EC: EC surprise block on Cognac conversion to vin de pays

The European Commission has blocked a scheme introduced by France to assist Cognac producers to switch production to table wine, despite Brussels' enthusiasm for persuading Cognac houses to reduce their production.A Commission statement said that the planned increase in output of "vin de pays" was counter to the principle behind the new common organisation of the EU wine market which is largely aimed at curbing new production.The French government proposed the plan last year in an effort to deal with the crisis in the Cognac industry, which has led to a substantial surplus of unsold stocks, a problem that has led the Commission to raise concerns about the payment EU grants to the industry.In this case, however, Brussels said that wine produced after the conversion of vineyards would enter the normal market in wine, whereas present Cognac production by definition went to a different market."Consequently, the generalised conversion of these vineyards would very likely simply shift the Cognac problem into other markets," the Commission said.Also, any conversion scheme should, under the terms of the new wine market organisation, be accompanied by a substantial reduction in production area and yields. Brussels said only measures adopted within the rules of the Common Agricultural Policy, and more precisely the common market organisation in wine, were likely to ensure that the overall interests of operators in this market throughout the EU were taken into account.Alan Osborn