Opinion of the Economic and Social Committee on the 'Proposal for a Council Regulation (EC) on the common organization of the market in wine'
Date: 1999-01-27
Institutions: European Economic and Social Committee
Subjects: ESC opinion, common organisation of markets, viticulture

C 101/60

EN

Official Journal of the European Communities

12.4.1999

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation
(EC) on the common organization of the market in wine’ (1)

(1999/C 101/14)

On 20 July 1998 the Commission decided to consult the Economic and Social Committee,
under Articles 43 and 198 of the Treaty establishing the European Community, on the
above-mentioned proposal.

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 8 January 1999.
The rapporteur was Mr Kienle.

At its 360th plenary session on 27 and 28 January 1999 (meeting of 27 January), the Economic
and Social Committee adopted the following opinion by 108 votes to 2, with 2 abstentions.

1. Preliminary remarks

1.1.
The ESC is pleased that on 16 July 1998 the
Commission submitted a new proposal for the reform
of the wine common market organization, which is to
be adopted as part of Agenda 2000. The proposal differs
fundamentally from the Commission proposal of 11 May
1994.

In its opinions of 24 February 1994 (2) and
1.2.
22 February 1995 (3) the ESC called for a new analysis
of the market situation and for the new situation to be
taken into account by GATT decisions. The ESC is
pleased to see that the Commission has acceded to both
these requests in its new proposal. The important
changes that have taken place in the European wine
sector in recent years are due, as the Commission says,
to adjustments being made to the common market
organization, to grubbing-up measures, to cyclical fac-
tors and to climatic conditions, but also, in the ESC’s
view, to the wine industry’s overriding concern for
quality.

1.3.
The ESC points out that among the CCEE
countries are some major wine producers and trading
partners who will push up the EU’s wine-growing
potential by around 400 000 hectares. This should be
taken into account when reforming the wine market.

1.4.
The Commission proposes that the new regu-
lation should come into force on 1 August 2000, as part
of the Agenda 2000 agricultural reform package. The
ESC supports this time scale and calls upon all the
interests concerned to hold their discussions in good
time, so that the regulation can come into force on the
date scheduled.

2. Aims of the reform

In recognizing the special nature of the wine
2.1.
sector when reforming the common market organ-

(1) OJ C 271, 31.8.1998, p. 21.
(2) OJ C 133, 16.5.1994, p. 22.
(3) OJ C 110, 2.5.1995, p. 30.

ization for wine, the Commission mentions seven broad
aims that, taken together, are to make the wine sector
more competitive in the long term:

— maintaining improved balance between supply and
demand on the Community market, allowing pro-
ducers 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;

— formalizing the potential role of producers and
interbranch (or equivalent) organizations; and

— considerably simplifying legislation.

The ESC supports these aims and intentions but thinks
too little account is taken of the demand for wine and
vine-based products. Today there are many scientific
surveys available that set out the health advantages of
drinking wine in moderation and the dangers of abuse.
The ESC therefore recommends that information about
these scientific findings be included as an additional aim
of the reform.

2.2.
To improve the transparency of European wine
law and simplify regulations, the Commission has
proposed that 23 Council regulations be combined in
the basic wine market regulation. The ESC welcomes
this courageous effort to simplify EU wine law and make
it more systematic. However, it feels the Commission’s
management committee (Article 75) has been given too
much authority that exceeds the granting of technical

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powers of implementation. It therefore advocates, as it
did in its earlier opinion on the Agenda 2000 agricultural
proposals (1), that the basic rules should continue to be
enacted in the Council regulation. The ESC also thinks
working groups should be set up in order to involve
experts in the sector in the enactment of implementing
provisions.

The Commission should submit a report in 2004/2005
on the development of wine-growing potential in the
EU and on experience acquired from the planting
regulations. Only then can a decision be taken in good
time on whether to continue or change the planting
regulation.

2.3.
The Commission notes in the explanatory mem-
orandum to its proposal that more responsibility will be
delegated to the Member States, in the interests of
subsidiarity. The ESC welcomes this intention but thinks
that further incorporation of the subsidiarity principle
into the proposed measures is both possible and desir-
able.

3. Proposed measures

3.1. Title II: Wine-growing potential

This section sets out the conditions for the use and
exploitation of the EU’s wine-growing potential. Instru-
ments include restrictions on new plantings, the regu-
lation of re-plantings, reserves for planting rights, bonus
payments for the final abandonment of vineyards, and
restructuring measures.

The ESC’s general view here is that the regu-
3.1.1.
lations do not target the desired objective of deregulation,
less bureaucracy and the principle of subsidiarity. It
calls for a fundamental simplification of the rules in this
title.

3.1.2.
In view of supply and demand trends, the ESC
is convinced that complete liberalization of planting
within the framework of the EU wine market organ-
ization is not yet feasible. It therefore suggests that the
ban on planting should continue until 2005/2006. The
Commission’s proposed deadline of 2010 is rejected as
being too long-term. Authorizations to plant vines
within the suggested period are only to be permitted to
those who have a new planting or replanting right.

3.1.3.
The ESC proposes that until 2005/2006 the
Member States should only grant new planting rights to
producers for wine products intended for marketing if
they are to be used for producing a quality wine psr
or table wine described by means of a geographical
indication where it has been recognized that the pro-
duction of the wine in question is far below demand.
The Commission’s proposed deadline of 31 July 2003 is
considered to be too short and requires there to
be proper timing between a ban on planting and
derogations.

The ESC recommends that the Member States
3.1.4.
should send a communication to the Commission each
year on the development of wine-growing potential.

(1) OJ C 407, 28.12.1998, p. 35.

3.1.5.
The ESC would point out that in some wine-
growing areas replanting rights are lapsing through
non-use. To avoid this happening as far as possible, the
Commission should try and find some organizational
in collaboration with the Member States
solutions,
and the regions. In the interests of ecology and the
maintenance of European vineyards the ESC suggests
that the validity of replanting rights be extended from 8
to 12 years. It feels that it should be left to the Member
States to decide whether growers can exercise their
replanting rights throughout this period or whether
these rights should be transferred to a regional or
national reserve if they have not been used after a certain
time (e.g. eight years).

3.1.6.
The ESC thinks the Member States should be
empowered to create planting-right reserves and regulate
the transferring and using-up of reserves or the preferen-
tial supplying of certain holdings from reserves in
accordance with their national or regional structures
and requirements. It feels this must be regulated in the
interests of subsidiarity by the EU Member States and
the EU’s wine-growing regions.

In order to prevent an undesirable extension
3.1.7.
of wine-growing potential,
the ESC suggests that
between the years 2000 and 2005 the Member States
should be able to grant new planting rights equal to 1 %
of their total area under vines. This percentage can be
increased to 2 % in cases where, because of unusable
replanting rights or extensive grubbing-up, the area
under vines in a Member State or region has declined to
the level it was during the period 1995-2000.

3.1.8.
The ESC is pleased that the Commission has
corrected its grubbing-up policy. Since implementation
is subject to the management committee procedure, an
assessment of the new regulations is only possible if
implementing provisions are laid down by the Com-
mission.

3.1.9.
The ESC is pleased that the Commission is
proposing restructuring measures for vineyards in order
to make European wine producers more competitive. In
addition to these measures, a market and quality-geared
renewal of old vineyards should also be encouraged.
The ESC considers that adequate funds must be made
available for this key element in the reform proposal
and that these should be engaged in accordance with the
vineyard shares in the EU Member States. It is the
responsibility of the Member States to decide which
reconversion programmes are chosen in their wine-
growing areas. The ESC sees producers’ organizations
as being very important in developing and implementing
reconversion measures.

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3.1.10.
The ESC feels that the proposed measures are
insufficient. Improving competitiveness also involves
measures to give a new boost to the bar trade, registration
and marketing structures. It feels that the Commission’s
proposal to incorporate restructuring of the bar trade
and marketing into the horizontal structural measures
of Agenda 2000 is insufficient. The ESC points to the
Commission’s express declaration that specific measures
are necessary because of the characteristics of the wine
sector.

The ESC advocates an EU programme to help
3.1.11.
wine-growers operating under disadvantaged con-
ditions, and particularly hillside vineyards. This should
be in keeping with the socio-economic, ecological and
cultural significance of wine-growing in disadvantaged
areas.

3.1.12.
The ESC stresses the importance of properly
maintained vineyard registers in the organization of the
European wine market. They should be a precondition
for receiving new planting rights and for participation
in structural and reconversion measures, as well as the
support measures in Title III.

3.2. Title III: Market mechanisms

Through its proposals, the Commission wants to ‘elimin-
ate intervention measures as an artificial outlet for
surplus production’. At the same time it wants to
maintain all traditional outlets for potable alcohol and
vine-based products.

3.2.1.
The ESC is pleased that the Commission has
planned to simplify intervention measures, in line with
the ESC’s own wishes.

3.2.2.
storage aid.

The ESC supports the retention of private

3.2.3.
It is true that the Commission proposal takes
account of the regular supplying of the market in potable
spirits as an important traditional outlet for wine and
wine products. All the same, a further investigation
should be carried out, in collaboration with independent
experts, to see whether the quantities provided for here
actually correspond to needs.

3.3. Title IV: Producer organizations and interbranch

organizations

The Commission suggests detailed conditions for recog-
nizing producer and interbranch organizations

In its opinion of 22 February 1995 the ESC said
3.3.1.
that a general
framework regulation for producer
and interbranch organizations should be adopted. The
Commission has now submitted a highly detailed pro-
posal for producer organizations and interbranch organ-
izations similar to that adopted for fruit and vegetables.
The ESC would point out that the wine sector differs
fundamentally from the fruit and vegetable sector. It
therefore asks that more account be taken of the very
great structural differences between Member States.

3.3.2.
The ESC sees the priority task of the producer
organizations as being in the area of improving structures
on the producer market. A specific regulatory framework
should be created for the wine sector describing tasks
and responsibilities in the wine market organization,
since the horizontal provisions for producer communi-
ties are to be scrapped in Agenda 2000. A transfer of
powers that are generally binding even on non-members
should not be envisaged.

3.3.3. However, the ESC suggests that the rules for
interbranch organizations should be more generally
binding. An enabling framework should be created for
all the different organizational structures in the sector
that would make possible the enactment of generally
binding rules for the market organization in one or more
EU regions. The Member States should be allowed to
recognize representative organizational structures in the
sector.

3.4. Title V: Oenological processes and practices and
product specifications; description, designation,
presentation and protection

As regards quality objectives, the Commission proposes
to regulate traditional oenological processes in the wine
market organization in a reliable manner, with technical
questions being dealt with in future in the management
committee. The rules on description and presentation
are to be completely revamped, set out more clearly and
simplified, and the ESC attaches particular importance
here to the provision of comprehensive product infor-
mation.

3.2.4.
The scheduled crisis distillation to provide
cyclical support for the market does not contain the
information necessary to assess the efficiency of such a
measure. The ESC therefore proposes that the Com-
mission should explain exactly how it intends to support
the market in crisis situations. Cyclical protection is
particularly necessary as a preventive measure, with
proper funding and covering sufficient quantities to
stabilize the market.

3.4.1.
The ESC is pleased that account will be taken,
in oenological processes and production conditions, of
the different locations, climates and weather conditions
within European wine-producing regions, in line with
the ESC opinion of 22 February 1995. However, it feels
that the Commission should be allowed to appoint
branch advisory committees to examine new oenological
processes before they can be authorized under the
management committee procedure.

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3.4.2.
The ESC is pleased that its call has been taken
up for a thorough overhaul of EU law on designations
and an abolition of the principle of banning anything that
is not explicitly allowed. However, as the Commission is
proposing to make the whole reform subject to the
management committee procedure, the ESC calls upon
the Commission to put its proposals for revamping the
law on designations on the table as soon as possible and
work together in a spirit of cooperation with all the
circles concerned. Here too, branch advisory committees
should be made responsible for examining proposals.

3.5. Title VI: Quality wine produced in specified

regions

Under the Commission’s proposal the rules on quality
wine psr, which up to now have been grouped together
in a special regulation, are to be incorporated into the
wine market organization and the rules on yields are to
be modified.

3.5.1.
In its opinion of 22 February 1995 the ESC
has already rejected the Commission’s proposals for
restricting the room for manoeuvre for regulating the
yield per hectare, on the grounds that this would be
contrary to the principle of subsidiarity.

3.5.2.
The ESC asks the Commission instead to
present proposals for promoting sales of quality wine
psr on the international market. In this connection it
regrets that the measures suggested in the 1994 proposal
for information campaigns extolling the virtues of
quality products are no longer contained in the Com-
mission proposal and are obviously to be included in
horizontal regulations. Because of the special features
of wine as a product, the ESC expressly advocates
independent information programmes to support a
policy of improving quality.

3.6. Title VII: Trade with third countries

The Commission points out in its explanatory memor-
andum that its proposals seek to take the action necessary
as a result of the conclusion of the WTO agreement.

3.6.1.
The ESC regrets that the Commission proposal
contains no specific measures for boosting competi-
tiveness in international trade. However, this is absol-
utely essential, because third-country production is
being expanded and their exports have risen sharply.

3.6.2.
Allowing third-country musts and wine bases
to be used for the production of wine products in the
EU would place the European wine industry at a
considerable disadvantage. The ESC would draw atten-
tion to the dangers of abuse and therefore rejects any
such authorization, as long as the abuse and monitoring

problems are unresolved. The ‘Europeanization’ of
non-EU products would lead to an unacceptable mislead-
ing of consumers and to major economic disadvantages
for EU wine-growers.

3.6.3.
The ESC calls upon the Commission to set up
an external trade council. The task of this council would
be to recommend additional measures to be taken by
the EU to promote exports of wine-sector products, and
in particular to:

— safeguard the identity of European wines, especially
by protecting designations of origin and traditional
descriptions;

— expanding market access;

— take action to promote, upgrade and provide infor-

mation about wine-sector products; and

— step up the Commission’s involvement in specific

international bodies.

Appropriate budget resources (external trade fund)
should be provided for the implementation of an active
external trade policy.

4. Conclusions

The ESC would point out that wine-growing is
4.1.
an essential part of European life and culture and has a
great tradition in the individual wine-producing areas.
In wine-growing regions other industries, such as luxury
food, tourism and crafts, are dependent on the existence
of the wine industry. Wine-growing areas are in every
way unique cultural landscapes that must be nurtured
by wine-growers through environmentally-friendly man-
agement practices. Any reform of the wine market
organization must take account of this economic and
cultural background in order to promote the way of life,
society, infrastructure, environment and economy of
wine-growing areas.

4.2.
The ESC renews its demands to get really serious
about deregulation and cutting red tape, transposing
subsidiarity into reality and strengthening self-regulating
forces in the economy.

4.3.
The ESC calls upon the Commission to revise
the reform proposal thoroughly so that all those involved
can put into effect a future-oriented and dynamic market
policy through ambitious measures.

For this reason the ESC calls upon all the circles
4.4.
involved to crack on with the discussions on the reform

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proposal so that the reform can be concluded in the first
quarter of 1999 as part of Agenda 2000. This is also

necessary in order to prepare the impending accession
of major wine producers among the CCEE countries.

Brussels, 27 January 1999.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI

Opinion of the Economic and Social Committee on:

— the ‘Proposal for a European Parliament and Council Directive on the taking up, the pursuit

and the prudential supervision of the business of electronic money institutions’, and

— the ‘Proposal for a European Parliament and Council Directive amending Direc-
tive 77/780/EEC on the coordination of laws, regulations and administrative provisions
relating to the taking up and pursuit of the business of credit institutions’ (1)

(1999/C 101/15)

On 16 November 1998 the Council decided, in accordance with Article 198 of the Treaty
establishing the European Community, to consult the Economic and Social Committee on the
above-mentioned proposals.

The Section for the Single Market, Production and Consumption, which was responsible for
preparing the Committee’s work on the subject, had adopted its opinion on 19 January 1999.
The rapporteur was Mr Burani.

The Economic and Social Committee, at its 360th plenary session (meeting of 27 January
1999), adopted the following opinion by 36 votes to one with two abstentions.

1.

Introduction

1.1.
The main aspects of electronic commerce —
which is likely to spread rapidly — need to be regulated
at European and world levels. In its institutional role as
initiator, the Commission, mindful of the fact that
Europe is part of a global context, which necessitates
harmonious application of the standards on a world
scale, has a number of initiatives in progress, or planned,
to establish common European standards for the Mem-
ber States.

1.2.
Electronic commerce — as applied to the offering
for sale and purchase of goods and services — demands
that the settling of debit/credit transactions be done
rapidly, securely and conveniently, for the benefit of
those involved and to ensure the credibility of the system
as a whole. A number of up-and-running schemes
introduced by the financial system essentially give users
access to sums of money which are stored in the memory
of a computer and can be transferred to the creditor

electronically. This is known as ‘network money’ or
‘software money’. As the Commission notes in the
introduction to its explanatory memorandum, this is
not just one means of payment but the means of payment
for future electronic commerce on the Internet.

Alongside software money are appearing less
1.3.
sophisticated payment instruments within the reach of
the ordinary citizen, and even of those who have neither
a computer nor the means or knowledge necessary to
access the Internet or similar systems, whether closed or
these are micro-
open: prepaid cards. Essentially,
processor cards which memorize sums previously paid
to the issuer and from which are gradually ‘downloaded’
the necessary sums for small purchases; in practice, then,
this is the electronic version of a purse containing small
change and lower-denomination banknotes.

The issuing of electronic money (2) can be looked
1.4.
at in different ways: commercial, technical, financial
and monetary. The Commission wishes to regulate the

(1) OJ C 317, 15.10.1998, p. 7-12.

(2) In this context the term ‘electronic money’ denotes ‘soft-

ware money’ and ‘prepaid cards’ taken together.