COUNCIL REGULATION (EC) No 1493/1999

of 17 May 1999

on the common organisation of the market in wine

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 36 and 37 thereof,

Having regard to the proposal from the Commission(1),

Having regard to the opinion of the European Parliament(2),

Having regard to the opinion of the Economic and Social Committee(3),

Having regard to the opinion of the Committee of the Regions(4),

Whereas:

(1) the operation and development of the common market in agricultural products should be accompanied by the establishment of a common agricultural policy to include in particular a common organisation of agricultural markets which may take various forms depending on the product;

(2) the aim of the common agricultural policy is to attain the objectives set out in Article 33 of the Treaty and in particular, in the wine sector, to stabilise markets and ensure a fair standard of living for the agricultural community concerned; these objectives may be attained by adjusting resources to needs, in particular through the pursuit of a policy for the adaptation of wine-growing potential and a quality policy;

(3) the existing framework of the common organisation of the market in wine was established by Regulation (CEE) No 822/87(5), as last amended by Regulation (EC) No 1627/98(6); in the light of experience it would be appropriate to replace it in order to address the current situation in the wine sector, which is typified by the fact that, while structural surpluses are less frequent, surpluses on a multiannual basis are still possible, however, in particular owing to the sector's inherent potential for dramatic fluctuations in production from one harvest to the next;

(4) the implementation of the Uruguay Round agreements in 1995 has resulted both in a more open Community market in which traditional intervention measures have now lost much of their potential impact, and in less scope for subsidised exports, which means that Community producers need to improve their competitive performance; the majority of exports are already being effected without subsidy;

(5) the most significant market problem currently facing certain parts of the Community wine sector is their limited ability to adapt sufficiently rapidly to competitive changes on both the internal and external market; the existing common organisation of the market has failed to offer solutions for wine-growing areas where production is clearly unable to find a remunerative market; there has been insufficient flexibility for those areas with expanding markets to allow scope for development;

(6) in 1994 the Commission presented a proposal for the reform of the common organisation of the market in wine which was not, however, adopted; the market situation has changed since that proposal was made;

(7) there should therefore be a reform of the common organisation of the market in wine to guarantee the necessary flexibility to adapt smoothly to new developments with the following broad aims: maintaining improved balance between supply and demand on the Community market; enabling the sector to become more competitive in the longer term; eliminating the availablility of intervention as an artificial outlet for surplus production; supporting the wine market and hence facilitating the continuation of supplies of wine distillates to those parts of the potable alcohol sector which traditionally use that alcohol; accommodating regional diversity; and formalising the potential role of producer organisations and sectoral organisations;

(8) Regulation (EEC) No 822/87 was supplemented and implemented by Regulations (EEC) No 346/79(7), (EEC) No 351/79(8), as last amended by Regulation (EEC) No 1029/91(9), (EEC) No 460/79(10), as last amended by Regulation (EEC) No 3805/85(11), (EEC) No 465/80(12), as last amended by Regulation (EEC) No 1597/83(13), (EEC) No 457/80(14), (EEC) No 458/80(15), as last amended by Regulation (EEC) No 596/91(16), (EEC) No 1873/84(17), as last amended by Regulation (EC) No 2612/97(18), (EEC) No 895/85(19), as last amended by Regulation (EEC) No 3768/85(20), (EEC) No 823/87(21), as last amended by Regulation (EC) No1426/96(22), (EEC) No 1442/88(23), as last amended by Regulation (EC) No 859/199(24), (EEC) No 3877/88(25), (EEC) No 4252/88(26), as last amended by Regulation (EC) No 1629/98(27), (EEC) No 2046/89(28), as last amended by Regulation (EC) No 2468/96(29), (EEC) No 2048/89(30), (EEC) No 2389/89(31), as last amended by Regulation (EC) No 2088/97(32), (EEC) No 2390/89(33), as last amended by Regulation (EC) No 2611/97(34), (EEC) No 2391/89(35), (EEC) No 2392/89(36), as last amended by Regulation (EC) No 1427/96(37), (EEC) No 3677/89(38), as last amended by Regulation (EC) No 2796/94(39), (EEC) No 3895/91(40), (EEC) No 2332/92(41), as last amended by Regulation (EC) No 1692/98 and (EEC) No 2333/92(42), as last amended by Regulation (EC) No 1429/96(43); those Regulations have been substantially amended several times; since further amendments are to be made, they should be recast in the interest of clarity, in a single text;

(9) Regulation (EEC) No 822/87 made provision for the Council to lay down general rules for its application; this created a complex structure of layers of legislation; the aforementioned Regulations contained a large amount of technical detail which required frequent amendment; this Regulation should therefore, in general, contain all the necessary guidance for its application; the Council should confer all necessary implementing powers on the Commission in accordance with Article 211 of the Treaty;

(10) the rules governing the common organisation of the market in wine are extremely complex; in some cases they do not take sufficient account of regional diversity; as far as possible the rules should therefore be simplified and policy developed and implemented as close as possible to the producer within a Community framework;

(11) to capitalise on and consolidate the improved market balance, and to better align supply on demand for different types of product, there should be a framework of measures on the management of wine-growing potential, to include restrictions on planting in the medium term, premiums for the permanent abandonment of wine-growing and support for the restructuring and conversion of vineyards;

(12) structural measures not directly related to the production of wine should fall within the scope of Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repeating certain Regulations(44); measures related to promotion make an important contribution to the sector's competitive performance and notably the promotion of Community wine on third-country markets should be stimulated; however, in order to ensure consistency with the general promotion policy of the Community, measures related to the wine sector should fall within the scope of horizontal rules on this matter; for this purpose, the Commission has submitted a proposal for a Regulation on measures to promote and provide information on agricultural products in third countries(45);

(13) market balance has improved, albeit in a relatively slow and difficult manner; whereas the existing restrictions on planting have shown themselves to be the essential component in this achievement; in the light of experience it does not seem possible to use any other measures to capitalise on and consolidate the improved market balance; it therefore seems necessary to control the use of producers' property in this manner in accordance with the general interest;

(14) existing restrictions on planting should therefore remain in place for a period limited in the medium term so as to allow the full range of structural measures to take effect, and thus any planting of vines for wine production should be prohibited until 31 July 2010 unless otherwise permitted under this Regulation;

(15) the existing permission for new planting of areas intended for graft nurseries, land consolidation and compulsory purchase as well as wine-growing experiments has shown itself not to unduly disturb the wine market and should therefore be continued subject to the necessary controls; for similar reasons, it should also be possible to plant vines, the production of which is intended for consumption by the wine-grower's family;

(16) the existing permission for new planting to produce a quality wine produced in specified regions (quality wine psr) and table wine described by reference to a geographical indications has proved to be a useful component of the quality policy which is designed to better align supply on demand; however, once a reserve system of planting rights is fully functional, this latter system should fulfil this objective; the existing permission should therefore be continued, subject to the necessary checks, for a transitional period until 31 July 2003, by which time the reserve system should be fully functional;

(17) the existing permission to replant vines is necessary to allow the normal renewal of exhausted vineyards; the existing system should therefore be maintained subject to the necessary checks; for greater flexibility the system should also permit, subject to the necessary checks, the acquisition and use of replanting rights before the related grubbing-up takes place; replanting rights acquired under prior Community or national legislation should be respected; furthermore, it should be possible to transfer replanting rights to another holding, subject to strict controls, provided that this transfer is in pursuit of quality or conerns the areas intended for graft nurseries or is connected with the transfer of part of the holding; in order to ensure the smooth running of the common organisation of the market, these transfers should be maintained within the same Member State;

(18) in order to improve the management of wine-growing potential and to promote the efficient use of planting rights and thus to further mitigate the effect of the restrictions on planting, a system of national or regional reserves should be set up:

(19) Member States should be given broad discretion in the management of the reserves, subject to the necessary controls, so as to permit them to better align the use of the rights to plant such reserves on local needs; this should include the opportunity to purchase planting rights, to fund the reserve and to sell planting rights from the reserve; to this end, Member States should be allowed not to apply the reserve system, provided that they can prove that they already have an efficient system of managing planting rights;

(20) the grant of specific benefits to young wine producers may facilitate not only their establishment but also the structural adjustment of their holdings after their initial establishment; such producers should therefore be eligible for the grant of rights from the reserves free of charge;

(21) to ensure that resources are used in the most efficient manner and to better align supply on demand, planting rights should be used by their holders within a reasonable time, or failing that, should be allocated or reallocated to the reserves; rights allocated to the reserves should be granted within a reasonable time for the same reasons;

(22) in the light of the improved market balance and the expanding world market, there may be justification for increasing planting rights which should be allocated to the Member States concerned and, in part, to a Community reserve for allocation which is dependent on additional market demand; this increase should be reduced by the extent to which new planting rights have been authorised for quality wines psr and table wines designated with a geographical indication;

(23) notwithstanding the existing restrictions on planting, areas have been planted in breach of those restrictions; the existing sanctions, which are designed to ensure that the products of such areas do not disrupt the wine market, have proved to be difficult to enforce; areas planted illegally should therefore be grubbed up; this requirement should be imposed in respect of all illegal planting which takes place after the proposal for this Regulation has been published, from which time producers should have been aware of the proposal to introduce the requirement;

(24) without prejudice to any existing national measures, for reasons of legal certainty it is not possible to impose at Community level the grubbing-up requirement on areas planted in breach of restrictions before the proposal for this Regulation has been published; for better control of wine-growing potential, during a fixed period Member States should therefore be able to regularise the position of such areas, subject to the necessary controls; a different treatment may be provided for as far as regularisation is concerned, depending on the details of the planting in question, in particular where such planting is liable to lead to an increase in production; the producer involved may be subject to appropriate administrative penalties should such a risk occur;

(25) Member States should be able to take account of local conditions and therefore be able to impose stricter rules in respect of new planting, replanting and grafting-on, where necessary;

(26) there are wine-growing areas whose production is not aligned on demand; to encourage a better alignment of the sector as a whole, the permanent abandonment of wine-growing in such areas should be encouraged; a premium should therefore be granted to this end; the management of such a premium should be left to Member States to administer, whithin a Community framework and subject to the necessary controls, so as better to target the premium on the regions concerned; in particular Member States should therefore be able to designate the regions concerned and set the levels of the premium, using objective criteria and whitin an overall ceiling;

(27) production in those Member States whose wine production is below 25000 hectolitres per year does not seriously affect the market balance; those Member States should therefore be exempt from the restrictions on planting but should not have access to the premium for permanent abandonment of wine-growing;

(28) there are other wine-growing areas where production is not aligned on demand, but where production could be better aligned through restructuring of vineyards by varietal conversion, relocation of vineyards or improvement of vineyard management techniques; there should therefore be support to this end subject to the necessary controls;

(29) to ensure that such restructuring and conversion are carried out in a controlled fashion, they should be planned; plans should be drawn up at a level as close as possible to the producer to ensure that regional diversity is taken into account; nevertheless, in order to ensure that the plans are in conformity with Community law, Member States should remain responsible in the last resort for those plans;

(30) restructuring and conversion have two main financial impacts on the producer, namely loss of earnings during the period of conversion and the costs of implementing those measures; the support should therefore cover both of these impacts; in the restructuring process there is a place for additional national measures within specified limits;

(31) it is desirable for a better management of wine-growing potential for an inventory of such potential to be compiled at Member State or at regional level; to encourage Member States to compile the inventory, access to the regularisation of unlawfully planted areas, the increase in planting rights and support for restructuring and conversion should be limited to those who have compiled the inventory; in the case of regional inventories, those regions which compiled the inventory should not be excluded from eligibility for the restructuring and conversion measures because other regions have not compiled an inventory; however, all the regional inventories must be completed by 31 December 2001;

(32) the classification of vine varieties for wine production is a task best carried out as close as possible to the producer; Member States should therefore take over this task from the Community;

(33) Council Regulation (EEC) No 2392/86 of 24 July 1986 establishing a Community vineyard register(46), as last amended by Regulation (EC) No 1631/98(47), should remain in force to enable those Member States who are still in the process of compiling it to complete the task; however, provision should be made for its subsequent amendment or repeal;

(34) in order to preserve market balance, provision should be made for aid for the private storage of table wine and types of grape must; the measure should be as flexible and responsive to market movements as possible; to this end, it should therefore be possible in particular to terminate its application at short notice;

(35) in order to eliminate the availability of intervention as an artificial outlet for surplus production there should be changes to the distillation system; there should therefore be the following forms of distillation: compulsory distillation of by-products of wine-making, compulsory distillation of wine produced from grapes not classified solely as wine grape varieties, a distillation measure to support the wine market by promoting continuity of supplies of wine distillates in parts of the potable alcohol sector which traditionally use that alcohol, and a crisis distillation measure; other forms of distillation should be abandoned; these measures should be as flexible as possible to respond to market needs and specific regional conditions;

(36) in view of the poor quality of wine obtained from overpressing, this practice should be prohibited and provision should be made, in order to prevent it, for the compulsory distillation of marc and lees; however, derogations from this obligation may be envisaged in order to take account of conditions of production in certain wine-growing regions; in addition, since the production and market structures in wine-growing zone A and in the German part of wine-growing zone B are able to ensure that the aims of the measure are achieved, producers in these regions should not be obliged to distill by-products of wine-making but to withdraw such by-products under supervision;

(37) the production of wine obtained from grapes not classified solely as wine-grapes varieties should be directed in the first instance towards traditional uses in the spirits sector and other traditional outlets; provisions should be made for the compulsory distillation of such wine produced in excess of the normal quantities directed towards such uses;

(38) certain parts of the potable alcohol sector constitute an important traditional outlet for wine distillates and other wine-based products; there should therefore be Community support for distillation of table wine and wine suitable for yielding table wine to supply this market, in the form of a primary aid paid for distillation of such wines and a secondary aid for storage of the resulting distillate;

(39) in order to deal with exceptional cases of market disturbance and serious quality problems, there should be a crisis distillation measure; the level and format of aid should be determined by the Commission to take account of specific situations, including cases where a noticeable fall in the market price for a category of wine has been noted; the measure should be voluntary for producers; if this measure is applied for three years in succession in respect of a particular category of wine (in a particular zone), the Commission should submit to the European Parliament and the Council a report and, where appropriate, proposals;

(40) the disposal of alcohol obtained by distillation should be carried out in such a manner as to afford greater transparency and control and to avoid disturbance of traditional markets for alcohol;

(41) the increase in the natural alcoholic strength by volume is not at present carried out under the same economic conditions by all Community producers on account of the various oenological practices allowed by this Regulation; in order to eliminate such discrimination, encouragement should be given to the use of vine products for enrichment, thereby increasing their outlets and helping to avoid wine surpluses; in order to achieve this, the prices of the various products for enrichment should be aligned; this result may be achieved by means of a system of aid for concentrated grape must and rectified concentrated grape must coming from certain regions and used for enrichment;

(42) it remains necessary, in order to achieve a more stable balance between production and use, to increase the use of vine products; intervention appears to be justified further back than table wine production, by encouraging the use of must for certain purposes other than wine-making by means of aid to ensure that Community wine products may maintain their traditional market outlets; the measure should be applied so as to avoid distortions of competition, taking into account traditional production methods;

(43) producers who have not fulfilled their obligations under compulsory distillation measures should not be allowed to benefit from any other intervention measures;

(44) provision should also be made for possible measures in the case of high prices on the Community market;

(45) given the special features of the market in wine, the formation of producers' organisations is likely to contribute to the attainment of the objectives of the common organisation of the market; Member States may recognise such organisations; the latter must be formed on a voluntary basis and must prove their utility through the scope and efficiency of the services offered by producer organisations to their members;

(46) in order to improve the operation of the market for quality wines psr and table wines with a geographical indication, Member States should be able to implement decisions taken by sectoral organisations; the scope of such decisions should exclude certain concerted practices; the Commission should ensure that such decisions conform with Community law; the sectoral organisations should perform certain tasks, taking into account consumers' interests;

(47) for health reasons and in pursuit of quality, authorised oenological processes and practices should be laid down at Community level, these being the only ones permitted for use in the manufacture of products covered by this Regulation; for similar reasons, only wine grape varieties should be used to produce wines for human consumption;

(48) in view of the fact that production conditions, in particular soil, terrain and climate, vary considerably from one Community wine-growing area to another, it is essential that such variations are taken into account with regard to oenological practices and processes; for reasons of simplicity and to facilitate the modifications based on experience and technological progress, certain technical limits and conditions connected with these practices and processes should be defined in the detailed rules of implementation; nevertheless, the limits concerning the levels of sulphur dioxide, sorbic acid and potassium sorbate should be laid down in this Regulation in view of their importance for health;

(49) provision should be made for authorised methods of analysis for wine-sector products;

(50) the description, designation and presentation of products covered by this Regulation can have significant effects on their marketability; this Regulation should therefore lay down rules in this connection which take into account the legitimate interests of consumers and producers and promote the smooth operation of the internal market and the production of quality products; the fundamental principles of these rules should provide for the obligatory use of certain terms so as to identify the product and provide consumers with certain important items of information and the optional use of other information on the basis of Community rules or subject to rules concerning the prevention of fraudulent practices;

(51) the rules concerning in particular designation should include provisions on the prevention of fraudulent practices, penalties at Community level to be applied in the event of improper labelling, use of languages, in particular when different alphabets are involved, and the use of brand names, especially when these could cause confusion amongst consumers;

(52) in view of the differences between products covered by this Regulation and their markets, and the expectations of consumers and traditional practices, the rules should be differentiated according to the products concerned, in particular as far as sparkling wine is concerned and according to their origin;

(53) rules should also be applied to the labelling of imported products, in particular to clarify their origin and to avoid any confusion with Community products;

(54) the right to use geographical indications and other traditional terms is a valuable one; the rules should therefore govern this right and provide for protection for these terms; to promote fair competition and so as not to mislead consumers, this protection may need to affect products not covered by this Regulation, including those not found in Annex I to the Treaty;

(55) bearing in mind the interests of consumers and the desirability of obtaining equivalent treatment for quality wine psr in third countries, provisions should be made so that reciprocal arrangements can be established whereby wines imported for direct human consumption and bearing a geographical description and marketed in the Community may enjoy these protection and control arrangements;

(56) in order to take account of the obligations arising, in particular, from Articles 23 and 24 of the Agreement on Trade-Related Aspects of Intellectual Property Righs, which forms an integral part of the Agreement establishing the World Trade Organisation approved by Decision 94/800/EC(48), provision should be made for the parties concerned to prevent, under certain conditions, the unlawful use of geographical designations protected by a third-country member of the WTO;

(57) the development of a policy of encouraging quality production in agriculture and especially in wine growing is bound to contribute to the improvement of conditions on the market and, as result, to an increase in outlets; the adoption of additional common rules which concern the production and control of quality wines psr falls within the framework of this policy and can contribute towards the attainment of those objectives;

(58) in order to maintain a minimum quality standard for quality wines psr, to avoid an uncontrollable expansion in the production of such wines, and to harmonise the provisions of the Member States so as to establish conditions of fair competition in the Community, a framework of Community rules should be adopted, governing the production and control of quality wines psr, with which the specific provisions adopted by the Member States will have to comply;

(59) taking into account traditional conditions of production, the nature and scope of the factors which enable each of the quality wines psr to be distinguished must be listed and defined; a common move to harmonise quality requirements should nevertheless be made; these factors should be: the demarcation of the area of production, vine varieties, cultivation methods, wine-making methods, minimum natural alcoholic strength by volume, yield per hectare and analysis and assessment of organoleptic characteristics; particular rules should be laid down for quality liqueur wines psr and quality sparkling wines psr given the particular nature of those products;

(60) experience has shown the need to draw up precise rules for reclassifying quality wines psr as table wines and to specify the cases in which the producer has the option of not requesting that a product appearing in his harvest or production declaration as a product suitable for yielding a quality wine psr be classified as a quality wine psr;

(61) in order to preserve the particular quality characteristics of quality wines psr, Member States should be allowed to apply additional or more stringent rules governing the production and movement of quality wines psr, in accordance with fair and traditional practices;

(62) the creation of a single Community market for wine involves the introduction of a single trading system at the external frontiers of the Community; a trading system including import duties and export refunds, in addition to the external market measures, should, in principle, stabilise the Community market; the trading system should be based on the undertakings accepted under the Uruguay Round of multilateral trade negotiations;

(63) in order to monitor the volume of trade in wine with third countries, provision should be made for a system of import and export licences for certain products, which includes the lodging of a security to guarantee that the transactions for which such licences are granted are effected;

(64) in order to prevent or counteract adverse effects on the Community market which could result from imports of certain agricultural products, imports of one or more such products should be subject to payment of an additional import duty, if certain conditions are fulfilled;

(65) it is appropriate, under certain conditions, to confer on the Commission the power to open and administer tariff quotas resulting from international agreements concluded in accordance with the Treaty or from other acts of the Council;

(66) provisions for granting a refund on exports to third countries, based on the difference between prices within the Community and on the world market, and falling within the WTO Agreement on Agriculture(49), should serve to safeguard Community participation in international trade in wine; these refunds should be subject to limits in terms of quantity and value;

(67) compliance with the value limits should, when refunds are fixed, be ensured through the monitoring of payments under the rules relating to the European Agricultural Guidance and Guarantee Fund; monitoring can be facilitated by the compulsory advance fixing of refunds, while allowing the possibility, in the case of differentiated refunds, of changing the specified destination within a geographical area to which a single refund rate applies; in the case of a change of destination, the refund applicable to the actual destination should be paid, with a ceiling on the amount applicable to the destination fixed in advance;

(68) ensuring compliance with the quantity limits calls for the introduction of a reliable and effective system of monitoring; to that end, the granting of refunds should be made subject to an export licence; refunds should be granted up to the limits available, depending on the particular situation of each product concerned; exceptions to that rule should only be permitted in the case of food-aid operations, which are exempt from any limit; monitoring of the quantities exported with refunds during the marketing years as referred to in the WTO Agreement on Agriculture should be carried out on the basis of export licences issued for each marketing year;

(69) in addition to the system described above, and to the extent necessary for its proper working, provision should be made for regulation or, when the situation on the market so requires, prohibiting the use of inward-processing arrangements;

(70) the customs duty system makes it possible to dispense with all other protective measures at the external frontiers of the Community; however, the internal market and duty mechanism could, in exceptional circumstances, prove defective; in such cases, so as not to leave the Community market without defence against any disturbances which may arise therefrom, the Community should be able to take all necessary measures without delay; those measures should be in accordance with the obligations derived from the relevant WTO agreements;

(71) products imported from third countries should be subject to rules on certain product specifications which ensure a measure of balance with Community definitions of wines; they should also comply with any rules laid down in their country of origin and be accompanied by an analysis report in appropriate circumstances;

(72) it should be provided that all the products covered by this Regulation should be furnished with an accompanying document when circulating within the Community;

(73) the establishment of a single market would be jeopardised by the granting of certain aids; the provisions of the Treaty which allow the assessment of aids granted by Member States and the prohibition of those which are incompatible with the common market should therefore apply in the common market organisation for wine; the provisions on premiums for the permanent abandonment of wine-growing should not of themselves preclude the granting of national aid for the same ends;

(74) given the necessary complexity of the rules in the wine sector, Member States' authorities should be responsible for ensuring compliance; the Commission should itself be able to monitor and ensure such compliance through its own inspectors collaborating with Member States' authorities;

(75) it is necessary that, as the common market in wine develops, the Member States and the Commission should keep each other supplied with the information necessary for applying this Regulation; producers of grapes for wine-making, must and wine should make a harvest declaration since this information is necessary; Member States should be able to request further information from producers; the Commission should be permitted to use external assistance when assessing any data;

(76) in order to facilitate implementation of the proposed measures, a procedure should be provided for establishing close cooperation between Member States and the Commission within a management committee;

(77) expenditure incurred by the Member States as a result of the obligations arising out of the application of this Regulation should be financed by the Community in accordance with Council Regulation (EC) No 1258/1999 on the financing of the common agricultural policy(50);

(78) the common organisation of the market in wine should take appropriate account, at the same time, of the objectives set out in Articles 33 and 131 of the Treaty;

(79) the common organisation of the market in wine should also be applied in the light of the agreements concluded under Article 300(2) of the Treaty, in particular those forming a part of the Agreement establishing the World Trade Organisation, notably that on technical barriers to trade;(51)

(80) the change from the arrangements in Regulation (EC) No 822/87 and the other Regulations in the wine sector to those in this Regulation could give rise to difficulties which are not dealt with in this Regulation; in order to deal with that eventuality, provision should be made for the Commission to adopt the necessary transitional measures; the Commission should also be authorised to solve specific practical problems,

HAS ADOPTED THIS REGULATION:

TITLE I

SCOPE

Article 1

1. The common organisation of the market in wine shall comprise rules governing wine-production potential, market mechanisms, producer organisations and sectoral organisations, oenological practices and processes, description, designation, presentation and protection, quality wine psr, and trade with third countries.

2. It shall apply to the following products:

>TABLE>

3. Definitions of the terms used in this Regulation for products shall be set out in Annex I, terms concerning alcoholic strengths in Annex II and wine-growing zones in Annex III. Detailed rules for the implementation of those Annexes may be adopted in accordance with the procedure laid down in Article 75.

4. The wine production year for the products covered by this Regulation (hereinafter referred to as the "wine year") shall begin on 1 August each year and end on 31 July of the following year.

TITLE II

PRODUCTION POTENTIAL

CHAPTER I

PLANTING OF VINES

Article 2

1. Planting with vines of wine grape varieties classified pursuant to Article 19(1) shall be prohibited until 31 July 2010 unless carried out pursuant to:

(a) a new planting right, as referred to in Article 3;

(b) a replanting right, as referred to in Article 4; or

(c) a planting right granted from a reserve, as referred to in Article 5 or in Article 6(1) in the case of the application of Article 5(8).

Until the same date, grafting of wine grape varieties on to varieties other than wine grape varieties shall also be prohibited.

2. Grapes obtained from areas:

(a) where vines have been planted before 1 September 1998, and

(b) whose production, according to Articles 6(3) or 7(4) of Regulation (EEC) No 822/87, could only be disposed of by distillation,

may not be used for producing wine which is to be marketed. Products made from such grapes may be put into circulation only for the purposes of distillation. However, these products may not be used in the preparation of alcohol having an actual alcoholic strength by volume of 80 % vol or less.

3. Where a Member State has compiled the inventory of wine production potential in accordance with Article 16, it may derogate from paragraph 2 of this Article. Such a derogation shall be granted by 31 July 2002 and shall involve permission being granted for the areas concerned to produce wine which is to be marketed.

The derogation shall be granted:

(a) where the producer concerned had previously grubbed up other vines on an equivalent area in terms of pure crop except in cases where the grower concerned has received a premium for grubbing-up under Community or national legislation in respect of the area concerned; and/or

(b) by permitting the use of replanting rights where a producer has obtained them within a period to be fixed subsequent to the planting of the area concerned; Member States may also use the newly created planting rights for this purpose under Article 6(1); and/or

(c) where the Member State can prove (to the satisfaction of the Commission) that it has unclaimed replanting rights which would still be valid if they had been applied for; such rights may be used and reallocated to producers for an area equivalent in pure crop; and/or

(d) where the producer concerned had undertaken to grub up an area equivalent in terms of pure crop, within a period of three years, where that area has been entered in the Vineyard Register of the Member State concerned.

4. Where paragraph 3(a) or (c) is applied, Member States shall impose an appropriate administrative penalty on the producers concerned.

5. Paragraph 3(c) may only be used in respect of an area no greater than the limit of 1,2 % of the area under vines.

6. Where paragraph 3(b) is applied:

(a) where the grower obtains the rights from a reserve, these may only be obtained under Article 5(3)(b) and he shall pay 150 % of the price normally charged by Member States under that provision, or

(b) where the grower purchases a replanting right, this shall cover the area concerned, plus 50 %, which latter amount shall be transferred to the reserve or the reserves in accordance with Article 5 or added to the volume of newly created planting rights in Article 6(1) where Article 5(8) is applied.

7. Areas planted with vines of wine grape varieties classified pursuant to Article 19(1):

(a) planted from 1 September 1998 whose production according to Articles 6(3) or 7(4) of Regulation (EEC) No 822/87 could only be disposed of by distillation, or

(b) planted in breach of the prohibition on plantings in paragraph 1,

shall be grubbed up. The expenses of such grubbing up shall be borne by the producer concerned. Member States shall take the measures necessary to ensure that this paragraph is applied.

Article 3

1. Member States may grant new planting rights to producers in respect of areas:

(a) intended for new planting carried out under measures for land consolidation or measures concerning compulsory purchases in the public interest adopted under national legislation,

(b) intended for wine-growing experiments, or

(c) intended for graft nurseries.

Member States may also grant new planting rights in respect of areas whose wine or vine products are intended solely for the consumption of the vine grower's family.

2. Member States may also grant new planting rights no later than 31 July 2003 for areas for the production of a quality wine prs or a table wine described by means of a geographical indication where it has been recognised that, owing to its quality, the production of the wine in question is far below demand.

3. New planting rights shall be used by the producer to whom they were granted, in respect of the areas and for the purposes for which they were granted.

4. New planting rights shall be used before the end of the second wine year after the one in which they were granted. New planting rights other than those referred to in paragraph 1 not so used during this period shall be allocated to a reserve in accordance with Article 5(2)(a).

5. New planting rights other than those referred to in paragraph 1 may only be granted to producers within the quantities set out in Article 6(1). To this end:

(a) prior to the allocation of the newly created planting rights referred to in Article 6 to a reserve or reserves, Member States shall ensure that the grant of new planting rights does not reduce the volume of the newly created planting rights in Article 6(1) to a value less than zero; and

(b) once a Member State has allocated the newly created planting rights referred to in Article 6 to a reserve or reserves, the subsequent granting of a new planting right shall mean that a planting right corresponding to an equal area in terms of pure crop allocated to the reserve or reserves related to the region in question shall be extinguished. Should sufficient planting rights not be available in the reserve or reserves concerned, the grant of new planting rights may not take place.

Article 4

1. Replanting rights shall be:

(a) replanting rights granted under paragraph 2; or

(b) similar rights acquired under prior Community or national legislation.

2. Member States shall grant replanting rights to producers who have grubbed up an area of vines. Member States may grant replanting rights to producers who untertake to grub up an area of vines, before the end of the third year after which the area was planted. The replanting rights shall be for an area equivalent in terms of pure crop to that from which vines have been or are to be grubbed up.

3. Replanting rights shall be exercised on the holding in respect of which they were granted. Member States may further stipulate that such replanting rights may be exercised only on the area where the grubbing-up was carried out.

4. By way of derogation from paragraph 3, replanting rights may be transferred, in whole or in part, to another holding in the same Member State where:

(a) part of the holding concerned is transferred to that other holding. In this case, the right may be used on an area on the latter holding no greater than the area transferred; or

(b) areas on that other holding are intended for:

(i) the production of quality wines psr or table wines which are described by means of a geographical indication, or

(ii) for the cultivation of graft nurseries.

The rights may only be used in respect of the areas and for the purposes for which they were granted.

Member States shall ensure that the application of these derogations shall not lead to an overall increase in production potential on their territory, in particular when transfers are made from non-irrigated to irrigated areas.

5. Replanting rights acquired under this Regulation shall be used before the end of the fifth wine year after the end of the one during which the grubbing-up took place. By way of derogation, this period may be extended by Member States to up to eight wine years. Replanting rights not used during this period shall be allocated to a reserve pursuant to Article 5(2)(a).

Article 5

1. In order to improve the management of production potential, at a national and/or regional level, Member States shall create a national reserve, and/or as the case may be, regional reserves, of planting rights.

2. The following shall be allocated to the reserve or reserves:

(a) new planting rights, replanting rights and planting rights granted from the reserve which are not used within the time limits laid down respectively in Article 3(4), Article 4(5) and paragraph 6 of this Article;

(b) replanting rights allocated to the reserve by producers who hold such rights, where necessary in return for a payment from national funds, the amount of which, and any other detail of which, shall be determined by the Member States taking into account the legitimate interests of the parties;

(c) newly created planting rights, as referred to in Article 6.

3. Member States may grant the rights allocated to the reserve:

(a) without payment, to producers who are under 40 years of age, who possess adequate occupational skill and competence, who are setting up for the first time on a wine-producing holding and who are established as the head of the holding; or

(b) against payment into national and, if appropriate, regional funds, to producers who intend to use the rights to plant vineyards whose production has an assured outlet. The Member States shall define the criteria for setting the amounts of the payment which may vary depending on the final intended product of the vineyards concerned.

4. Member States shall ensure that the location where planting rights granted from a reserve are used, the varieties used and the cultivation techniques used guarantee that the subsequent production is adapted to market demand and that the yields concerned are typical of the average in the region where such rights are used, in particular, where planting rights originating in non-irrigated areas are used in irrigated areas.

5. Planting rights allocated to a reserve may be granted from it no later than the end of the fifth wine year following the one during which they were allocated to it. Planting rights not granted by that time shall be extinguished.

6. Planting rights granted from a reserve shall be used before the end of the second wine year after the one in which they were granted. Planting rights granted from a reserve not so used during this period shall be allocated to a reserve under paragraph 2(a).

7. When a Member State creates regional reserves, it may lay down rules permitting the transfer of planting rights between regional reserves. If regional and national reserves coexist in the same Member State, transfers between such transfers may also be permitted.

The transfers referred to in this paragraph may be subject to a reduction coefficient.

8. By way of derogation fram paragraphs 1 to 7, a competent authority of a Member State may choose not to implement the reserve system provided that the Member State can prove that an effective system for managing planting rights exists throughout its territory. That system may, where necessary, derogate from the relevant provisions of this Chapter. Where a Member State has such a system, replanting rights as referred to in the first sentence of Article 4(5) shall be extended by five wine years. The second sentence of Article 4(5) shall remain applicable.

Article 6

1. The newly created planting rights, including the new planting rights granted by the Member States under Article 3(2), shall be allocated as follows:

(a) Germany: 1534 ha

Greece: 1098 ha

Spain: 17355 ha

France: 13565 ha

Italy: 12933 ha

Luxembourg: 18 ha

Austria: 737 ha

Portugal: 3760 ha

(b) Community reserve: 17000 ha.

2. The newly created planting rights may only be allocated to a reserve or used under Article 2(3)(b) where the Member State has compiled the inventory of production potential in accordance with Article 16.

3. The allocation of the newly created planting rights referred to in paragraph 1 to a reserve or their use under Article 2(3)(b) may only take place once.

Article 7

1. The following definitions shall apply to this Chapter:

(a) grubbing-up means the complete elimination of all vine stocks on a plot planted with vines;

(b) planting means the definitive establishment of vine plants or parts of vine plants, whether or not grafted, with a view to producing grapes or to establishing a graft nursery;

(c) planting rights means the right to plant vines under a new planting right, a replanting right, a planting right granted from a reserve or a newly created planting right in accordance with the conditions laid down respectively in Articles 3, 4, 5 and 6;

(d) replanting right means the right to plant vines for an area equivalent in terms of pure crop to that from which vines have been grubbed up or are to be grubbet up in accordance with the conditions laid down in Article 4 and Article 5(8);

(e) grafting-on (surgreffage) means the grafting of a vine which has already been the subject of a previous grafting.

2. Detailed rules for the application of this Chapter shall be adopted in accordance with the procedure laid down in Article 75.

These rules may in particular include:

- the provisions governing the distillation of the products referred to in Article 2(7),

- provisions to avoid excessive administrative charges when applying the provisions of this Chapter,

- recognition referred to in Article 3(2)

- the coexistence of vines pursuant to Article 4(2),

- the application of the reduction coefficient referred to in Article 5(7),

- the operation of the Community reserve referred to in Article 6(1). In particular the rules may provide in the period up to 31 December 2003 for the allocation of newly created planting rights from the Community reserve to Member States for use in regions where it can be shown that there is additional need which could be met by the allocation of those newly created planting rights,

- provisions to ensure that the new planting rights granted in accordance with Article 3(1) do not undermine the ban on new plantings in Article 2(1).

3. By 31 December 2003, and at three-yearly intervals from the date, the Commission shall submit a report to the European Parliament and the Council on the operation of this Chapter. The report may be accompanied, if appropriate, by proposals for the grant of further newly created planting rights.

CHAPTER II

ABANDONMENT PREMIUMS

Article 8

1. A premium may be granted in return for the permanent abandonment of vine-growing on a particular area.

The premium may be granted, subject to the provisions of this Chapter, to producers of cultivated vine-growing areas for the production of wine grapes. The area concerned shall not be less than 10 acres.

2. Member States may designate in which areas, if any, the premium may the granted. They may also subject the designation to conditions, including those intended to ensure a balance between production and ecology in the regions concerned.

3. The grant of the premium shall cause the producer to forfeit any replanting rights in respect of the area for which the premium is granted.

4. Member States shall fix the level of the premium per hectare, taking into account:

(a) the agricultural yield or production capacity of the holding,

(b) the method of production,

(c) the area concerned in comparison with the area of the holding,

(d) the type of wine produced,

e) the existence of associated cultivation.

5. The level of the premium shall not exceed levels to be laid down.

Article 9

The following shall not qualify for the premium:

(a) cultivated wine-growing areas in respect of which infringements of Community or national provisions regarding planting have been recorded during a period to be determined which shall not exceed 10 wine years;

(b) wine-growing areas which are no longer tended;

(c) wine-growing areas which were planted during a period to be determined which shall not exceed to wine years;

(d) wine-growing areas which have received financing for their restructuring and conversion during a period to be determined which shall not exceed to wine years.

Article 10

Detailed rules for the application of this Chapter shall be adopted in accordance with the procedure laid down in Article 75.

These rules may in particular include:

(a) the dates for the submission of applications and for the execution of grubbing-up;

(b) conditions for the grant of payments;

(c) the maximum levels of the premium referred to in Article 8(5);

(d) environmental considerations;

(e) laying down the periods referred to in Article 9.

CHAPTER III

RESTRUCTURING AND CONVERSION

Article 11

1. A system for the restructuring and conversion of vineyards is hereby established.

2. The objective of the system shall be the adaptation of production to market demand.

3. The system shall cover one or more of the following measures:

(a) varietal conversion, including by means of grafting-on;

(b) relocation of vineyards;

(c) improvements to vineyard management techniques related to the objective of the system.

The system shall not cover the normal renewal of vineyards which have come to the end of their natural life.

4. Only in those regions of a Member State in respect of which the Member State has compiled the inventory of production potential in accordance with Article 16 shall there be access to the system.

Article 12

Member States shall be responsible for restructuring and conversion plans, including, where appropriate, the approval of plans. Plans shall comply with the rules laid down in this Chapter and implementing legislation.

Article 13

1. Support for restructuring and conversion shall only be granted in relation to plans which have been drawn up and, where necessary, approved by Member States. Support shall take the following forms:

(a) compensation of producers for the loss of revenue due to implementation of the plan, and

(b) contribution to the costs of restructuring and conversion.

2. The compensation of producers for loss of revenue may take either of the following forms:

(a) permission for the coexistence of both old and new vines for a fixed period which shall not exceed three years, notwithstanding the provisions of Chapter I of this Title; or

(b) financial compensation, which shall be funded by the Community.

3. The Community contribution to the costs of restructuring and conversion shall not exceed 50 % of those costs. However, in regions classified as Objective 1 in accordance with Council Regulation (EC) No 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds(52), the Community contribution shall not exceed 75 %. Without prejudice to Article 14(4), Member States may not contribute to the cost in either case.

Article 14

1. The Commission shall make initial allocations to Member States per year on the basis of objective criteria taking into account particular situations and needs, and efforts to be undertaken in the light of the objective of the scheme.

2. Initial allocations shall be adapted in view of real expenditure and on the basis of revised expenditure forecasts submitted by the Member States taking into account the objetive of the scheme and subject to funds available.

3. Financial allocation between Member State shall take due account of the proportion of the Community vineyard area in the Member State concerned.

4. Where a financial allocation in respect of a certain number of hectares has been made to a Member State, that Member State may use that financial allocation in respect of a greater number of hectares than that allocated. In this context, the Member State may use national funds to increase the reduced amount per hectare up to the level of the original ceiling per hectare of the Community allocation.

Article 15

Detailed rules for the implementation of this Chapter shall be adopted according to the procedure laid down in Article 75.

These rules may in particular include:

(a) a minimum size for the vineyard concerned;

(b) provisions governing the use of replanting rights arising from the implementation of plans;

(c) provisions aiming to prevent an increase in production potential arising out of this Chapter;

(d) maximum amounts of support per hectare.

CHAPTER IV

INFORMATION AND GENERAL PROVISIONS

Article 16

1. The inventory of production potential shall contain the following information:

(a) the areas under vines classified as varieties for the production of wine pursuant to Article 19(1) on the territory of the Member State concerned:

(b) the varieties concerned;

(c) the total stock of existing planting rights;

(d) any national or regional provisions adopted pursuant to this Title.

2. A Member State may provide that the inventory may be drawn up on a regional basis. However, in this case, all regional inventories shall be drawn up by 31 December 2001. In accordance with the provisions of this Regulation, failure by a region to draw up the inventory shall not prevent the application of this Title in other regions of that Member State.

Article 17

1. The Commission may assess:

(a) the production of wine-sector products;

(b) the industrial use of these products;

(c) the consumption trends for wine and other wine-sector products which are consumable without further processing;

(d) any other factor which needs to be known for the purposes of managing the market or a system for adjusting supply.

2. When making these assessments, the Commission may use external assistance.

3. The Commission shall fund an independent study on the use of interspecific varieties. On the basis of this study it shall present by 31 December 2003 a report to the European Parliament and the Council accompanied, if appropriate, by proposals.

Article 18

1. Producers of grapes for wine-making and producers of must and wine shall declare each year the quantities produced from the last harvest. Member States may also require merchants of grapes for wine-making to declare each year the quantities marketed from the last harvest.

2. Producers of must and wine, and merchants other than retailers, shall declare each year their stocks of must and wine, whether from the current year's harvest or from the harvest of preceding years. Must and wine imported from third countries shall be stated separately.

Article 19

1. Member States shall classify vine varieties for the production of wine. All classified varieties shall belong to the specifies Vitis vinifera or come from a cross between this species and other species of the genus Vitis. The following varieties may not be included in the classification:

- Noah

- Othello

- Isabelle

- Jacquez

- Clinton

- Herbemont.

2. In their classification, Member States shall indicate the vine varieties suitable for the production of each of the quality wines psr produced in their territory. These varieties shall be of the species Vitis vinifera.

3. Only those vine varieties which are shown in the classification may be planted, replanted or grafted within the Community for the purpose of wine production. This restriction shall not apply to vines used for scientific research and experiments.

4. Areas planted with vine varieties for the purpose of wine production not entered in the classification shall be grubbed up, save where the production of those areas is intended exclusively for the consumption of the wine producer' family. Member States shall take the measures necessary to monitor this exception.

5. Where varieties are deleted from the classification, grubbing-up shall take place within 15 years of their deletion.

Article 20

The rules governing the Community vineyard register shall be those set out in Regulation (EEC) No 2392/86.

Article 21

Chapters I and II of this Title shall not apply in Member States where wine production does not exceed 25000 hectolitres per wine year. This production shall be calculated on the basis of the average production during the last five wine years.

Article 22

Member States may adopt more restrictive national rules in respect of the new planting or replanting of vines or grafting-on. They may require that the applications and information provided for in this Title be supplemented by other information necessary for monitoring the development of production potential.

Article 23

1. Detailed rules for the application of this Chapter shall be adopted in accordance with the procedure laid down in Article 75.

They may in particular deal with:

(a) the format and level of detail of the information required for the inventory referred to in Article 16;

(b) the management of the classification of vine varieties referred to in Article 19;

(c) the destination of products from grape varieties which do not figure in this classification.

2. Provisions for an accompanying document for vine vegetative multiplication materials and detailed rules for its application, including those concerned with control, may be adopted in accordance with the procedure laid down in Article 75.

3. Regulation (EEC) No 2392/86 may be amended or repealed in accordance with the procedure laid down in Article 75.

4. In accordance with the procedure laid down in Article 75, it shall be decided whether a Member State has compiled the inventory referred to in Article 16, and whether that decision should be revoked in appropriate circumstances, including where the Member State has failed to update the inventory as necessary.

TITLE III

MARKET MECHANISMS

CHAPTER I

PRIVATE STORAGE AID

Article 24

1. Aid shall be granted to producers for the private storage of:

(a) table wine;

(b) grape must, concentrated grape must and rectified concentrated grape must.

2. The aid shall be granted subject to the conclusion with intervention agencies, between 16 December and 15 February of the following year and on conditions to be determined, of a long-term storage contract.

3. Long-term storage contracts shall be concluded for a period which ends:

(a) at the earliest, for table wines, on 1 September following the date of conclusion, and for grape musts, concentrated grape musts and rectified concentrated grape musts, on 1 August following the date of conclusion;

(b) at the latest, on 30 November following the date of conclusion.

Article 25

1. The conclusion of storage contracts shall be subject to conditions relating in particular to the quality of the products in question.

2. For table wines, storage contracts shall contain provisions for the termination of aid payments and of the producer's corresponding obligations in respect of all or part of the quantities stored if market prices for the type of table wine concerned rise above a level to be fixed.

3. The amount of private storage aid may cover only technical storage costs and interest charges, both of which shall be fixed at a standard rate.

4. For concentrated grape musts, this amounts may be adjusted by a coefficient corresponding to the degree of concentration.

Article 26

1. Detailed rules for the application of this Chapter shall be adopted in accordance with the procedure laid down in Article 75.

These rules may in particular provide:

- for the fixing of the level, rate and coefficient referred to in Article 25,

- that long-term storage contracts for table wine may only be concluded for specific table wines,

- that grape musts which are the subject of a long-term storage contract may be converted, wholly or partially, into concentrated grape must or rectified concentrated grape must during the period of the contract,

- for rules concerning the application of the provision for the termination of aid payments as referred to in Article 25(2),

- that grape musts and concentrated grape musts intended for the manufacture of grape juice may not be the subject of a long-term storage contract,

- for the effective duration of contracts.

2. Under the procedure laid down in Article 75, it may be provided:

- that the private storage aid scheme shall not be applied if it is apparent from the market situation that the scheme is not justified,

- that the possibility of concluding further long-term storage contracts may be suspended at any time if this is justified by the market situation and in particular the rate at which contracts have already been concluded.

CHAPTER II

DISTILLATION

Article 27

1. The overpressing of grapes, whether or not crushed, and the pressing of wine lees shall be prohibited. The refermentation of grape marc for purposes other than distillation shall be prohibited.

2. Filtering and centrifuging of wine lees shall not be considered as pressing where:

(a) the products obtained are of sound, genuine and merchantable quality,

(b) the lees are not reduced to the dry state.

3. Any natural or legal person or group of persons, with the exception of the persons and groups referred to in paragraph 7, having made wine, shall be required to deliver for distillation all the by-products of that winemaking.

4. The quantity of alcohol contained in the by-products must be at least equal to 10 % in relation to the volume of alcohol contained in the wine produced if the wine has been made directly from grapes. Save in the case of derogations for technically justified cases, it may not be less than 5 % where the wine has been made by vinification of grape musts, partially fermented grape musts or new wines in fermentation. Should the relevant percentage not be reached, those subject to the obligation shall deliver a quantity of wine from their own production, thus ensuring attainment of that percentage.

Derogations may be made from paragraph 3 and the first subparagraph of this paragraph for categories of producers to be determined, for certain production regions and for wines subject to the distillation referred to in Article 28.

5. The delivery obligation set out in paragraph 3 may instead be satisfied by delivery of wine to a vinegar manufacturer.

6. Any natural or legal persons or groups of persons, with the exception of the persons and groups referred to in paragraph 7, who hold by-products of any processing of grapes other than vinification shall be required to deliver them for distillation.

7. Any natural or legal persons or groups of persons who process grapes harvested in wine-growing zone A or in the German part of wine-growing zone B, or on areas planted with vines in Austria shall be required to withdraw the by-products of such processing under supervision and subject to conditions to be determined.

8. Those subject to the obligations referred to in paragraph 3 or to that referred to in paragraph 6 may discharge that obligation by the withdrawal of the by-products of vinification under supervision and subject to conditions to be determined.

9. The buying-in price of grape marc, wine lees and of wine delivered for distillation under this Article shall be EUR 0,995 per % vol/h.

10. The price paid by the distiller may not be lower than the buying-in price.

11. The distiller may either:

(a) receive aid in respect of the product to be distilled, provided that the product obtained by distillation has an alcoholic strength of at least 52 % vol; or

(b) deliver the product obtained by distillation to the intervention agency; provided that it has an alcoholic strength of at least 92 % vol.

If wine has been processed into wine fortified for distillation before delivery to the distiller, the aid referred to in (a) shall be paid to the manufacturer of the fortified wine and the product of the distillation may not be delivered to the intervention agency.

12. It may be decided that delivery of the alcohol to the intervention agency may be replaced by delivery to an operator who has submitted a tender in the framework of sales organised for the disposal of the products of distillation which has been accepted under the procedure referred to in Article 31(1).

13. Paragraphs 1 to 12 shall not apply to grape juice or concentrated grape juice or grape must or concentrated grape must intended for the preparation of grape juice.

Article 28

1. Where wine is produced from a grape variety listed in the classification for the same administrative unit as both a wine grape variety and a variety for use for another purpose, any wine which is produced in excess of the normal quantity and which is not exported during the wine year concerned shall be distilled by a date to be determined. Except by derogation, it may not be moved except to a distillery.

2. The quantity of wine normally produced shall be determined from:

(a) the quantities produced during a reference period to be determined;

(b) the quantities of wine put to traditional uses.

3. The buying-in price of wine delivered for distillation under this Article shall be EUR 1,34 per % vol; it may vary during a given wine year provided that the average for that wine year remains EUR 1,34 per % vol.

4. The price paid by the distiller may not be lower than the buying-in price.

5. The distiller may either:

(a) receive aid in respect of the product to be distilled, provided that the product obtained by distillation has an alcoholic strength of at least 52 % vol; or

(b) deliver the product obtained by distillation to the intervention agency, provided that it has an alcoholic strength of at least 92 % vol.

If wine has been processed into wine fortified for distillation before delivery to the distiller, the aid referred to in (a) shall be paid to the manufacturer of the fortified wine and the product of the distillation may not be delivered to the intervention agency.

6. It may be decided that delivery of the alcohol to the intervention agency may be replaced by delivery to an operator who has submitted a tender in the framework of sales organised for the disposal of the products of distillation which has been accepted under the procedure referred to in Article 31(1).

7. This Article shall apply notwithstanding Article 1(2).

Article 29

1. The Community may provide support for the distillation of table wines and wines suitable for yielding table wines in order to support the wine market and, as a consequence, facilitate the continuation of supplies of wine distillate to those parts of the potable alcohol sector, where the use of such alcohol is traditional.

2. The support shall take the form of a primary aid and a secondary aid paid to distillers.

3. The primary aid shall be paid on the basis of the volume of table wine and wine suitable for yielding table wine which is destilled.

4. The primary aid shall be implemented on the basis of a system of contracts concluded between distillers and wine producers. A minimum price to be paid by distillers to wine producers shall be determined; it may vary during a given wine year provided that the average for that wine year remains at least EUR 2,488 per % vol.

5. The level of primary aid shall reflect:

(a) the need for the average minimum price to be paid by distillers to wine producers in a given wine year to respect the level referred to in paragraph 4;

(b) the need to maintain supplies to traditional outlets in the potable alcohol sector at competitive prices.

6. The secondary aid shall take the form of a payment to cover reasonable storage costs of the resultant product. It shall serve to facilitate the operation of the primary aid system.

Article 30

1. There may be a crisis distillation measure if there is an exceptional case of market disturbance caused by serious surpluses and/or problems of quality.

2. The measure shall have as its objectives:the elimination of specific pockets of surplus;

(a) the elimination of specific pockets of surplus;

(b) the assurance of supply continuity from one harvest to another.

3. The measure shall be voluntary on the part of producers.

4. The measure may be limited to certain categories of wine or certain areas of production. The measure may be applied to quality wine psr only at the request of the Member State concerned.

5. A criterion for introducing the measure may be a demonstrable deterioration, over time, in the market price for a category of wine or for wines from certain areas of production.

6. Should the Community use this measure for three years in succession, for a particular type of wine (in a particular area), the Commission shall draw up a report to the European Parliament and the Council on the persistent crisis including, if appropriate, proposals.

Article 31

1. Alcohol taken over by the intervention agency shall be disposed of either by public auction or by a tendering process. When disposing of such alcohol, as far as possible, the authorities shall avoid affecting the market outlets for alcohol traditionally dependent on the existence of such outlets. It may not be disposed of into the sector of alcohol destined for comestible use.

2. However, it may be decided that if the supply of the part of that sector where the use of wine alcohol is compulsory is not assured by means of the operation of Articles 27, 28 and 29, such alcohol may be disposed of into that sector.

Article 32

1. For the wines made by producers who have increased the alcoholic strength by adding sucrose or must having benefited from the aid referred to in Article 34, the buying-in price fixed for each distillation, with the exception of that referred to in Article 27, shall be reduced within each wine-growing area by a similar flat-rate amount calculated on the basis of the level of the aid referred to in Article 34 and the increase in the alcoholic strength prescribed for the wine-growing area concerned.

2. At the request of the producer concerned, the reduction shall apply only within the limits of the quantities subject to the increased alcoholic strength referred to in paragraph 1.

Article 33

1. Detailed rules for the application of this Chapter shall be adopted in accordance with the procedure laid down in Article 75.

These rules may in particular include:

(a) the derogations referred to in this Chapter;

(b) in respect of Articles 27 and 28, the conditions under which distillation is to be carried out, the assessment of the volume of alcohol contained in the wine produced, the conditions under which products may be delivered to the intervention agency, and the buying-in prices of the products of distillation which can be taken over by the intervention agencies or the criteria for fixing these prices;

(c) the minimums standards to be met by marc and lees;

(d) the conditions under which withdrawal under supervision as referred to in Article 27(7) may be carried out;

(e) the quantities of wine normally produced as mentioned in Article 28(2);

(f) the detailed mechanism for applying the measure referred to in Article 30, including the products covered by it, and the flow of the products of the products of distillation in particular to avoid any disturbance of the market in alcohol and spirituous beverages;

(g) the provision for the modulation of the buying-in price referred to in Article 28(3);

(h) the determination of the minimum price referred to in Article 29(4).

2. The amount of the aids referred to in Articles 27 and 28 which will enable the products obtained to be disposed of, the amount of the aids referred to in Article 29 and rules defining the circumstances which may lead to a triggering of the measure referred to in Article 30 and the level and form of the Community financial support for that measure shall be set by the procedure laid down in Article 75.

CHAPTER III

AIDS FOR SPECIFIC USES

Article 34

1. Aid is hereby established for the use of:

(a) concentrated grape musts;

(b) rectified concentrated grape musts,

produced in the Community, when they are used in order to increase alcoholic strengths of the wine products for which such increases are authorised within the meaning of this Regulation.

2. The grant of aid may be reserved for products coming from wine-growing zone C III if the trade patterns in must and coupage wines cannot be guaranteed without this measure.

3. The amount of aid shall be fixed in euro per % vol potential alcoholic strength and per hectolitre of concentrated grape must or rectified concentrated grape must, taking into account the difference between the cost of enrichment by means of these products and by means of sucrose.

Article 35

1. Aid is hereby established for the use of:

(a) grape musts and concentrated grape musts produced within the Community for the purpose of manufacturing grape juice or manufacturing other comestible products from such grape juice;

(b) grape musts and concentrated grape musts produced in zone C III for the purpose of manufacturing, in the United Kingdom and in Ireland, products falling within CN code 2206 00 in respect of which, pursuant to Annex VII, paragraph 2 of point C, the use of a composite name including the word "wine" may be allowed by these Member States;

(c) concentrated grape musts produced within the Community as the main element in a set of products marketed in the United Kingdom and Ireland with clear instructions for the consumer to obtain from it a beverage in imitation of wine (home-made wine).

2. By way of derogation from paragraph 1(b), where the geographical restriction related to the production of grape musts and concentrated grape musts referred to in that point gives rise to distortion of competition, it may be decided to extend the granting of the aid to grape musts and concentrated grape musts produced in regions of the Community other than zone C III:

3. The aids referred to in paragraph 1 shall be reserved for the use of products coming from vine varieties which are classified exclusively as wine grapes or as both a wine grape variety and variety for use for another purpose and may equally be granted to grapes of Community origin coming from the same varieties.

4. The amounts of aid must be fixed so that the supply costs for grape musts and concentrated grape musts originating in the Community are such that they may maintain their traditional market outlets.

5. A part to be determined of the aid provided for in paragraph 1(a) shall be set aside for the organisation of campaigns to promote the consumption of grape juice. The aid may, for the purposes of organising such campaigns, be fixed at a higher level than that resulting from the application of paragraph 4.

Article 36

Detailed rules for the application of this Chapter shall be adopted in accordance with the procedure laid down in Article 75.

These rules shall in particular include:

(a) the conditions for granting the aid referred to in Article 34(1);

(b) the measures necessary to ensure control of the use of the products referred to in Article 35(1);

(c) the amount of the aid referred to in Articles 34 and 35, which shall be fixed before the start of each wine year;

(d) the decision referred to in Article 35(2).

CHAPTER IV

GENERAL PROVISIONS

Article 37

Producers subject to the obligations referred to in Articles 27 and 28 shall be entitled to benefit from intervention measures under this Title provided that they have complied with the above obligations for a reference period to be determined. That period, and the detailed rules for the implementation of this Article, shall be adopted in accordance with the procedure laid down in Article 75.

Article 38

1. Where excessively high prices for a type of wine are recorded on the Community market and the situation is likely to continue, thereby disturbing that market, the necessary measures may be taken by the Commission.

2. To the extent necessary to support the market in table wines, interventions measures may be adopted in respect of the products listed in Article 1(2)(b) other than table wine in accordance with the procedure laid down in Article 75.

TITLE IV

PRODUCER ORGANISATIONS AND SECTORAL ORGANISATIONS

CHAPTER I

PRODUCER ORGANISATIONS

Article 39

1. "Producer organisation", if recognised under this Regulation, means any legal entity:

(a) which is formed on the own initiative of producers of products covered by this Regulation;

(b) which has in particular the aim of:

(i) ensuring that production is planned and adjusted to demand, particularly in terms of quality and quantity;

(ii) promoting concentration of supply and the placing on the market of the products produced by its members;

(iii) reducing production costs and stabilising producer prices;

(iv) promoting the use of environmentally sound cultivation practices, production techniques and waste-management practices in particular to protect the quality of water, soil and landscape and preserve and/or encourage biodiversity.

2. Producer organisations recognised under this Regulation shall be required to be able to impose appropriate penalties on their members for infringement of obligations under the rules of association

3. Member States may recognise as producer organisations for the purposes of this Regulation, all producer groups applying for such recognition, on condition that:

(a) they meet the requirements laid down in paragraphs 1 and 2 and provide the relevant evidence, including proof that they have a minimum number of members and cover a minimum volume of marketable production;

(b) there is sufficient evidence that they can carry out their activities properly, both over time and in terms of effectiveness;

(c) they effectively enable their members to obtain technical assistance in using environmentally sound cultivation practices.

Article 40

1. Member States shall:

(a) decide whether to grant recognition to a producer organisation within three months of the lodging of an application with all supporting documents;

(b) carry out checks at regular intervals to ascertain that producer organisations comply with the terms and conditions for recognition, impose in the event of non-compliance the penalties to apply to such organisations and decide, where necessary, to withdraw recognition;

(c) notify the Commission, within two months, of every decision to grant or withdraw recognition.

2. The Commission shall check that Article 39 and paragraph 1(b) of this Article are complied with by carrying out checks and in the light of such checks shall, where appropriate, call on Member States to withdraw recognition.

CHAPTER II

SECTORAL ORGANISATIONS

Article 41

1. In order to improve the operation of the market in quality wines psr and table wines described by means of a geographical indication, producer Member States, particularly in implementing decisions taken by sectoral organisations, may lay down marketing rules to regulate supply on first marketing, provided that such rules relate to the retention and/or gradual release of produce, to the exclusion of any other concerted practice such as:

- price fixing, even for guidance or by way of recommendation,

- rendering unavailable an excessive proportion of the vintage that would normally be available and, in general, any abnormal operation to curtail supply,

- refusing to issue the national and/or Community attestations needed for the circulation and marketing of wine products where such marketing is in accordance with those rules.

2. The rules referred to in paragraph 1 must be brought to the attention of operators, in extenso, by publication in an official publication of the Member State concerned.

3. Every year Member States which have availed themselves of the possibilities offered by paragraph 1 shall report to the Commission on decisions adopted the previous year by virtue of those possibilities. The Commission shall examine whether they comply with Community law, in particular the rules on free movement (Articles 28 to 31 of the Treaty), and competition (Articles 81 to 86 of the Treaty) and the principle of non-discrimination (Article 34(3) of the Treaty).

4. The organisations referred to in paragraph 1 shall carry out several of the following measures in one or more regions of the Community, taking account of the interests of consumers:

(i) improving knowledge and the transparency of production and the market;

(ii) helping to coordinate better the way products are placed on the market, in particular by means of research and market studies;

(iii) drawing up standard forms of contract compatible with Community rules;

(iv) exploiting more fully the potential of production;

(v) providing the information and carrying out the research necessary to adjust production towards products more suited to market requirements and consumer tastes and expectations, in particular with regard to product quality and protection of the environment;

(vi) seeking ways of restricting the use of plant-health products and other inputs and ensuring product quality and soil and water conservation;

(vii) developing methods and instruments for improving product quality at all stages of production, vinification and marketing:

(viii) exploiting the potential of and protecting organic farming as well as designations of origin, quality labels and geographical indications;

(ix) promoting, in particular, integrated production or other environmentally sound production methods.

TITLE V

OENOLOGICAL PRACTICES AND PROCESSES, DESCRIPTION, DESIGNATION, PRESENTATION AND PROTECTION

CHAPTER I

OENOLOGICAL PRACTICES AND PROCESSES

Article 42

1. Authorised Community oenological practices and processes are established for the production of the products covered by this Regulation other than grape juice and concentrated grape juice and grape must and concentrated grape must intended for the preparation of grape juice.

2. Authorised oenological practices and processes may only be used for the purposes of ensuring proper vinification, proper preservation or a proper refinement of the product.

3. Authorised oenological practices and processes shall exclude the addition of water, except where required by specific technical necessity, as well as the addition of alcohol, except for fresh grape must with fermentation arrested by the addition of alcohol, liqueur wine, sparkling wine, wine fortified for distillation and, in conditions to be determined, semi-sparkling wine.

4. Member States may, in respect of oenological practices and processes, impose stricter conditions to ensure the preservation of the essential characteristics of quality wines psr, table wines which are described by a geographical indication and are produced in their territory, sparkling wines and liqueur wines. They shall communicate these conditions to the Commission, which shall bring them to the attention of the other Member States.

5. Except where otherwise decided, only grapes belonging to varieties listed in the classification established in accordance with Article 19 as wine grape varieties, or products derived therefrom, may be used in the Community for the manufacture of:

(a) grape must with fermentation arrested by the addition of alcohol;

(b) concentrated grape must;

(c) rectified concentrated grape must;

(d) wine suitable for yielding table wine;

(e) table wine;

(f) quality wines psr;

(g) liqueur wine;

(h) grape must in fermentation, extracted from raisined grapes;

(i) wine from over-ripened grapes.

6. Coupage of a wine suitable for yielding a white table wine or of a white table wine with a wine suitable for yielding a red table wine or with a red table wine may not yield a table wine.

However, this provision shall not prevent, in certain cases to be determined, such a coupage as referred to in the first subparagraph, provided that the resultant product has the characteristics of a red table wine.

By way of derogation from the first subparagraph, such a coupage shall be permitted until 31 July 2005, in areas where such a practice was traditional, in accordance with detailed rules to be laid down.

Article 43

1. The authorised oenological practices and processes are set out in Annex IV and Annex V.

2. In particular:

- authorised oenological practices and processes concerning enrichment, acidification, deacidification and sweetening, and rules concerning sulphur dioxide content and maximum volatile acid content, are set out in Annex V, points A to G,

- authorised oenological practices and processes and rules concerning the production of sparkling wine and quality sparkling wine are set out in points H and I of Annex V,

- authorised oenological practices and processes and rules concerning the production of liqueur wine are set out in point J of Annex V.

Article 44

1. Of the products falling within CN codes 2204 10, 2204 21 and 2204 29, only liqueur wines, sparkling wines, aerated sparkling wines, semi-sparkling wines, aerated semi-sparkling wines, quality wines psr, table wines and where appropriate, notwithstanding Article 45, legally imported wines may be offered or delivered for direct human consumption within the Community.

2. Except for bottled wine in respect of which there is evidence that bottling was performed prior to 1 September 1971, wine other than quality wine psr obtained from the vine varieties referred to in Article 42(5) but not corresponding to the definitions contained in items 12 to 18 of Annex I may be used only for consumption by individual wine-producers' families, for the production of wine vinegar or for distillation.

3. In years when climatic conditions have been unfavourable, it may be decided that products from wine-growing zones A and B which do not possess the minimum natural alcoholic strength by volume laid down for the wine-growing zone in question may be used in the Community for the production of sparkling wine and aerated sparkling wine, provided that such wines have an actual alcholic strength by volume of not less than 8,5 % vol, or for the production of aerated semi-sparkling wine. In that event, they shall be enriched subject to the limits referred to in paragraph 5 of point D of Annex V.

4. Without prejudice to any more restrictive provisions which Member States apply with respect to this preparation in their territory of products not falling within CN codes 2204 10, 2204 21 and 2204 29, fresh grape must with fermentation arrested by the addition of alcohol may be used only in the preparation of such products.

5. Grape juice and concentrated grape juice originating in the Community may not be made into wine or added to wine. These products shall be subject to control with respect to their use. They may not undergo alcoholic fermentation in the territory of the Community.

6. The provisions of paragraphs 4 and 5 shall not apply to products intended for the production, in the United Kingdom and Ireland, of products falling within CN code 2206 00 for which, pursuant to Annex VII, paragraph 2 of point C, Member States may allow the use of a composite name including the word "wine".

7. Wine suitable for yielding table wine which does not reach the minimum actual alcoholic strength by volume for table wines may not be put into circulation except for the production of sparkling wine, vinegar making, distillation and other industrial uses. The enrichment of such wine and coupage thereof with a table wine in order to bring its actual alcoholic strength by volume up to the level laid down for a table wine may take place only on the premises of the wine-maker or on his behalf.

8. With the exception of alcohol, spirits and piquette, neither wine nor any other beverage intended for direct human consumption may be made from wine lees or grape marc.

9. Piquette, where its production is authorised by the Member State concerned, may be used only for distillation or for consumption in the families of individual wine-growers.

10. Wine fortified for distillation may only be used for distillation.

11. Grape must in fermentation, extracted from raisined grapes, may be put on the market only for the manufacture of liqueur wines only in the wine-growing regions where this usage was traditional on 1 January 1985, and wine of overripe grapes.

12. Fresh grapes, grape must, grape must in fermentation, concentrated grape must, rectified concentrated grape must, grape must with fermentation arrested by the additional of alcohol, grape juice and concentrated grape juice originating in third countries may not be turned into wine or added to wine in the territory of the Community.

13. The products referred to in paragraph 12 may not undergo alcoholic fermentation within the territory of the Community. This provision shall not apply to products intended for the production in the United Kingdom and Ireland of products falling within CN code 2206 00 for which, pursuant to Annex VII, paragraph 2 of point C, Member States may allow the use of a composite name including the word "wine".

14. Coupage of a wine originating in a third country with a Community wine and coupage in the geographical territory of the Community between wines originating in third countries shall be prohibited.

15. The Council may derogate from paragraph 12, the first sentence of paragraph 13 and paragraph 14, in accordance with the international obligations of the Community.

Article 45

1. Except by way of derogation, the following products may not be offered or disposed of for direct human consumption:

(a) products falling within CN codes 2204 30 10, 2204 21, 2204 29 and 2204 10, whether imported or not, which have undergone oenological practices not authorised by Community rules or, where this is permitted, by national rules;

(b) products as referred to in Article 1(2)(a), (b) and (c) which are not of sound and fair merchantable quality;

(c) products as referred to in Article 1(2) which do not comply with the definitions shown in Annex I.

2. The derogations referred to in paragraph 1 for imported products shall be adopted in accordance with the procedure laid down in Article 133 of the Treaty.

Article 46

1. Detailed rules for the application of this Chapter, and Annexes IV and V, shall be adopted in accordance with the procedure laid down in Article 75.

These rules shall, in particular, provide for:

(a) in respect of point A of Annex V, transitional measures concerning wines produced before 1 September 1986 and amendments to the lists of wines in paragraph 2;

(b) in respect of Annexes IV and V, the limits and certain conditions for the use of the oenological practices and processes referred to in those Annexes, with the exception of limits and conditions fixed in those Annexes;

(c) the decisions, exceptions, derogations, conditions and lists referred to in this Chapter and Annex V;

(d) the application of points C to G of Annex V to products harvested in Community regions not included within the wine-growing zones specified in Annex III;

(e) in respect of point J of Annex V, the lists referred to in paragraphs 2(b) and 6 thereof, the derogations referred to in paragraph 4(b) and the declaration and registration procedure referred to in paragraph 6.

2. The following rules shall be adopted according to the procedure laid down in Article 75:

(a) the rules governing the comparison between certain oenological practices and processes applied in third countries and those referred to in Article 43(1) and Annex IV;

(b) provisions regulating the blending and coupage of musts and wines;

(c) the purity and identification specification of substances used in oenological practices;

(d) administrative rules for carrying out the oenological practices and processes authorised; these rules may provide that certain oenological practices and processes may only be carried out under the supervision of a person recognised by the Member State who possesses sufficient knowledge to guarantee the quality, hygiene and healthiness of the product;

(e) the conditions governing holding and circulation, the use of products as referred to in Article 45 or lists of products excepted from the requirements of that Article, and the establishment of criteria for the purpose of avoiding hardship in individual cases, the conditions under which Member States may authorise the holding, circulation and use of products not complying with the provisions of this Regulation other than those referred to in Article 45(1), or with provisions adopted pursuant to this Regulation;

(f) the general rules for the experimental use of otherwise unauthorised oenological practices and processes.

3. The methods of analysis for determining the composition of the products covered by this Regulation and the rules whereby it may be established whether these products have undergone processes contrary to authorised oenological practices shall be adopted in accordance with the procedure laid down in Article 75.

Using the same procedure there shall be adopted, if required, maximum figures for substances whose presence indicates that certain oenological practices have been used, and comparative analysis tables.

However, where no provision is made for Community methods of analysis or for the rules referred to in the first subparagraph for the detection and quantification of substances sought in the product in question, the methods of analysis to be used shall be:

(a) those recognised by the General Assembly of the International Vine and Wine Office (IWO) and published by that Office, or

(b) where an appropriate method of analysis does not appear among those referred to in point (a), a method of analysis complying with the standards recommended by the International Organisation for Standardisation (ISO), or

(c) in the absence of either of the methods referred to in points (a) and (b) and by reason of its accuracy, repeatability and reproducibility:

(i) a method of analysis allowed by the Member State concerned, or

(ii) if necessary, any other appropriate method of analysis.

Automatic methods of analysis used instead of a Community method of analysis shall be considered equivalent to the Community methods of analysis referred to in the first subparagraph, provided it is established, under the procedure laid down in Article 75, that the results obtained are, as to their accuracy, repeatability and reproducibility, at least equal to the results obtained by the corresponding Community method.

CHAPTER II

DISCRIPTION, DESIGNATION, PRESENTATION AND PROTECTION OF CERTAIN PRODUCTS

Article 47

1. Rules relating to the description, designation and presentation of certain products covered by this Regulation, and the protection of certain particulars and terms are set out in this Chapter and in Annexes VII and VIII. The rules shall take into account, in particular, the following objectives:

(a) the protection of the legitimate interests of consumers;

(b) the protection of the legitimate interests of producers;

(c) the smooth operation of the internal market:

(d) the promotion of the production of quality products.

2. The rules mentioned in paragraph 1 shall include, in particular, provisions:

(a) making the use of certain terms compulsory;

(b) permitting the use of certain terms, subject to conditions;

(c) permitting the use of other terms, including information which may be useful for consumers;

(d) governing protection and control arrangements for certain terms;

(e) governing the use of geographical indications and traditional terms;

(f) governing the labelling of products which are imported or, where authorised under this Regulation, made from those products, in order to ensure that the consumers are aware of the nature of the product concerned and that the latter is not lab