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The Reform of the Common Organisation of the Market in Wine

The Reform of the Common Organisation of the Market in Wine . Kieran Dooley . Biggest producer in the world Biggest consumer in the world Biggest exporter in the world (5.5 billion € in 2006) Biggest importer in the world  Net exporter (3 billion €). Reform of Wine CMO.

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The Reform of the Common Organisation of the Market in Wine

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  1. The Reform of the Common Organisation of the Market in Wine Kieran Dooley

  2. Biggest producer in the world • Biggest consumer in the world • Biggest exporter in the world (5.5 billion € in 2006) • Biggest importer in the world  Net exporter (3 billion €)

  3. Reform of Wine CMO Why a Reform? • Decrease of the consumption in the EU • Increase of imports from Third Countries • Unbalance in the wine market • Unfavourable medium term forecast for EU-27 Which are the objectives? • Higher competitivity • Simpler rules • To preserve the wine producing traditions in EU

  4. Reform objectives We need a wine CMO that: • Increases the competitiveness of the EU’s wine producers, strengthens the reputation of EU quality wine as the best in the world, torecover old markets and to win new ones in the EU and worldwide • Operates through clear, simple and effectiverules and ensures balance between supply and demand. • Preserves the best traditions of the EU wine production and reinforces the social and environmental fabric of many rural areas

  5. Reform of Wine CMO How to reform? • Abolition market measures • Crisis distillation • Potable alcohol distillation • Distillation of by-products • Alcohol Storage • Use of concentrated must • Encouraging non competitive producers to leave the sector • Simplifying and improving labelling rules

  6. Reform of Wine CMO How to reform? • National envelopes • Promotion on Third Countries markets • Restructuring and conversion of vineyards • Green harvesting • Mutual funds • Harvest insurance • Information campaigns on responsible consumption • Transfer of funds to Rural Development

  7. Main changes to the Commission proposal

  8. Eligibility of vine areas for SPS More flexibility for producers Reinforcing environment protection From 01/01/2009 • All vines become eligible = complete freedom to farm • Producers can activate single payment entitlements they already have or can buy. • MS may allocate entitlements notably by transferring funds from national envelopes • Cross compliance applicable on the whole holding

  9. Planting rights will be extended until end 2015 (1/8/210 under current CMO) • Option for a Member State to maintain them up to end 2018 Abolition of planting rights Limiting production constraints Reinforcing competitiveness From 01/01/2016 at EU level • In the meantime, planting rights remain applicable. • Current regularization procedure is extended to 31/07/2008 • New regularization procedure from 01/08/2008 to 31/12/2009 with a penalty = x 2 the value of planting right in the region

  10. To be decided by the producer (except limited restrictions by MS) • More attractivelevel but decreasing over time to speed up the take up • 175 000 ha over 3 years • Area will qualify as eligible for SPS and receive a new entitlement • Environmental requirements Grubbing-up Providing alternative to less competitive producers Achieving a balanced market From 01/08/2008 to 31/07/2011

  11. Export refunds • Private storage support of wine and musts • Must aid for grape juice • Dual-purpose grape distillation • Public alcohol storage • Must aid for enrichment • Potable alcohol distillation • Crisis distillation (replaced by crisis management measures) phased down Suppression ineffective intervention measures Reinforcing farmers’ market orientation Achieving a balanced market From 01/08/2008 From 01/08/2012 at the latest

  12. National envelopes More subsidiarity Modernisation of structures, income support From 01/08/2008 • Given menu: • restructuring and conversion scheme vineyard • investment and innovation in processing • promotion in third countries • harvest insurance • mutual funds • green harvesting measure • transitional measures (aid for potable alcohol, crisis distillations, must for enrichment) • support for disposal of by-products • In addition, funds may be transferred to grant entitlements to the decoupleddirect payments to producers under the single payment scheme

  13. Oenological practices, Simplified and consumer oriented measures From 01/08/2009 • Clearer, simpler and more transparent rules: • More flexible wine making practices (quicker adoption after approval by MS in OIV) • Reduced limits for enrichment: • - 3% in zone A- 2% in zone B- 0.5% in zone C • In case of exceptional climatic conditions the limit may be increased by 0.5% • Decisions taken through Regulatory Committee

  14. Clearer, simpler and more transparent rules as well as WTO-TRIPS compatibility • Simplification of wine classification: • wines without GIs and wines with GIs • Implementing rules by Regulatory Committee GIs /Quality Simplified and consumer oriented measures From 01/08/2009 PGI = Protected Geographical Indication PDO = Protected Denomination of Origin

  15. Clearer, simpler and more transparent rules • Similar mandatory and optional mentions for all categories of wines • Allow, under conditions to be defined, wine without GIs to mention the vine variety and harvest year • Fully WTO compatible • Commission competence Labelling Simplified and consumer oriented measures From 01/08/2009

  16. Enhance promotion scheme outside the EU (national envelopes) • for wines with Geographical indications and single variety wines, • Information/education campaigns inside the EU: • on responsible drinking and harmful alcohol consumption (60% EU cofinancing). Promotion/information Simplified and consumer oriented measures From 01/08/2008

  17. Currently available measures of RD, for ex: • Investments on holdings, young farmers • Early retirement • Agri-environment, landscapes protection, organic farming… • Investments for reconversion to other agricultural activities • Transfer of funds from first to second pillar (optional for MS with a transfer lower than 2.5 Mio € in 2009) Funds transferred to rural development Modernisation of structures Safeguarding local economy From 01/08/2008

  18. Environmental requirementsfor production and processing (soil erosion and contamination by use of plant protection products, waste management): • Cross compliance applicable on all “activated” vine area or on mixed farms. • Vines to be kept in good agricultural and environmental conditions (GAEC) • Cross compliance on : • restructuring scheme payments • green harvesting payments • grubbing-up premium • Rural development standards Environmental requirements Reinforcing environment safeguard

  19. Budget evolution by measures

  20. National envelope and Rural Development transfer by MS 2009 LU, MT, UK (and LT) cannot be seen due to the scale used

  21. National envelope and Rural Development transfer by MS 2015 LU, MT, UK (and LT) cannot be seen due to the scale used

  22. Reform agenda • 19/12/2007: political agreement in the Council • First semester 2008: Implementing regulations (first phase) • 01/08/2008 application (first phase) • End 2012: Commission report

  23. More information http://ec.europa.eu/comm/agriculture/capreform/wine/index_en.htm Thank you

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