In the Spotlight - EU wine reform

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New figures obtained from the European Commission suggest that the grand plan to reform Europe's wine sector is stuck in second gear, almost a year after being introduced.

EU member states are failing to spend funding allocated to them to promote and restructure their national wine industries, European agriculture commissioner Mariann Fischer Boel warned this week. 

Of all 27 EU member states, only Slovakia had spent more than half of the funding allocated to it for the fiscal year to the end of October, according to figures obtained by just-drinks today (10 July) from the European Commission.

The lack of spending indicates a sluggish beginning to the EU wine reform plan, which was signed off by member states last year and is designed to make the bloc's wine industry more competitive against the likes of Australia and US.

So, almost a year to the day since the reform plan was implemented, do the early signs indicate that it will not go far enough to close the gap on New World producers?

Fischer Boel this week warned that funding not spent by 15 October would be lost.

"By the end of May this year, with more than half the financial year over, on average Member States had spent only about 20% of their national envelopes. Some had spent nothing at all," Fischer Boel told a meeting of high level European wine industry delegates in Greece.   

So-called national envelopes are the engines being used to drive wine reform, offering member states annual funding to restructure their industries, from grubbing up vines to promoting wine. Total funding is more than EUR600m, split proportionately depending on a country's production level.

"In terms of Member States' implementation of the reform in general (especially through their national envelopes), I must say I have concerns," said Fischer Boel, adding that it would be "a small tragedy" if unspent funding is allowed to lapse.

She said some states need to "get their skates on". Spain and Italy, two of the world's largest producers, have only spent 6% and 19% of their allocations respectively.

A more serious problem revealed by the figures is the destination of the spend.

The whole idea behind the Commission's plan was to stem the flow of funding heading to distil excess wine into undrinkable industrial alcohol, and direct it instead towards promotional efforts and restructuring.

Of the 27 EU members, only France has spent any of its funding on promoting wines. Up to the end of May, France had allocated around EUR11m to promotion, but had still spent around EUR20m on distilling excess wines. France had spent 46% of its total funding allocation.

Figures for the same period show that France and Italy had spend nothing on grubbing up vines, which was a key part of the reform plan.  

A Commission spokesperson told just-drinks today that it expects spend in several member states to have risen in June. More grubbing up will take place before October, he said.

To make matters worse, the Commission has proven itself weak at crucial moments in the wine reform process, despite having made much of its hardline stance on reforming the EU sugar sector a few years ago.

Having originally called for 400,000 vines to be uprooted across the EU, in order to drain a 1.5bn-litre lake of largely excess plonk, a coalition of countries battered the Commission down to a total of just 175,000.

The renegade bloc, often led by France, also secured a pledge that funding would continue to be made available for crisis distillation, at least until 2012.

More recently, Fischer Boel publicly u-turned over a proposal to lift a ban on blending red and white wines to make rose - despite having made the usual "they shall not pass" noises.

Opponents in the wine industry now know that, by applying enough pressure, the Commission may crack.

In the end, no matter how sensible or beneficial the reform, it can only be implemented across the EU if there is the will to do so - from the corridors of Brussels to the vines of La Mancha. Right now, there are question marks.

Sectors: Wine

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