Table of Contents 1.INTRODUCTION 2.BACKGROUND AND FRAMEWORK OF THE INTERVENTION 2.1.Description of the EU wine sector and wine policy 2.2.Other CAP measures 2.3.Market prospects for wine 3.Implementation 3.1.Overview of the budgets and execution of the national support programmes 3.2.Implementation of the authorisation scheme for vine plantings 4.Method 4.1.Data collection tools 4.2.Counterfactual analysis 4.3.Analytical tools 4.4.Limitations of the evaluation and robustness of findings 5.Analysis and answers to the evaluation questions 5.1.Effectiveness 5.2.Efficiency 5.3.Coherence

5.4.Relevance 5.5.EU added value 6.CONCLUSIONS 6.1.Effectiveness 6.2.Efficiency 6.3.Coherence of measures in the national support programmes 6.4.Relevance and EU added value57 6.5.Main lessons learned58 Annex 1: Procedural information60 Annex 2: Stakeholder consultation62 ANNEX 3: THEORETICAL ANALYSIS AND INTERVENTION LOGIC OF THE MEASURES92 ANNEX 4: DETAILS OF THE IMPLEMENTATION100 ANNEX 5: METHOD105 ANNEX 6: REFERENCES110



Glossary AWU CAP COMTRADE EC EMCS EU EUR FADN FAO FNVA GI ha MS OIV Oenological practices PDO PGI SWOT UAA USA USDA Varietal wine









Annual work unit Common agricultural policy TEST United Nations International Trade Statistics Database European Commission Excise Movement and Control System European Union Euro (official currency of the Eurozone) Farm Accountancy Data Network Food and Agriculture Organization of the United Nations Farm net value added Geographical indication Hectare (unit of area equal to 10 000 m²) Member State International Organisation of Vine and Wine Wine making practices Protected designations of origin Protected geographical indications Strengths, weaknesses, opportunities, threats Utilised agricultural area United States of America United States Department of Agriculture A varietal wine is a wine made primarily from a single named grape variety , and which typically displays the name of that variety on the wine label . Examples of grape varieties commonly used in varietal wines are Cabernet Sauvignon , Chardonnay and Merlot .





1.INTRODUCTION The EU is the world’s leading producer, consumer and exporter of wine. In a context of declining domestic consumption and growing opportunities on the world market, the wine sector has increasingly shifted its focus on competitiveness and quality rather than on volumes of production. The EU’s wine policy, as part of the common agricultural policy (CAP), has played a key role in this transition. Initially, the EU’s wine market policy aimed to manage annual variations in production. It has evolved over the years to concentrate on improving competitiveness and enhancing the reputation of EU wines, the simplification of market management rules, and on preserving the best traditions of EU wine growing, boosting its social and environmental role in rural areas. The purpose of this evaluation is to assess the effects of the various instruments applicable to the wine sector under the Common Market Organisation Regulation. These instruments are national support programmes (support measures in the wine sector which strengthen competitive structures), an authorisation scheme for vine planting, marketing and labelling rules , rules on protected designations of origin (PDO) and protected geographical indication (PGI) wines, certification, monitoring and control systems, oenological (i.e. winemaking) practices and restrictions, vineyard registers, and marketing rules to regulate supply. For 2014-2018, the overall budget assigned to the national support programmes amounted to EUR 5 507 million. The budget for all CAP measures applicable to the wine sector amounted to EUR 6 243 million (including the budget transferred to the single payment scheme). This evaluation assesses the effectiveness, efficiency, relevance, coherence and EU value-added of the EU wine policy. Evaluating policies regularly is an obligation laid down in article 34(1) and (3) of the Financial Regulation applicable to the general budget of the Union of July 2018, and in article 110(1)(b), 2(a) and 3(b) of Regulation(EU) No 1306/2013 on the financing, management and monitoring of the common agricultural policy, which demands a periodical evaluation of the market measures. Besides the objective of ensuring viable wine production, the evaluation considers the other two general CAP objectives, namely the sustainable use of natural resources and climate action, and a balanced territorial development, with respect to the wine policy. The relevant measures contained in the rural development programmes are covered in the analysis of coherence, although the effects of these rural development measures on environment and rural development are not within the remit of the study. The evaluation also considers other EU objectives in relation to the EU’s wine policy, including public health and EU economic objectives regarding jobs, growth, innovation and support for small and medium-sized enterprises. The geographical scope of the evaluation is the EU-28 (i.e. including the United Kingdom). The analysis covers the period following the 2013 CAP reform, notably from 1 January 2014 onwards. The legislation referred to in the text is therefore that which was applied during the period evaluated, although it was updated and simplified in 2018 and 2019 to align it with the Lisbon Treaty. However, when relevant for the analysis, particularly when possible improvements are discussed, references are made to the new regulations that entered into force in March 2018 and in December 2019. 2.BACKGROUND AND FRAMEWORK OF THE INTERVENTION 2.1.Description of the EU wine sector and wine policy The EU is the world’s leading producer of wine. Between 2014 and 2018, the average annual production was 162 million hectolitres. The EU accounts for 44% of world wine-growing areas, 61% of production, 50% of global consumption and 67% of exports. Three Member States account for 76% of EU areas under vines: Spain, France and Italy. The EU’s main competitors are the United States, Argentina, Chile, Australia and South Africa. Close to 15% of EU domestic production of wine is exported to non-EU countries, while around 30% of it is traded on the EU market. Table 1: Area under vines (including table grape vines) 2000-2018 (in 1000 ha) Area (in 1000 ha) Area in 2018 versus earlier years (rate of change) 2000 2008 2012 2018 2018/2000 2018/2008 2018/2012 Spain 1 169 1 118 969 969 -17% -13% 0% France 907 846 792 793 -13% -6% 0% Italy 908 769 713 705 -22% -8% -1% Romania 248 192 192 191 -23% -1% -1% Portugal 244 246 233 192 -21% -22% -18% Greece 131 115 110 106 -19% -8% -4% Germany 104 102 102 103 -1% 1% 1% EU 3 989 3 596 3 288 3 243 -19% -10% -1% China 300 478 706 875 192% 83% 24% Turkey 575 517 497 448 -22% -13% -10% USA 413 411 442 439 6% 7% -1% Argentina 201 226 222 218 8% -4% -2% Chile 174 198 206 212 22% 7% 3% Iran 292 231 225 153 -48% -34% -32% India 43 73 125 151 251% 107% 21% Moldova 147 150 142 147 0% -2% 4% Australia 140 173 162 146 4% -16% -10% South Africa 124 132 135 126 2% -5% -7% World 7 779 7 533 7 505 7 449 -4% -1% -1% Source: OIV, FAO Note: In China, more than three quarters of grape production is dedicated to table grapes, whereas this accounts for a quarter of production in the USA and less than 10% in the EU. There are around 2.5 million wine growers in the EU (of which 854 000 in Romania alone) and 3.2 million ha of vineyards. The EU wine policy reform of 1999 aimed to balance supply and demand by restructuring vineyards. It led to a 10% reduction in vineyards between 2000 and 2008, mainly in Italy, Greece and France. In addition, the implementation of the voluntary and temporary grubbing-up scheme spread over three years (the 2009-2011 financial years) led to a further 8.5% drop in the area of vineyards in the EU (mainly in Spain, Italy and France) between 2008 and 2012. Since 2012, the EU area of vineyards has stabilised, due to a slower decrease in the area in the main EU producing countries (France, Italy and Spain), mainly for the reconversion of old vineyards, while significant decreases took place in Portugal and Greece. In the rest of the world, the area of vineyards grew by 11% between 2000 and 2012. Since then, it has also stabilised, the increases in China, the USA, Chile, Argentina and New Zealand being offset by declines in Australia and Brazil. The CAP is based on two ‘pillars’. The first pillar encompasses both the framework for market measures, defined by Common Market Organisation Regulation (EU) No 1308/2013, and direct payments to farmers, defined by Regulation (EU) No 1307/2013. The second pillar relates to the EU’s rural development policy and is defined by Regulation (EU) No 1305/2013. Measures applicable to the wine sector are described in the Common Market Organisation Regulation. They are subject to the ‘horizontal regulation’ that lays down the general rules for expenditures and the control system implemented by the Member States. Since the late 1970s, the main focus of the EU’s wine policy has been the balance between supply and demand, along with market management measures (such as distillation of surpluses) and planting restrictions. In addition, there have been several schemes aimed at reducing production (with reinforced financial incentives for giving up vineyards in the late 1980s, and a grubbing-up scheme in the late 2000s). Measures for the restructuring and conversion of vineyards have also been at the heart of the wine policy since 1999 on account of their positive structural effects on the wine sector. In a context of declining domestic consumption and increasing opportunities on a very competitive world market, the wine reform adopted in 2008 (Regulation (EC) No 1234/2007) had the following three goals: ·making EU wine producers even more competitive – improving the reputation of European wines and regaining market share both in the EU and outside;

·making the market management rules simpler, clearer and more effective – to achieve a better balance between supply and demand; ·preserving the best traditions of European wine growing and boosting its social and environmental role in rural areas. Focusing even more on competitiveness and quality, the 2013 reform (Regulation (EU) No 1308/2013) put an end to support for potable alcohol distillation and crisis distillation and limited enrichment by use of concentrated must. In compensation, it introduced measures to support the development of new products, processes and technologies in the wine sector. It also expanded promotion measures in EU countries, with a view to informing consumers about the responsible consumption of wine and about the EU systems covering designations of origin and geographical indications. It also extended the restructuring and conversion of vineyards to the replanting of vineyards where it is necessary following mandatory grubbing up for health or phytosanitary reasons. In addition to its general goals of harmonising, streamlining and simplifying the legislation, the planting rights regime was replaced in 2015 by an authorisation scheme for vine planting between 2016 and 2030, enabling competitive producers to increase production within certain limits. The new Common Market Organisation focuses on increasing the marketability of wine products and reinforcing the ability of producers to adapt to market demand. The specific objectives for the wine sector are: ·strengthening the competitiveness of the sector; ·ensuring a smooth functioning of the internal market, notably by increasing the marketability of wine products and ensuring an orderly growth of vine plantings; ·ensuring the quality of EU wine, taking into account consumer expectations; ·encouraging a responsible approach to crisis situations; ·protecting the environment. These objectives are addressed through two sets of measures: regulatory measures and national support programmes, as illustrated in the intervention logic below. Note: ‘R’ refers to recitals of Regulation (EU) 1308/2013. Source: Evaluation support study, Agrosynergie. The possibility of introducing decoupled income support for wine growers was made available after the wine Common Market Organisation reform in 2008. In 2014, the three countries with the lowest budgets, the United Kingdom, Malta and Luxembourg, transferred the whole of their national support programme budget to the single payment scheme. Among the large wine-producing countries, only Spain transferred part of its budget. In 2014, Greece transferred part of its budget to the single payment scheme, but from 2015 onwards it put all of its budget into the national support programme. In total, 13% of the EU national support programme budget was transferred to the single payment scheme. Specialised wine farms in the EU have an above-average income and, in most cases, do not depend on direct payments. At close to EUR 30 000 per annual working unit in 2017, specialised wine producers’ income was significantly above the EUR 21 500 average for all farms, according to data from FADN. Therefore, other forms of support (like restructuring) are more relevant to this sector. The national support programmes are the main support tool in the wine sector. The beneficiaries are wine growers and wine producers, i.e. not only primary crop producers but also processors, as a large share of wine processing takes place on farms. This policy tool is better adapted to the needs of the wine sector, because wine is a perennial crop with high planting and grubbing-up costs. In addition, there is not a single wine market and wine products are highly differentiated. Price is not the only factor influencing consumer choices and is determined partly by market equilibrium and partly by quality and reputation. The European Commission published a working paper in 2016 that provides guidelines for implementing the regulations in the national support programmes. The key measures eligible for these programmes are: ·promotion and marketing of EU wines, including information on responsible wine consumption; ·restructuring and conversion activities to increase competitiveness and adapt to consumer demand;

·investments in the wine sector targeting economic performance; ·support for by-product distillation to ensure the quality of wine, while protecting the environment; ·preventive instruments such as harvest insurance, mutual funds and green harvesting to encourage a responsible approach to crisis situations; ·innovation that can increase the marketability and competitiveness of EU grapevine products. More information on these measures is provided in the implementation chapter. Member States are not allowed to contribute to the costs of measures financed by the EU under the support programmes. Exceptions are granted for promotion, harvest insurance and investment (Article 212 of Regulation (EU) No 1308/2013), in which case the Member States must notify the European Commission of their decision to grant State aid. While the measures in the national support programmes are defined and financed by the EU, it is up to Member States to select an appropriate set of measures to meet the needs and particular situation of their regional and local stakeholders and to integrate them into national support programmes. An overview of the overall EU legal framework in the wine sector up to 2018 is presented in figure 39 in Annex 3. The regulatory instruments set out in Regulation (EU) No 1308/2013 applicable to the wine sector are summarised below and described in detail in Annex 4. In 2018, the European Commission introduced two new regulations applicable to the wine sector, Commission Delegated Regulation (EU) 2018/273 and Commission Implementing Regulation (EU) 2018/274. These regulations simplify some of the above provisions. The authorisation scheme for vine plantings (Articles 61 to 72 of Regulation (EU) No 1308/2013) establishes a safeguard mechanism for new plantings. This scheme does not apply in Member States that did not implement the previous planting rights system, and it is optional for Member States whose area under vines does not exceed 10 000 hectares. Member States can authorise the planting of vines with approved varieties on specific areas expressed in hectares, on the basis of applications by producers, within the limit of 1% of their total area of vines on 31 July of the preceding year. Member States are free to limit the issuing of authorisations at regional level. Any limitations must be justified by a well-demonstrated risk of: (a) oversupply of wine products; and/or (b) significant devaluation of a particular PDO/PGI. Member States are required to notify the Commission about the implementation of the authorisation scheme for vine plantings. The Common Market Organisation Regulation sets out rules on a vineyard register and inventory of production potential (Articles 145 to 147). The vineyard register aims to improve the management of this production potential. It is compulsory to maintain an updated vineyard register for Member States implementing the authorisation scheme for vine plantings or a national support programme. A certification system ensures the veracity of the information labelled on a wine product in order to protect consumers (Article 120). To facilitate verification by Member States, a satisfactory level of traceability must be ensured and maintained through rules for the transport of wine (Recitals 125 and 126 of the Common Market Organisation Regulation). The ‘accompanying document’ is one of the main tools for this purpose. This document may also be used to certify a wine’s origin, characteristics, vintage or wine grape variety and its status as a PDO or a PGI, if applicable. Commission Delegated Regulation (EU) 2018/273 provides for several measures to simplify trade in wine products and facilitate their movement (Recital 11), without impeding their traceability. The Common Market Organisation Regulation sets out labelling and presentation rules (Articles 117 to 123) for wine products , in order to ensure a smooth functioning of the EU market and fair competition, and to avoid consumers being misled. Wine labels must contain information about the category of the product, its alcoholic strength, the provenance, the bottler and the importer (in the case of imported wine products). Specific requirements exist for sparkling wines, such as the obligation to indicate the sugar content on the label. Optional information can be added on the packaging of the product, such as the vintage year, the name of the wine grape variety, the sugar content (optional for wine other than sparkling wine) and traditional terms reserved for PDO/PGI wines. The Common Market Organisation Regulation lays down general provisions on marketing standards and oenological practices (Articles 73 to 75 and 78 to 83) for wine. These concern substances used in production, production methods including oenological (i.e. winemaking) practices, definitions and restrictions of must and wine coupage and blending, and disposal of non-complying products. Only grape varieties belonging to the Vitis vinifera species or crosses between the Vitis vinifera species and other species of the genus Vitis are authorised for making wine products (excluding six specific varieties). Annex VIII of the regulation defines the authorised oenological practices for the enrichment, acidification and de-acidification of wine products according to wine- growing zones. The annex also provides general restrictions on the addition of water and alcohol, the use of fresh grapes, grape must and grape juice, blending of wines from non-EU countries and by-products. Commission Regulation (EC) No 606/2009 further detailed the list of authorised practices, including those for the specific characteristics of some types of wine products (sparkling wines, liqueur wines, coupage and rosé, and certain Hungarian and Slovak wines). That regulation was replaced in 2019 by Commission Delegated Regulation (EU) 2019/934, which entered into force on 7 December 2019 and contains rules very similar to those of Regulation (EC) No 606/2009. The scheme for protected designations of origin (PDO), protected geographical indications (PGI) and traditional terms (Articles 92 to 116) was set up to protect the legitimate interests of consumers and producers, ensure the smooth operation of the internal market and promote the production of quality products (Article 92 of Regulation (EU) No 1308/2013). It can apply to wine, liqueur wine, sparkling wine, partially fermented grape must and wine from raisined/overripe grapes. In 2018, there were close to 1 160 wine PDOs and 440 PGIs in the EU, accounting for a market value of around EUR 39 418 million, i.e. 58% of EU wine production value . The designation of origin consists of the name of a region, a specific place or (in exceptional cases) a country used to describe a product. It can be used when the quality and characteristics of the wine product are essentially or exclusively due to a particular geographical environment with its inherent natural and human factors. The grapes used for its production must come exclusively from this geographical area, and its production must take place in this geographical area. In addition, the product must be obtained exclusively from the vine varieties belonging to Vitis Vinifera.

The geographical indication refers to a region, a specific place or (in exceptional cases) a country used to describe a product. It can be used when the wine product possesses a specific quality, reputation or other characteristics attributable to that geographical origin. At least 85% of the grapes used for its production must come exclusively from this geographical area, and its production must take place in this geographical area. The product must be obtained from the vine varieties belonging to Vitis Vinifera or a cross with other species of the genus Vitis. Designations of origin and geographical indications relating to geographical areas in non-EU countries can also be eligible for protection in the EU. Traditional terms are used to describe the characteristic of a PDO/PGI product (such as a production method, a quality, colour, type of place or a particular event linked to the history of the product) and also benefit from protection against unlawful use. Any misuse of the protected term, misleading indication or other practice likely to mislead the consumer is forbidden. The Common Market Organisation Regulation lays down provisions for imported wine products (Article 90). Except as otherwise provided for in international agreements, these products are subject to the same requirements as EU products regarding designation of origin and geographical indications, definitions and labelling. Imported wine products must be produced in accordance with oenological practices authorised by the EU or recommended by the OIV. Imported products are subject to presentation of an import document. 2.2.Other CAP measures The EU legal framework encompasses general provisions applying to the agricultural sector as a whole, with sometimes equivalent objectives to those of the Common Market Organisation measures applicable to the wine sector. This is particularly true for the Rural Development Regulation and the Regulation on information provision and promotion measures. 2.2.1.Rural Development Regulation The EU’s rural policy addresses a range of economic, environmental and social issues in rural areas. Member States are required to draw up national or regional rural development programmes adapted to the needs of their territories and responding to EU priorities such as fostering knowledge transfer and innovation in agriculture, forestry and rural areas. The rural development programmes encompass a set of measures to be adopted by Member States under Regulation (EU) No 1305/2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD). These include measures for knowledge transfer and innovation in agriculture, competitiveness of the agricultural sector and risk management in agriculture that may cover certain needs of the wine sector, such as: §organic farming – support can be granted, per hectare of agricultural area, to active farmers or groups of farmers to convert to, or maintain, organic farming practices and methods; §investments in physical assets – support can be granted for tangible and/or intangible investments which improve the overall performance and sustainability of the agricultural holding and/or concern the processing, marketing or development of agricultural products; §plant insurance – aid can be granted as financial contributions to premiums for plant insurance against economic losses to farmers caused by adverse climatic events, animal or plant diseases, pest infestation, or an environmental incident; §mutual funds – support can cover financial contributions to mutual funds, e.g. administrative costs of setting up the mutual fund or amounts paid by the mutual fund as financial compensation to farmers. The potential synergies between rural development support and wine support programmes were addressed in the evaluation question on coherence. 2.2.2.Regulation on information provision and promotion measures Regulation (EU) No 1144/2014 of the European Parliament and of the Council provides rules under which information provision and promotion measures for agricultural products implemented in the internal market and in non-EU countries may be fully or partially financed by the EU budget. Its objective is ‘to enhance the competitiveness of the Union agricultural sector, thereby bringing about greater competitive equity both in the internal market and in third countries’ (Recital 3) and, notably, to increase awareness and recognition of EU quality schemes. Its scope is therefore relatively close to the promotion measure provided for by the Common Market Organisation Regulation in the national support programmes. For wine products, the EU may finance information provision and promotion measures covering wine with protected designation of origin or geographical indication status and wine with an indication of the wine grape variety. This can occur either within the framework of ‘simple programmes,’ along with other types of products, or be limited to informing consumers about the specific scheme (quality, organic production method, etc.) and about responsible wine consumption. 2.2.3.Managing the risk of overlapping The Common Market Organisation Regulation aims to ensure consistency between national support programmes and the various EU regulations. National support programmes cannot support measures contained in Member States’ rural development programmes or research projects other than studies linked to promotion in non-EU countries. Moreover, the Commission has adopted specific rules to avoid potential double funding between a Member State’s wine support programme and its rural development or promotional programmes. 2.3.Market prospects for wine

The EU is the largest consumer of EU wines, with five Member States (France, Italy, Spain, Germany and the UK) accounting for over 70% of consumption of EU wines. Driven by health concerns and changing consumption patterns, the EU’s annual per capita consumption is decreasing. This trend is expected to continue, but at a slower rate (-0.4% per year), to reach around 25 litres per capita per year by 2030, although large differences between countries could remain. The wine sector is adapting to a new generation of consumers with changing lifestyles and preferences. In particular, red wine consumption, often associated with the traditional dinner at home, is decreasing across the EU. Demand for white, rosé and sparkling wines, which generally have a lower alcohol content and can be consumed on a variety of occasions, is growing. The overall declining consumption of wine, together with a further expected decline of the use of vinified production for ‘other uses’ (e.g. distillation and the production of ‘processed/elaborated products’) is projected to lead to a decline in total domestic use of vinified production (-0.5% per year) by 2030. In contrast, wine consumption has increased strongly in the United States, China, the UK, Russia, Australia and Canada. These markets represent new development potential for EU wine producers, along with those experiencing a recent increase in their per capita rate of consumption (Angola, Hong Kong and Macao). EU exports have grown strongly over the last decade (+6% per year). While the volume of exports has recently stabilised, their value has continued to grow. Despite strong competition from wine-producing countries outside the EU and possible trade tensions, in particular with the United States, EU exports are expected to keep growing to reach 26 million hectolitres in 2030 (+1% per year). The increase in exports is driven by the high demand for EU wines with a geographical indication and sparkling wines in general. Due to the decline in EU demand and the slowdown in trade, the EU’s wine production is projected to decline to 155 million hectolitres (-0.5% per year) by 2030, although with annual variability due to climatic conditions. The main reason for this decrease is the increasing abandonment of small vineyards (-0.9% per year) due to ageing farm owners and/or difficulties in competing on the market. Some of the abandoned vineyards will be replanted, particularly in zones eligible for producing GI wines. Abandonment of smaller areas and the resulting further concentration of wine production is not expected to lead to strong yield increases. Indeed, yields are being constrained to ensure the quality of wine (particularly GI wines) and the production of organic wines and wines using less farm inputs.

3.Implementation 3.1.Overview of the budgets and execution of the national support programmes The national support programmes are the main financial instrument of the wine common market organisation. For the 2014-2018 programming period, they were allocated a total budget of EUR 5 667 million. The Member States’ budgets for the national support programmes were set at EU level (agreed on by the European Parliament and the Council) as annual budgetary limits, in Annex VI of Regulation (EU) 1308/2013. They are above the former allocations in most Member States, and are quite similar to the ceilings for the 2009-2013 programming period . The budgetary limits for Spain, France and Italy amount to three quarters of the total ceiling. 2009 2010 2011 2012 2013 2014 2015-16 From 2017 Italy 238 298 294 341 337 337 337 337 France 172 227 224 284 280 281 281 281 Spain 214 265 136 215 210 210 210 210 Portugal 38 52 53 66 65 65 65 65 Romania 42 42 42 42 42 48 48 48 Germany 23 31 32 39 39 39 39 39 Hungary 17 23 24 29 29 29 29 29 Bulgaria 16 21 22 27 27 27 27 27 Greece 14 6 7 8 8 8 24 24 Austria 8 11 11 14 14 14 14 14 Croatia 12 12 11 Slovenia 4 5 5 6 6 5 5 5 Cyprus 3 4 4 5 5 5 5 5 Slovakia 3 4 4 5 5 5 5 5 Czechia 3 4 4 5 5 5 5 5 Lithuania 0.03 0.04 0.05 0.05 0.05 0.05 0.05 0.05 Luxembourg 0.3 0.5 0.5 0.6 0.6 0.6 Malta 0.2 0.3 0.3 0.4 0.4 0.4 UK 0.2 0.2 0.2 0.3 0.3 0.3 EU 796 994 863 1 087 1 073 1 084 1 106 1 105 Source: DG Agriculture and Rural Development, EC Regulation No 1308/2013 - Annex VI. The budget execution varies per year and per Member State. At EU level, it ranged between 88% and 94% over the 2014-2018 programming period. Within the national support programmes, Member States are free to choose and implement the measures best adapted to their needs, define the budget allocation and set the rate of EU support for each measure within the limits laid down in EU law. For the 2014-2018 period, the main EU measures from a financial point of view have been those for restructuring and conversion (49%), investments (22%) and promotion (18%). The newly introduced innovation measure has a low budget, and has been allocated to only Germany, Spain and Cyprus, with no uptake in Germany. The measure supporting the setting up of mutual funds (Article 48 of Regulation (EU) No 1308/2013) has never been implemented by any Member State. Note: EU expenditure, excluding the share of the budgets for national support programmes transferred to the single payment scheme. Source: DG Agriculture and Rural Development, monitoring data for the national support programmes. At Member State level, the restructuring and conversion measure has also been predominant, but specific national choices can be noted: §Eight Member States (Bulgaria, Czechia, Greece, Hungary, Portugal, Romania, Slovenia, Slovakia) chose to focus on a limited number of measures and/or to allocate above 70% of their budget to the restructuring and conversion measure. Romania and Bulgaria are the most striking cases, with more than 93% of their budget spent on restructuring and conversion. This is logical considering the degree of evolution of their wine sector in relation to PDO and PGI production; §Seven countries (Germany, Spain, France, Croatia, Cyprus, Italy, Austria) developed a different strategy, sharing the budget between different measures and allocating a large share to promotion and/or investment.

Source: DG Agriculture and Rural Development, monitoring data for the national support programmes. 3.2.Implementation of the authorisation scheme for vine plantings The new authorisation scheme has been implemented since 2016, in 13 Member States. The Member States’ implementation choices relate to the following, and are all optional: §Potential decision to limit the area to be made available for new plantings, by setting a percentage below the standard value of 1% of the total area planted with vines, or to limit the issuing of authorisations at regional level. §Selection of eligibility criteria, among the criteria set out in Article 64 of Regulation 1308/2013. §Potential selection of priority criteria (and weighting associated to each criterion) to grant new plantings instead of a pro-rata attribution. In 2018, out of the 26 490 hectares available for new plantings, 81% was granted. In six Member States, 100% or close to 100% of the available area was granted (Czechia, Germany, Spain, Greece, Italy, Portugal). In Italy in particular, where the percentage of area for new plantings was very low, applications greatly exceeded availability. In contrast, in France, where the largest area for new planting was available, only 71% of the available area was granted in 2018, because France applies regional limits. For more details, see Chapter 5.2.4. Member State % decided at national level in 2018 (max. 1%) Area available for new plantings (hectare) Area granted in 2018 (% of the area available) 2017 2018 Bulgaria 1% 604 606 19% Czechia 1% 177 178 100.0% Germany 0.3% 308 308 100.0% Greece 1% 628 627 100% Spain 0.52% 4 989 4 950 100.0% France 1% 7 939 8 101 71% Hungary 1% 642 652 86% Italy 1% 6 622 6 522 100.0% Austria 1% 476 483 53% Portugal 1% 1 932 1 916 100% Romania 1% 1 824 1 825 5% Slovenia 1% 156 156 58% Slovakia 1% 174 166 54% Total EU (13 MS) - 26 470 26 490 81%

Source: DG Agriculture and Rural Development, monitoring data for the national support programmes.



4. Method This chapter sets out the overall methodological approach adopted for this evaluation: it presents the data sources and collection tools, as well as the main analytical methods that were used. A detailed description of the methodology can be found in Annex 5. 4.1.Data collection tools Databases and information on policy implementation: These include the ‘grey literature’, reports and indicators available at EU and national level that provide information on the implementation of the regulations. Review and analysis of vineyard, wine and other databases: Eurostat data was given priority to provide contextual indicators. It was complemented by indicators from other databases, such as Member States’ price notifications, COMTRADE, the World Bank, the USDA and the FAO. Databases focusing on vineyards and on the wine sector, such as OIV and the vineyard register, provided key indicators on the structural changes in the wine sector since 2008. Case studies: To gather detailed and contextual qualitative and quantitative information to complement the EU-wide information, and to understand the implementation choices and the effects of the regulations in the Member States, 10 case studies were carried out at national and regional level in seven Member States. The selection procedure for the case studies and the case study reports are available as annexes to the evaluation support study carried out by Agrosynergie. Farm Accounting Data Network (FADN): A dataset from the FADN for 2009-2016 was analysed in order to identify changes in the cost of production, sale prices, value of assets, and income of growers. Interviews: In-depth semi-structured interviews were carried out with stakeholders, based on common interview guides, covering all topics in the evaluation questions. The aim was to understand the context in which stakeholders operate and formulate judgements. Questionnaire to Member States’ administrations: A questionnaire was used to collect specific quantitative data, to analyse how efficiently the regulations have been implemented. The questions focused on the workload and the indirect costs of implementing the national support programmes and the control and checks system. Internet research on the wine offerings of online retailers: Internet research was carried out to review the wine products of online retailers and to check the positioning of EU wines and their competitors in each product segment. The research included the online shops of 16 retailers, either wine specialists or large national or international food retail chains, from the main four wine-producing Member States: Italy, Spain, France and Portugal. Monographs of EU wine producers: Monographs of significant regional wine producers were drawn up within the framework of the case studies. The selected companies answered specific questions on actions that had been supported by the national support programmes. In all, 17 independent producers and cooperatives were selected (from 1-4 per case study). Consumer survey: A survey in four Member States assessed the increase in consumers’ awareness about the responsible consumption of wine and the EU system covering PDO/PGI, as well as their satisfaction with the safety and quality of wine products. The survey was conducted in two large wine-producing countries and two large net importer countries, and was answered by around 1 100 consumers. The outcome of this survey is detailed in Annex 2. Public consultation: This evaluation included a public consultation that ran from 7 March to 7 June 2019. Only 33 contributions were received by the closing date. Roughly a third of the respondents represented non-governmental organisations, another third represented a business organisation/association or trade union, and the remaining third represented a public authority or were EU citizens. The outcome of this consultation is detailed in Annex 2. 4.2.Counterfactual analysis In order to draw valid conclusions about the effects of the EU’s wine policy, it was necessary to compare it with a counterfactual situation where the policy did not exist. Depending on the purposes of the various evaluation questions, different counterfactual situations were used. Generally, the actual situation was compared to a theoretical situation without the measures, produced from the analysis of the intervention logic and based on economic approaches derived from the literature. This theoretical analysis of the expected effects of the measures helped to identify behaviour expected from economic actors faced with incentives or constraints deriving from alternative instruments. For the purposes of data analysis, an empirical counterfactual situation was also used. Before/after 2008 can be taken as a point of comparison, considering that, at the time of the previous evaluation in 2012, the reform had not been applied for long enough to allow meaningful conclusions to be drawn. Moreover, significant changes have occurred on the world wine market since then. 4.3.Analytical tools

The following analytical tools were used: statistical analysis, Strengths Weaknesses Opportunities Threats (SWOT) analysis, and matrix tabulation. 4.4.Limitations of the evaluation and robustness of findings The findings of the evaluation are robust, as they are underpinned by solid empirical analysis. However, several challenges were faced in the evaluation. The first challenge was that the extent to which national support programmes contributed to changes in productivity, costs and income could not be assessed in the evaluation support study. This was because the support received from these national support programmes was either not reported, or was poorly reported, in the FADN database. The second main challenge related to the duration of implementation of the regulations. Most regulations have been implemented with very few changes since 2008: this period is too long to make a comparison between the situation before the implementation of the regulations and after. Regarding the authorisation scheme for new plantings, the opposite problem arose: the very short implementation period of the scheme (applicable only since 2016) limited the assessment of its effects. The third main challenge was to distinguish the effects of the regulations from the effects of other factors, e.g. on the competitiveness of the EU wine sector. In a globalised market, a number of factors (in particular the world economic recovery after the 2008 crisis) may have impacted the sector and diluted the effects of the measures. The fact that Member States chose to implement different measures, due to a complex combination of local needs, political choices and external factors, limited the possibilities for comparisons between Member States. The last main challenge related to the availability of data and the accuracy of monitoring at national level. In particular, notifications to the European Commission on operations supported by the national support programmes did not provide enough information to be evaluated. Even though a sizeable amount of data was collected at national level to complement the information available at EU level, the analyses carried out for this evaluation were nevertheless limited. In addition, the evaluation was mainly concerned with the effects of the measures on competitiveness and market adaptation, which are a central objective of the national support programmes, and not with their effects on the environment and rural development. These were analysed in the evaluation questions related to the coherence and relevance of the policy. Unfortunately, participation in the public consultation was very low, with only 33 respondents, so the results are not representative and should be looked at with caution. The methodology for each evaluation question was developed to provide reliable evidence, in spite of these challenges. The extensive use of case studies and systematic cross-checking between sources helped to ensure the soundness of the results.



5.Analysis and answers to the evaluation questions 5.1.Effectiveness 5.1.1.Effects of national support programmes on the competitiveness, product quality and market orientation of wine growers The impact of the EU’s wine policy on the competitiveness of wine growers is assessed through changes in productivity, costs and income. The evaluation also looks at the adaptation of production to market demand, including for more quality products. This evaluation question relates mainly to the restructuring and conversion measure aimed at wine growers (the investment measure mainly targets wine processors). The competitiveness of wine producers is assessed in the next question. The productivity of wine farms is way above the average for farms in the EU, with a ratio of total output to total input of 144% in 2017 compared to 114% on average for all EU farms (FADN). The statistical analysis of the FADN dataset, isolating a sample of wine farms in seven Member States, showed an overall increase in the productivity and revenue of growers in 2009-2016. The statistics also highlighted very significant disparities in the income of growers both between Member States and between regions within Member States. To a lesser extent, significant gaps were also found between wine-producing growers and growers who sell their grapes: the former were found to have significantly higher but less stable revenue. Source: DG Agriculture and Rural Development, based on FADN.

However, as previously stated, the extent to which the national support programmes contributed to the observed changes could not be assessed in the evaluation, because the support received was either not reported, or was poorly reported, in the FADN database. In addition, the interviews with stakeholders in six Member States (sector representatives, national authorities, wine growers and researchers) also confirmed the influence of other factors on the revenue of growers, such as market trends, taxes, etc. As pointed out in the evaluation support study, the restructuring and conversion measure, amounting to half of the expenditure on national support programmes, was mainly used to change varieties, relocate production and improve management techniques. Some changes in management techniques, such as changes in density, aimed to mechanise the practices in vineyards and meet the requirements of PDO/PGIs. The selling price of PDO/PGIs is significantly above average, and the conversion to geographical indications can bring more value to farmers. The case studies revealed that the restructuring and conversion measure accelerated changes in the producing systems and in management practices at vineyards, especially by enabling large-scale mechanisation and plantings better adapted to water management (irrigation, higher drought-resistant varieties, management of diseases). Through the reduction of humidity thanks to lower densities, it may contribute in the long term to lowering the use of pesticides, though managing environmental issues was not a direct objective of the national support programmes. In addition, wine growers who also produce wine could use the investment support on machinery and promotional activities to increase their wine value. Source: Evaluation support study, Agrosynergie. Nevertheless, the statistical analysis of the costs of production revealed increasing production costs per hectare in most Member States. This does not mean that the measure had no effect on production costs. On the contrary, very positive opinions from the wine sector in the interviews testify to its actual contribution. For example, mechanisation led to a reduction in the cost of labour. However, positive effects may have partially been offset by other factors such as the increasing costs of wages, crop protection products, land rent costs, etc. Overall, it seems that the restructuring and conversion measure had a mitigating effect on the increase in production costs. Furthermore, in Romania, where the measure affected a very large share of professional wine growers, there has been a significant decrease in the cost of production since 2010, which can be linked to the implementation of the measure leading to increasing mechanisation. Similarly, the effect of the national support programmes on yields could not be quantitatively assessed. National support programmes financed, in part, the switch of vineyards to PDO/PGI production systems, which have lower yields, maximum yield ceilings and higher production costs than standard production systems. Furthermore, positive effects of the restructuring and conversion measure on yields and production costs might appear only in the longer term, since a vine needs at least three years before production and even more before cropping management is stabilised. In any case, significant yield increases are expected in a few Member States, such as Romania and Bulgaria, due to the replacement of old vineyards. The share of PDO/PGI in vinified production increased from 61.6% in 2009/2010 to 62.3% in 2018/2019. The vine area under GIs increased by 6% between 2009/2010 and 2018/2019, to 88% of vineyards. Despite the growing demand, the production of wines with an indication of the grape variety is still small in the EU. The national support programmes of seven Member States (Hungary, Italy, Portugal, Greece, Slovenia, Slovakia, Cyprus) clearly aimed to foster production of wines with PDO/PGI. In most cases, this objective was implemented through an eligibility criterion requiring that the supported area meets the requirement for the production of PDO or PGI wines. The results of the FADN analysis show that the EU’s wine policy has had a generally positive effect on the revenue of wine growers, through the restructuring and conversion measure, and of grower-producers, through investment in machinery and promotion,. The significant coverage of the measure (11% of the EU’s vineyard surface area) can make a difference in terms of competitiveness and advances in sustainable production. In addition, a majority of respondents to the public consultation agreed that the EU wine measures led to a more competitive and market-oriented wine sector. This was particularly highlighted by respondents involved in the wine business. The evaluation support study could not provide quantitative data to show that the restructuring and conversion measure resulted in actual conversion toward more market-adapted varieties. Nevertheless, all the case studies revealed the contribution of the measure to a better differentiation of varieties (varieties separated by plot), much better phytosanitary quality, and, in many cases, a focus on national and regional varieties to respond to the demand for unique, typical products. Conversion has often been carried out alongside other types of operation (e.g. relocation, installation of irrigation systems, land consolidation, etc.) and the relevance of the chosen variety could not be monitored. Nevertheless, the positive opinions of sector representatives and wine producers showed how the measure for the vineyards contributed to meeting current market trends. For example, in Veneto, the area planted with Glera - the variety used to produce Prosecco - increased significantly. Conversion and other types of operation have contributed to a general upgrade in the quality of grapes (e.g. through changes in density and use of improved clones) and to a significant increase of production under PDO/PGI. 5.1.2.Effects of the national support programmes on wine producers/ products and external trade Competitiveness depends on the EU wine sector’s capacity to produce and sell products in various markets with specific features that make them more attractive than the products offered by competitors. The evaluation support study concludes that the national support programmes have contributed to improving the key factors of competitiveness of EU wine producers, based on the analysis below. The investment measure was implemented by Member States to improve the processing facilities and reduce winemaking costs. Countries facing ageing industry infrastructure needed to support the modernisation of industrial equipment (Czechia, Germany, Croatia, Romania, Slovakia), whereas others already benefiting from a highly competitive and high-quality wine sector used the support to optimise their processing and marketing tools (France, Italy). Other Member States considered supporting dynamic and competitive wine holdings and decided to encourage the creation of larger-scale wine companies (Austria, Germany, Greece). As the case studies show, the measures under the national support programmes, notably the support for restructuring and investment, have been widely used by operators to improve efficiency and to develop new products adapted to consumer demand. Support for investment in modern equipment adapted to the production of new wine products (e.g. white and rosé wines) has also led to more efficiency in wine processing, bottling and marketing. These changes have helped to improve the quality of wine and the stability of products (Germany, Italy, France, Spain, Hungary, Romania). In Spain and Italy particularly, the investment support made it possible to shift from bulk to bottled wine and improve the overall quality by converting to PDO/PGI wines. The beneficiaries of the restructuring and investment support (winegrowers/producers) who were interviewed indicated that the progress achieved has contributed positively to their turnover and subsequently has improved their negotiating position in the supply chain. The investment measure also helped actors expand their activities further down the production chain (thereby fostering vertical integration). It supported the setting up of processing facilities on farms, leading to an increase in the number of independent wine makers, and made possible the development of on-farm sales, through the construction of tasting cellars. The FADN analysis showed that the average value of buildings per wine holding increased over 2014-2016, in all the Member States considered (Germany, Spain, France, Hungary, Portugal) except Italy. On-farm sales have resulted in better prices for producers, who have thereby enjoyed increased income (France, Germany). Access to foreign markets was also supported through the promotion measure. This support also led to improved horizontal cooperation, and resulting alignment and complementarity of strategies implemented by wine producers, notably in Italy and Portugal.

The national support programmes have helped EU wine producers adapt to market demand. There is more or less one year of consumption in stocks, although when the weather is particularly favourable stocks rise and the production of ‘processed/elaborated products’ increases slightly. However, no major issue of market balance was observed in 2014-2018, explaining why the green harvesting measure was used only once by one Member State (Italy), and then only marginally. This is particularly positive given the context of a past structural surplus. Per capita consumption is decreasing slightly in the EU. The main wine consumed in the EU is red wine, but red wine consumption is declining, while demand is growing for specific wine products such as rosé wines (notably in France) and sparkling wines. Rosé is also on the rise in the United States. According to the consumer survey, the same share of consumers (32%) look for protected geographical indications and for wines with an indication of the grape variety. In addition, consumers also look for wines produced from environmentally friendly practices (including organic), and they are attracted by features such as authenticity and identity. However, as the consumer survey and the internet research on the wine offerings of online retailers have shown, the key purchasing criteria differ according to the Member State, and retailers have adapted their product range: PGI wines are the predominant category of wine products offered by EU retailers, although retailers offer a larger proportion of wine products with an indication of the grape variety in the UK and non-EU countries. Source: Consumer survey, Agrosynergie, based on data collected by Ifop. PDO wines are often produced in the largest quantities in the EU, except in Spain. Their prices increased in France, Hungary and Italy over 2014-2016. This was not the case for other types of wine, and demonstrates once more the high demand for PDO wines. Wines with an indication of the grape variety are still produced in very small volumes in the EU. Their production has increased in Italy and Spain, but, as illustrated by the high share of non-EU varietal wines selected by retailers (53% based on internet research), EU supply is still below demand, to the benefit of imports. Stakeholders, particularly sector representatives and representatives of wine growers, also indicated that the varieties grown were converted to correspond to consumer demand, notably in France and Italy. These countries have made extensive use of the restructuring and investment measures to develop new products - rosé in France (Languedoc-Roussillon) and Prosecco in Italy (Veneto and Friuli Venezia Giulia). The promotion measure has also enabled producers to better identify consumers’ tastes and the expectations in foreign markets. Despite a 0.4% annual decline in its production over the last decade, the EU remains the world’s major producer of wine, with a share in world production of around 60%. As the total consumption of wine decreased in traditional EU markets (France, Italy, Germany), the EU producing countries had to look for growth potential, notably outside the EU. Over the last decade, EU exports grew by almost 50%, to 24 million hectolitres in the 2019 marketing year. The export value of wine products reached EUR 12 million in 2019. Spain, Italy and France are the main wine exporters, with French wine having more value on export markets, while Italy exports the largest quantities. The EU operates in a very competitive market: non-EU countries registered strong growth in their production between 2000 and 2018. Among them, the main producing countries are the United States, followed by Australia, Chile, South Africa and China. New Zealand and Argentina also export significant volumes of wine. The majority of exports are composed of still wines bottled (68%) and sparkling wines (16%), while the share of still wines exported in bulk (12%) and in bag-in-boxes (3%) remains modest. The evaluation support study shows that, from 2000 to 2017, EU bottled wine exports increased significantly towards extra-EU markets. They are essentially composed of PDO/PGI wines and oriented towards Canada, China, Russia and the United States. In addition, bulk wine trade increased in the EU market, with flows mainly oriented towards France and Germany and composed of non-PDO/PGI wines. Exports by types of packaging 2019 (in million hectolitres) % Still wines bottled 16 477 68% Sparkling wines 3 748 16% Still wines bulk 2 995 12% Still wines bag in boxes 652 3% Others 236 1% Total 24 108 100% Source: DG Agriculture and Rural Development, based on ESTAT. After a period of stabilisation in its production over the last decade, the EU remains the largest wine producer, with 61% of world production in 2018. In addition, the share of the EU in world wine trade is high and very stable (64% in volume over 2005-2018), meaning that the EU maintained its competitive position against efficient producers in non-EU countries. Note: The lower share of the EU in world trade in 2017 and 2018 is linked to the low EU harvest in 2017 due to adverse climatic events. Source: DG Agriculture and Rural Development, based on the OIV 2019 Statistical Report on World Vitiviniculture. According to COMTRADE data for 2016, the share of EU wine was predominant (above 50%) in the imports of the main wine-importing countries and increased in Germany, the UK, Italy, the USA, Switzerland, France (in volume only), the Netherlands (in value only), China (in volume only) and Canada (in value only). However, it decreased in Belgium, Russia, Japan, Hong Kong and Angola. The main competitors in these markets are the USA, Chile, Australia and South Africa. Independently of the evolution of EU wine exports, the competitive pressure from other producing countries (Chile, USA, Australia, etc.) plays a significant role in the evolution of the share of EU wine products in the overall volume/value of wine imported by non-EU countries. Indeed, while the value of wine exported (from Germany, France, Hungary, Italy and Romania) to traditional and new markets has increased, this does not often result in an increase in the share of EU wine in total wine imports (in the experience of France, Hungary and Romania). Still, the operators interviewed are generally satisfied with an increase in the volume/value of their wine exports, independently of their market shares in target countries (notably in Portugal). An analysis of internet research on products sold by online wine producers showed that EU wines remain predominant among the products sold by online retailers, especially those located in wine-producing Member States. EU wines prevail in the segments of red, white, rosé and sparkling wines for all the online retailers considered, except in the USA and the UK. Among the EU wines sold by online retailers, 70% are PDO/PGI and 30% are wines with an indication of the grape variety. The analysis could not ascertain whether non-EU varietal wines were more affordable than EU ones. These positive results may be linked to the efforts made by EU producers to improve their performance. However, the competitiveness of EU wine producers and products is due to a multitude of social, economic, climatic and political factors. Some of the factors are directly related to the strategy implemented by the producers and could as such be influenced by the national support programmes (especially through restructuring and conversion, investment, and promotion) and/or EU rules. Other factors are external, such as market forces, the structure of the sector, reputation or climatic conditions, which affect the environment in which producers must exchange their products.

In the future, special attention should be paid to distance selling. The internet continues to transform the shape of the marketplace for all types of products, including foodstuffs. 5.1.3.To what extent is the effectiveness of the support under the national support programmes influenced by its financial architecture? The management of national support programmes has two key features: ·Yearly budget: All expenditure declared within a given financial year must respect the budgetary ceilings. ·Absence of obligatory national co-financing. At EU level, the rate of budget execution ranged between 88% and 94% between 2014 and 2019. In most Member States, the rate of execution of the yearly budget is stable and above 80% (Czechia, Germany, Spain, France, Italy, Cyprus, Hungary, Portugal, Slovenia). Bulgaria and Croatia recorded an increase in the uptake of the programmes over the period, while in Romania the execution rate, which was equal to 100% for the 2014 programming year and in the previous programming period (2009-2013), rapidly decreased to 24% in 2016 and 2017 and recovered to close to 50% in 2019. Austria and Slovakia show unstable execution rates, though always above 50%. 2014 2015 2016 2017 2018 2019 Bulgaria 62% 74% 81% 85% 91% 54% Czechia 99% 100% 100% 100% 99% 99% Germany 81% 95% 94% 85% 86% 97% Greece 87% 63% 72% 55% 61% 49% Spain 91% 100% 100% 96% 77% 93% France 100% 100% 100% 100% 100% 95% Croatia 11% 13% 27% 31% 52% 55% Italy 96% 96% 95% 96% 92% 93% Cyprus 89% 100% 100% 78% 100% 100% Hungary 100% 100% 100% 100% 94% 81% Austria 53% 70% 98% 76% 86% 89% Portugal 100% 98% 100% 100% 100% 100% Romania 100% 42% 24% 24% 35% 46% Slovenia 97% 100% 100% 100% 100% 100% Slovakia 81% 76% 52% 71% 75% 100% Total EU 94% 93% 93% 92% 88% 89% Sources: DG Agriculture and Rural Development, monitoring data for the national support programmes. In all Member States, the driving factors behind the execution of the programme are the number of potential beneficiaries and the capacities of beneficiaries to invest. In the absence of obligatory co-financing, the capacity and willingness of the national and/or local authorities to support the wine sector has no bearing on the implementation of the programme. Among the stakeholders who were interviewed, some highlighted the positive effects of not having obligatory co-financing, the certainty that funds would be available, the consistency of funding over time and the ring-fencing of funds. On the negative side, beneficiaries are required to provide a significant level of financing themselves, which is a key issue in Bulgaria and Croatia. In Romania, the low execution rate is mainly due to the fact that huge restructuring efforts took place in the previous programming period (with very high execution rates in the wine programme), while in the current period the needs of the wine sector have changed and Romania is slowly adapting. As the questionnaire addressed to Member State administrations revealed, the certainty of having a budget available for a 5-year period provided a level of visibility and security that facilitated the implementation of operations. Some countries adopted a multiannual approach to the management of applications and expenditure (Spain, for example), which maximised execution of the budget but resulted in lower budgets being available in the later years of the programme. Other countries (France, Hungary, Portugal, Italy) overbooked yearly budgets, carrying over execution to the following year. This type of management also allows for maximum execution of the budget, although it results in an additional workload for the managing authority. Where funds are managed exclusively on an annual basis, meaning that the managing authorities would not accept any application that went beyond the annual budgetary limit, the execution rates are lower but the yearly management is perceived as less constraining. In general, it seems that the yearly budgetary limits fostered responsiveness both from the administration and the beneficiaries, as well as quick implementation of operations and closure of cases. The possibility for Member States to transfer funds between measures was a key source of flexibility, making it possible to overcome potential implementation delays or a decrease in the sector's absorption capacity. More of the budget than planned was spent on the restructuring and conversion measure in France, Italy and Portugal, which compensated for the lower-than-expected budget execution on the promotion and investment measures. This helped to counterbalance the constraint of yearly budget management and allowed for optimal budgetary execution. 5.1.4.To what extent has EU support for promotion of wines been successful in strengthening the reputation of EU wines, recovering old markets and winning new ones worldwide? In all case studies, wine operators mentioned that the EU wine products with the best reputation abroad were, in particular, French red wines with PDO from Bourgogne and Bordeaux and white sparkling wines from Champagne. The Italian sparkling wine Prosecco was also often considered to have a great reputation in international markets and the German Riesling wine was said to be very well known. Several case study reports mentioned red wines with PDO from Tuscany in Italy. It is nevertheless difficult to establish a link between the promotion that was carried out, the reputation of EU wines and the strong increase in EU wine exports towards non-EU countries, particularly because of the other factors that influence the competitiveness of wine products in today’s global market. On the one hand, certain external factors may have contributed to the increase in EU wine exports (e.g. increasing demand for specific products such as Prosecco, climatic events that affected the harvest in other countries, consumption trends in emerging countries, etc.). On the other hand, negative trends in the value/volume of EU wine exported might actually have been offset because of the promotion efforts. However, in all of the Member States/regions studied, almost all stakeholders stated that the promotion measure had a great impact on the reputation of national wines. The measure was truly appreciated by beneficiaries, especially in a context of intense competitive pressure from non-EU countries. This is confirmed by the outcome of the public consultation: out of 33 respondents, close to 70% agreed that promotional support has strengthened the reputation of EU wines. According to the analysis of the case studies, promotion is also needed by producers to improve the reputation of their wine, especially when significant efforts have been made to increase the quality of their wine and adapt it to market demand, along with other measures under the national support programmes (notably, restructuring and investment). In France, Italy and Spain, however, the administrative burden involved in justifying expenditure and the small annual budget were mentioned by stakeholders as two factors that had negative effects on the uptake of the measure and which explain the lower-than-planned budgetary execution (83% in the EU over 2014-2018). This might also be partially explained by the possibility of funding promotion both through the national support programmes and through support for horizontal promotion of agricultural products. This is an administrative burden, as operators may be obliged to prove the absence of double funding. While support for promotion through the national support programmes is obviously tailored to wine, support for horizontal promotion of agricultural products follows a basket approach, so that wine might be promoted together with other wine products such as vinegar.

5.1.5.To what extent has the information measure for EU wines helped to improve knowledge about EU quality schemes and awareness about the responsible consumption of wine? An analysis of the information campaigns can assess their reach and their impact on consumers’ knowledge. However, it is difficult to assess the results of the campaigns due to lack of detailed monitoring information. In addition, opinion polls about the impact on awareness are costly and lack a sufficient number of observations. Therefore, the contractor carried out additional surveys. The reach of the information campaigns on the EU system of PDO and PGI carried out with the support of the information measure was measured for three campaigns, one in Germany and two in France. In Germany, 22% of consumers surveyed stated that they had seen the visuals of the national campaign, but this was the case for only 17% of surveyed consumers in France. However, this rate is considered to be satisfactory, given that the campaigns focused on specialist distribution channels, i.e. wine shops/wine bars. The consumer survey (see Annex 2) highlighted the knowledge deficit among EU consumers (France, Germany, Spain and the UK) with regard to the PDO/PGI scheme applying to wine. Indeed, few respondents knew the PDO/PGI labels or were aware of the characteristics of wines with a PDO/PGI designation. Source: Consumer survey, Agrosynergie, based on data collected by Ifop. Some of the denominations that appeared in information campaigns were known by a majority of respondents (e.g. Monbazillac, Languedoc, Corbières, etc. in France). However, these denominations are among the most renowned and it is not possible to assess whether the campaigns helped to increase their reputation. Out of the six Member States that implemented the information measure, only two (Germany and Austria) supported operations on responsible consumption of wine that were implemented by the sector. France banned this measure because of possible conflict of interest, given that the campaign has to be organised by the wine producers themselves. The operations supported by other Member States consisted of training programmes for a specific public grouping. No indicators on the effects achieved were reported by the Member States. 5.1.6.To what extent have EU rules on oenological practices in the wine sector been successful in reaching the objectives on marketing conditions of producers and traders, competitiveness of EU wines and safety and quality? Oenological (i.e. winemaking) practices and restrictions are defined by OIV standards, as well as the protection of human health, the climatic and soil conditions in specific wine-growing zones, the possible risk of consumers being misled and ensuring an acceptable level of environmental care. The comparative analysis of the Common Market Organisation Regulation and the OIV International Code of oenological practices reveals three main differences between them: (1) the category of grapevine product covered by the rules; (2) the strength of alcohol in the products; and (3) the oenological processes, additives and processing aids allowed. Regarding competitiveness and marketing conditions, the case study analysis shows that the effects of restrictions on oenological practices vary according to the market concerned – i.e. inside the EU or in non-EU countries – and the market segment. As for PDO/PGI high-end products, the rules on oenological practices are made more restrictive by the PDO/PGI specifications themselves (rather than by general EU rules). These rules contribute to their notoriety and to maintaining their reputation and their quality, and hence to maintaining their competitiveness. In general, EU rules offer some flexibility in adapting practices to the special characteristics of the wine-growing zones, such as the acidification or de-acidification of wines or the possibility to increase the maximum total alcoholic strength up to 20%. In contrast, EU rules prohibit, for reasons of quality, reputational damage and fraud, the addition of water (during the fermentation process) to decrease the degree of alcohol. Because of the warmer climate in southern Europe, wines tend to have a higher degree of alcohol (above 15%). With global warming, this phenomenon will increase, while there is an increasing demand for wines with a lower alcohol strength. Case studies revealed that operators perceive this prohibition as a major comparative disadvantage vis-à-vis main foreign competitors (such as the USA and Australia), where this practice is allowed. At international level, EU rules on oenological practices seem to provide a guarantee of the products in terms of quality and safety, which helps with their marketing. The quite prompt adaptation of EU rules to changes in OIV standards also helps to improve their marketing. However, the small differences in wine standards among different destination countries for EU wines might affect trade slightly: EU wines might face entry barriers where rules are more demanding (e.g. organic wine in the USA), but in markets with fewer rules the competitiveness of EU wine products could decrease. Moreover, low-alcohol products made from wine are not covered by the Common Market Organisation and are not considered as wine products, whereas there is a demand for these products among consumers in the EU and in non-EU countries. The consumer survey carried out in four Member States showed that 45% of consumers are interested in wines with a low alcoholic strength (i.e. between 8% and 10%) and 25% are interested in drinks made from wine with an alcoholic strength of between 1.2% and 8%. The fact that this category of wine products is not covered by EU standards could hamper their adaptation to the market as well as their competitiveness. In conclusion, except for the two specific rules on the minimum alcohol content and the prohibition of adding water, EU rules on oenological practices do not seem to have any impact on competitiveness. As the survey of consumers revealed, wine consumers seem to be satisfied with EU wine quality but the direct effect of EU rules on oenological practices appears to be limited at that level. Consumers consider that oenological practices are not a major criterion impacting wine quality. However, since they consider that EU wine quality is better than that of non-EU countries, it could be assumed that EU rules have been effective. Figure10: Consumers satisfied with wine quality (%)

Source: Consumer survey, Agrosynergie, based on data collected by Ifop. Furthermore, consumers’ positive expectations of the safety of products correspond to the fact that there has been no major safety issue since 2008. The effectiveness of oenological rules in ensuring product safety and quality is also deeply linked to the existence of an efficient control system. 5.1.7.To what extent have EU rules on labelling and presentation specific to the wine sector been effective in reaching their objectives? This question relates to the effectiveness of labelling rules in meeting consumers’ legitimate expectations, in improving marketing conditions and in ensuring a level playing field for producers of all kinds of wines through simplified and harmonised rules. The new labelling rules introduced in 2008 allow non-PDO/PGI wines to mention the grape variety or vintage year. In addition, the rules for labelling non-EU wine products circulating in the EU market are also harmonised with those applicable to EU wine products. Regarding the legitimate expectations of consumers, the results of a survey in four EU Member States show that respondents generally consider that wine labels provide relatively clear and sufficient information. In addition, stakeholders in Germany and France mentioned that the EU PDO/PGI logos were not used and are therefore unknown to most consumers. Source: Consumer survey, Agrosynergie, based on data collected by Ifop. However, consumer and public health organisations expressed the need for more information, especially concerning nutritional values and ingredients. In addition, on the labelling of ingredients, civil society organisations strongly criticised the fact that the alcoholic beverages sector is not fully aligned with Regulation (EU) No 1169/2011 in terms of providing food information (ingredients) to consumers, even though the rules apply to all other EU food sectors. However, the cost arising from the possible need to mention ingredients is considered by the operators who were interviewed as being too heavy for small producers. Moreover, EU labelling rules do not yet address consumers’ increasing concern for more transparency on the environmental impact of food, including wine products (e.g. on pesticide use). There is strong demand for varietal wines. Mature markets, such as the USA, where varietal wines still represent more than 50% of the wine consumed, look for more typical and authentic wines. In this respect, EU labelling rules can improve marketing conditions. Labelling rules are generally considered by the operators interviewed as simple to implement and necessary to ensure the smooth functioning of the internal market. 5.1.8.To what extent does the certification of wine products facilitate trade/improve the economic conditions for marketing wine products? This question deals with the level of detail needed to balance the goals of traceability, simplification and facilitation of trade. Chapter 5.2.3 below looks at whether certification systems guarantee the quality, safety and traceability of wine products. Certification procedures may vary from one Member State to another and even from one region to another inside the same Member State. However, in all Member States/regions covered by a case study, the certification system seems to be very effective in ensuring the traceability of wine products and the veracity of the information that will appear on the label of the final product, and stakeholders have become used to it. A similar tendency regarding procedures was observed in some central and eastern Member States (Hungary, Romania) and in some western Member States (France, Spain, Italy). In these central and eastern Member States, the certification procedures are more similar among all wine categories, while in western Member States there is a greater distinction between certification of PDO/PGI wines and non-PDO/PGI wines which mention the vintage year and/or wine grape variety (especially as concerns organoleptic and analytical tests). In these Member States, the certifying and controlling bodies may differ according to the wine category. In many Member States (Germany, Spain, Hungary, Portugal, Romania), all PDO/PGI wine products in a given wine campaign are subject to certification procedures, i.e. administrative control of information and analytical and organoleptic (aspects of wine that create an individual experience via the senses of smell, taste, etc.) tests, while in others (France, Italy) the certification may be issued in a given year even if analytical and organoleptic tests are not performed on 100% of wine batches. However, according to representatives of the sector, the PDO/PGI managing organisations are very well organised and are in contact with public authorities. They perform additional checks to allay suspicions.

In many Member States, when transporting wine the consignors have the possibility to self-certify the information about the wine that is being transported. However, the relevant authorities can easily check the validity of the information provided in the accompanying document, since they cooperate with other accredited or public bodies who maintain the vineyard register and other information on operators. Concerning the certification of wine products for export, trade may be facilitated by the new Commission Delegated Regulation (EU) 2018/273, particularly by the introduction of a specific EU wine export certificate which certifies the origin and health of wine products and aims to respond to the additional certification requirements of some non-EU countries. It has also been acknowledged by the authorities in many Member States that certification procedures (together with the procedures for checks) have been simplified with the introduction of computerised monitoring systems to collect information on operators and track wine products. In addition, certification procedures have a significant impact on the reputation of wines with a protected designation of origin (PDO) or a protected geographical indication (PGI). Since the reputation of a given PDO/PGI is one of the main drivers of marketing and trade, the certification procedure indirectly affects trade and marketing conditions for wine products. 5.2.Efficiency 5.2.1.To what extent has the expenditure on the measures financed under the national support programmes been justifiable and proportionate, including the administrative burden, to the benefits achieved with each measure? The Commission revised the rules on the implementation of the national support programmes in 2016 to address the 2014 recommendations of the European Court of Auditors to improve the efficiency of EU wine policy. Although the Court has concluded that their recommendations were implemented in most respects, the evaluation question will assess the efficiency of the national support programmes and the impact of the new rules on removing unreasonable burdens (‘deadweight’) that affect the cost-benefit ratio. 2014 2015 2016 2017 2018 Bulgaria 3 590 3 030 2 800 2 670 2 520 Czechia 3 450 3 420 3 450 3 440 3 550 Germany 3 270 2 770 2 810 3 120 3 070 Greece 9 350 4 140 3 670 4 740 4 290 Spain 5 000 4 560 4 570 4 720 5 910 France 2 870 2 830 2 830 2 890 2 890 Italy 1 980 1 990 2 010 2 010 2 130 Cyprus 1 910 1 700 1 700 2 190 1 660 Croatia 21 050 13 460 6 510 6 120 3 660 Hungary 2 230 1 880 2 190 2 240 2 410 Austria 6 570 4 940 3 560 4 670 4 150 Portugal 3 400 3 010 2 970 2 940 2 920 Romania 3 830 9 170 15 640 15 820 11 010 Slovenia 3 280 3 100 3 100 3 090 3 100 Slovakia 4 380 4 540 6 670 4 590 4 060 Average 5 080 4 300 4 300 4 350 3 820 Source: DG Agriculture and Rural Development, monitoring data for the national support programmes. Since 2014, EU expenditure per hectare for the whole set of measures under the national support programmes has ranged from about EUR 1 700 (in Cyprus) to EUR 21 050 (in Croatia). The differences in the average cost per hectare between Member States may be related to the type of operation supported, e.g. Croatia supported vineyard conversion on steep slopes which involve significant and costly work. In line with the European Court of Auditors’ recommendations, support in all Member States is based on a flat rate per type of operation (a standard scale of unit costs), or according to thresholds that were calculated and duly justified by the public authority in charge of the programme’s implementation. The analysis of efficiency was limited by the lack of consistency in the monitoring data. Nevertheless, the cross-analysis of the information that was collected allowed for some conclusions to be drawn. The case studies revealed that the ‘deadweight’ of the restructuring and conversion measure is small (it was quantified by public authorities at 10% in Hungary and considered as quite limited in other Member States). Regarding investments, the interviews showed that, in most cases, these would have been carried out even without EU support, but that this support brought significant added value to the projects. In the case of promotion, given the high administrative burden and the relatively low rate of support (up to 50% of the total eligible expenditure), beneficiaries only apply for support if they are convinced of the relevance of the operations to increase their exports and truly need extra funds to carry out promotion: hence the level of deadweight is very low. On restructuring and conversion, as well as investment, the implementation of the measure is quite efficient. Although some aspects, such as the yearly management of the budget, have been burdensome in some Member States, other aspects such as close relationships between the administration and the beneficiaries and the use of standard scales have facilitated the management of the measures and their quick implementation, while ensuring operations were paid at market prices. However, it appeared in the interviews and in the data collected in some Member States that the workload related to checks is very high and not proportionate to their benefits. In all cases, it is much higher than the workload related to the review of applications and management of the measures, although the system was simplified in 2016. Concerning support for promotion, the analysis showed a high level of administrative burden, in particular for beneficiaries. On the one hand, the level of the financial commitment ensured that only very relevant projects (based on market analysis by applicants) were supported. On the other hand, a lot of time and money was spent by the sector on managing the grants, which hindered the efficiency of the measure. Although it is very difficult for smallholders to access support, the increase in the reputation of EU wines thanks to promotion campaigns benefits all producers. 5.2.2.To what extent have the restrictions on labelling of wines without PDO or PGI proven to be justifiable and proportionate in relation to the risk of misinformation of consumers? This question seeks to determine whether the new EU labelling rules helped to prevent consumers from being misinformed and whether this justifies the economic impact arising from these provisions. Two types of economic impact should be identified: the costs to Member States of ensuring that non-PDO/PGI labels comply with EU rules and the impact on the sales of producers or traders that would otherwise have been able to sell more non-PDO/PGI wine. According to the consumer survey carried out in four Member States, EU consumers generally consider that they have a good understanding of the labels.

Source: Consumer survey, Agrosynergie, based on data collected by Ifop. Consumers generally consider that the information provided on the labels is sufficient to evaluate the quality of wines (72%). This percentage is higher in the UK and Spain than in Germany and France. This could be due to the fact that, in the latter two Member States, there is a high diversity of wines and that labelling is not sufficient to determine the characteristics of each of them. Furthermore, consumers who are aware of the PDO/PGI system consider that wine labelling makes it easy to identify PDO/PGI wines, even though the EU logos barely appear on the labels. Only in the UK, where these types of wines are rarely consumed (only 15% of the time on average), 39% of consumers do not know whether it is easy to identify PDO/PGI wines on labels. Indeed, the less PDO/PGI systems are known by consumers, the less they find it to be easily identifiable on the label, which somehow justifies the promotion of labelling in these Member States. EU consumers generally consider that they have a good understanding of labels. However, this does not fully correspond to the opinion of stakeholders in the sector, who cast doubt on the fact that consumers have a good knowledge of the PDO/PGI system. During case study interviews, stakeholders explained that consumers are used to the specific systems of their own country but do not necessarily have a good understanding of the quality and labelling systems of other Member States. Actually, the EU PDO/PGI logos hardly appear on the labels, because wine producers consider that consumers are more used to the specific systems of their own country, which existed before the EU PDO/PGI system, although these references are little understood in other Member States (an example being ‘reserva’, used in Italy and Spain). In addition, interviewees who are operators in the wine sector and sector representatives are concerned that the growing number of PDOs and PGIs could negatively affect the reputation of EU quality schemes and make them more vulnerable to fraud. Mislabelling is a relatively frequent form of fraud. In all Member States, cases of non-compliance with EU labelling have been identified. The main issue is fraud regarding a wine’s country of origin. The other types of labelling fraud identified in the four Member States studied are: (i) insufficient visibility of the wine’s origin; (ii) use of misleading marketing symbols; (iii) inclusion of references which are not legally admitted; and (iv) fraud related to a missing identity or number, alcohol content, variety, etc. Source: EU Food Fraud Network ( https://ec.europa.eu/food/safety/food-fraud/ffn_en ) The efficiency of labelling restrictions for non-PDO/PGI wines is not a big issue for stakeholders. Indeed, labelling is not a main cause of fraud during investigations. The control of labelling restrictions does not produce an additional workload for the relevant authorities. They add to the complexity of the regulation for operators, but during interviews stakeholders generally considered the time spent to be acceptable and necessary to reduce misuse and fraud. According to the evaluation, the potential economic impact of restricting labelling of grape varieties for non-PDO/PGI wines is limited since it concerns specific varieties on specific markets (i.e. mature markets that value varietal wines). 5.2.3.To what extent is the system of monitoring and checks in the wine sector efficient in addressing the risks of fraudulent manipulation of wine and in guaranteeing the quality, safety and traceability of wine products or the correct implementation of rules on the national support programmes? This evaluation question aims to look in detail at the way the system of monitoring and checks is organised to ensure compliance with EU rules governing the wine sector, and the safety and traceability of wine products. It also seeks to understand whether checks are conducted consistently across Member States. The analysis also looks at the extent to which Member States cooperated in cases of transnational issues such as fraud and at potential problems encountered at Member State level when attempting to apply EU rules. All Member States and regions covered by the case studies have put in place a computerised vineyard register managed by public authorities allowing the relevant authorities to have access to all necessary information on operators involved with wine products. Thus, the administrative and on-the-spot checks can be performed more efficiently. Moreover, good cooperation was observed between the different competent bodies involved in checks, from grape production to the final product. This cooperation is necessary since several such bodies are involved in the monitoring and checks system. In all Member States covered by the case studies, the national customs agency is in charge of issuing accompanying documents through the Excise Movement and Control System (EMCS) to operators before the transport of wine products. All the accompanying documents are registered in the EMCS, allowing the checking of all wine movements in real time. All Member States seem to be prepared for mandatory use of an electronic accompanying document (‘e-ADs’, with the Administrative Reference Code (ARC) or the specific administrative code (MVV) code) by 2021. The EMCS information and, where available, the national information system for e-ADs can be linked to the computerised vineyard register to enable greater traceability of the wine product along the production chain. In the wine sector, the control system requires a coordinated approach and access to information kept by the authorities responsible for checks in the wine sector and customs and tax authorities. The more bodies that are involved in checks, the more cooperation is required to identify fraud and avoid overlaps. The necessary cooperation between competent bodies was already identified by the European Commission as the third phase of the EMCS project, which started in 2012, incorporating the recording of checks, the reporting of events that occurred during shipments, and the exchange of information in EMCS to facilitate administrative cooperation between Member States . Even if it is hard to assess the efficiency of monitoring and checks, since many factors could affect the level of fraud that is detected, the system of checks on wine products in the Member States can be considered highly reliable given the different levels of checks that range from wine growing to the marketing of the final product. These checks verify compliance with EU rules on production, labelling and marketing, and the traceability of wine products. Moreover, as stated in Commission Staff Working Document (SWD(2017) 131 final), the elimination of paper and the associated increase in efficiency, the freeing up of resources in order to focus on higher-risk movements, and the improved control of movements have all been identified as clear advantages that accrue from the electronic environment. The overall efficiency of the management of national support programmes is analysed in Chapter 5.2.1, which concludes that checks are one of the heaviest phases in terms of workload. It should be noted that the fraud related to the support of non-eligible operations was not studied. However, since the changes introduced in 2016, the use of standard simplified costs has been added as a reimbursement method for the promotion measure, which is the third highest measure in terms of expenditure in the national support programmes. The new Commission Delegated Regulation (EU) 2018/273 and Commission Implementing Regulation (EU) 2018/274 enforce the general principles of checks laid down in Regulation (EU) No 1306/2013 and Regulation (EU) 2017/625. They also introduced checks based on risk analysis, which are more efficient. These new regulations provide explicit and simplified requirements to guarantee the quality, the safety and the traceability of wine products. Nevertheless, given the nature of the measure, 100% of beneficiaries of the restructuring and conversion measures must still be checked to ensure the sound use of EU funds. In addition, several Member States perform 100% on-the-spot checks (Germany, Italy, Portugal) for the promotion measure.

5.2.4.What was the impact of the authorisation scheme for vine plantings on wine growers? The system has only been in place since 2016, so information is available only for the past three years and most of its effects can only be anticipated. The evaluation showed that Member State administrations, as well as growers, are in the process of assimilating the new system and of adapting it to local needs, taking advantage of subsidiarity, particularly with regard to eligibility and priority criteria. Furthermore, Member States may limit the issuing of authorisations at regional level. Only Germany (0.3%) and Spain (0.5% in 2019 and 2020) chose to apply a lower percentage than the default rule of 1% of the total area planted with vines in the previous year. In Spain, this choice was justified by a latent risk of imbalance between supply and demand, and by the potential increase in production related to climatic conditions and to the modernisation of Spanish vineyards. In Germany, this choice relates to the fact that even a small increase in production could result in significant falls in producer prices and disturbance of the market for German quality wines, in the context of a fragile market that has been declining in recent years . To avoid having to issue authorisations for very small areas using a very low allocation coefficient on all applications, Member States may apply one or several priority criteria, which are made public before the application deadline. Some Member States have set up relatively simple selection procedures. Bulgaria and Slovakia chose not to apply any eligibility or priority criteria for the applications. Romania and Czechia applied eligibility criteria, but no priority criteria. Slovenia and Austria have not applied any eligibility criteria but used specific priority criteria. In some of those Member States, this choice of a ‘simple’ methodology for the selection of applicants seems to be related to low demand for new plantings (see Table 3 ). In contrast, Greece, France, Hungary, Italy and Portugal have developed selection procedures involving up to five priority criteria reflecting their national priorities, in a context of high demand for new vineyard areas (particularly in Italy and France). The system offers a large degree of flexibility to Member States to target specific groups (such as new entrants, young or smaller producers, applicants having respected the rules in the past ), areas (with natural constraints) and practices (preserving the environment). The analysis showed that the scheme could result in an increase in the area under vines that is small (thanks to the 1% or lower maximum and regional ceilings), so it cannot threaten the balance of the EU wine market. The transitional possibility of conversion of the old planting rights, more than from the granting of new authorisations, may result in a significant increase in production potential or, to the extent where the conversion is not carried out, in a loss of production potential. The old planting rights that could be converted into new authorisations amounted to 235 611 hectares in 2016, i.e. around ten times more than the yearly area available under the system of planting rights. From 2016 to 2019, 63% of these planting rights were converted into authorisations. Under the previous scheme, the purchase of planting rights made it possible for growers to quickly invest in the expansion or development of a new type of vineyard, but it was costly for producers. In contrast, under the new system planting authorisations are granted to applicants free of charge, based on criteria which are made public in advance, so the new system is fairer. Planting authorisations are not transferable and an administrative penalty is applied if they are not used before the end of their validity, thereby excluding speculation. On the downside, in Member States where demand for planting authorisations is high, applicants cannot be sure to be granted the authorisation they app