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

The Reform of Wine CMO Osijek, 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 )

The Reform of Wine CMO Osijek, 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

The Reform of Wine CMO Osijek, Reform objectives We need a wine CMO that: Increases the competitiveness of the EUs wine producers, strengthens the reputation of EU quality wine as the best in the world, to recover old markets and to win new ones in the EU and worldwide Operates through clear, simple and effective rules 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

The Reform of Wine CMO Osijek, 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

The Reform of Wine CMO Osijek, 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

The Reform of Wine CMO Osijek, Main changes to the Commission proposal Commission proposal July 2007 Political agreement December 2007 Budget foreseen for grubbing-up max ha over 5 years Budget foreseen for grubbing-up max ha over 3 years with lower increase of current premium level 5 measures in national envelope menuNew measures in the national envelope menu and transitional measures 120 mio earmarked for third markets promotion No more earmarked budget Ban of sugar for enrichment and lower margins for enrichment with must Enrichment with sugar maintained but with lower margins (applicable also to enrichment with must) End of planting rights: end 2013End of planting rights: -end 2015 at EU level -end 2018 at MS level

The Reform of Wine CMO Osijek, Eligibility of vine areas for SPS Reinforcing environment protection More flexibility for producers 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 From 01/01/2009

The Reform of Wine CMO Osijek, Abolition of planting rights Reinforcing competitiveness Limiting production constraints 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 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

The Reform of Wine CMO Osijek, To be decided by the producer (except limited restrictions by MS) More attractive level but decreasing over time to speed up the take up 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

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

The Reform of Wine CMO Osijek, 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 decoupled direct payments to producers under the single payment scheme National envelopes Modernisation of structures, income support More subsidiarity From 01/08/2008

The Reform of Wine CMO Osijek, 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 Oenological practices, Simplified and consumer oriented measures From 01/08/2009

The Reform of Wine CMO Osijek, 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 Simplified and consumer oriented measures GIs / Quality PGI = Protected Geographical Indication PDO = Protected Denomination of Origin From 01/08/2009

The Reform of Wine CMO Osijek, 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 Simplified and consumer oriented measures Labelling From 01/08/2009

The Reform of Wine CMO Osijek, Enhance promotion scheme outside theEU (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). Simplified and consumer oriented measures Promotion/information From 01/08/2008

The Reform of Wine CMO Osijek, 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

The Reform of Wine CMO Osijek, Environmental requirements for 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

The Reform of Wine CMO Osijek, Budget evolution by measures

The Reform of Wine CMO Osijek, National envelope and Rural Development transfer by MS 2009 LU, MT, UK (and LT) cannot be seen due to the scale used

The Reform of Wine CMO Osijek, National envelope and Rural Development transfer by MS 2015 LU, MT, UK (and LT) cannot be seen due to the scale used

The Reform of Wine CMO Osijek, 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

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