EN Official Journal of the European Union C 120/42

Opinion of the European Economic and Social Committee on the ‘Proposal for a Council Regulation on the common organisation of the market in wine and amending certain Regulations’

COM(2007) 372 final — 2007/0138 (CNS)

(2008/C 120/10)

On 7 September 2007, the Council decided to consult the European Economic and Social Committee, under Articles 36 and 37 of the Treaty establishing the European Community, on the

Proposal for a Council Regulation on the common organisation of the market in wine and amending certain Regulations.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 27 November 2007. The rapporteur was Mr Kienle.

At its 440th plenary session, held on 12 and 13 December 2007 (meeting of 12 December), the European Economic and Social Committee adopted the following opinion by 109 votes to five with 12 abstentions.

1. Summary of EESC conclusions and recommendations

1.1 The European Economic and Social Committee (EESC) welcomes the Commission's recommendation in its proposal on reform of the European market organisation in wine to maintain a specific market organisation for wine. The Committee would have liked the European Commission to take on board more of the recommendations it elaborated in its opinion of 14 December 2006 on the Communication from the Commission to the Council and the European Parliament — Towards a sustainable European wine sector (1).

1.2 The EESC repeats its point that the main aim of the reform must be to improve the competitiveness of European wines and win back market shares. As far as the reform and external trade provisions are concerned, the Commission should take more account of the fact that Europe's wine sector leads the global market.

1.3 The EESC notes that wine and wine-growing are important and integral aspects of Europe's culture and way of life. Wine-growing shapes the social and economic environment of many European wine-growing regions. The Committee therefore believes it is important that both the objectives and the measures of the reform should reflect not just the economic effects, but also the consequences for employment, social structures and the environment — in particular through grubbing-up programmes — as well as consumer protection and health. The European Commission's proposal falls short in this regard.

1.4 The EESC would point out that wine-growing provides a livelihood for 1.5 million mainly small, family-run businesses in the European Union and at least seasonal employment for over 2.5 million workers. The Committee is therefore particularly concerned that the reform should give preference to measures that have a positive impact on the incomes of wine-growers and job opportunities in Europe's wine-growing sector.

1.5 The EESC considers the European Commission's proposal to provide the wine-producing Member States with an individual national budget envelope as an important fillip to subsidiarity and consideration of regional differences. However, the list of support instruments must be extended if the objectives of the reform are to be achieved.

1.6 The EESC regards the proposals submitted by the European Commission on consumer information measures as inadequate. It welcomes the proposals for promotion in export markets, but believes this idea should be extended to include the internal market.

2. Proposals of the Commission

2.1 The European Commission is proposing reform of the market organisation for wine mainly in the following areas: — support measures within a national budget envelope to restructure and convert vineyards, fodder crops, mutual funds, harvest insurance and promotion of wine on third markets; — financial transfer to rural development; — changing wine-making provisions, especially as regards oenological practices, increasing alcohol strength, and acidification; — changing labelling requirements, in particular for the indication of provenance and origin, as well as adaptation of other labelling requirements; — producer and inter-branch organisations; — relaxation of planting rules from 2013; — voluntary grubbing-up programme; — dismantling of current market mechanisms; — transfer of powers from the Council of Ministers to the European Commission.

3. General comments

3.1 The EESC broadly endorses the objectives of the European Commission proposal. However, it considers that certain adjustments and improvements are needed in the case of the measures recommended.

3.2 The EESC reiterates its call for the competitiveness of European wine producers in the internal market and export markets to be improved, for Europe as a business location to be strengthened, for quality measures to be supported and for there to be more focus on market developments and consumer preferences. The Commission does not take enough account of these issues in its current proposal.

3.3 The EESC also thinks it is important to make the economic objectives specific and to supplement them with social and employment policy objectives. These would include improving the income of wine-producing holdings, making it easier for young wine-growers to develop their businesses, and providing sustainable employment opportunities and appropriate remuneration for permanent and seasonal workers.

3.4 The EESC still has reservations about transferring powers from the Council of Ministers to the Commission, e.g. in relation to authorisation of more recent wine-making practices, since the Commission has not adequately defended the interests of European wine producers when negotiating bilateral agreements.

3.5 The EESC re-affirms its view that current funding must be increased to take account of the accession to the EU of two new wine-producing countries.

3.6 The EESC again calls for improved and more comprehensive market monitoring, so that better data on production, trade and consumption are available as the basis for organisation of the wine market. The general data used hitherto are important, but inadequate. It is also necessary to provide updated information on changes in production structures, distribution channels and consumer behaviour.

3.7 The EESC agrees with the Commission's view that the new market organisation in wine should come into effect as soon as possible. However, it considers a ‘phasing-out period’ to be necessary so that businesses can adapt to the new framework gradually if required.

3.8 The EESC is pleased that the European Commission has modified its proposal for a grubbing-up programme. However, it would make sense for these measures to be carried out under regional or national structural programmes, in order to avoid the negative effects of one-off grubbing-up measures (e.g. fallow land surrounded by vineyards) and ensure systematic implementation.

3.9 The EESC reiterates its objection to complete liberalisation of planting rules, as this would jeopardise the economic, social, environmental and landscape maintenance objectives of wine market reform.

4. Specific comments

4.1 Title II: support measures; Chapter 1: support programmes

4.1.1 The EESC welcomes the fact that its views have basically been taken on board in so far as the proposals provide for more account to be taken of regional differences and more consistent implementation of subsidiarity in the wine sector through the introduction of national budget envelopes. However, it regards the support measures provided for as inadequate.

4.1.2 The EESC agrees with the European Commission that a more consistent and more appropriate Community framework should be maintained. Within that framework, it should fall to the Member States to select measures for their wine-producing regions. Producer organisations, sectoral associations, regulatory bodies and other organisations with equivalent objectives should play an important role here.

4.1.3 The EESC would like to see a comprehensive list of measures that reflect the goals of the market organisation. It refers to its previous opinions on reform of the CMO in wine (2), in which it already called among other things for programmes to promote product quality in wine-growing, cellaring, marketing and consumer information, measures to support disadvantaged areas, and the possibility of direct area payments.

4.1.4 The EESC reiterates its call for coherent, integrated measures with a view to maximising efficiency. Such measures should be incorporated into comprehensive plants for the entire production chain, from wine-growing to processing and marketing of the product. This also includes measures to develop alternative market outlets for all grape products.

4.1.5 The EESC once again urges that a special programme be introduced to promote disadvantaged wine-growing areas, such as steep and sloping vineyards, and areas subject to extreme climate conditions.

4.1.6 The EESC welcomes the fact that the EU Commission has placed considerable emphasis on export promotion measures within the national budget envelope. Measures are also needed to inform consumers in the internal market about wine-growing and in particular about the advantages of moderate wine consumption and the dangers of alcohol abuse. It reiterates its call for support to be given to setting up a European market monitoring system.

4.1.7 The Committee does not regard immediate abolition of intervention measures as feasible. It therefore recommends that aids should be provided within the national envelopes during the 2008-2010 ‘phasing-out period’ for distillation to produce potable alcohol and for private storage support.

4.1.8 The Committee believes that the national financial envelopes should include crisis management measures based on shared responsibility among wine-producers. Existing measures (harvest insurance and mutual funds) are not adequate for managing economic crises. This makes it necessary to consider whether existing emergency distilling arrangements are effective and whether an emergency distillation system could be provided for within the national financial envelopes.

4.1.9 The prevailing ban on overpressing of grapes, grape mash and wine lees has proved an effective way of ensuring the quality of wine products and preventing abuse, and should therefore be retained. Member States should be authorised to raise the percentage of production for distillation during certain years.

4.1.10 The EESC notes the European Commission's elaboration of a proposal for allocating the budget for the national financial envelopes. Special financial provisions should be set out for the new Member States, for which no background information is available, according to the amount of land planted with vines.

4.2 Chapter 2: Financial transfer

4.2.1 In various opinions the Committee has emphasised the importance of the second pillar for the future development of rural areas, to which the European wine-producing areas also belong. But even taking account of this fundamental broad objective, the EESC considers that, with a view to resolving the specific problems of the wine sector, all the measures discussed in connection with the reform of the wine market should be financed from the wine budget. This budget must therefore not be reduced, either through cuts or transfers of funding.

4.3 Title III: regulatory measures; Chapter 2: Oenological practices and restrictions

4.3.1 The EESC believes that it is absolutely essential to establish an internationally recognised definition of ‘wine’. This would also make it necessary to lay down recognised production methods. It should be made clear that ‘fruit wines’ are not covered by the wine market organisation.

4.3.2 The EESC believes that measures to bring wine-making practices into line with OIV standards should be incorporated more consistently into the strategic thrust of bilateral or international trade agreements. The authorisation of any practice for imported wines that is approved elsewhere in the world would conflict with the proposed closer alignment of European wines with OIV standards and lead to further distortions in competition. The EESC is also against the proposal to allow for wine exports oenological practices that are banned on the internal market.

4.3.3 The EESC recommends that a catalogue of authorised oenological practices should be attached as an appendix to this directive and that the Council should retain its powers to update these practices and authorise new ones.

4.3.4 The EESC is pleased that the European Commission has distanced itself from the proposal to authorise the production in Europe of wine made from imported grape must or must concentrate and the proposal to authorise the blending of EU products with products from other countries.

4.3.5 The EESC calls on the Commission to take account in its proposals for production rules of the varying location, climate and weather conditions in the European Union. It notes that this issue is very sensitive and must not lead to rifts within the European wine sector or even a boycott of the reform proposals. The EESC, however, supports the demand for tighter control of oenological practices in order to enhance and guarantee the quality of wines.

4.3.6 The EESC therefore bases its assessment of the Commission's proposals on its previous opinion, the analyses set out by the Commission, the proposed liberalisation of wine production methods, recognition of wine production processes in bilateral agreements, and on the objectives of the reform, especially increasing competitiveness and reducing production costs. After weighing up the pros and cons of the Commission's proposals, the EESC advocates a general continuation of the existing rules governing the use of sucrose and aid for must concentrate.

4.4 Chapter III: Designations of origin and geographical indications

4.4.1 The EESC welcomes the European Commission's elaboration of detailed proposals on labelling wines according to their provenance. It shares the Commission's view that the concept of quality wines in the Community is based inter alia on the specific characteristics attributable to the wine's geographical origin. Protecting the designation of origin and geographical indications is a high priority. For this reason the use of a designation of origin or geographical indication should be conditional on production within the delineated geographical areas.

4.4.2 The EESC welcomes the fact that the European Commission has now explained and elaborated its proposals such that it is possible to maintain tried-and-tested quality policy systems that are not, or not solely, based on the principle of designations of origin. Quality wine testing in particular has proved effective in many countries for producers and in particular consumers.

4.4.3 Many questions nevertheless remain regarding the compatibility with Commission Regulation (EC) No 753/2002 of 29 April 2002 laying down certain rules for applying Council Regulation (EC) No 1493/1999 as regards the description, designation, presentation and protection of certain wine sector products (3). The EESC therefore calls for an equivalency table to be presented from which the impact on geographical and traditional designations can be ascertained.

4.5 Chapter IV: Labelling

4.5.1 The EESC regards the Commission's proposals in respect of labelling as highly complex, and it expects the Commission to carry out an accurate simulation of the impact of the proposed changes.

4.5.2 The EESC draws attention to the fact that, following a debate lasting a number of years, labelling law has been amended only very recently. It therefore calls upon the Commission to explain what new factors now come into play that were not assessed in the debate which has just come to an end.

4.5.3 The EESC welcomes moves to simplify labelling provisions, provided that they promote improved consumer information. Such changes must not, however, increase the risk of distorting competition or misleading consumers, resulting in a flood of legal disputes. The proposal by the European Commission for the grape variety and vintage year to be optionally indicated for wines without a designation of origin or geographical indication should also be regarded as questionable from this perspective. This proposal can only be endorsed if a control and certification system is provided for to ensure the traceability of such wines so as to protect consumers and prevent misinformation and unfair competition.

4.5.4 The EESC draws attention to the growing linguistic diversity in an ever larger European Union. This linguistic diversity may give rise to trade barriers, as is currently the case with regard to the indication of sulphite use. It should therefore be possible to give mandatory information on labels, e.g. ingredients, using readily comprehensible symbols.

4.6 Title V: Production potential

4.6.1 The EESC welcome the fact that the Commission has modified its proposals on grubbing-up rules and reduced the budget envisaged. It recognises the importance of grubbing-up as an instrument of market organisation which is to be offered as part of the regional or national structural programmes for limited periods of three to five years within the overall Community framework. Grubbing-up should be offered as a voluntary measure for removing vines from land that is not suitable for viticulture and as a cushion against the social effects of withdrawal from production of businesses that are not viable.

4.6.2 The EESC is pleased that the Commission has changed its original deadlines for liberalising planting rules. However, the EESC is still against full liberalisation — even at a later point — since this would jeopardise the economic, social, environmental and landscape maintenance objectives of the wine-market reform. It is not acceptable to shift wine production from culturally valuable man-made wine-growing landscapes to areas that are cheaper to cultivate, owing to general responsibility for employment, the economy and infrastructure of wine-growing regions, the social fabric, the environment and nature conservation.

4.6.3 If the EU planting regulation, together with a ban on new planting, is to be abolished, an enabling framework should be created to make it possible for wine-growing regions to continue applying or develop their planting rules in accordance with the objectives of the European wine market organisation.

4.7 New title: promotion and information

4.7.1 The EESC believes that the Commission proposals fall short of what is needed in order to win back market shares from wines from third countries, especially the New World.

4.7.2 The EESC calls on the Commission to provide, within the national budget envelopes, for promotion of consumer information and sales promotion measures not just in export markets, but also within the internal market. With this aim in mind, particular attention must be paid to providing comprehensive information on the benefits of moderate wine consumption as an integral part of a healthy diet and a modern lifestyle.

4.7.3 The EESC stresses that any information and promotional measures should include all products made from grapes.

4.7.4 The EESC recommends that communication measures for wine products be linked to tourism, gastronomic activities and other products in wine-growing regions.

Brussels, 12 December 2007. The President of the European Economic and Social Committee Dimitris DIMITRIADIS

(1) OJ C 325, 30.12.2006, p. 29.

(2) OJ C 101, 12.4.1999, pp. 60-64 and document cited in footnote 1.

(3) OJ L 118, 4.5.2002, pp. 1-54.