain measures: vineyard conversion and modernisation, investment, innovation, insurance and, more importantly, promotion. We have a specific amount of money for promotion, which has helped a lot with exports and promotion outside the European Union.

We think [with] the big discussions about the CAP, we have the threat that there is no specific money for agriculture, our measures are not part of this package, or we may not have a specific amount of money exclusive to those measures and [they] are watered down – and, in the end, we lose this fundamental access to measures that support competitiveness.

All this structure is being shaken in the big discussions about the budget of the European Union. The CAP has a bag of money. This bag of money is now smaller and shared with other objectives. There is a big debate on how to secure money for agriculture.

That is our main priority for the next four months. Beyond the CAP, from now until the end of the year, the Commission is working on additional rules for wine labelling, notably digital labelling. That includes how to place and identify the QR code, what symbol should accompany it and how the digital system will work. The Commission is also trying to harmonise more of the rules about what constitutes a label, which is positive.

FH: Is the EU looking to harmonise rules on digital labels because adoption has been tricky for producers?

ISR: We did what we could to harmonise the system. We built a platform called U-Label with spirits producers and then handed it over to an IT company so it could continue operating. We developed a strict interpretation of what an e-label is, how to present the information and how to identify the QR code. At the time, we proposed using our platform… to identify the QR code [using the symbol] ‘I’ for information.

Just before the rules started to apply in 2023, the Commission said [they didn’t think] the ‘I’ for information is sufficient. They obliged the word ‘ingredients’ to be written above or around the QR code. Some member states said it was not just about ingredients but nutrition. Some retailers were asking for translation. There was a need to clarify.

And what happens if tomorrow, which is already the case, you provide through this QR code other mandatory information? In Spain and Italy, the sorting instructions or information about packaging material is given through the e-label.

We said there needs to [show] a symbol that consumers will understand as identifying the QR code. Behind it, they will find regulatory information, not marketing. That is what the Commission is working on. These regulations should be adopted by the Commission in December.

FH: What would be the impact if the wine sector was unsuccessful in securing CAP funding for those specific measures?

ISR: Today the wine sector is not in its best shape. There is a structural decline in wine consumption in our traditional markets.

In markets that are not growing, we need to be competitive

In this framework, it is fundamental to have promotion. Because the more you can communicate and make your wines resonate with consumers, the better.

We need to gain new consumers, I’m talking about Brazil, for example, Vietnam. There are several markets where we can get new consumers. At the same time, in markets that are not growing, we need to be competitive. The consumer needs to choose our wines because they consider EU wines are better for a good price than Chile’s, Argentina’s or Australia’s.

This package of money is fundamental to improve competitiveness: to support innovation, support investments, support the reconversion of vineyards to adapt to climate change, and promotion.

FH: The new wine package regulation, agreed in December includes support for ‘grubbing up’. The CEEV was opposed to using EU funds for that.

ISR: On using EU funds to grub up, we are opposed. This is an old tool that was used 15 years ago. The European Union spent more than €1bn ($1.1bn) on grubbing up. Ten years after, we had bigger production and the same problems.

We know that agriculture is not at the centre of EU decision-making today. Industrial policy, energy independence, they are the big elements.

We know that there are other priorities today on the table: defence, strategic independency etc., and there will be less money for supporting agriculture. Within agriculture, there will be less money for the wine sector.

FH: What do you see as an alternative to tackling surplus production?

ISR: What we have been defending is, firstly, the problem is our competitiveness. We cannot just accept that wine is less trendy than before.

We need to focus on quality more than quantity. That is one of the elements that we proposed in the wine package. We should not be giving money to people who are increasing drastically the production per yield without a market orientation.  

If a destructive measure needs to be implemented you have three: grubbing up, definitive, or as the French sector was proposing temporary grubbing up. Then you have distillation and green harvesting.

Green harvest… is better than producing the grapes, engaging with all the inputs, harvesting, the cost and vinification, and then sending the wine for distillation, where the money goes to the distillers and does not cover the cost of production.

We have seen in places where it works, you can control yourself. Champagne has been reducing production a lot. The technical file imposed no more than a certain yield per hectare.

They are imposing limits on themselves to match production better with consumption and demand.

FH: How do you see the future of low- and no-alcohol wine playing out?

ISR: It is more or less the only category growing rapidly, with double-digit growth. It is interesting but, even if we are lucky, dealcoholised and partially dealcoholised wine will represent only 5% of total wine production.

We need good rules on presentation to valorise these products and the wine package is partly doing that.

The Commission found a compromise between the different voices with [the descriptor] “reduced-alcohol wine”.

The important [thing] is that we have these descriptors and a harmonised interpretation. Because 0.0 or alcohol-free wine, those were terms that were not subject to any rule.

In the same way that the rules applying to white or red wines are not the same in terms of oenological practices, for liqueur wines or sparkling wines we have different oenological practices. We [also] need specific oenological practice for these wines.

FH: Thinking about attracting younger consumers to wine, some are coming into the category for the first time. What should the sector be doing?

ISR: If I like hats, I will not wear my grandfather’s hat; I will wear something modern or new. Wine is the same. You need to stick to your real thing but you need to modernise yourself.

We have a problem: we are not resonating sufficiently with younger generations, young adults. We should be avoiding this tendency to say they will come to the wine sector and I don’t need to adapt myself. They may never come to the wine sector.

You need to modernise absolutely without losing your soul

There are still some PDOs, PGIs that are not mentioning the varieties on the label. Many years ago, [if] you are buying a Bourgogne, you should know if a Bourgogne should be a Pinot Noir because it’s the unique variety authorised. But 90% of the 95% of the consumers will not know.

Maybe it will resonate to them the term Pinot Noir: “I have heard about this. I tried the Pinot Noir from Switzerland. Let’s try this.”

You need to modernise absolutely without losing your soul and we need to listen more to consumers.

FH: Markets like the US have been challenging for wine in recent years around trade relations and tariffs. The US is the sector’s largest market. Over the next five years or even longer-term, do you anticipate more producers will redirect their focus to other markets?

ISR: The United States accounts for around 27% of our exports. There is no other market that will be able to replace [it].

However, there is an understanding in the wine sector that you need to diversify. We are losing money in the US, in the sense that, since the application of the tariffs, there has been a reduction of the exports and a reduction of the average value.

It is getting tough to sell in the US because your benefits per bottle are being reduced drastically. People are looking around and saying: “It is not as good as it used to be and maybe there are other markets that [I] will need to invest [in], that will compensate slowly what I’m not selling in the US.”

They will not stop looking at the US because it is still the biggest market but they will need to diversify to compensate a little bit.

FH: What is the CEEV’s view on mandatory health-warning labels? Do you anticipate other countries will follow the likes of Ireland?

ISR: This is one of the ongoing works that for me is the most disruptive. If we get it wrong, it could really change the face of the alcoholic-beverage sector and notably in the wine.

Ireland is really a problem because we are still 100% convinced that its legislation is not compliant with EU law. We submitted a complaint to the European Commission. The Commission is supposed to give us a response in one year saying, yes or no, it is compliant. Three years [later] because of policy, they have been able to respond to us.

It is true that they work and help to extend [implementation] to 2028. But retailers and importers will start to request already next year. We saw that happen with the previous date of implementation, the regulation says products sold after a certain date will have to bear the health warning.

It is an absolute dramatic precedent

The way this is drafted means that, if it enters… 17 September, you have bottles on your shelves and you’ll have to take them and put a sticker. It’s an unacceptable cost for retailers and wholesalers.

It is an absolute dramatic precedent because other member states will follow if they see the Commission, independently of EU rules, gives the green light to others. If Ireland has it, why not me, Estonia? Or other countries, Sweden?

It will break the single market. Wine is the product that enjoys the most the single market because you don’t have to change the label for one country or the other, except for the sulphites. The rest can go in one label, one language and you can move your bottle freely.

Secondly, it will help change the perception of the consumer. It will no longer be that for wine, any alcohol beverage, the problem is abuse; it would be that the product itself is dangerous, as the WHO is pushing. If we get this stigma recognised, the problem is will you be giving the EU money to support a sector when they are producing a product which is in theory, according to these health warnings, bad per se?

FH: What, then, is your outlook for the European wine sector over the next five years?

ISR: The next two years will be difficult. From a production point of view, we need to accelerate adaptation to climate change.

There is no sector that can adapt to this variability from one year to the other, and the increase of cost of production.

We need to modernise our production systems to mitigate and, at the same time, to better adapt because the cost of production is too high. The next two years should be a boost for that.

This decline of consumption, the fact that it seems we are not resonating with young adults, people between 25- to 35- or 40 years-old: if we are not able to adapt the way we produce, how we present the bottles and when wine is consumed to the new behaviours of the population, we will suffer.

The next three years will be quite difficult because I don’t see a lot of increase of opportunities in the short term.

New opportunities will emerge. It is a sector which is quite resilient. We need to find new consumers, new ways of communicating to them and to get stronger companies able to navigate better in these difficult times.

I do not like the negative vision some people are pushing, that wine is not for young [people]… Wine is a good product. It is about how you present yourself, where you are present in their way of life and I’m sure that we can maintain a stable and good shape sector.

Tourism, for example. We need to better connect with consumers. We are asking for specific money for oenotourism activities.

We need to get real connections with consumers, enhancing the real connections we have and present it in a way that is attractive to them without making them afraid.