The European Commission announced a plan on 22 June to reform the wine production industry in Europe in order to make it more competitive.
The plan has two variants. The simpler one-step approach would simply encourage EU winemakers to cease production in less viable areas in an attempt to tackle over-production, with more than ten per cent of current wine-growing land being put to alternative use by 2011, whereas the two-step approach would include measures to balance supply and demand by encouraging producers to label their products better – for instance by showing grape varieties - and to invest more in marketing in an attempt to raise demand.
The increasing popularity of New World wines in Northern Europe, along with falling wine consumption in many traditional wine-drinking EU countries is causing over-production to become an increasing problem.
Already much excess wine in France and Italy is being turned into ethanol because it cannot be sold. The aim of the plan is to spend the budget, currently €1.2 billion a year, on making the industry more competitive, rather than subsidising producers whose products are uneconomic.
Wine production accounts for more than 10 per cent of agricultural production in France, Italy, Austria, Portugal, Luxembourg and Slovenia.
23 June 2006