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
Date: 2006-12-06
Institutions: European Committee of the Regions
Subjects: EU policy, common organisation of markets, food consumption, product quality, reform of the CAP, viticulture

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III

(Preparatory Acts)

COMMITTEE OF THE REGIONS

67th PLENARY SESSION HELD ON 6 AND 7 DECEMBER 2006

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

THE COMMITTEE OF THE REGIONS,

(2007/C 57/01)

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 Devel-
opment 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 Com-
munity (ES-EPP));

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

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1. The Committee of the Regions' views

The Committee of the Regions

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

1.1 General comments

1.2 Problems of the existing CMO

1.1.1
make specific reference to differing regional and local features;

the Commission proposals do not

considers that

1.1.2
supports the Commission's decision to reform the
wine sector in the light of falling consumption, structural imbal-
ances in production and marketing, and intensifying competi-
tion on global markets;

regrets that the focus of the Commission's proposal
1.1.3
tends to obscure the role of wine production in upholding agri-
culture 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
own specific market organisation (CMO);

agrees that the wine sector should continue to have its

1.1.5
economic vision in the Commission proposal;

draws attention to the lack of social and socio-

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

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 hori-
zontal criteria for Community policies based on a comprehen-
sive 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/infor-
mation to the general public recommending an increase in
moderate wine consumption;

points out that the existing CMO has failed to provide
1.2.1
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
competitive on a globalised market;

agrees that Community producers must be more

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 suffi-
ciently 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
away from quality and marketing/consumption
resources
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 effec-
tive market regulation tool, and proposes that greater flexibility
be introduced in order to make it more accessible;

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;

1.2.10
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;

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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 Euro-
pean 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 Euro-
pean quality model;

1.2.14 welcomes the concern at rising alcohol consumption
among young people and, while it is true that wine consump-
tion by this group has fallen substantially in recent years, recog-
nises 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
sustainable European wine sector;

supports

the continuation of a competitive and

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

reinforces the social

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

for the environment, although some of

fabric of

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

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
industry with long-term
and competitive European wine
prospects;

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

disagrees with the proposal

1.5.3
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;

rejects the view that liberalising planting rights would
1.5.5
provide a direct boost to the sector's competitiveness by redu-
cing 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 grub-
bing 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;

rejects the abolition ‘… from day one …’ of market
1.5.8
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;

1.4 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;

accepts the introduction of

1.5.9
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;

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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
in order to prevent any of
subject to certain common rules,
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 develop-
ment, 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 refer-
ence 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 sustain-
able rural development;

opposes the transfer of funds from the first pillar to
1.5.14
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 trans-
parent and effective;

disagrees, however, with the priority given to
1.5.16
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;

supports application at

1.5.17
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;

international

level of

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;

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

1.5.22
maintained, using only must for enrichment;

calls for the maximum 2 % volume increase to be

disagrees with automatic authorisation of the use of
1.5.23
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 experi-
ments 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 provi-
sions 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
tion such as variety and vintage for wines without GIs;

is therefore opposed to the appearance of informa-

1.5.28 welcomes the proposal
traditional terms;

to maintain and improve

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

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

agrees that the strongest possible guarantees must be
1.5.31
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 cate-
gories 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;

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

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

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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;

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;

strongly supports the idea of carrying out informa-
1.5.35
tion campaigns within the EU on responsible and moderate
wine consumption, emphasising the concept of moderate wine
consumption and, in consequence, clearly separating this prac-
tice 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 suffi-
cient 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;

agrees that minimum environmental requirements
1.5.37
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 infrin-
gement procedures;

opposes the idea of taking the current financial state-
1.5.40
ment 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 manage-
ment 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 effi-
ciency 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;

argues that, as at present, new vineyards should only
1.5.44
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;

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

1.5.46
minimum natural alcoholic strength for wine;

is opposed to removal of

the requirement

for a

2. The Committee of the Regions' recommendations

Overview of the new wine CMO

advocates a European wine making model that sets out
2.1
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, Competi-
tiveness 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 produc-
tion 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 prac-
tice, the wine CMO reform legislation and its financial statement
improved
should concentrate primarily on achieving quality,
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 signif-
icantly 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,
and
marketing, and Europe's relative loss of position on the world
stage over recent years;

production

imbalances

structural

in

in order to deal with the risk of adulterated wines,
1.5.43
is
to trade and growing production surpluses,
distortions
opposed to lifting the ban on producing wine from imported

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

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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 vine-
yards 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;

hopes to secure greater support

2.8
from the European
Commission for encouraging higher quality wines in disadvan-
taged 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 intro-
duce 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
the financial statement;

points to the need to maintain the overall amount of

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 Euro-
pean 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;

accepts the introduction of

the ‘national envelope’
2.14
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 Indi-

Brussels, 6 December 2006.

cation’ concept, step up its backing and promotion for the
distinctiveness of these wines, under the intellectual property
aspects of WTO agreements (TRIPs);

suggests that the purpose of

2.16
labelling should be to
provide clear and accurate information for consumers, priori-
tising differentiation, without sacrificing aspects such as guaran-
tees of authenticity in the production of certain wines of higher
quality than others. Such guarantees should be backed by appro-
priate 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 recon-
version 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;

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

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

in favour of moderate,

strongly advocates a promotion policy including
2.21
responsible
information campaigns
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
instruments
itself,
that the European Union might have already or implement in
the future;

in addition to other agri-food promotional

2.22 warmly welcomes the idea of carrying out informa-
tion 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.

The President

of the Committee of the Regions

Michel DELEBARRE