WRITTEN QUESTION E-3110/96 by Amedeo Amadeo (NI) to the Commission (18 November 1996)

Subject: Reform of the common organization of the market in wine

During the 1995/96 wine year structural difficulties have emerged and production volumes fallen, resulting in higher prices and costs and a corresponding loss of international competitiveness.

Wine prices have risen sharply, and less frequent use has consequently been made of distillation contracts: in Italy, for example, only 800 000 hectolitres has been distilled out of the 3.8 million allowed. In view of the changed situation, the Commission ought to reconsider its policy of conversion and the moves to scale down the wine market.

Will the Commission therefore:

1. suspend the aid arrangements for grubbing-up;

2. cancel the EAGGF funds intended to finance new vine planting and lower the running costs of vineyards;

3. resolve the problem of enrichment, so as to ensure that those who may chaptalize their must and those who may not are placed on an equal footing in cost terms;

4. launch promotion and advertising campaigns throughout the Union and in third countries;

5. reduce distillation operations which adversely affect production of alcohol for oral consumption;

6. bring aid for distillers into line with the purchase price of marcs and lees, since that price level determines whether distillers will choose to produce marc brandy to be marketed or raw alcohol to be delivered to the intervention agencies?

Answer given by Mr Fischler on behalf of the Commission (10 December 1996)

The Commission would like to make a number of comments on the market analysis put forward by the Honourable Member. The 1995 harvest was indeed lower than in previous years and the price movements at the beginning of the year were one of the consequences of reduced supply. Without ignoring the lessons of that year, it appears premature to regard such a short period as implying permanent changes in the vine-growing sector. The Commission's view is supported by estimates of an increase of around 10% in the 1996 harvest and the trend of prices at the beginning of this year as compared with those in the previous year (some 25% lower in certain cases).

1. In the latest prices package, the Council extended Regulation (EEC) No 1442/88 ((OJ L 132, 28.5.1988. )) on abandonment with premium until 31 August 1998 while allowing the Member States to exclude one, several or all regions from the grubbing up scheme.

2. The Commission is aware of the need to rejuvenate the vine stock and measures to achieve this were included in the proposals for reform of the common organization of the market in wine.

3. Enrichment has been discussed at length during work on the reform but it has not yet proved possible to reach a compromise acceptable to the Member States.

4. The Commission included promotional measures in its proposed reform of the wine market. At present, since the reform is a package proposal, it is not possible to separate promotion from the other measures contemplated in the reform.

5. Since the proposal for reform has not been accepted, the market management measures are unaltered. Hence, for 1996/97 preventive distillation under Article 38 of Regulation (EEC) No 82/87 ((OJ L 85, 27.3.1987. )) was introduced by Commission Regulation (EC) No 2177/96 of 13 November 1996. ((OJ L 291, 14.11.1996. )) Such distillation in no way excludes the production of alcohol for oral consumption.

6. The Commission has tabled a proposal for a Council regulation ((COM(96) 368 final. )) to amend Regulation (EEC) No 2046/89 ((OJ L 202, 14.7.1989. )) along the lines suggested by the Honourable Member. Work has not yet been completed but agreement in principle has been reached.