Opinion of the European Economic and Social Committee on the Communication from the Commission to the Council and the European Parliament — Towards a sustainable European wine sector COM(2006) 319 final
Date: 2006-12-14
Institutions: European Economic and Social Committee
Subjects: labelling, market organisation, reform of the CAP, viticulture

30.12.2006

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Official Journal of the European Union

C 325/29

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

COM(2006) 319 final

(2006/C 325/07)

On 22 June 2006 the European Commission decided to consult the European Economic and Social
Committee, under Article 262 of the Treaty establishing the European Community, on the abovementioned
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 November 2006. The rapporteur was
Mr Kienle.

At its 431st plenary session, held on 13 and 14 December 2006 (meeting of 14 December), the European
Economic and Social Committee adopted the following opinion by 107 votes to two with four abstentions:

1. Summary of conclusions and recommendations

The European Economic and Social Committee welcomes
1.1
the fact that the European Commission has submitted a report
on reform of the European market organisation for wine. The
Committee particularly welcomes the fact that the Commission
proposes in principle the maintenance of a specific wine market
organisation, which can be pursued within the ‘profound
reform’ option.

1.2
Given that the market share of European wines in rela-
tion to wines from countries outside the European Union, espe-
cially ‘new world’ countries, has declined, both in the internal
market and in important export markets, a change in the legal
framework conditions is needed to improve the competitiveness
of European wines and win back market shares. The Commis-
sion should pay greater heed in the reform and the external
trade provisions to the position of the European wine sector as
global market leader.

workers with at least seasonal employment. The Committee
therefore thinks it important that preference be given in the
reform to measures which have a positive effect on the income
of wine-growers and on employment opportunities in European
viticulture.

1.6
The EESC regards the European Commission proposal to
make a national envelope available to each wine-producing
Member State as an important contribution to more subsidiarity
and more account being taken of regional differences. In its
proposals on the division of promotion instruments between
the European Community framework and measures in the
context of the national envelope, the EESC holds to these princi-
ples and rejects steps towards the renationalisation of wine
market policy.

The calls upon the Commission to propose concrete
1.7
measures on consumer information and the promotion of wine
sales in both the internal market and export markets.

1.3
The EESC would draw attention to its opinion of 27/28
January 1999 (1), in which it took the view that the European
Commission's reform proposals at the time were inadequate.
Many of its ideas are now more topical than ever, particularly
with reference to competitiveness, intervention measures, taking
account
information. The
differences,
Committee underlines that wine and viticulture are an impor-
tant and integral part of European culture and the European
way of life. Viticulture moulds the social and economic environ-
ment in many European wine growing regions.

regional

and

of

1.4
The Committee therefore attaches importance to account
being taken in the reform not only of economic consequences,
but also of the effects on employment, the social fabric, the
environment (particularly through the programme of grubbing
up vines) as well as consumer protection and health.

1.5
The Committee points out that viticulture in the Euro-
pean Union provides a living for 1,5 million predominantly
It provides more than 2,5 million
small

family enterprises.

(1) OJ C 101 of 12.4.99, pp. 60-64.

2. Comments and proposals made by the Commission

Reform objectives

2.1
The Commission mentions as objectives of the reform:
increasing the competitiveness and strengthening the image of
European wines, winning back market shares and gaining new
market shares, keeping rules as simple as possible,
taking
account of the social and political role of wine growing regions.

The Commission gives as a further objective the estab-
2.1.1
lishment of a balance on the market and to that end proposes
certain measures, such as the need for extensive grubbing-up.

The present CMO for wine

2.2
The Commission document analyses the present market
situation, describes problems with the present CMO and
proposes appropriate measures.

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Four options

Winemaking practices

The Commission considered four possible options for

2.3
the reform of the EU wine market organisation:

— maintenance of the status quo with slight adaptations,

2.9
The Commission proposes a liberalisation of winemaking
practices taking particular account of the standards of the inter-
national wine organisation (OIV).

— reform on the lines of the CAP reform,

Enrichment

— deregulation of the wine market,

— profound reform of the CMO.

2.3.1
On the basis of its assessments the Commission comes
to the conclusion that of the four options the profound reform
the maintenance of a
offers the most advantages and that
specific wine market organisation is necessary.

Profound reform of the CMO

The Commission proposes

2.4
two variants: a one-step
reform and a two-step reform. Under variant A the planting
regulation would be abolished immediately (or on 1 August
2010) with no transitional regulation. Under variant B an exten-
sive grubbing-up scheme would be carried out before the aboli-
tion of the planting regulation, in order to achieve a structural
adjustment.

The Commission proposes a ban on enrichment with
2.10
saccharose, combined with abolition of the aid for use of must
concentrate as well as a considerable reduction in the enrich-
ment level for the northerly wine growing areas.

Labelling

2.11
The Commission proposes to simplify the labelling
provisions by setting up a single legal framework applying to all
the different categories of wine and particulars relating to them.

Promotion and information

The Commission intends

2.12
to pursue a responsible
promotion and information policy. All available opportunities
in existing Community legislation should be used.

Abolition of market management measures and introducing more
forward-looking measures

Environment

The Commission proposes that the following measures

2.5
be abolished immediately:

2.13
The Commission intends to ensure that the reform of
the wine regime also contributes to minimising the effects of
vine growing and wine making on the environment.

— support for by-product distillation,

— potable wine distillation and crisis distillation,

WTO

— private storage support,

— must aid in relation to enrichment and for making grape

juice.

National envelope

It

The Commission attaches importance to the new CMO
2.14
being WTO-friendly.
therefore envisages the abolition of
current intervention measures and allowing the production of
wines in the European Union from imported must as well as
the blending of Community wines with wines from outside the
EU.

The Commission proposes that a budget envelope be
2.6
made available to each wine-producing Member State, calculated
according to objective criteria. With this envelope it would
finance measures best suited to its situation from a given menu.

3. General comments

Reform objectives

Rural development

2.7
The Commission proposes that many of these adjust-
ment and restructuring measures could be carried out in the
context of rural development and that funds for this purpose
could be transferred from the specific wine budget to Pillar II.

Quality policy and geographical indications

3.1
The EESC can to a large extent support the objectives
mentioned by the Commission. However, it thinks some adapta-
tions are necessary.

3.1.1
mentioned the following objectives among others:

The EESC points out

that

in its earlier opinion it

— improvement of the long-term competitiveness of the sector,

— abolition of intervention measures used to provide artificial

outlets for surplus production,

2.8
The Commission proposes a substantial revision of the
current quality regulatory framework with a view to better
conformity of EU quality policy with the international rules,
particularly the TRIPs Agreement.

— account to be taken of regional differences,

— information on the advantages of moderate wine consump-

tion.

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The EESC thinks it necessary to investigate thoroughly
3.1.2
whether in a globalised wine market and after the removal of
effective external protection the objective of market balance is
still attainable at all.

market organisation. All aspects of market organisation, from
production to consumption, and particularly measures on
consumer protection, health care and consumer information,
should be taken into account within the wine market organisa-
tion.

Special

attention should therefore be

given to
3.1.3
increasing the competitiveness of domestic producers.
is
It
important to strengthen the European market position, support
efforts to improve quality and adjust more to market develop-
ments and consumer preferences.

it

The Committee

as necessary for

3.1.4
the
regards
economic objectives to be given practical expression and supple-
In this
mented by social and employment policy objectives.
context, efforts should be made, above all,
to improve the
income situation of wine-growing enterprises. Special attention
should be paid to enhancing the scope for development avail-
able to young wine-growers. Employment opportunities for the
permanent labour force and for seasonal workers must be taken
into account and the conditions for proper payment improved.

3.1.5
The Committee has doubts about a transfer of powers
from the Council of Ministers to the Commission, e.g. for the
authorisation of
innovative wine-making procedures, as the
Commission has failed to represent the interests of European
wine producers adequately in negotiating bilateral agreements.

3.1.6
The EESC takes the view that the current financial
resources must be increased in order to take account of the
accession to the EU of two new producer countries.

The current CMO for wine — ex post analysis

3.2
The EESC thinks there is a need to review the Commis-
sion's analysis and the resulting measures thoroughly, as the
analysis of organisations involved in the market and indepen-
dent organisations is called into question.

The Committee thinks it necessary to improve and
3.2.1
extend market observation in order to obtain better data on
production, trade and consumption as a basis for the organisa-
tion of the wine market. The general data used so far are impor-
tant, but inadequate. Also needed is current information on
changes in production structures, outlets and consumer beha-
viour.

3.2.2
The Commission's claim that structural surpluses are
increasing should be checked. The Committee points out that
the increase in stocks should also be considered in the light of
increased production of quality wine.

Four options

3.3
The EESC is in favour of a thorough evaluation of these
four options, but after an initial analysis agrees with the option
chosen. However,
the ‘profound reform’
option needs to be modified.

the formulation of

The Committee particularly welcomes the fact that the
3.3.1
Commission proposes the maintenance of a specific wine

Profound reform

The EESC takes the view that the new wine market orga-
3.4
nisation should come into force in 2008.
It does, however,
think there is a need for a phasing-out period, to enable enter-
in
prises to carry out gradual adjustments, where necessary,
order to comply with the new basic conditions.

The EESC is entirely opposed to spending more than a
3.4.1
third of the available budget on a grubbing-up programme,
which would mean that these funds would not be available for
market measures or measures to increase competitiveness. The
importance of grubbing-up as an instrument of market organi-
sation, which is to be offered to wine-growing regions for use
on a voluntary basis within an overall Community framework,
is, however, recognised (see below).

3.4.2
The EESC opposes total liberalisation of the planting
rules as this would jeopardise the achievement of the economic
and social objectives of the reform of the wine market and its
objectives in respect of environmental policy and maintenance
the landscape. Shifting wine production from man-made
of
wine-growing landscapes to areas which are cheaper to cultivate
cannot be supported. If the EU planting regulation, together
with a ban on new planting,
is to be abolished, an enabling
framework should be created to make it possible for wine-
growing regions to continue to apply their planting rules in
accordance with the objectives of the European wine market
organisation or to devise planting rules in accordance with
these objectives.

3.4.3
The Committee deplores the fact that the Commission
does not follow up its words on winning back market shares
with any deeds in the planning of the profound reform. There is
a lack of instruments and measures to translate these worth-
while objectives into reality.

Abolition of market management measures and introducing more
forward-looking measures

The EESC would draw attention to its earlier call for the
3.5
abolition of
intervention measures, which provide artificial
outlets, and it expresses its appreciation of the proposals in the
light of this objective.

3.5.1
The Committee recommends that grubbing-up may be
offered, as a voluntary measure and as part of a structural
programme including social components, by wine-growing
regions to enterprises wishing to withdraw, wholly or in part,
form wine production.

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The Committee does not regard an immediate abolition
3.5.2
of intervention measures as feasible. It therefore recommends
that within the national envelope in the 2008-2010 phasing-
out period:

— distillation to produce potable alcohol (formerly Art. 29),

and

— private storage support (formerly Art. 24 ff.)

can be offered.

3.5.3
The EESC believes that the obligation to dispose of by-
products should be maintained in order to ensure the quality of
wine production and avoid abuse.

3.5.4
The Committee would argue that crisis distillation as a
component of crisis management can be offered permanently
within the national envelope. The Committee believes that the
national
financial envelopes should include crisis prevention
measures based on shared responsibility among wine-producers.

3.5.5
The Committee thinks it necessary to introduce new
forward-looking instruments in order to achieve the objectives
listed. These include:

— extensive market observation,

— information programmes for the internal market, to inform
consumers of the advantages of moderate consumption and
to warn them against abuse,

— creation of an export promotion programme,

— information programmes for consumers in non-EU coun-

tries and

— research programmes,

including such programmes carried

out in cooperation with non-EU countries.

The Committee emphasises that the market organisa-
3.5.6
tion instruments must in the first instance benefit those who
wish to developing winemaking further in Europe, and not be
geared to those who drop out for whatever reason.

The EESC points out that it has called for a special
3.6.2
programme to promote disadvantaged wine-growing areas, such
as steep and sloping vineyards. A similar programme should
also address the needs of areas subject to extreme climate condi-
tions.

3.6.3
The EESC is in favour of an extensive catalogue of
measures which in its view should go beyond the examples
given by the Commission. It refers to its opinion (CES 68/99) in
which it called for a considerable extension of the programme
to promote cellaring and marketing.

The EESC further believes that

the national budget
3.6.4
envelopes should finance measures that are consistent and inte-
grated with each other in order to maximise their impact. Such
measures should be integrated in chain projects from the vine-
yard, to the processing and marketing of the product. In addi-
tion, funding is needed for measures permitting producers to
co-manage the potential and scope of alternative outlets. The
EESC believes that the central players in the management of
these projects are the wine-producer organisations.

for

The budget

3.6.5
the financial envelopes should be
divided up according to the vineyard area key, as already
occurred with the restructuring.
In the phasing-out period
adequate funding should be earmarked for the market mechan-
isms which are to be discontinued in order to enable enterprises
which hitherto availed themselves of such mechanisms to adjust
gradually to meet the new basic conditions.

3.6.6
The instruments of the national envelope should be
defined in the EU wine market organisation. It is incumbent on
the Member States, in the context of their proportion of the
budget (vineyard area key) to make a choice with a view to
making their viticulture more competitive. The programmes
must be communicated to Brussels. Responsibility for proper
implementation lies with the Member States.

The Committee proposes the following division of
3.6.7
promotion
Community
between
measures and measures in the context of the national envelope:

instruments

European

National envelopes

— European market observation,

3.6.7.1

European Community measures:

The EESC welcomes this proposal, as it corresponds to
3.6
its own demands for more account to be taken of regional
differences and for subsidiarity to be applied more consistently
in the wine sector. A coherent and adequate Community frame-
work must nevertheless be maintained in order to avoid renatio-
nalisation and keep the European character of the European
wine sector. A similar programme should also address the needs
of areas subject to extreme climate conditions.

3.6.1
It had already called in its earlier opinion (CES 68/99)
for it to be a matter for the Member States to decide which
measures in the reform programme to choose for their wine-
producing
together with
sectoral associations and bodies pursuing the requisite objectives
can have an important role to play in this matter.

regions. Producer organisations,

— information programmes for consumers at European level

and on export markets,

— export programmes for third countries,

— research programmes.

3.6.7.2

National envelope:

— aid for the use of must in enrichment,

— Article 29 distillation (2008-2010),

— aid for distillation of by-products (2008-2010),

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— definitive and temporary grubbing-up measures

(2008-

2010),

— area-linked direct aid,

— fodder crops,

— aid for grape juice production,

— restructuring of vineyards and measures,

— measures to improve registration and marketing structures
(e.g. integrated network of enterprises and combinations of
enterprises),

— information programmes for consumers,

— measures to improve quality,

would also make it necessary to lay down recognised production
methods.

3.9.2
The authorisation of any WMPs approved anywhere in
the world would conflict with the proposed closer alignment on
OIV standards.

3.9.3
The EESC calls for the drive to bring WMPs into line
with OIV standards to be incorporated more consistently into
the strategic thrust of bilateral or international trade agreements.

The EESC opposes

3.9.4
to authorise the
production in Europe of wine made from imported grape must
or must concentrate and the proposal to authorise the blending
of EU products with products from other countries.

the proposal

— programme for disadvantaged wine-growing areas, such as
steep and sloping vineyards, and areas subject to extreme
climate conditions,

Enrichment

— crisis management (prevention and control of crises, insur-

ance fund).

Rural development

3.7
In many of its opinions the Committee has emphasised
the importance of the second pillar for the future development
of the countryside, to which the European wine producing areas
also belong.

3.7.1 Whilst taking account of this fundamental broad objec-
tive, the EESC considers that, with a view to resolving the
special problems of the wine sector, all the measures discussed
in connection with the reform of the wine market should be
financed from the wine budget. This budget must therefore not
be reduced, either by means of cuts or transfers of funding.

Quality policy/geographical indications

3.8
In view of the fact that the Commission's proposals are
of very wide-ranging importance and are designed, ultimately, to
do away with the current system for ensuring wine quality, the
EESC expects the European Commission to draw up simulation
models for determining the effect which the proposals would
have on the objectives of the reform of the wine market, as
regards both improvement in competitiveness and measures to
promote enhanced quality and also the impact of these propo-
sals from consumer standpoints.

The EESC urges that

the current provisions of

3.8.1
the
TRIPs Agreement should first be implemented, in particular the
introduction of a register for protecting designations of origin,
the current European
before discussing any amendment of
quality system.

Wine making practices (WMPs)

In the EESC's view, the Commission's proposals contain a

3.9
number of inconsistencies which will have to be resolved.

to
3.9.1
establish an internationally recognised definition of ‘wine’. This

The EESC believes that

is absolutely essential

it

3.10
In its 1999 opinion on this subject, the EESC had called
for account to be taken of the varying conditions in respect of
location, climate and weather in the European Union. This is a
very sensitive issue and one which must not bring about a split
in the European wine industry or even result in the blocking of
the proposals for reform.

3.10.1
In making its appraisal of the Commission's propo-
sals, the EESC has therefore taken account of the following
elements: the earlier EESC opinion on the subject; the analyses
carried out by the Commission; the proposed liberalisation of
the WMPs; recognition of wine making procedures under bilat-
eral agreements; and the objectives of the reform of this sector,
in particular the need to increase competitiveness and reduce
production costs. After weighing up the pros and cons of the
Commission's proposals, the EESC advocates a general continua-
tion of the existing provisions governing the use of sucrose and
the aid for must concentrate.

Labelling

The EESC regards

in
3.11
respect of
labelling as highly complex and it expects the
Commission to carry out an accurate simulation of the impact
of the proposed changes.

the Commission's proposals

The EESC draws attention to the fact that, following a
3.11.1
labelling law has been
debate lasting a number of years,
amended only very recently. It therefore calls upon the Commis-
sion to explain what new factors now come into play which
were not assessed in the debate which has just come to an end.

The EESC welcomes moves to simplify labelling provi-
3.11.2
sions, provided that they promote improved consumer informa-
tion. Such changes must not, however, lead to an increased risk
of distortion of competition or misleading of consumers,
resulting in a flood of legal disputes. The proposal by the Euro-
pean Commission for the grape variety and vintage year to be
optionally indicated in the case of simple table wines should
also be scrutinised from this standpoint since such wines have
to comply with a lower level of requirements than do regional
wines and quality wine produced in a specific region (quality
wine psr).

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The EESC draws attention to the growing linguistic
3.11.3
diversity in an ever larger European Union. This linguistic diver-
sity may give rise to trade barriers, as is currently the case with
regard to the indication of the use of sulphite. With regard to
the indication of mandatory information on labelling, such as
ingredients, provision should therefore be
the description of
made for this information to be indicated by making use of
readily comprehensible symbols.

Promotion and information

3.12
In its opinion number CES 68/99, the EESC had already
called for steps to be taken to make the provision of informa-
tion on the health benefits of a moderate level of wine
consumption and the dangers of the abuse of wine to be made
one of the key pillars of the wine CMO.

3.12.1
As the proposals put forward by the Commission are
very vague, the EESC calls upon the Commission to propose
concrete measures in respect of consumer information and the
promotion of wine sales in both the internal market and export
markets; such measures should go beyond the current unsatis-
factory framework and be conducive to winning back or
extending market share.

3.12.2 With this aim in view, particular attention must be
paid to the provision of comprehensive information on the
benefits of moderate wine consumption as an integral part of a
healthy diet and a modern lifestyle.

The deterioration in the external

3.12.3
trade balance, a
phenomenon which has been ongoing for a number of years,
has to be halted and the situation needs to be considerably
improved by introducing export promotion programmes.

Brussels, 14 December 2006.

Environment

3.13
already called for a more wide-ranging consideration of
environmental aspect.

In its opinion of 1999 (CES 68/99), the EESC had
the

3.13.1 Wine-growing areas usually represent unique man-
made landscapes which have to be cared for by wine-growers
through the use of environmentally friendly methods of cultiva-
tion. Wine-growing represents an integral part of the life and
culture of whole regions, the economic, social and cultural exis-
tence of which is dependent upon this sector.

3.13.2
Any reform must therefore fully take account of the
environment, the social fabric, infrastructure, the economy and
quality of life.

WTO

3.14
In its abovementioned opinion of 1999 (CES 68/99),
the EESC had already rejected any move to authorise the
blending of Community wines with non-EU wines and the
production of wine in the EU using non-EU products, on the
grounds that these measures would give rise to disadvantages
for EU producers and entail risks of abuse incurred by consu-
mers. In this earlier opinion the EESC had deplored the lack of
Commission proposals for making EU wine more competitive
in international trade, particularly in export markets. The EESC
reiterates this criticism in respect of the forthcoming reform of
the wine market.

3.14.1
In the light of its earlier analyses, the EESC calls upon
the Commission to pay greater heed, in the reform of the orga-
nisation of the wine market and, in particular, in the context of
external trade provisions, to the position of the EU wine sector
as the global market leader.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS