EU Wants to Put a Cork on Excess Wine Production | Business| Economy and finance news from a German perspective | DW | 04.07.2007
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EU Wants to Put a Cork on Excess Wine Production

The EU has decided to cut back subsidies for farmers and vintners in an effort to stop them from producing cheap wine no one wants to drink. But wine producers are already griping about the new grape proposals.

Vintner cutting grapes

Many vintners aren't smiling at EU attempts to prune subsidies

The EU Agriculture Commissioner Mariann Fischer Boel of Denmark announced the proposed reforms in Brussels, saying they were needed to save taxpayers' money and make European wines more competitive against rising global imports.

Fischer Boel said her proposals would "reinvigorate the European wine sector and put it back where it belongs, that is, back on top of the world."

She added: "Everybody recognizes that a profound reform of the wine sector is needed, so we have to bite the bullet and do what we think is the best solution for our producers and our consumers."

The reform plans include reducing the amount of land used for producing wine in Europe from 3.6 million to 3.2 million hectares by 2012. The EU also wants to completely do away with subsidies for grape juice concentrate, which is used to produce the alcohol in wine, and abolish the distinction between table and choice wine.

Danish European Commissioner for Agriculture, Mariann Fischer Boel, harvests grapes

Danish European Commissioner for Agriculture, Mariann Fischer Boel

The EU has a current annual wine budget of 1.8 billion euros ($2.4 billion). But up to 15 percent of European wine produced every year is simply thrown away or converted into industrial alcohol, and a third of the EU wine budget goes toward those ends.

Meanwhile, wine from other parts of the world is becoming more and more popular in Europe -- imports from South Africa, for instance, have risen by 770 percent over the last decade. Consumption of domestic wines is declining by around .65 percent annually.

Wrath of Grapes

woman drinking wine

Industry groups say the reforms could raise the price of European wine

The President of Association of German Wine Producers, Norbert Weber, slammed the planned changes.

"The commission has a completely inaccurate understanding of wine," he said in an interview with German public television. "It thinks of wine as a large industry and forgets family farming businesses."

In his organization's official reaction, Weber predicted that the proposed reforms would lead to "loss of income and significant economic disadvantages, especially in areas that produce high-quality wines where land is expensive."

Weber also criticized EU plans to pay farmers some 1 billion euros ($1.36 billion) to uproot grape vines, objecting that farmers would be free to replant them as 2013.

Fischer Boel may have a hard time convincing agricultural ministers from the individual EU member states, especially the big wine producers, when they meeting to discuss the reforms this fall. And it probably won't help her cause that she comes from Denmark -- traditionally a beer-drinking country.

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