Commission report to the European Parliament and the Council on management of planting rights (Chapter I of Title II of Council Regulation (EC) No 1493/1999)
Date: 2004-03-12
Institutions: European Commission
Subjects: common organisation of markets, plantation, replanting, report, viticulture

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 12.3.2004 
COM(2004) 161 final 

COMMISSION REPORT 
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

on management of planting rights 

(Chapter I of Title II of Council Regulation (EC) No 1493/1999) 

EN 

   EN 

 
 
 
  
 
 
TABLE OF CONTENTS 

INTRODUCTION............................................................................................................................ 3 

1. 

1.1. 

1.2. 

1.3. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

2.5. 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

PROHIBITION ON PLANTING VINES ................................................................................. 4 

Purpose......................................................................................................................... 4 

Content of provisions ................................................................................................... 4 

Application of provisions............................................................................................. 4 

CHANGES IN PRODUCTION POTENTIAL........................................................................... 4 

New planting rights ...................................................................................................... 5 

Replanting rights .......................................................................................................... 9 

Planting right reserve ................................................................................................. 11 

Changes in production potential since 1 August 2000............................................... 15 

Commission’s conclusion on use of the Community reserve of new planting rights 18 

REGULARISATION OF ILLICIT PLANTINGS .................................................................... 18 

Purpose....................................................................................................................... 18 

Content of provisions ................................................................................................. 18 

Application of Community provisions....................................................................... 19 

Commission’s conclusion on regularisation of illicit plantings................................. 20 

The  tables  in  this  report  use  the  figures  that  the  Member  States  notify  under  Commission 
Regulation (EC) No 1227/2000 of 31 May 2000 laying down detailed rules for the application 
of Council Regulation (EC) No 1493/1999 on the common organisation of the market in wine, 
as  regards  production  potential.  It  was  last  amended  by  Commission  Regulation  (EC) 
No 1841/2003 of 17 October 2003. 

2 

 
 
  
 
 
INTRODUCTION 

Management  of  viticultural  production  potential  is  a  primary  tool  of  the  common  market 
organisation  for  wine  (CMO).  It  splits  into  three  parts:  restrictions  on  planting  vines, 
premiums  for  permanent  abandonment  of  vine-growing  on  particular  areas,  and  support  for 
restructuring and conversion of vineyards. 

Restricting planting rights is a means of controlling the area under vines. The basic principle is 
that vines cannot be planted unless a right to replant or right to make a new planting is held. 
The creation and transfer of planting rights are themselves regulated. 

These  provisions  have  in  their  general  form  been  in  existence  since  the  end  of  the  70s.  But 
Council Regulation (EC) No 1493/1999 of 17 May 1999 on the common organisation of the 
market in wine1 introduced a number of changes, partly in response to changes in the sector’s 
economic position. The two major ones were quotas of new planting rights for each Member 
State and creation of reserves of rights. 

The  Council  wanted  to  be  able  to  look  at  how  these  provisions  were  operating  after  three 
years:  " By  31  December  2003,  and  at  three-yearly  intervals  from  the  date,  the  Commission 
shall  submit  a  report  to  the  European  Parliament  and  the  Council  on  the  operation  of  this 
Chapter. The report may be accompanied, if appropriate, by proposals for the grant of further 
newly created planting rights."2 

The  chapter  on  "Planting  of  vines"  in  Regulation  (EC)  No  1493/1999  has  the  following 
provisions: 

1. 

2. 

3. 

renewal of the prohibition on planting: Article 2(1) and (7). 

management of production potential: 

– 

– 

– 

assignment of new planting rights: Articles 3 and 6 (also Article 3 of Regulation 
(EC)  No  1227/2000  laying  down  detailed  rules  for  the  application  of  Council 
Regulation  (EC)  No  1493/1999  on  the  common  organisation  of  the  market  in 
wine, as regards production potential3); 

assignment of replanting rights: Article 4 (see also Article 4 of Regulation (EC) 
No 1227/2000); 

introduction of a reserve of planting rights: Article 5 (see also Articles 5 and 6 
of Regulation (EC) No 1227/2000). 

a  procedure  for  regularising  illicit  plantings  made  before  1  September  1998  by 
waiving  (if  certain  requirements  are  met)  the  prohibition  on  marketing  wine  from 
illicitly  planted  vines:  Article  2(3)  to  (6)  (see  also  Article  2  of  Regulation  (EC) 
No 1227/2000). 

1  
2 
3 

OJ L 179, 14.7.1999, p. 1. 
Article 7(3) of Council Regulation (EC) No 1493/1999. 
OJ L 143, 16.6.2000, p. 1. 

3 

 
 
  
 
                                                 
1. 

PROHIBITION ON PLANTING VINES 

1.1. 

Purpose 

A prohibition on planting vines of wine grape varieties has been a basic feature of the 
CMO since 19764. Its purpose is to maintain a curb on production potential. 

It  also  enables  Member  States  to  exercise  some  degree  of  quality  control  over  their 
vineyards  by  orienting  planting  to  production  at  the  levels  of  quality  demanded  by 
consumers. 

1.2. 

Content of provisions 

It  is  freedom  to  plant  vines  that  is  restricted.  There  is  no  blanket  ban  on  planting: 
replanting is permitted and under certain circumstances so also is new planting. This 
is  why  planting  and  replanting  require  prior  authorisation  from  the  Member  States’ 
authorities. 

The new provisions since entry into force of Council Regulation (EC) No 1493/1999 
is an obligation to grub up unauthorised plantings made from 1 September 1998, i.e. 
vines  planted  without  a  replanting  or  new  planting  right.  Before  this  the  rules 
imposed distillation at the grower’s expense of the production from the illicit area. 

1.3. 

Application of provisions 

The  prohibition  has  been  in  place  for  nearly  30  years.  The  Member  States’ 
administrations therefore have mechanisms in place for seeing to its application. 

The  Member  States  have  taken  over  into  their  texts  the  obligation  to  grub  up  vines 
planted  in  contravention  of  the  rules.  The  Commission  does  not  at  present  have 
figures  for  the  areas  to  which  this  provision  has  been  applied.  Member  States  are 
however under an obligation to notify cases. 

The prohibition on planting also applied to table grapes up to 1996. Since then it is 
vinification  of  these  grapes  that  has  been  prohibited,  except  in  the  case  of  dual 
purpose varieties, for which there are special compulsory distillation rules. 

2. 

CHANGES IN PRODUCTION POTENTIAL 

Production  potential  can  be  defined  as  the  area  planted  with  vines  plus  the  areas  of 
replanting and of new planting rights that exist. 

Three sets of provisions therefore have an impact on it: those on new planting rights, 
those on replanting rights and those on reserves of planting rights. 

4 

Council Regulation (EEC) No 1162/76 of 17 May 1976 on measures designed to adjust wine-growing 
potential to market requirements. The prohibition was introduced as a temporary measure and has been 
constantly renewed since then. Article 2(1) of Regulation (EC) No 1493/1999 extends it to the end of the 
2009/10 wine year. 

4 

 
 
  
 
                                                 
2.1. 

New planting rights 

2.1.1  Background 

The general prohibition on planting vines has always been accompanied by waivers 
targeted  on  boosting  wine  quality  by  permitting  the  expansion  of  "quality  wines 
produced in specified regions" (qwpsr) at the expense of table wines. 

Thus  in  the  last  years  of  application  of  the  old  CMO,  when  the  price  package  was 
issued  each  year  a  new  planting  right  area  (in  hectares)  was  allocated  between  the 
relevant  Member  States  for  production  of  quality  wines,  i.e.  qwpsr  and  table  wines 
with a geographical indication. 

This  flexible  approach  was  given  backing  by  the  fact  that  Community  wine 
production  from  the  1996,  1997  and  1998  crops  was  markedly  lower  than  in  the 
previous years. This was the background to the discussions that led to the new basic 
Regulation in 1999 and introduction of quotas of new planting rights for the Member 
States. 

2.1.2  Content of provision 

Regulation (EC) No 1493/1999 distinguishes two types of new planting right: 

– 

– 

in  Article  3(1)  rights  (no  quantitative  limits  specified)  granted  exclusively  in 
certain administrative contexts; 

in  Articles  3(2)  to  (5)  and  6,  new  quantitatively  restricted  planting  rights 
granted in order to allow production of quality wines to expand. 

2.1.2.1  New planting rights (administrative contexts) 

This is a provision taken over from the previous CMO. Member States can grant new 
planting rights in connection with land consolidation or with compulsory purchase of 
land in the public interest, and also for the purposes of wine-growing experiments and 
creation  of  graft  nurseries.  The  Council  Regulation  added  a  fifth  instance:  for 
production reserved exclusively for family consumption. 

The  terms  of  these  waivers  are  further  defined  in  the  Commission’s  implementing 
Regulation. The extent of new planting rights granted is dictated by the scope of the 
operation  in  question,  i.e  the  implementing  Regulation  seeks  to  stop  any  significant 
increase in production potential occurring. 

– 

– 

– 

In the case of rights granted in the context of land consolidation or compulsory 
purchase, there is a limit of 105% of the area under vines to which the operation 
related (Article 3(1)). 

Rights granted for wine-growing experiments are restricted to the experimental 
period,  after  which  the  vines  must  be  grubbed  up  at  the  grower’s  expense 
(production between the end of the experimental period and grubbing-up must 
be distilled) or they must be "regularised" by acquisition of a replanting right or 
of a new planting right under quota (Article 3(2) and (3)). 

Graft  nurseries  have  a  limited  life  span  as  such,  after  which  the  vines  can  be 
used for wine production. Accordingly Article 3(4) and (5) provides that after 
the plantation has ceased to function as a graft nursery the same provisions as in 
the case of experimental areas apply. 

5 

 
 
  
 
– 

In the case of assignment of planting rights for family consumption, Article 3(6) 
to (8) requires Member States to have suitable arrangements for checking that 
the wine produced is not marketed. If the marketing prohibition is not observed 
the vines must be grubbed up at the grower’s expense. Member States must also 
stipulate the maximum area per grower for which the right can be granted. 

2.1.2.2  New planting rights to meet demand for quality wines 

The  Council  Regulation  uses  two  formulations  in  identifying  these  new  planting 
rights: the new planting rights in Article 3(2) and the newly created planting rights in 
Article 6(1). 

The  rights  spoken  of  in  Article  3(2)  are  intended  for  production  of  geographical 
indication wines (both qwpsr and table wines) for which there is a growing market. 
This provision was already in the previous CMO5. Granting of rights is conditional on 
evidence  that  the  production  of  the  vineyards  concerned  is  lower  than  demand. 
Article 3(9) of Regulation (EC) No 1227/2000 requires Member States to be able to 
provide this evidence but prior Commission approval of the grant is not required. 

The  planting  rights  spoken  of  in  Article  6  are  also  intended  for  production  of 
geographical indication table wines and qwpsr but can also be granted for other uses: 
regularisation  of  illicit  plantings6  and vineyard  restructuring7.  But  these  uses  are 
generally of restricted scope and the Article 6 rights correspond essentially to those of 
Article  3(2),  which  Article  3(5)  states  are  to  be  counted  against  the  Article  6(1) 
quotas. 

Article 3(2) rights must be assigned before 31 July 2003 (see Article 3(2)). This date 
was inserted in order to allow the Member States to continue granting new planting 
rights for qwpsr and geographical indication table wine vineyards pending creation of 
the planting right reserves (see 2.1.3.2.1). 

2.1.3  Application of provisions 

2.1.3.1  New planting rights (administrative contexts) 

2.1.3.1.1The  figures  sent  in  by  the  Member  States  on  new  planting  rights  granted  under 

Article 3(1) are: 

5 
6 

7 

Article 6(1) of Council Regulation (EEC) No 822/87. 
Article  2(3)  of  the  Regulation.  In  such  cases  their  use,  which  is  the  equivalent  of  use  of  a  replanting 
right, does not increase production potential. 
Article 11(3) of the Regulation. 

6 

 
 
  
 
                                                 
Table 1 

(ha) 

2000/01 

2001/02 

2002/03 

Germany 
Greece 
Spain 
France 
Italy 
Luxembourg 
Austria 
Portugal 

Total 

3.53 
– 
197.95 
41.40 
144.72 
– 
– 
8.30 

395.90 

0.93 
– 
141.42 
29.20 
– 
– 
– 
– 

171.55 

1.13 
– 
47.02 
15.68 
– 
– 
– 
14.80 

78.63 

Total 

5.59 
– 
386.39 
86.28 
144.72 
– 
– 
23.10 

646.08 

Germany  and  Italy  also  granted  planting  rights  for  family  consumption:  0.52  ha  in 
Germany (2000/01 to 2002/03) and 97.16 ha in Italy (2000/01). 

2.1.3.1.2Impact on production potential 

A general point to be borne in mind is that new planting rights of the above type have 
no  impact  on  production  potential  except  those  granted  for  production  for  family 
consumption. 

The  explanation  is  that  rights  granted  in  connection  with  land  consolidation  or 
compulsory purchase offset the withdrawal of vineyards of equivalent area. From the 
economic point of view these are replanting rights. 

Rights  granted  for  experimental  purposes  or  creation  of  graft  nurseries  have  no 
impact following termination of the periods of experimental or graft nursery use since 
if the vines are not grubbed up replanting rights for an equivalent area are used. 

It is only in the case of new planting rights for family consumption  that there is an 
impact  on  production  potential.  Although  the  production  of  these  areas  cannot  be 
marketed  granting  of  the  right  entails  no  reduction  in  the  available  volume  of 
replanting  rights  and  so  increases  production  potential.  But  the  increase  is 
insignificant,  about  100 ha,  and  is  probably  offset  by  spontaneous  abandonment  of 
small family vineyards in the areas where they have been a widespread tradition. 

7 

 
 
  
 
2.1.3.2  New planting rights to meet demand for quality wines 

2.1.3.2.1 The figures available for grants under Article 3(2) are: 

(ha) 

Germany 
Greece 
Spain 
France 
Italy 
Luxembourg 
Austria 
Portugal 

Table 2 

2000/01 

291.82 
– 
6 041.33 
5 016.35 
854.50 
– 
– 
3 041.00 

2001/02 

37.91 
1 098.00 
6 335.52 
4 360.76 
– 
– 
– 
– 

2002/03 

141.56 
– 
4 730.00 

– 

Total 

471.29 
1 098.00 
17 106.85 
9 377.11 
854.50 
– 
– 
3 041.00 

Total 

15 245.00 

11 832.19 

4 871.56 

31 948.75 

The following points should be noted: 

a)  Greece and Spain, and in lesser degree Portugal and France, have used up a 
large  proportion  of  the  new  (newly  created)  planting  right  quota  allocated  to 
them by Article 6(1): 

Table 3 

New plantings  
Art. 3(2) (ha) 

Article 6(1)  
quota (ha)  

Quota take-up 

Germany 
Greece 
Spain 
France 
Italy 
Luxembourg 
Austria 
Portugal 

Total 

471.29 
1 098.00 
17 106.85 
9 377.11 
854.50 
– 
– 
3 041.00 

31 948.75 

1 534 
1 098 
17 355 
13 565 
12 933 
18 
737 
3 760 

51 000 

30.7 % 
100 % 
98.6 % 
69.1 % 
6.5 % 
0 % 
0 %  
80.9 % 

62.6 % 

Leaving  out  Italy,  which  has  sent  no  figures  for  the  last  two  wine  years  despite  the 
Regulation  (EC)  No  1227/2000  requirement  to  do  so,  the  new  planting  right  quotas 
amount to 38 067 ha and the rights assigned for 31 125 ha (81.7%). 

It  is  also  to  be  noted  that  Article 6(1)  rights  that  have  not  been  granted  by 
31 July 2003  for  Article 3(2)  purposes  are  transferred  to  the  reserve  or  reserves  of 
planting  rights  created  by  the  Member State.  They  then  have  a  "life"  of  five 
wine years (Article 5(5)), i.e. can be granted up to the end of the 2007/08 wine year.8 

8 

A grower granted a planting right must use it before the end of the second wine year following that in 
which it was granted [Article 3(4)]. The terminal date for use of Article 6(1) rights is therefore the end of 
the 2009/10 wine year. 

8 

 
 
  
 
 
 
 
 
 
                                                 
b) 

These rights have been granted primarily for production of qwpsr: 

Wine years 
2000/01 to 2002/03 

Germany 
Greece 
Spain 
France 
Italy 
Luxembourg 
Austria 
Portugal 

qwpsr 
(ha) 

471.29 
361.90 
16 125.88 
6 875.43 
740.82 
– 
– 
2 456.42 

Table 4 

Table wines 
(with GI) (ha) 

Total 
(ha) 

qwpsr share  
of total 

– 
736.10 
980.97 
2 501.68 
113.68 
– 
– 
584.58 

471.29 
1098.00 
17 106.85 
9 377.11 
854.50 
– 
– 
3 041.00 

100 % 
32.9 % 
94.3 % 
73.3 % 
86.7 % 
– 
– 
80.7 % 

84.6 % 

Total 

27 031.74 

4 917.01 

31 948.75 

The  lack  of  Italian  figures  for  2001/02  and  2002/03  makes  the  picture  less  than 
comprehensive. 

2.1.3.2.2 Impact on production potential 

The  51 000  ha  of  new  (newly  created)  (Article 6(1))  planting  rights  corresponds  to 
1.53%9 of the total area under vines in the Community when the basic Regulation was 
adopted. By definition they constitute additional production potential. 

Of this nearly 2/3 (31 949 ha) has been granted by the end of the third year of the new 
CMO but not all of it has already been used and the time lag between utilisation and 
actual production is two or three years. 

Thus  it  is  at  present  impossible  to  measure  with  precision  the  impact  of  the  1999 
decisions on production since 1 August 2000, the date when the new CMO began. 

2.2. 

Replanting rights 

2.2.1  Content of provisions 

Article  4  of  Regulation  (EC)  No  1493/1999  and  Article 4  of  Regulation  (EC) 
No 1227/2000 in essence take over the provisions already in force under the previous 
CMO: 

– 

– 

– 

automatic creation of a right following grubbing-up10, 

the possibility of transferring the right from one holding to another in the same 
Member State, 

a period of up to eight wine years within which to use the right. 

9 

10 

1.53%  on  the  basis  of  the  Community  area  under  vines  according  to  the  inventories  notified  by  the 
Member States under Article 16. See 2.4.2 below. 
Except  grubbing-up  in  the  cases  indicated  in  Article 4(1)  of  Regulation  (EC)  No  1227/2000  that  are 
regulated  by  the  new  provisions  on  new  planting  rights  (administrative  context)  (Article 3(1)  of 
Regulation (EC) No 1493/1999). 

9 

 
 
  
 
                                                 
The  main  change  under  the  new  CMO  is  that  a  replanting  right  can  be  used  in 
anticipation, i.e. the grower is authorised to plant vines before grubbing up those on 
an equivalent area. In this way he avoids a loss of income between grubbing-up and 
the time when the new vines come into production. Detailed rules (Article 4(2) to (5) 
of  Regulation  (EC)  No  1227/2000)  are  intended  to  prevent  temporary  or  permanent 
increases in production potential: 

– 

– 

– 

a deadline for the grubbing-up, 

a  prohibition  on  simultaneous  marketing  of  the  production  from  the  newly 
planted and the old areas, 

lodging of a security to guarantee that the grubbing-up will be carried out. 

Article 4(4) (last subparagraph) of Regulation (EC) No 1493/1999 also stipulates that 
Member  States  must  ensure  that  transfers  of  replanting  rights  between  holdings, 
particularly when made from non-irrigated to irrigated areas, do not lead to increases 
in production potential. 

It should be remembered that replanting rights are normally used on the holding on 
which  the  grubbing  up  occurs.  Transfer  between  holdings  is  a  possibility  open  to 
Member States. 

When  a  replanting  right  is  exercised  with  no  transfer  between  holdings,  there  is  no 
regulatory  obligation  to  check  its  impact  on  production  potential.  A  change  of 
vine-training method or of variety is bound to affect it.11. 

A transfer between holdings is accordingly even more likely to entail a radical change 
in cultivation practice and hence in the yield of the new area. 

2.2.2  Application of provisions 

All Member States have made use of the two options in the rules: transfers between 
holdings and an 8-year duration period for rights. 

In these circumstances the national provisions for controlling production potential are 
of great importance. These either ensure that there is no foreseeable increase in yield 
from  the  replanted  area  or  restrict  its  size  if  an  increase  is  foreseeable.  The 
Member States  have  put  these  rules  into  their  national  (or  regional)  texts  but  at  this 
stage it is difficult to ascertain how they are applied in practice.  

2.2.3. 

Impact on production potential 

When  the  new  CMO  came  into  force  the  replanting  rights  available  for  take-up 
corresponded, on the basis of the inventories provided by the Member States, to 5.9% 
of the total area under vines. On the assumption of  an average Community yield of 
50 hl/ha this corresponds in turn to potential production of 10 million hl.  

11 

The right is to replant an area the same size as that grubbed up. There is no mention of variety. Potential 
yield varies from one variety to another. 

10 

 
 
  
 
                                                 
Replanting rights at the end of the 2002/03 wine year amounted to: 

Table 5 

(ha) 

Inventory (1999) 

End of 2002/03 wine year 

Difference 

Germany 
Greece 
Spain 
France 
Italy 
Luxembourg 
Austria 
Portugal 

Total excluding Italy 

Total 

3 616 
– 
86 456 
43 551 
49 870 
– 
5 945 
7 498 

147 066 

196 936 

3 900 
560 
83 315 
47 611 
– 
44 
5 313 
12 045 

152 788 

+284 
+560 
–3 141 
+4 060 

– 
+44 
–632 
+4 547 

+5 722 

Austria and Spain show falls of 10% and 4% respectively over the three wine years. 
The  primary  reason  for  the  fall  in  Spain  has  been  use  of  these  rights  to  regularise 
illicit plantings. 

In the other Member States the movement has been the other way: a 14% increase in 
the volume of available rights over the last three wine years12. The increase can only 
have come from increased grubbing-up entailing the right to replant. Probably at least 
part  of  the  explanation  is  that  vineyard  restructuring  has  engendered  a  wave  of 
grubbing-up. 

In  total  (leaving  out  Italy,  for  which  the  change  is  unknown)  the  area  that  there  is 
entitlement to replant has increased by 3.9% in three wine years and now corresponds 
to 6.1% of the area under vines at the end of 2002/03. 

2.3. 

Planting right reserve 

2.3.1  Background 

As  already  mentioned  at  2.1.1,  the  discussions  leading  to  Regulation  (EC) 
No 1493/1999  were  held  after  there  had  been  a  marked  fall  in  Community  wine 
production and a big reduction in the area under vines had come to light13. 

One  of  the  major  causes  of  this  fall  was  the  disappearance  of  numerous  replanting 
rights that were not used by their holders. It was to stop these rights disappearing that 
the idea arose, and was adopted, of an automatic recovery system for expired rights.  

2.3.2  Content of provisions 

For  Member  States  the  reserve  is  a  permanent  instrument  for  the  recycling  and 
distribution of planting rights. 

12 
13 

In fact the increase is less, since in 1999 rights must have been available in Greece and Luxembourg. 
See Eurostat’s statistical survey on areas under vines 1989-1999, which records for that decade a 14.5% 
fall in the Community’s area of vines for wine production. 

11 

 
 
  
 
 
 
                                                 
2.3.2.1 Permanent instrument for recycling planting rights 

In addition to replanting rights the reserve was assigned the new (or newly created) 
planting rights indicated in Article 6(1) of Regulation (EC) No 1493/1999. 

The  essential  feature  is  that  the  reserve  acquires  rights  –  for  both  new  planting  and 
replanting – not used within the set time limits and also recovers rights granted from 
it that are not used within the set time limit. 

2.3.2.2  Instrument for distributing planting rights 

Granting of planting rights recovered or acquired for the reserve is subject to certain 
constraints. 

Article  5(4)  of  Regulation  (EC)  No  1493/1999  states:  "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 are typical of the average in 
the  region  where  such  rights  are  used,  in  particular,  where  planting  rights 
originating in non-irrigated areas are used in irrigated areas." 

Thus the Council text requires Member States to ensure that rights allocated from the 
reserve  serve  to  produce  wine  for  which  there  is  a  market  and  that  no  increase  in 
production is involved.  

To  this  end  Article 5(1)  and  (2)  of  Regulation  (EC)  No 1227/2000  authorises 
Member States to reduce planting right areas if they are transferred to a zone where 
yields are higher than those in the zone where the right arose. The Community rules 
do not authorise an increase if the transfer is in the opposite direction.  

The  reserve  also  gives  Member  States  a  means  of  improving  the  quantitative 
adjustment  of  production  potential  to  changes  in  demand:  they  can  control  planting 
by slowing down or accelerating the pace of grants from the reserve rights.  

Thus  under  Regulation  (EC)  No  1493/1999  the  planting  rights  that  can  appear  in  a 
reserve are: 

– 

– 

– 

– 

– 

unused replanting rights that have been recovered (Articles 4(5) and 5(2)), 

replanting rights bought for the reserve from their holders (Article 5(2)(b)), 

unused new planting rights that have been recovered (Articles 3(4) and 5(2),  

new (newly created) planting rights (Article 5(2)(c)),  

rights  that  were  previously  in  the  reserve  but  were  not  used  in  time  by  their 
holders and have reverted to it (Article 5(2) and (6)). 

12 

 
 
  
 
2.3.3  Application of provisions 

2.3.3.1  Reserves can be set up by each Member State at national or regional level or at both 

levels. 

Table 6 

National reserve 

Regional reserves 

"Non-reserve system"14 

Germany 
Greece 
Spain 
France 
Italy 
Luxembourg 
Austria 
Portugal 

no 
yes 
yes 
yes 
no 
no 
yes 
yes 

yes 
no 
yes 
no 
yes 
no 
yes 
no 

yes 
no 
no 
no 
no 
yes 
no 
no 

The situation varies by Member State. 

Luxembourg is the only Member State not to have adopted the reserve system. 

Germany has a mixed system: reserves in certain regions and the "effective system" 
(see 2.3.5) in others. 

Greece, France and Portugal have national reserves but no regional ones. 

Italy has regional reserves only. Spain and Austria have both a national and regional 
reserves. 

Article 5(7) of Regulation (EC) No 1493/1999 allows for transfers between regional 
reserves.  It  appears  however  that  movement  between  regions  is  difficult,  since  no 
region wishes its production potential to decline. While this difficulty is on the whole 
under control in Greece, France and Portugal thanks to their having a national reserve 
only  (which  does  not  however  prevent  difficulties)  it  is  a  problem  in  Germany  and 
particularly so in Spain and Italy. 

The  fact  is  that  if  transfers  between  regions  within  a  Member  State  are  restricted 
differences in vineyard structure between them can mean that some regions are short 
of planting rights whereas others have a pool of unused or even unusable rights. 

2.3.3.2  The requirements in Article 5(4) of Regulation (EC) No 1493/1999 that are intended 
to  stop  transfers  of  rights  via  a  reserve  from  leading  to  an  increase  in  production 
potential  are  of  the  same  type  as  those  specified  for  transfers  of  replanting  rights 
(Article 4(4) of that Regulation). 

Member States have taken over the same provisions as indicated in 2.2.1 but as with 
direct transfers of replanting rights here also it is too early to measure their impact, all 
the more so since the reserves were actually set up by the Member States in only the 
2001/02 or even 2002/03 wine year. 

14 

Article  5(8)  of  Regulation  (EC)  No  1493/1999:  By  way  of  derogation  from  paragraphs  1  to  7,  a 
competent authority of a Member State may choose not to implement the reserve system provided that 
the Member State can prove that an effective system for managing planting rights exists throughout its 
territory. See 2.3.5 below.. 

13 

 
 
  
 
 
                                                 
The following table shows that at the end of 2002/03 the rights put into the reserves 
amounted to a very small area and that in Greece, France and Italy none had been put 
in. 

 (ha) 

Germany 
Greece 
Spain 
France 
Italy 
Luxembourg 
Austria 
Portugal 

Total 

Table 7 

qwpsr 

64.61 
– 
6 792.00 
– 
– 
– 
50.00 
– 

Table wines with GI  

Total 

– 
– 
665.00 
– 
– 
– 
– 
– 

64.61 
– 
7 457.00 
– 
– 
– 
50.00 
208.00 

7 779.61 

2.3.4 

Impact on production potential 

The reserve system is a basic requirement for controlling production potential. 

Quite apart from dealing with the effects of transferring rights from regions with low 
yields to regions with high yields, whether the difference in yield is a matter of vine 
varieties or cultivation practices15, the reserve system brings into play a mechanism 
for  automatically  stopping  non-use  of  a  planting  right  from  entailing  its  extinction. 
An unused right will always be put back into the distribution channel. 

Accordingly  the  area  that  provides  a  Member  State’s  production  potential  (area 
planted  with  vines  plus  available  replanting  rights)  cannot  diminish  if  the  Member 
State is managing the rights efficiently. 

2.3.5 

"Effective system" of planting right management 

It  is  not  compulsory  to  use  the  reserve  system:  see  Article  5(8)  of  Regulation  (EC) 
No 1493/1999. 

2.3.5.1  Content of provisions 

Generally speaking, if a Member State chooses not to use the reserve system it has no 
legal  means  of  systematically  recycling  unused  planting  rights  within  the  set  time 
limits. On the other hand, distribution of new planting rights and checking on the use 
and transfer of replanting rights are carried out under the national provisions in force 
before the new CMO came into operation. 

Member  States  who  choose  not  to  introduce  a  reserve  system  must  show  the 
Commission that they manage planting rights in an effective way. 

The Council Regulation also sets additional rules in connection with replanting rights: 

– 

they are valid for ten years; 

15 

Also  a  problem  in  the  case  of  direct  transfers  of  replanting  rights  between  holdings.  The  last 
subparagraph of Article 4(4) is a catch-all for dealing with it.. 

14 

 
 
  
 
 
 
                                                 
– 

the Member State can extend this to thirteen years. 

Their purpose is to make up in part for the absence of indefinite recycling of planting 
rights that the reserve system affords. 

2.3.5.2  Application of provisions 

Luxembourg is the only Member State that  has chosen an "effective system" for its 
entire vineyard area. She plans to raise the period of validity of the rights to thirteen 
years. 

Germany has a mixed system (see 2.3.3.1). In the "effective system" areas replanting 
rights are valid for thirteen years. 

2.3.5.3  Impact on production potential 

Luxembourg  and  Germany  were  the  only  two  Member  States  to  maintain,  with  the 
regulatory tools then available, their production potential through the period 1989 to 
1999 covered by the surveys published by Eurostat. 

The CMO put in place in 1999 offered the Member States new ways of counteracting 
the downward trend of production potential. Luxembourg and part of Germany have 
chosen not to use them. 

It  is  too  early  to  judge  the  real  impact  of  the  "effective  system"  on  production 
potential  but  it  is  reasonable  to  think  that  there  will  be  no  significant  change  given 
that the new CMO has not resulted in any real modification of the rights management 
system in either Member State. 

2.4. 

Changes in production potential since 1 August 2000 

2.4.1  Areas 

The Commission has three sources of information on areas under vines. 

The first is that provided by application of Council Regulation (EEC) No 357/79 of 
5 February 1979 on statistical surveys of areas under vines. The last basic survey was 
for 1999. 

The  second  is  that  provided  by  application  of  Article  16(1)  of  Regulation  (EC)  No 
1493/1999.  Member  States  are  required  to  notify  an  inventory  of  their  areas  under 
vines for the  purpose  of application of certain provisions of the new CMO, notably 
the vineyard restructuring and conversion policy. 

The third is the vineyard register or reference chart, use of which is compulsory under 
Article 5 of Commission Regulation (EC) No 2729/2000 of 14 December 2000 laying 
down detailed implementing rules on controls in the wine sector. 

15 

 
 
  
 
The available data is: 

Table 8 

Date of 
survey 

Survey area 
(ha) 

Date of 
inventory 

Inventory 
area (ha) 

Inventory 
excess over 
survey (ha) 

Inventory 
excess over 
survey (%) 

Germany 
Greece 
Spain 
France 
Italy 
Luxembourg 
Austria 
Portugal 

Total 

1999 
1999 
1999 
1999 
1999 
1999 
1999 
1999 

104 233 
50 878 
1 144 354 
940 47816 
636 662 
1 348 
48 496 
205 003 

3 131 452 

31/08/2000 
01/09/1999 
31/07/2000 
31/08/1998 
01/09/1999 
15/11/1999 
31/12/1999 
01/09/1999 

105 530 
77 466 
1 141 986 
901 412 
792 440 
1 348 
52 226 
252 709 

1 297 
26 588 
–2 368 
–38 624 
155 778 
0 
3 730 
47 706 

+1.24 % 
+52.25 % 
–0.02 % 
–4.15 % 
+24.46 % 
0 
+7.70 % 
+23.27 % 

3 325 117 

193 665 

+6.18 % 

Some  variations  between  the  dates  of  the  two  sources  may  explain  the  very  small 
differences  between  the  areas  reported  (Germany,  Spain)  but  apart  from  this  the 
differences found, except for Luxembourg, are particularly revealing. 

2.4.2  Changes in inventory areas 

After two years of the new CMO the area under vines has fallen by 1.3%. 

Table 9 

Area under vines 
(inventory) 

Area under vines (end 
of 2002/03 wine year) 

Difference 

(ha) 

Germany 
Greece 
Spain 
France 
Italy 
Luxembourg 
Austria 
Portugal 

105 530 
77 466 
1 141 986 
901 412 
792 440 
1 348 
52 226 
252 709 

Total (excluding Italy) 

2 532 677 

104 211 
80 794 
1 115 322 
907 669 
– 
1 298 
51 136 
241 119 

2 501 549 

–1 319 
+3 328 
–26 664 
+6 257 
– 
–50 
–1 900 
–11 590 

–31 128 

This  fall  is  essentially  the  outcome  of  the  vineyard  restructuring  and  conversion 
programmes under which grubbing-up is occurring prior to replanting with varieties 
better  adapted  to  the  demands  of  the  wine  market.  The  Member  States  with  the 
biggest falls are those most engaged in restructuring. 

16 

The  survey  distinguishes  areas  of  vines  producing  grapes  for  wine  production  and  areas  of  vines 
producing grapes for production of spirits, a distinction applicable only in France and there only to the 
vineyards of the regions producing Cognac and Armagnac. Management of these vineyards, which also 
produce wine, falls within the scope of the wine CMO and they must therefore be included in the French 
vine area. 

16 

 
 
  
 
 
 
 
                                                 
The areas under vines of all Member States apart from Greece and France are lower. 
They  are  the  two  Member  States  that  delayed  longest  in  taking  up  the  restructuring 
policy. 

Overall it appears that production potential (considered as the sum of the area under 
vines and the replanting rights available for granting) continued17 to fall over the first 
three years of the new CMO but very slowly18. 

(ha) 

Germany 
Greece 
Spain 
France 
Italy 
Luxembourg 
Austria 
Portugal 

Table 10 

Production potential 
1999 

Production potential 
2003 

Difference 

109 146 
77 466 
1 228 442 
944 963 
not notified 

1 348 
58 171 
260 207 

108 111 
81 354 
1 198 637 
955 280 
not notified 

1 342 
56 449 
253 164 

–1 035 
+3 888 
–29 805 
+10 317 

–6 
–1 722 
–7 043 

–25 406 

Total (excluding Italy) 

2 679 743 

2 654 337 

Italy  excluded,  the  Community’s  viticultural  potential  fell  by  less  than  1%  over  the 
first three years of the new CMO. As in the case of areas, this figure masks divergent 
movements  among  the  Member  States,  linked  to  both  regularisation  of  illicit 
plantings (see 3 below) and vineyard restructuring and conversion policy. 

New (newly created) planting rights (Article 6(1) of Regulation (EC) No 1493/1999) 
that have not yet been granted are not included in the production potential figures. 

31 949 ha out of the 51 000 ha has been granted (see Table 3 above).  

Italy  excluded,  there  accordingly  remain  6 943  ha  of  new  planting  rights  not  yet 
granted that fall to be deducted from the 25 406 ha reduction (see Table 10). Further, 
out  of  the  31 125  ha  of  new  plantings  already  granted,  an  unknown  but  probably 
sizeable fraction has not yet been used by the growers, i.e. was not planted at the end 
of the 2002/03 wine year. 

The  fall  in  production  potential  would  therefore  be  at  worst  (i.e.  on  the  supposition 
that all the new planting rights granted are included in the Table 10 figures) 0.65% at 
the end of the first three years of the CMO. This figure is too small to be genuinely 
significant. 

Generally  speaking,  the  regulatory  tools  exist  for  maintaining  the  Community’s 
viticultural production potential, which had fallen substantially in the 90s (and even 
more in the previous decade).  Even if it is still too soon to verify the impact of the 
new  CMO,  the  figures  now  available  appear  to  confirm  that  potential  has  remained 
roughly stable for three years. 

17 

18 

See  Eurostat  study (Theme  5-25/2003)  showing  that  areas  for  wine production  fell by  14.5% between 
1989 and 1999. 
Again Italy, which did not send the Commission figures, has to be left out of the calculation. 

17 

 
 
  
 
 
                                                 
Lastly, it should be remembered that this is a finding from the data provided by the 
Member  States  to  update  the  viticultural  inventory  required  by  Council  Regulation 
(EC) No 1493/1999, but that these figures do not correspond to those notified under 
other regulatory provisions. 

2.5. 

Commission’s  conclusion  on  use  of  the  Community  reserve  of  new  planting 
rights  

Article  6(1)  of  Regulation  (EC)  No  1493/1999  assigned  17 000  ha  to  a  Community 
reserve. 

Italy and Greece have officially requested additional planting rights. 

The new CMO introduced regulatory tools to maintain the Community’s viticultural 
production potential. It has apparently been maintained since 2000. The impact of the 
51 000 ha allocated to the Member States cannot yet be measured. 

Thus it would be premature to add a further 17 000 ha to the area under vines in the 
Community. 

3. 

REGULARISATION OF ILLICIT PLANTINGS 

3.1. 

Purpose 

The  new  CMO  has  a  penalty  not  found  in  the  old:  areas  planted  from  1  September 
1998 in contravention of the planting prohibition must now be grubbed up. The old 
penalty was merely that the production from them be distilled. 

This  change  led  to  introduction  of  regularisation  procedure  for  plantings  made  in 
contravention  before  1  September  1998,  the  aim  being  to  reach  a  stage  where  no 
illicit plantings exist and the Community vine area inventory therefore corresponds to 
reality. 

3.2. 

Content of provisions 

Article 2(2) to (6) of Council Regulation (EC) No 1493/1999 set out the procedure for 
regularisation of illicit plantings predating 1 September 1998. 

The procedure is set out in the form of waiver provisions. 

1) 

2) 

Once the procedure has commenced the grower may market the production from the 
illicit  area  instead  of  delivering  it  for  distillation.  Thus  he  already  benefits  from 
waiving of the obligation to have it distilled at his own cost. 

The Member State’s competent authority examines the application. If it is refused the 
grower  must  revert  to  having  the  production  of  his  illicit  area  distilled  and  pay  a 
penalty as specified in Article 2(4) of Regulation (EC) No 1227/2000. If it is accepted 
the waiver is confirmed. 

There  are  four  means  available  to  growers  for  securing  regularisation  of  their  illicit 
plantings.  They  can  be  used  only  within  the  Member  State’s  administrative 
framework. 

18 

 
 
  
 
"The derogation shall be granted: 

a)  where  the  producer  had  previously  grubbed-up  other  vines  on  an  equivalent 
area  in  terms  of  pure  crop  except  in  cases  where  the  grower  concerned  has 
received a premium for grubbing-up under Community or national legislation 
in respect of the area concerned;  

and/or  

b) 

by permitting the use of replanting rights where a producer has obtained them 
within  a  period  to  be  fixed  subsequent  to  the  planting  of  the  area  concerned; 
Member  States  may  also  use  the  newly  created  rights  for  this  purpose  under 
Article 6(1);  

and/or  

c) 

where the Member State can prove (to the satisfaction of the Commission) that 
it  has  unclaimed  replanting  rights  which  would  still  be  valid  if  they  had  been 
applied for; such rights may be used and reallocated to producers for an area 
equivalent in pure crop; 

and/or  

d)  where the producer concerned had undertaken to grub up an area equivalent in 
terms  of  pure  crop,  within  a  period  of  three  years,  where  that  area  has  been 
entered in the vineyard register of the Member State concerned." 

Some of these means are subject to imposition of certain requirements set in the basic 
Regulation or in the Commission’s implementing Regulation. The main purpose is to 
penalise the growers concerned. 

3.3. 

Application of Community provisions 

At the end of the 2002/03 wine year the cumulated areas (2000/01 to 2002/03 wine 
years) for which regularisation applications had been made were19: 

19 

These figures are calculated from those sent by the Member States (Table 1 in the Annex to Regulation 
(EC) No 1227/2000). The Italian figures cover only the period to the end of 2001/02. 

19 

 
 
  
 
                                                 
Table 11 

Regularised 

Refused 

Under examination 
by Member States 

(ha) 

Germany 
Greece 
Spain 
France 
Italy 
Luxembourg 
Austria 
Portugal 

Total 

2 
6 575 
36 534 
128 
753 
– 
– 
9 

44 001 

2 
– 
9 834 
– 
6 
– 
– 
– 

9 842 

3 
5 681 
36 697 
7 
51 845 

8 

Total 

7 
12 256 
83 065 
135 
52 604 
– 
– 
17 

94 241 

148 084 

Luxembourg and  Austria state  that they received no applications for the 2000/01 to 
2002/03 wine years. 

The other Member States have been involved in regularisation work.  

Large areas have been dealt with in Greece, Spain and Italy. 

Article 2(3) of Regulation (EC) No 1493/1999 required regularisation procedures to 
be  terminated  by  31  July  2002  but  some  Member  States  have  on  a  number  of 
occasions encountered difficulty in making the necessary checks on the applications 
lodged by growers. Under Article 80 of the Regulation the Commission, in response 
to  Member States’  requests,  has  several  times  deferred  the  final  date.  It  is  now  by 
Regulation (EC) No 1841/2003 of 17 October 2003 set at 31 July 2004. 

Italy  has  also  drawn  attention  to  another  difficulty,  that  of  locating  illicitly  planted 
parcels. She states that without an operational tool such as the vineyard register it is 
impossible  to  know  whether  an  area  is  illicit  or  not,  and  therefore  impossible  to 
regularise plantings made before the register was created. Areas may have been illicit 
since  the  time  when  the  Community  rules  withdrew  freedom  of  planting,  i.e.  since 
1976. 

3.4. 

Commission’s conclusion on regularisation of illicit plantings 

This  business  should  be  completed  as  quickly  as  possible  in  the  interests  of  sound 
operation  of  the  market  and  accurate  determination  of  the  Community’s  viticultural 
potential. 

It  should  be  noted  that  the  problem  of  regularising  illicit  plantings  can  be  resolved 
the 
only  by  amendment  of  Regulation  (EC)  No 1493/1999.  Consequently, 
Commission foresees the presentation of an appropriate proposal in 2004. 

20