Commission in bid to grub up European vineyards

The EU is preparing for a battle over plans to reform its struggling wine industry, with job losses expected in many of the oldest industrial sectors.

The Commission last June said that a "profound reform" of the wine industry was needed in response to years of over-production and falling consumption. The EU currently spends €0.5 billion a year getting rid of surplus wine through distillation.

Reform proposals due on 4 July are expected to call for the grubbing up of 200,000 hectares of vineyards and an end to EU subsidies for distillation.

The reform argues that these changes will force low quality and unsuccessful wine - products that are not commercially successful - off the market. A ban on the planting of new vineyards will also be removed by the reform, leaving successful wine-makers free to extend production.

But an impact assessment due to be published with the proposals warns that job losses are inevitable in parts of Europe responsible for most distillation of the wine.

"Although it is difficult to foresee the actual adaptation capacity of the distillery industry," says a draft of the assessment, "according to the opinion of an Italian professional organisation, the sector could lose 75% of its jobs in Italy."

Reform is also expected to bring down the price of cheaper table wines, as wine that would, under the old regime, have been distilled is instead bottled for sale. As a result of the fall in prices, specialised table wine producers in Sicily, Italy and Languedoc-Roussillon, France, could see their income fall by up to a third.

Wine-makers in Languedoc-Roussillon last month started fires in several French supermarkets to protest against the reform.

But CEEV, the European wine producers’ federation, said that changes to the industry were inevitable in the face of growing globalisation. "This may be the last chance we have to update the sector," warned José-Ramón Fernández. "We welcome the Commission’s efforts to reform the industry, as long as they are accompanied by measures to move into alternative agricultural sectors that are socially acceptable to producers."

The reform proposal will stress that unviable vineyards could move into different agricultural sectors, where they would be eligible for support under the reformed Common Agricultural Policy (CAP).

In addition, says the impact assessment, "the grubbing-up scheme and reinforced early retirement measures under rural development [a CAP funding plan] would give adequate support for non-competitive or older vine-growers, thus enabling them to leave the activity in honourable conditions."

A Commission agriculture spokesman said that the reform did not necessarily mean reducing the size of the EU wine industry. In the short-term the changes were likely to mean "less but better" wine on the market, he explained, but in the long-term a more competitive market, together with simplified labelling and classification rules, could see production soar.

"This reform will expand the market, making European wines a more attractive export," he said. "In the long-term people around the world could be drinking French and Spanish and Italian wine, instead of New World varieties."

Katerina Batzeli, the Greek Socialist MEP responsible for guiding the wine reform proposals through the European Parliament, said that the reform would have to propose "explicit criteria" to help wine-makers asked to grub up their vineyards. "The Commission is aware of the sector’s problems and should take action to resolve them," said Batzeli.

The EU is preparing for a battle over plans to reform its struggling wine industry, with job losses expected in many of the oldest industrial sectors.