EN Official Journal of the European Union C 57/1

Opinion of the Committee of the Regions on the Communication from the Commission to the Council and the European Parliament Towards a sustainable European wine sector

(2007/C 57/01)

THE COMMITTEE OF THE REGIONS,

Having regard to the Communication from the Commission to the Council and the European Parliament — Towards a sustainable European wine sector (COM(2006) 319 final),

Having regard to the Commission staff working document, Summary of the impact assessment annexed to the Communication from the Commission — Towards a sustainable European wine sector (SEC(2006) 780 final),

Having regard to the decision of the European Commission of 22 June 2006 to consult it on this matter, under the first paragraph of Article 265 of the Treaty establishing the European Community,

Having regard to its Bureau's decision of 25 April 2006 to instruct the Commission for Sustainable Development to draw up an opinion on this subject,

Having regard to Council Regulation (EC) No 1493/1999 of 17 May 1999 on the common organisation of the market in wine,

Having regard to the Ex-post evaluation of the Common Market Organisation for wine,

Having regard to the conclusions of the Wine seminar ‘Challenges and opportunities for European wines’ (Brussels, 16 February 2006),

Having regard to the conclusions of the public hearing held by the European Parliament's Committee on Agriculture and Rural Development ‘Towards a sustainable wine industry’ (Brussels, 12 July 2006),

Having regard to the conclusions of the 5th World Wine Forum (La Rioja, 28, 29 and 30 March 2006),

Having regard to the conclusions of the XXIX World Congress of Vine and Wine and the IV General Assembly of the OIV (International Organisation of Vine and Wine) (La Rioja, 26 to 30 June 2006),

Having regard to the conclusions of the AREV International Council meeting (Brno, 20 July 2006);

Having regard to its draft opinion (CdR 257/2006 rev. 1) adopted on 6 October 2006 by the Commission for Sustainable Development (rapporteur: Mr Pedro Sanz Alonso, President of La Rioja Autonomous Community (ES-EPP));

adopted the following opinion at its 67th plenary session, held on 6 and 7 December 2006 (meeting of 6 December):

1. The Committee of the Regions' views

The Committee of the Regions

1.1 General comments

1.1.1 considers that the Commission proposals do not make specific reference to differing regional and local features;

1.1.2 supports the Commission's decision to reform the wine sector in the light of falling consumption, structural imbalances in production and marketing, and intensifying competition on global markets;

1.1.3 regrets that the focus of the Commission's proposal tends to obscure the role of wine production in upholding agriculture and man-made landscapes, the rural environment and sound spatial planning, by giving priority in the proposal to purely economic criteria, and lacking the sensitivity which the farm sector in general, and wine in particular, require;

1.1.4 agrees that the wine sector should continue to have its own specific market organisation (CMO);

1.1.5 draws attention to the lack of social and socio-economic vision in the Commission proposal;

1.1.6 shares the Commission's view that the Member States should be given the greatest possible flexibility, so they can propose solutions suited to particular local and regional circumstances;

1.1.7 consequently endorses the Commission proposal to foster greater subsidiarity for the Member States and, within them, for the regions;

1.1.8 emphasises, nevertheless, the need to establish horizontal criteria for Community policies based on a comprehensive view of the European wine sector;

1.1.9 is critical of the Commission's approach of seeking to restore balance by grubbing up 400 000 ha. The declarations made in the Commission document regarding the importance of the European wine sector, the quality of our wines and their significance to the economic sector are contradicted by its approach of reducing production through grubbing up vines, while ignoring more constructive proposals such as winning new markets or competing with New World wines;

1.1.10 points to the need to step up communication/information to the general public recommending an increase in moderate wine consumption;

1.1.11 highlights the need for wine-related communication and promotion to touch upon the potential qualitative health benefits of moderate wine consumption and its contribution to good land use, together with the environmental advantages of wine production;

1.1.12 underlines the need to avoid a breakdown of the European socio-economic wine making system when implementing reform of the wine CMO;

1.2 Problems of the existing CMO

1.2.1 points out that the existing CMO has failed to provide an adequate response in terms of the organisation, structure, development or competitiveness of the wine sector against the backdrop of a globalised economy in areas such as the market, regulation of production potential, wine making practices, geographical indication, labelling, health and communication;

1.2.2 agrees with the figures provided by the Commission on the decline in wine consumption in Europe and the current structural production surplus, and that imports are growing faster than exports;

1.2.3 agrees that Community producers must be more competitive on a globalised market;

1.2.4 agrees with the Commission that production potential must be regulated in the light of the increased yields in some Member States;

1.2.5 is concerned that in some cases, the restructuring and reconversion schemes have undermined the objective of pursuing quality in favour of increasing production;

1.2.6 notes the continued existence of irregular vineyards in some Member States, aggravating imbalances between supply and demand and favouring some producers to the detriment of others;

1.2.7 agrees with the Commission that market support measures in the form of crisis distillation have not been sufficiently effective in guaranteeing producers' income;

1.2.8 voices its concern at the conversion of a measure such as crisis distillation, which should be of a short-term nature, into a structural measure, becoming one of the main objectives of the current financial statement, thereby drawing resources away from quality and marketing/consumption measures. It considers that distillation of potable alcohol should also be covered, together with distillation of by-products. It is emphasised that distillation of by-products should account for a minimum of 15 % of the alcohol from raw materials;

1.2.9 welcomes the retention of private storage as an effective market regulation tool, and proposes that greater flexibility be introduced in order to make it more accessible;

1.2.10 agrees that all wine making practices should be covered by the OIV, and that they should be based on scientific and technical studies. They must, of course, provide full food safety guarantees;

1.2.11 warns that under no circumstances should such wine making practices lead to confusion among consumers, by undermining the current practices on which the quality they appreciate is grounded. This would be harmful for those European regions which produce their wines by using traditional practices which are geared to final product quality or, as the Commission document puts it in the third point of the section Objectives for a new EU wine policy, ‘… that preserve the best traditions of EU wine production …’;

1.2.12 is aware of the confusion caused to consumers by the excessively complicated rules governing definitions, wine making practices and classification of wines, and therefore proposes that they be simplified;

1.2.13 accepts that simpler labelling may be of benefit for lower quality wines which have no other means of making themselves distinctive and therefore more competitive on the markets, but is opposed to the option of using terms so far allowed only for QWpsr having a clearly prejudicial impact on highly successful wines, produced under the traditional European quality model;

1.2.14 welcomes the concern at rising alcohol consumption among young people and, while it is true that wine consumption by this group has fallen substantially in recent years, recognises that any information initiative on the potential beneficial effects of wine must also make clear that young people are particularly susceptible to imitating adult alcohol habits, and must indicate the recommended limits for alcohol consumption that specifically apply to young people;

1.3 Objectives of the European wine sector

1.3.1 supports the continuation of a competitive and sustainable European wine sector;

1.3.2 supports the establishment of a wine regime based on clear and straightforward standards, and on effective rules enabling supply and demand to be matched;

1.3.3 congratulates the Commission on its aim of creating a wine regime that preserves the best traditions of EU wine production, reinforces the social fabric of rural areas and ensures respect for the environment, although some of the measures proposed in the document contradict these good intentions, especially that of grubbing up vineyards located mainly in lower-yield areas;

1.3.4 advocates CMO reform based on two pillars: quality and communication, in order to secure bigger markets for European wines;

1.4 Options ruled out by the Commission

1.4.1 agrees with the Commission's view that the options of maintaining the status quo, reforming the wine CMO along the lines of CAP reform and deregulating the wine market should be ruled out;

1.5 Profound reform of the wine CMO

1.5.1 acknowledges the challenge of adapting the regulatory framework and the production structure to obtain a sustainable and competitive European wine industry with long-term prospects;

1.5.2 is pleased to see that GIs are not included in the measure to liberalise planting rights under Variant A, and assumes that the exclusion of such indications will be permanent, and similarly in the rest of the sector, since liberalisation would seriously damage the European production model;

1.5.3 disagrees with the proposal to restore a balance between supply and demand by providing incentives for the grubbing-up of vineyards and subsequently liberalising planting rights;

1.5.4 is critical of this rather timid-looking approach, as it resolves the market imbalance by encourage grubbing-up of vines without even mentioning the possibility of stepping up marketing;

1.5.5 rejects the view that liberalising planting rights would provide a direct boost to the sector's competitiveness by reducing production costs, since it fails to acknowledge that planting costs are directly linked to the commercial success of products from the areas concerned and are in themselves a tool for achieving a supply/demand balance within them;

1.5.6 takes a negative view of the idea of applying the sugar sector reform model to the wine CMO, as this would entail the disappearance of a large proportion of producers in order to guarantee the continuity of production and would, moreover, boost imports of wines into the EU;

1.5.7 does not accept that one of the objectives of CMO reform, particularly in the wine sector, should depend on grubbing up 400 000 ha, especially when the amount earmarked for this purpose accounts for some 40 % of the overall financial package for reform and the effect on reducing production would certainly be much more limited than originally expected;

1.5.8 rejects the abolition ‘… from day one …’ of market management tools which, although clearly leaving room for improvement in the way they are both designed and applied, should not be abolished without a transitional period, so that the good points of some of them can be harnessed. During this transitional period, the amounts allocated to market measures should be gradually reduced, with measures geared to improving quality, promotion and marketing being increased in parallel;

1.5.9 accepts the introduction of the ‘national envelope’ mechanism provided it does not lead to renationalisation of the CAP, insists on a full and practical definition of the list of measures for which the EU authorises funding from this national envelope, and calls for application of the subsidiarity principle in the regions for the management of such funds;

1.5.10 welcomes the plan for certain crisis management measures to be implemented by the Member States;

1.5.11 welcomes the fact that these measures would be subject to certain common rules, in order to prevent any of them constituting hidden aid through measures which might distort competition between Member State producers, such as market aid;

1.5.12 rejects the Commission's approach to rural development, which consists primarily of incentives for farmers to stop farming, in the form of highly specific economic measures, rather than opting to uphold farming as a key component of development in rural areas, and would also refer in general terms to the Committee of the Regions' opinion and declaration on this subject;

1.5.13 does not agree with the absence of any explicit reference to winemaking in very steep areas, which incurs higher costs, because of the contribution this form of farming makes to conserving the environment, shaping the landscape and boosting rural tourism, and because it helps to support sustainable rural development;

1.5.14 opposes the transfer of funds from the first pillar to the second to finance the European wine sector, and advocates retaining the CMO's financial statement;

1.5.15 welcomes the emphasis the communication lays on simplifying the rules and making them clearer and more transparent and effective;

1.5.16 disagrees, however, with the priority given to profound reform of the existing regulatory framework on quality, with a view to enhancing the compliance of EC quality policy with the international rules: although it is accepted that this adjustment is necessary, it does not by itself constitute an adequate quality-related objective;

1.5.17 supports application at international level of the European concept of quality wines, based on geographical origin (QWpsr — ‘quality wine’ produced in specified regions). The concept should be reinforced, confirmed, promoted and enhanced;

1.5.18 welcomes the proposal to expand the role of the interprofessional organisations so they can control and manage the quality of the wine produced in their territories. To this end, the most effective experiences thus far should be catalogued, disseminated and put into practice;

1.5.19 agrees that control systems and instruments, which should provide consumers with appropriate guarantees, ought to be reinforced;

1.5.20 is critical of the review of responsibilities, particularly the transfer of Council competences to the European Commission, and feels that these changes are unnecessary;

1.5.21 agrees that OIV practices should be recognised and that they should be examined, such examinations to be systematically based on scientifically-grounded reports, and backed by the results of research projects carried out in the EU;

1.5.22 calls for the maximum 2 % volume increase to be maintained, using only must for enrichment;

1.5.23 disagrees with automatic authorisation of the use of OIV wine making practices in the EU, even in cases where the wines concerned are to be exported to regions in which such practices have been approved. The practices must be subjected to the procedure mentioned in the previous point;

1.5.24 welcomes the assurance of an acceptable minimum level of environmental care in the wine making and ageing process. It should be pointed out, in this regard, that experiments in this area have been funded under the LIFE Initiative, which could provide highly valuable, relevant information;

1.5.25 welcomes the proposal to simplify labelling provisions by setting up a single legal framework applying to all the different categories of wine, while repeating that there must be guarantees that consumers will not be confused: labelling must therefore be simple and uphold consumers' interests as well as being clear;

1.5.26 warns of the risk that might ensue from the removal of the distinction between the rules on labelling wines with and without GIs, all the more since it is envisaged to facilitate the indication of vintage and vine variety for wines without GIs;

1.5.27 is therefore opposed to the appearance of information such as variety and vintage for wines without GIs;

1.5.28 welcomes the proposal to maintain and improve traditional terms;

1.5.29 welcomes the proposal to adapt the policy on trademarks and amend the language rules in the wine sector;

1.5.30 confirms that quality, marketing and promotion policy must be one of the main recipients of the resources earmarked by the financial statement for the wine CMO;

1.5.31 agrees that the strongest possible guarantees must be provided regarding health and consumer information and protection, which could moreover have positive effects on consumption, in view of the health-giving properties of modest consumption of wine for certain categories of people, at the same time as it can have more damaging effects for other categories and if consumed to excess;

1.5.32 welcomes the concern to provide consumers with the fullest and most accurate information about the origin of the product through appropriate labelling rules on traceability;

1.5.33 welcomes the proposal to inform consumers on the environmental aspects of wine making and production practices;

1.5.34 welcomes the Commission's determination to pursue a responsible promotion and information policy. This should not however be restricted to promotion projects outside the EU;

1.5.35 strongly supports the idea of carrying out information campaigns within the EU on responsible and moderate wine consumption, emphasising the concept of moderate wine consumption and, in consequence, clearly separating this practice from the harmful effects of excessive consumption;

1.5.36 believes that it is necessary for the Commission, in the context of its health and youth policies, to earmark sufficient funds for information campaigns on responsible moderate consumption of wine, to be carried out also at local level with the involvement of local and regional authorities, schools, universities and associations;

1.5.37 agrees that minimum environmental requirements must be included for the wine sector regarding soil erosion and contamination, use of plant protection products, and waste management;

1.5.38 warns that EU concessions in WTO negotiations must not involve using the European wine sector as a bargaining chip in order to secure advantages in other sectors, agricultural or otherwise;

1.5.39 welcomes the Commission's intention to ensure compliance with the legislation on irregular and illicit vineyards and, in the event that it is not observed, to take appropriate measures under the clearance of accounts procedures or infringement procedures;

1.5.40 opposes the idea of taking the current financial statement as a ceiling when putting the legislative proposals for the future CMO into practice, given the Commission's ambitions regarding the competitiveness of the European wine sector;

1.5.41 shares the Commission's concern to make best use of the financial resources and good management, but again insists that the financial statement should be adjusted to meet any new needs arising from the reform;

1.5.42 welcomes the savings which the Commission intends to achieve with this reform, due to ‘simplification and better regulation, with positive consequences on limiting the management and statistical monitoring costs, on easing implementation and controls, hence on limiting the risk of fraud and misuse of public funds. In addition it would increase management efficiency through a higher level of subsidiarity given to Member States for the determination of the type of measures they need to respond to their specific situation’. It would however point to the increased work arising from labelling controls for wines without GIs, and to the transfer of some control tasks so far carried out by the European Commission to the Member States by virtue of subsidiarity, in such a way that the final outcome is likely to be invariable;

1.5.43 in order to deal with the risk of adulterated wines, distortions to trade and growing production surpluses, is opposed to lifting the ban on producing wine from imported grape must. As well as denaturing the quality of the wine, this could create problems as regards the origin, provenance and identification of the product on the part of the consumer;

1.5.44 argues that, as at present, new vineyards should only be permitted in future on the basis of planting rights, in order to prevent the negative repercussions on the market of an expansion of EU wine producing potential;

1.5.45 considers that when recognising OIV-approved wine-making practices, attention must be paid to safeguarding well-established European wine-making traditions;

1.5.46 is opposed to removal of the requirement for a minimum natural alcoholic strength for wine;

2. The Committee of the Regions' recommendations

Overview of the new wine CMO

2.1 advocates a European wine making model that sets out to make the sector sustainable through access to markets and by consolidating and boosting its presence on world markets; this should be underpinned by the three pillars of Quality, Competitiveness and the Market;

2.2 upholds a model of moderate wine consumption, giving priority to communication and promotion of its health-giving and cultural characteristics, and a European agri-food production model linked to quality, tradition, the land and traditional cultural practices;

2.3 calls for harmonisation and consistency between all the Community policies affecting the sector: agriculture, health, tax, budget and trade;

2.4 believes that, in order to put these principles into practice, the wine CMO reform legislation and its financial statement should concentrate primarily on achieving quality, improved marketing and communication/promotion and on ensuring the survival of traditional European winemakers, of farming in rural areas, of this form of land-use and of the essential role that winemaking plays in protecting the environment in certain regions;

2.5 points out that the financial resources must focus significantly and primarily on these principles, under a horizontal approach (European policy);

Specific recommendations

2.6 considers reform of the wine sector to be essential, in the form of a specific CMO for the sector, in the light of falling consumption, structural imbalances in production and marketing, and Europe's relative loss of position on the world stage over recent years;

2.7 is of the view that the wine sector's role in upholding agriculture, the rural environment, landscape, culture and good land use must never be overlooked. Similarly, the farmers' role in European integration must not be forgotten: consequently the reform proposals must not have an excessively economic focus, given the fragile nature of the European farm sector in general. The Commission's proposal must therefore retain a social and socio-economic vision. But this economy-focused and free-market driven proposal for the large-scale grubbing-up of vineyards and their liberalisation as of 2013 clearly runs counter to the principles of maintaining farming and land use, because it will lead to farmers ceasing activity;

2.8 hopes to secure greater support from the European Commission for encouraging higher quality wines in disadvantaged upland regions and regions which suffer discrimination as a result of funding through national financial frameworks;

2.9 proposes that given the present urgent need to introduce measures to resolve the problems of the European wine sector, all proposals included in the final reform document should be implemented from the outset, with some (promotion/marketing) being stepped up while others (market measures) are wound down, and using the current financial statement or, if necessary, an increased budget;

2.10 suggests that a proposal must be formulated which seeks to boost the presence of European wine production on world markets in the medium and long term;

2.11 points to the need to maintain the overall amount of the financial statement;

2.12 proposes joint, coordinated action that is in keeping with the Community policies affecting the sector: agriculture, tax, trade, health and budget;

2.13 warns that under no circumstances should wine making practices lead to confusion among consumers, by undermining the current practices on which the quality they appreciate is grounded. This would be harmful for those European regions which produce their wines by using traditional practices that are geared to final product quality — in other words, that preserve proven traditions of EU wine production;

2.14 accepts the introduction of the ‘national envelope’ mechanism provided it does not lead to renationalisation of the CAP, insists on a full and practical definition of the list of measures for which the EU authorises funding from this national envelope, and calls for application of the subsidiarity principle in the regions for the management of such funds;

2.15 proposes that the European Commission should, with a view to the international recognition of the ‘Geographical Indication’ concept, step up its backing and promotion for the distinctiveness of these wines, under the intellectual property aspects of WTO agreements (TRIPs);

2.16 suggests that the purpose of labelling should be to provide clear and accurate information for consumers, prioritising differentiation, without sacrificing aspects such as guarantees of authenticity in the production of certain wines of higher quality than others. Such guarantees should be backed by appropriate control arrangements. The ultimate aim of clear labelling must be to inform the consumer about the product, using terms which clearly distinguish between different practices;

2.17 proposes retaining vineyard restructuring and reconversion programmes under the ‘national envelope’, and that these programmes should reflect the most efficient vineyard models from the point of view of control and achievement of the programmes' objectives;

2.18 emphasises the need to influence how the European concept of quality wines based on geographical origin (QWpsr) is applied at international level. The concept must be reinforced, confirmed, promoted and enhanced;

2.19 considers that OIV wine making practices should not be authorised automatically for use in the EU without the necessary research and experiments, based on purely scientific criteria;

2.20 argues that quality, marketing and promotion policy must be one of the main recipients of the financial resources earmarked for the wine CMO;

2.21 strongly advocates a promotion policy including information campaigns in favour of moderate, responsible consumption, as well as a European agri-food model focusing on quality, its specific characteristics, and its links to the land, culture, history and traditions of its peoples, and to this end having a system of economic support provided by the CMO itself, in addition to other agri-food promotional instruments that the European Union might have already or implement in the future;

2.22 warmly welcomes the idea of carrying out information campaigns within the European Union on responsible and moderate wine consumption, and calls for initiatives in this field, inter alia at local level, involving local authorities, schools, universities and associations.