Proposal for a Council Regulation (EC) on the common organisation of the market in wine (98/C 271/02) COM(98) 370 final - 98/0126 (CNS)

(submitted by the Commission on 16 July 1998)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 42 and 43 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Having regard to the opinion of the Economic and Social Committee,

Having regard to the opinion of the Committee of the Regions,

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

(2) Whereas the aim of the common agricultural policy is to attain the objectives set out in Article 39 of the Treaty and in particular, in the wine sector, to stabilise markets and ensure a fair standard of living for the agricultural community concerned; whereas these objectives may be attained by adjusting resources to needs, in particular through the pursuit of a policy for the adaptation of wine-growing potential and a quality policy;

(3) Whereas the existing framework of the common organisation of the market in wine was established by Council Regulation (EEC) No 822/87 (1), as last amended by Regulation (EC) No 2087/97 (2); whereas in the light of experience it would be appropriate to replace it in order to address the current situation in the wine sector, notably the less frequent occurrence of structural surpluses but the remaining possibility of surpluses on a pluriannual basis, in particular owing to the sector's inherent potential for dramatic fluctuations in production from one harvest to the next;

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

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

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

(7) Whereas, therefore, there should be a reform of the common organisation of the market in wine to guarantee the necessary flexibility to adapt smoothly to new developments with the following broad aims: maintaining improved balance between supply and demand on the Community market; allowing producers to take advantage of expanding markets; enabling the sector to become more competitive in the longer term; eliminating the availability of intervention as an artificial outlet for surplus production; continuing to maintain all traditional outlets for potable alcohol and vine-based products; accommodating regional diversity; and formalizing the potential role of producer organisations and interbranch (or equivalent) organisations;

(8) Whereas Regulation (EEC) No 822/87 was supplemented and implemented by Council Regulations (EEC) No 346/79 (3), (EEC) No 351/79 (4), as last amended by Council Regulation (EEC) No 1029/91 (5), (EEC) No 460/79 (6), as last amended by Regulation (EEC) No 3805/85 (7), (EEC) No 456/80 (8), as last amended by Regulation (EEC) No 1597/83 (9), (EEC) No 457/80 (10), (EEC) No 458/80 (11), as last amended by Regulation (EEC) No 596/91 (12), (EEC) No 1873/84 (13), as amended by Regulation (EC) No 2612/97 (14), (EEC) No 895/85 (15), as last amended by Regulation (EEC) No 3768/85 (16), (EEC) No 823/87 (17), as last amended by Regulation (EC) No 1426/96 (18), (EEC) No 1442/88 (19), as last amended by Regulation (EC) No 191/98 (20), (EEC) No 3877/88 (21), (EEC) No 4252/88 (22), as last amended by Regulation (EC) No 1419/97 (23), (EEC) No 2046/89 (24), as last amended by Regulation (EC) No 2468/96 (25), (EEC) No 2048/89 (26), (EEC) No 2389/89 (27), as last amended by Regulation (EC) No 2088/97 (28), (EEC) No 2390/89 (29), as last amended by Regulation (EC) No 2611/97 (30), (EEC) No 2391/89 (31), (EEC) No 2392/89 (32), as last amended by Regulation (EC) No 1427/96 (33), (EEC) No 3677/89 (34), as last amended by Regulation (EC) No 2796/94 (35), (EEC) No 3895/91 (36), (EEC) No 2332/92 (37), as last amended by Regulation (EC) No 1419/97, and (EEC) No 2333/92 (38), as last amended by Regulation (EC) No 1429/96 (39); whereas those Regulations have been substantially amended several times; whereas, since further amendments are to be made, they should be recast in the interest of clarity, in a single text;

(9) Whereas Regulation (EEC) No 822/87 made provision for the Council to lay down general rules for its application; whereas this created a complex structure of layers of legislation; whereas the aforementioned Council Regulations contained a large amount of technical detail which required frequent amendment; whereas therefore this Regulation should in general contain all the necessary guidance for its application; whereas the Council should confer all necessary implementing powers on the Commission in accordance with Article 155 of the Treaty;

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

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

(12) Whereas structural measures not directly related to the production of wine should fall within the scope of Council Regulation (EC) No [. . .] [on support for Rural Development from the European Agricultural Guidance and Guarantee Fund (EAGGF)] (40); whereas measures related to promotion make an important contribution to the sector's competitive performance and notably the promotion of Community wine on third country markets should be stimulated; whereas, however, in order to ensure consistency with the general promotion policy of the Community, measures related to the wine sector should fall within the scope of Council Regulation (EC) No [. . .] [horizontal promotion Regulation] (41);

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

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

(15) Whereas the existing permission for new planting in respect of mother plantation, land consolidation and compulsory purchase, wine-growing experiments, non-marketed production and graft nurseries has shown itself not to unduly disturb the wine market and should therefore be continued subject to necessary controls;

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

(17) Whereas the existing permission to replant vines is necessary to allow the normal renewal of exhausted vineyards; whereas the existing system should therefore be maintained subject to necessary controls; whereas for greater flexibility the system should also permit, subject to necessary controls, the acquisition and use of replanting rights before the related grubbing-up takes place; whereas replanting rights acquired under prior Community or national legislation should be respected; whereas further, it should be possible to transfer replanting rights to another holding, subject to strict controls, provided that this transfer is for purposes that either do not disturb the market unduly or is in pursuit of the quality policy, or is connected with the transfer of part of the holding;

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

(19) Whereas Member States should be given a broad discretion in the management of the reserves, subject to necessary controls, so as to permit them to better align the use of the reserve rights on local needs; whereas this should include the opportunity to purchase planting rights, to fund the reserve and to sell planting rights from the reserve;

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

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

(22) Whereas in the light of the improved market balance and the expanding world market, an increase in planting rights can be justified, which should be allocated to the reserves provided that the production linked to these rights is aligned on demand; whereas this increase should be reduced by the extent to which new planting rights have been otherwise authorised and to which the status of unlawfully planted areas is regularised;

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

(24) Whereas, without prejudice to any existing national measures, for reasons of legal certainty it is not possible to impose at the Community level the grubbing-up requirement on areas planted in breach of restrictions before the proposal for this Regulation has been published; whereas therefore for better control of wine-growing potential, during a fixed period Member States should be able to regularise the position of such areas; whereas such regularisation may be differentiated between those areas where there has been unlawful replanting and unlawful new planting, since it is the latter which is more likely to lead to an increase in production;

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

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

(27) Whereas production in those Member States whose wine production is below 25 000 hectolitres per year does not seriously affect the market balance; whereas therefore those Member States should be exempt from the restrictions on planting but should not have access to the premium for permanent abandonment of wine-growing;

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

(29) Whereas to ensure that such reconversion is carried out in a controlled fashion, it should be planned; whereas plans should be drawn up at a level as close as possible to the producer to ensure that regional diversity is taken into account and thus should be drawn up by Member States, regions, interbranch organisations or producer groups; whereas, however, Member States should remain responsible for ensuring that the plans are in conformity with Community law;

(30) Whereas restructuring has two main financial impacts on the producer, namely loss of receipts during the period of conversion and material costs of the conversion; whereas therefore the support should cover both of these impacts;

(31) Whereas it is desirable for a better management of wine-growing potential for an inventory of such potential to be compiled by Member States; whereas to encourage Member States to compile the inventory, access to the regularisation of unlawfully planted area, the increase in planting rights and support for reconversion should be limited to those who have compiled the inventory;

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

(33) Whereas Council Regulation (EEC) No 2392/86 (42), as last amended by Regulation (EC) No 1596/96 (43), should remain in force to enable those Member States who are still in the process of compiling it to complete the task; whereas, however, provision should be made for its subsequent amendment or repeal;

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

(35) Whereas in order to eliminate the availability of intervention as an artificial outlet for surplus production whilst continuing to maintain all traditional outlets for potable alcohol and vine-based products there should be changes to the distillation system; whereas there should therefore be the following forms of distillation: compulsory distillation of by-products of wine-making, compulsory distillation of wine produced from grapes not classified solely as wine grape varieties, a distillation measure to supply the potable alcohol market, and a crisis distillation measure; whereas other forms of distillation should be abandoned; whereas these measures should be as flexible as possible to respond to market needs and specific regional conditions;

(36) Whereas in view of the poor quality of wine obtained from overpressing, this practice should be prohibited and provision should be made, in order to prevent it, for the compulsory distillation of marc and less and/or an obligation to distil the by-products of wine-making, or under certain conditions, to withdraw them under supervision;

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

(38) Whereas the potable alcohol market is an important traditional outlet of wine and vine-based products; whereas therefore there should be Community support for distillation of table wine and wine suitable for yielding table wine to supply this market, in the form of a primary aid paid for distillation and a secondary aid for storage of the resulting distillate;

(39) Whereas in order to deal with exceptional cases of market disturbance and serious quality problems, there should be a crisis distillation measure; whereas the level and format of aid should be determined by the Commission to take account of specific situations; whereas, the measure should be voluntary for producers;

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

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

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

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

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

(45) Whereas, given the special features of the market in wine, the formation of producers' organisations whose members are obliged to comply with certain rules, in particular as regards marketing, is likely to contribute to the attainment of the objectives of the common organisation of the market; whereas provision should therefore be made for measures to recognize the formation and operation of such organisations; whereas such grouping must be effected on a voluntary basis and must prove its utility through the scope and efficiency of the services offered by producer organisations to their members;

(46) Whereas, in order to boost further the impact of producer organisations and associations thereof and give the market as much stability as is desirable, Member States should be allowed on certain conditions to extend to non-member producers in their region the rules, particularly on production, marketing and environmental protection, adopted for its members by the organisation or association for the region concerned; whereas, where proper justification is given, certain costs arising from this extension of the rules should be chargeable to the producers concerned, since they will benefit from the extension;

(47) Whereas interbranch, or equivalent, organisations set up on the initiative of individual or already grouped operators can, if they account for a significant proportion of the members of the various occupational categories of the wine sector, contribute to behaviour taking closer account of market realities and can facilitate a commercial approach that will improve production reporting, that is to say, the organisation of production, product presentation and marketing; whereas since the work of those organisations is able to contribute in general to attaining the objectives of Article 39 of the Treaty and in particular to those of this Regulation, it should be possible, once the relevant tasks are defined, to grant specific recognition to such of those organisations which provide proof of sufficient representativeness and carry out action in regard to the abovementioned objectives;

(48) Whereas the provisions on extending the rules adopted by producer organisations and their associations and on sharing the costs resulting from such extension should, given the similarity of the objectives pursued, also apply to interbranch, or equivalent, organisations;

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

(50) Whereas certain processes and practices, namely enrichment, acidification and deacidification should be set out in this Regulation; whereas the same is true for certain product specifications; whereas other such processes, practices and specifications should be set out in implementing rules for simplicity and ease of amendment in the light of experience and technological progress;

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

(52) Whereas the description, designation and presentation of products covered by this Regulation can have significant effects on their marketability; whereas therefore there should be rules governing these issues which should take into account the legitimate interests of consumers and producers, as well as promoting the smooth operation of the internal market and the production of quality products;

(53) Whereas the existing provisions on these topics are distributed across a large number of regulations and lack clarity and coherence; whereas, therefore, to promote clarity, simplicity and coherence such rules should be set out in implementing rules subject to basic principles which should include the obligatory use of certain terms, so as to identify the product, and the optional use of others, subject to either Community rules or proof of their accuracy;

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

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

(56) Whereas in order to take account of the obligations arising, in particular, from Articles 23 and 24 of the Agreement on Trade-Related Aspects of Intellectual Property Rights, which forms an integral part of the Agreement establishing the World Trade Organisation approved by Council Decision 94/800/EC (44), provision should be made for the parties concerned to prevent, under certain conditions, the unlawful use of geographical designations protected by a third-country member of the WTO;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(77) Whereas expenditure incurred by the Member States as a result of the obligations arising out of the application of this Regulation should be financed by the Community in accordance with Council Regulation (EC) No [. . .] of in [on the financing of the common agricultural policy] (45);

(78) Whereas the common organisation of the market in wine should take appropriate account, at the same time, of the objectives set out in Articles 39 and 110 of the Treaty;

(79) Whereas the common organisation of the market in wine should also be applied in the light of the agreements concluded under Article 228 (2) of the Treaty, in particular those forming a part of the Agreement establishing the World Trade Organisation, notably that on Technical Barriers to Trade;

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

HAS ADOPTED THIS REGULATION:

TITLE I SCOPE

Article 1

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

2. It shall apply to the following products:

>TABLE>

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

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

TITLE II WINE-GROWING POTENTIAL

CHAPTER I PLANTING OF VINES

Article 2

1. The planting of vine varieties classified as wine grapes shall be prohibited until 31 July 2010 unless carried out pursuant to:

(a) a new planting right;

(b) a replanting right; or

(c) a planting right granted from a reserve.

2. In respect of areas where vines have been planted before 1 August 1998 in breach of Community or national provisions concerning planting, a Member State shall, provided that it has compiled the inventory of wine-growing potential referred to in Article 16 for all its territory, regularise the position of such areas before 31 July 2002 in either of two ways:

(a) by granting retrospective planting rights for the area concerned where the wine producer concerned had previously grubbed-up other vines on an equivalent area; or

(b) by permitting the use of replanting rights where a wine producer has obtained them within a period to be fixed subsequent to the planting of the area concerned.

Grapes obtained from such areas whose position has not been regularised by virtue of the first subparagraph may not be used for producing table wine. Products made from such grapes may be put into circulation only for the purposes of distillation. However, these products may not be used in the preparation of alcohol having an actual alcoholic strength by volume of 80 % vol. or less.

3. Vines planted from 1 August 1998 in breach of Community or national provisions concerning planting shall be grubbed up. The expenses of such grubbing up shall be borne by the producer concerned. Member States shall take the measures necessary to ensure the application of this paragraph.

4. Once a Member State has allocated the newly created planting rights referred to in Article 6 to a reserve or reserves, the subsequent regularisation of an area under the first subparagraph 2 shall mean that an equivalent planting right allocated to the reserve or reserves related to the region in question shall be extinguished. Should sufficient planting rights not be available in the reserve or reserves concerned, then the regularisation may not take place.

Article 3

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

(a) intended for the cultivation of mother plantations;

(b) intended for new planting carried out under measures for land consolidation or measures concerning compulsory purchase in the public interest adopted under national legislation;

(c) intended for wine-growing experiments;

(d) whose vine products are not intended to be marketed; or

(e) intended for graft nurseries, provided that grapes coming from these vines are not harvested or, if they are harvested, are destroyed.

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

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

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

5. Once a Member State has allocated the newly created planting rights referred to in Article 6 to a reserve or reserves, the subsequent grant of a new planting right shall mean that an equivalent planting right allocated to the reserve or reserves related to the region in question shall be extinguished. Should sufficient planting rights not be available in the reserve or reserves concerned, the grant of new planting rights may not take place.

Article 4

1. Replanting rights shall be:

(a) replanting rights granted under paragraph 2; or

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

2. Member States shall grant replanting rights to producers who undertake to grub up an area of vines. The replanting rights shall be for an area equivalent in terms of pure crop to that from which vines are to be grubbed up.

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

4. By way of derogation from paragraph 3, replanting rights may be transferred, in whole or in part, to another holding where part of the holding concerned is transferred to that other holding. In this case, the right may be used on an area on the latter holding no greater than the area transferred.

Replanting rights may similarly be transferred, in whole or in part, to another holding where areas on that other holding are intended for the production of quality wines psr or table wines which are described by means of a geographical indication, for the cultivation of mother plantations or for graft nurseries, (provided that grapes coming from these vines are not be harvested or, if they are harvested, are destroyed). In this case, the rights may only be used in respect of the areas and for the purposes for which they were granted.

5. Replanting rights acquired under Community legislation shall be used before the end of the fifth wine year after the end of the one during which the grubbing-up took place. Replanting rights not used during this period shall be allocated to a reserve pursuant to point (a) of Article 5 (2).

6. Where replanting rights are transferred to another holding, Member States shall ensure that the location where they are used, the varieties used and the cultivation techniques used guarantee that the subsequent production is adapted to market demand and that the yields concerned do not exceed the average in the region where the replanting takes place.

Article 5

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

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

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

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

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

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

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

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

4. Member States shall ensure that the location where planting rights granted from a reserve are used, the varieties used and the cultivation techniques used guarantee that the subsequent production is adapted to market demand and that the yields concerned do not exceed the average in the region where they are used.

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

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

7. Where a Member State creates regional reserves, it may lay down rules permitting the transfer of planting rights between regional reserves. Such transfers may be made subject to a reduction coefficient.

Article 6

1. The newly created planting rights shall be calculated, on the date of their allocation to the reserve or reserves, as:

(a) an area equal to 1 % of the total area in the Member State in question under vines (not counting in that total area any areas which have been planted in breach of Community or national provisions on planting whether or not regularised by virtue of the first subparagraph of Article 2 (2));

(b) less the total area in the Member State in question under vines planted before 1 August 1998 in breach of Community or national provisions governing new planting, whether or not regularised by virtue of the first subparagraph of Article 2 (2), and less the areas in respect of which new planting rights have been granted.

2. The newly created planting rights may only be allocated to a reserve or reserves where the Member State has compiled the inventory of wine-growing potential referred to in Article 16 for all its territory.

3. The allocation of the newly created planting rights to the reserve or reserves may only take place once.

Article 7

1. The following definitions shall apply to this Chapter:

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

(b) 'planting` means the definitive establishment of young vine plants or parts of young vine plants, whether grafted or ungrafted, with a view to producing grapes or to establishing a mother plantation.

2. Detailed rules for the application of this Chapter, including those concerning the recognition referred to in Article 3 (2) and the application of the reduction coefficient referred to in Article 5 (7), shall be adopted in accordance with the procedure laid down in Article 75.

CHAPTER II ABANDONMENT PREMIUMS

Article 8

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

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

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

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

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

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

(b) the method of production;

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

(d) the type of wine produced; and

(e) the existence of associated cultivation.

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

Article 9

The following shall not qualify for the premium:

(a) cultivated wine-growing areas in respect of which infringements of Community or national provisions regarding planting have been recorded during the last five wine years;

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

(c) wine-growing areas which were planted during the last five wine years; and

(d) wine-growing areas which have received financing for their restructuring during the last five wine years.

Article 10

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

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

(b) conditions for the grant of payments;

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

(d) environmental considerations.

CHAPTER III RESTRUCTURING

Article 11

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

2. The system shall have as its objectives the adaptation of production to market demands and the promotion of:

(a) maintaining and promoting sustainable wine-growing systems;

(b) ways of using agricultural land which are compatible with the protection and improvement of the environment, the landscape and its features, natural resources, the soil and genetic diversity;

(c) an environmentally favourable extensification of wine growing; and

(d) the use of environmental planning in wine-growing practice.

3. The system shall cover:

(a) varietal conversion;

(b) relocation of vineyards; and

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

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

4. There shall only be access to the system in those regions of a Member State in respect of which the Member State has compiled the inventory of wine-growing potential referred to in Article 16.

Article 12

1. Proposed plans for restructuring may be drawn up by:

(a) Member States;

(b) regions of Member States;

(c) producer organisations; or

(d) interbranch organisations.

2. Where a plan has not been drawn up by the Member State itself, the latter shall be responsible for its approval or rejection.

3. Plans shall comply with the rules laid down in this Chapter and implementing legislation.

Article 13

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

(a) compensation of producers for the loss of receipts due to implementation of the plan; and

(b) contribution to the material costs of restructuring.

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

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

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

3. The Community contribution to the material costs of restructuring shall not exceed 50 % of those costs. However, in regions classified as Objective 1 in accordance with Council Regulation (EC) No . . . of . . . [laying down general provisions on the Structural Fonds] (46) the Community contribution shall not exceed 75 %. Member States may not contribute to the cost in either case.

Article 14

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

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

Article 15

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

(a) a minimum size for the vineyards concerned;

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

(c) provisions preventing any increase in production arising out of this Chapter; and

(d) maximum amounts of support per hectare.

CHAPTER IV INFORMATION AND GENERAL PROVISIONS

Article 16

The inventory of wine-growing potential shall contain the following information:

(a) the areas under vines on the territory of the Member State concerned;

(b) the varieties concerned;

(c) the allocation of planting and replanting rights to producers and reserves; and

(d) the national provisions adopted pursuant to Chapter I of this Title.

Article 17

1. The Commission may assess:

(a) the production of wine-sector products;

(b) the industrial use of these products;

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

(d) in any other way the management of the market, or the need for adjusting supply.

2. In completing these assessments, the Commission may use external assistance.

Article 18

1. Producers of grapes for wine-making and producers of must and wine shall declare each year the quantities produced from the last harvest.

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

Article 19

1. Member States shall classify vine varieties. All classified varieties shall belong to the species Vitis vinifera or come from a cross between this species and other species of the genus Vitis.

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

3. Subject to any more restrictive Community provisions, only varieties shown in the classification may be planted, replanted or grafted within the Community.

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

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

Article 20

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

Article 21

Chapters I and II of this Title shall not apply in Member States where wine production does not exceed 25 000 hectolitres per wine year. This production shall be calculated on the basis of the average production during the last five wine years.

Article 22

Member States may adopt more restrictive national rules in respect of the new planting or replanting of vines.

Member States may require that the applications and information provided for in this Title be supplemented by other information necessary for monitoring the development of wine-growing potential.

Article 23

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

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

(b) the management of the classification of vine varieties.

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

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

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

TITLE III MARKET MECHANISMS

CHAPTER I PRIVATE STORAGE AID

Article 24

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

(a) table wine;

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

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

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

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

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

Article 25

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

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

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

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

Article 26

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

(a) for the fixing of the level, rate and coefficient referred to in Article 25;

(b) that long term storage contracts for table wine may only be concluded for specific table wines;

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

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

(e) that grape musts and concentrated grape musts intended for the manufacture of grape juice may not be the subject of a long term storage contract; and

(f) for the effective duration of contracts.

2. Under the procedure laid down in Article 75, provision may be made:

(a) that the private storage aid scheme shall not be applied if it is apparent from the market situation that the scheme is not justified; and

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

CHAPTER II DISTILLATION

Article 27

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

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

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

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

3. Any natural or legal person or group of persons, having made wine, shall be required to deliver for distillation all the by-products of that winemaking. Partial or total derogation may be granted for producers who prove that they have concluded long-term storage contracts with manufacturers of aromatised wine.

4. The quantity of alcohol contained in the by-products must be at least equal to 10 % in relation to the volume of alcohol contained in the wine produced if the wine has been made directly from grapes. It may not be less than 5 % where the wine has been made by vinification of grape musts, partially fermented grape musts or new wines in fermentation.

Should the relevant percentage not be reached, those subject to the obligation shall deliver a quantity of wine from their own production ensuring attainment of that percentage.

5. The delivery obligation set out in paragraph 3 may instead be satisfied by delivery to an approved vinegar manufacturer.

6. Any natural or legal person or group of persons who holds by-products of any processing of grapes other than vinification shall be required to deliver them for distillation.

7. Member States may provide that, for some or all of their producers, the distillation obligation imposed in paragraphs 3, 4 and 5 shall be replaced by a monitored system of withdrawal of by-products or by other systems which guarantee that the by-products will not be used in the wine sector. Such systems shall be implemented on the basis of objective criteria. Where any such system is applied, the Member States concerned shall inform the Commission of the measures taken.

8. The buying-in price of grape marc, wine lees and of wine delivered for distillation shall be ECU 0,995 per % vol./hectolitre.

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

10. The distiller may either:

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

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

11. It may be decided that delivery to the intervention agency may be replaced by delivery to an operator who has submitted a tender in the framework of sales organised for the disposal of the products of distillation.

12. Paragraphs 1 to 11 shall not apply to grape juice or concentrated grape juice or grape must or concentrated grape must intended for the preparation of grape juice.

Article 28

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

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

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

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

3. The buying-in price of wine delivered for distillation under this Article shall be ECU 1,34 per % vol./hectolitre.

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

5. The distiller may either:

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

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

6. It may be decided that delivery to the intervention agency may be replaced by delivery to an operator who has submitted a tender in the framework of sales organised for the disposal of the products of distillation.

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

Article 29

1. The Community may provide support for the distillation of table wines and wines suitable for yielding table wines in order to maintain traditional supplies of wine to the potable alcohol sector.

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

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

4. The level of the primary aid shall reflect:

(a) the need for the average payment by distillers to wine producers to be ECU 2,488 per % vol./hectolitre; and

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

5. The primary aid shall be implemented on the basis of a system of contracts concluded between distillers and wine producers.

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

Article 30

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

2. The measure shall have as its objectives:

(a) the elimination of specific pockets of surplus; and

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

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

4. The measure may be limited to certain categories of wine or certain areas of production.

Article 31

Alcohol taken over by the intervention agency shall be disposed of either by public auction or by a tendering process. It may not be disposed of into the sector of alcohol destined for a food use.

However, it may be decided that, where the supply of the part of that sector where the use of wine alcohol is compulsory is not assured by means of the operation of Article 29, then such alcohol may be disposed of into that sector.

Article 32

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

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

Article 33

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

(a) the derogations referred to in this Chapter;

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

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

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

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

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

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

CHAPTER III AIDS FOR USAGE OF GRAPE MUSTS

Article 34

1. Aid is hereby established for the use of:

(a) concentrated grape musts; and

(b) rectified concentrated grape musts,

produced in the Community, when they are used in order to increase alcoholic strengths as referred to point C of Annex IV and in point F of Annex V.

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

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

Article 35

1. Aid is hereby established for the use of:

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

(b) grape musts and concentrated grape musts produced in zones C III for the purpose of manufacturing, in the United Kingdom and in Ireland, products falling within subheading 2206 00 of the combined nomenclature in respect of which, pursuant to rules adopted under Article 51, the use of a composite name including the word 'wine` may be allowed by these Member States;

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

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

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

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

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

Article 36

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

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

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

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

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

CHAPTER IV GENERAL PROVISIONS

Article 37

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

Article 38

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

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

TITLE IV PRODUCER ORGANISATIONS AND INTERBRANCH ORGANISATIONS

Chapter I Producer organisations

Article 39

1. For the purposes of this Regulation, 'producer organisation` means any legal entity:

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

(b) which has in particular the aim of:

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

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

(iii) reducing production costs and stabilizing producer prices;

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

(c) the rules of association of which require its producer members, in particular, to:

(i) apply the rules adopted by the producer organisation relating to production reporting, production itself, marketing and protection of the environment;

(ii) belong to only one of the producer organisations referred to in point (a) in respect of a given holding's production of one of the products covered by this Regulation;

(iii) market their entire production concerned through the producer organisation. However, where the producer organisation so authorises and in compliance with the terms and conditions it lays down, the producer members may:

- sell not more than 25 % of their production directly on their holdings to consumers for their personal needs; and furthermore

- market themselves or through another producer organisation designated by their own organisation quantities of products which are marginal in relation to the volumes marketable by their organisation;

- market through another producer organisation designated by their own organisation products which, because of their characteristics, are not normally covered by the commercial activities of the organisation concerned;

(iv) provide the information requested by the producer organisation for statistical purposes, in particular in growing areas, quantities cropped, yields and direct sales;

(d) the rules of association of which provide for:

(i) procedures for determining, adopting and amending the rules referred to in subpoint (i) of point (c);

(ii) the imposition on members of financial contributions needed to finance the producer organisation;

(iii) rules enabling the producer members democratically to scrutinise their organisation and its decisions;

(iv) penalties for infringement of obligations under the rules of association, particularly non-payment of financial contributions, or for breach of the rules laid down by the producer organisation;

(v) rules on the admission of new members, particularly a minimum membership period; and

(vi) the accounting and budgetary rules necessary for the operation of the organisation;

(e) which has been recognised by the Member State concerned pursuant to paragraph 2.

2. Member States shall recognize as producer organisations for the purposes of this Regulation, all producer groups applying for such recognition, on condition that:

(a) they meet the requirements laid down in paragraph 1 and provide the relevant evidence, including proof that they have a minimum number of members and cover a minimum volume of marketable production, to be determined in accordance with the procedure laid down in Article 75;

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

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

(d) they effectively provide their members with the technical means for storing, packaging and marketing their produce and ensure proper commercial and budgetary management of their activities.

Article 40

1. Member States shall:

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

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

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

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

Article 41

1. In cases where a producer organisation, or an association of producer organisations which have adopted the same rules, which operates in a specific economic area is considered, in respect of a specific product, to be representative of production and producers in that area, the Member State concerned may, at the request of the organisation or association, make binding on producers established in the area who do not belong to one of the organisations in question the rules referred to in subpoint (i) of point (c) of Article 39(1).

2. For the purposes of this Article, 'economic area` means a geographical zone made up of adjoining or neighbouring production regions in which production and marketing conditions are homogeneous.

3. A producer organisation or association of organisations shall be deemed representative within the meaning of paragraph 1 where its members account for at least two-thirds of the producers in the economic area in which it operates and where it covers at least two thirds of the production of that area.

4. The rules which are made binding on all producers in a specific economic area:

(a) shall not cause any harm to other producers in the Member State or in the Community;

(b) shall not apply, unless they expressly cover them, to products delivered for processing under a contract signed before the beginning of the wine year; with the exception of rules on reporting production;

(c) shall not conflict with Community and national rules in force.

5. Member States shall notify the Commission forthwith of the rules which they have made binding on all producers in a specific economic area. Those rules shall be published in the 'C` series of the Official Journal of the European Communities.

6. The Commission shall decide that a Member State shall repeal an extension of the rules decided on by that Member State:

(a) if it finds that the extension in question to other producers excludes competition in a substantial part of the internal market of jeopardises free trade, or that the objectives of Article 39 of the Treaty are thereby endangered;

(b) if it finds that Article 85(1) of the Treaty applies to the agreement, decision or concerted practice which it has been decided to extend to other producers. The Commission's decision with regard to that agreement, decision or concerted practice shall apply only from the date of such a finding;

(c) where, following ex-post checks, it finds that this Article has not been complied with.

7. Where paragraph 1 is applied, the Member State concerned may decide, on scrutiny of evidence presented, that non-member producers shall be liable to the organisation, or where appropriate, the association, for the part of the financial contributions paid by the producer members, in so far as these are used to cover:

(a) administrative costs resulting from applying the rules referred to in paragraph 1; or

(b) the cost of research, market studies and sales promotion undertaken by the organisation or association and benefiting all producers in the area.

8. Member States shall notify to the Commission a list of economic areas as referred to in paragraph 2. Within one month of notification, the Commission shall approve the list or shall, after consultation with the Member State concerned, decide on the amendments which the latter must make to it. The approved list shall be published in the 'C` series of the Official Journal of the European Communities.

CHAPTER II INTERBRANCH ORGANISATIONS

Article 42

1. For the purposes of this Regulation, 'recognised interbranch organisations`, hereinafter referred to as 'interbranch organisations`, means legal entities which:

(a) are made up of representatives of economic activities linked to the production of and/or trade in and/or processing of the products covered by this Regulation;

(b) are established at the initiative of all or some of the organisations or associations which constitute them;

(c) carry out several of the following measures in one or more regions of the Community, taking account of the interests of consumers:

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

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

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

(iv) exploiting more fully the potential of production;

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

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

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

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

(ix) promoting integrated production or other environmentally sound production methods;

(d) have been recognised by the Member State concerned on the terms set out in paragraph 2.

2. If warranted by the Member State's structures, Member States may recognize as interbranch organisations all organisations established on their territory which make an appropriate application, on condition that:

(a) they carry out their activity in one or more regions in that territory;

(b) they represent a significant share of the production of and/or trade in and/or processing of the products covered by this Regulation in the region or regions in question and, where more than one region is involved, they can demonstrate a minimum level of representativeness in each region for each of the branches that they combine;

(c) they carry out several of the measures referred to in paragraph 1(c);

(d) they are not themselves engaged in the production or processing or marketing of the products covered by this Regulation;

(e) they do not affect the sound operation of the market organisation and carry out any of the activities referred to in Article 43(1).

3. Before granting recognition Member States shall notify the Commission of the interbranch organisations which have applied for recognition, providing all relevant information about their representativeness and their various activities, together with all other information needed for an assessment. The Commission may object to recognition within a time-limit of two months after notification.

4. Member States shall:

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

(b) carry out checks at regular intervals to ascertain that interbranch organisations meet the terms and conditions for recognition, impose the applicable penalties to such organisations in the event of their failure to do so and, if necessary, withdraw their recognition;

(c) withdraw recognition if:

(i) the terms and conditions for recognition laid down in this Regulation are no longer met;

(ii) the interbranch organisation contravenes one or other of the prohibitions imposed in Article 43(1), without prejudice to any other penalties otherwise incurred pursuant to national law;

(d) notify the Commission, within two months, of any decision to grant, refuse or withdraw recognition.

5. Only one producer organisation may be recognised in relation to the production of quality wines psr in a specified region.

6. The Commission shall check that paragraph 2 and point (b) of paragraph 4 are complied with by carrying out checks and may, as a result of these checks, ask a Member State to withdraw recognition.

7. Recognition shall constitute an authorisation to carry out the measures listed in point (c) of paragraph 1, consistent with the terms of this Regulation.

8. The Commission shall publish in the 'C` series of the Official Journal of the European Communities a list of the interbranch organisations recognised, indicating the economic sphere or the area of their activities and the activities carried out within the meaning of Article 44. Withdrawals of recognition shall also be published.

Article 43

1. Notwithstanding Article 1 of Council Regulation No 26 (47), Article 85(1) of the Treaty shall not apply to the agreements, decisions and concerted practices of recognized interbranch organisations intended to implement the measures referred to in point (c) of Article 42(1) which do not:

(a) entail the fixing of prices (without prejudice to measures taken by interbranch organisations in the application of specific provisions of Community rules;

(b) lead to the partitioning of markets in any manner whatever within the Community;

(c) create discrimination or eliminate competition in respect of a substantial proportion of the products in question; or

(d) create distortions of competition which are not necessary in achieving the objectives of the common agricultural policy pursued by the interbranch organisation measure.

2. A Commission decision declaring that Article 85(1) of the Treaty applies to the agreement, decision or concerted practice shall not come into effect earlier than the date of notification to the interbranch organisation concerned.

Article 44

1. Wherever an interbranch organisation operating in a specific region or regions of a Member State is considered to be representative of the production of and/or trade in and/or processing of a given product, the Member State concerned may, at the request of the organisation, make some of the agreements, decisions or concerted practices agreed on within that organisation binding for a limited period on other operators operating in the region or regions in question, whether individuals or groups, who do not belong to the organisation.

2. An interbranch organisation shall be deemed representative within the meaning of paragraph 1 where it accounts for at least two-thirds of the production and/or trade in and/or processing of the product or products concerned in the region or regions concerned. Where the application for extension of its rules to other operators covers more than one region, the interbranch organisation must demonstrate a minimum level of representativeness for each of the branches it combines in each of the regions concerned.

3. The rules for which extension to other operators may be requested shall concern one of the following aims:

(a) production and market reporting;

(b) stricter production rules than any laid down in Community or national rules;

(c) drawing up of standard contracts which are compatible with Community rules;

(d) rules on marketing;

(e) rules on protecting the environment;

(f) measures to promote and exploit the potential of products;

(g) measures to protect organic farming as well as designations of origin, quality labels and geographical indications.

These rules shall have been in force for at least one wine year; they may be made binding for no more than three wine years, and shall not cause any harm to other operators in the Member State or the Community.

Article 45

1. Member States shall notify the Commission forthwith of the rules which they have made binding on all operators in any one or more specific regions. Those rules shall be published in the 'C` series of the Official Journal of the European Communities.

2. Before publication takes place, the Commission shall inform the Committee provided for in Article 74 of any notification of the extension of interbranch agreements.

3. The Commission shall decide that a Member State shall repeal an extension of the rules decided on by that Member State in the circumstances referred to in Article 41(6).

4. In cases where rules for one or more products are extended and where one or more of the activities referred to in the first subparagraph of Article 44(3) are pursued by a recognised interbranch organisation and are in the general economic interest of those persons whose activities relate to one or more of the products concerned, the Member State which has granted recognition may decide that individuals or groups which are not members of the organisation but which benefit from those activities shall pay the organisation all or part of the financial contributions paid by its members to the extent that such contributions are intended to cover costs directly incurred as a result of pursuing the activities in question.

TITLE V OENOLOGICAL PROCESSES AND PRACTICES AND PRODUCT SPECIFICATIONS; DESCRIPTION, DESIGNATION, PRESENTATION AND PROTECTION

CHAPTER I OENOLOGICAL PROCESSES AND PRACTICES AND PRODUCT SPECIFICATIONS

Article 46

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

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

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

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

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

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

(b) concentrated grape must;

(c) rectified concentrated grape must;

(d) wine suitable for yielding table wine;

(e) table wine;

(f) quality wines psr;

(g) liqueur wine;

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

Article 47

1. The authorised oenological practices and processes concerning enrichment, acidification, deacidification and sweetening, and rules concerning sulphur dioxide content and maximum volatile acid content are set out in Annex IV at points A to G.

2. Authorised oenological practices and processes and rules concerning the production of sparkling wine are set out at point H of Annex IV. These rules shall not apply to dietetic sparkling wine.

3. Authorised oenological practices and processes and rules concerning the production of liqueur wine are set out at point I of Annex IV.

Article 48

1. Of the products falling within CN codes 2204 10, 2204 21 and 2204 29, only liqueur wines, sparkling wines, aerated sparkling wines, semi-sparkling wines, aerated semi-sparkling wines, quality wines psr, and where appropriate, notwithstanding Article 49(1), legally imported wines and table wines may be offered or delivered for direct human consumption within the Community.

2. Except for bottled wine in respect of which there is evidence that bottling was performed prior to 1 September 1971, wine other than quality wine psr obtained from the vine varieties referred to in Article 46(5) but not corresponding to the definitions contained in items 12 to 18 of Annex I may be used only for consumption by individual wine-grower's families, for the production of wine vinegar or for distillation.

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

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

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

6. The provisions of paragraphs 4 and 5 shall not apply to products intended for the production, in the United Kingdom and Ireland, of products falling within CN code 2206 00 for which, pursuant to rules adopted under Article 51, Member States may allow the use of a composite name including the word 'wine`.

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

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

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

10. Wine fortified for distillation may only be used for distillation. However, imported wine fortified for distillation may be used for the manufacture of potable spirits.

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

Article 49

The following products may not be offered or disposed of for direct human consumption:

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

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

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

Article 50

1. Detailed rules for the application of this Chapter, and Annex IV, shall be adopted in accordance with the procedure laid down in Article 75. These rules shall, in particular, provide for:

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

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

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

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

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

(a) the authorised oenological practices and processes, other than those set out in points C to I of Annex IV, for the production and preservation of the products referred to in Article 46(1);

(b) dispositions regulating the blending and coupage of musts and wines; if provision is made for the blending of white wine and red wine, the proportion of white wine in the end product may not exceed 10 %;

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

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

(e) the conditions governing holding and circulation, the use of products as referred to in Article 49 or lists of products excepted from the requirements of that Article, and the establishment of criteria for the purpose of avoiding hardship in individual cases, the conditions under which Member States may authorise the holding, circulation and use of products not complying with the provisions of this Regulation other than those referred to in point (a) of Article 49, or with provisions adopted pursuant to this Regulation; and

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

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

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

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

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

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

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

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

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

Automatic methods of analysis used instead of a Community method of analysis shall be considered equivalent to the Community methods of analysis re