13. The European Wine Policies: Regulations and Strategies

The Common Agricultural Policy (CAP) is the main agricultural policy instrument of the EU. Today, it is organized in two pillars. Pillar I defines and funds market measure and it is founded by the European Agricultural Guarantee Fund (EAGF). Pillar II regards the Rural Development Programs (RDP), aimed to improve quality of life in rural areas, to support young farmers setting up a farm for the first time, and to introduce measures for investments and innovation in farms. Measures under Pillar II are financed by the European Agricultural Fund for Rural Development (EAFRD) and co-financed by EU Member States.

(1) Obligatory distillation of wine from dual-purpose grapes, which originate from other grape wine varieties or dual-purpose grapes produced in excess of the normal verified quantity. (2) Obligatory distillation of by-products as wine lees and grape marc. (3) Voluntary distillation for table wine or distillation “with a guarantee of proper use” for those with long-term storage contracts. A few years later, with the reform in 1987, three distillations were voluntary and could be chosen by the producer: (1) distillation supplementary to long-term storage contracts, (2) preventive distillation, and (3) support distillation. Whereas the remaining three were compulsory: (1) distillation of by-products, (2) distillation of wines other than table wines, and (3) distillation of table wines. The 1999 (Reg. 1493/99) reform provided for two types of compulsory distillation, (1) wine obtained from dual-purpose grapes and (2) by-product distillation, and two types of voluntary distillation: (3) for the production of potable alcohol and (4) crisis distillation.

Use of must for enrichment in order to compensate for the competitive disadvantage suffered due to the higher cost of enrichment using must incurred by producers who were banned from using sugar to regulate alcoholic strength.

Among these, only the single payment scheme (SPS) and harvest insurance were financed in the wine sector between 2008 and 2015. Support for setting up mutual funds was created in order to provide assistance to producers seeking to insure themselves against market fluctuations. The measure is subject to national (and local) choices and covers the amounts paid by the mutual fund to holders of financial compensation.

Article 68 allowed all Member States to retain up to 10% of their national ceilings for direct payments to provide support to specific sectors, for an expanded range of purposes: payments for disadvantages faced by specific sectors (dairy, beef, sheep and goats, and rice) economically vulnerable, support for risk assurance in the form of contributions to crop insurance premium, contributions to mutual funds for animal and plant diseases, and so on.

In the political economy mechanism of quality wine regulation, Meloni and Swinnen (2013) provide interesting analyses of the expenditure distribution effects.

The basic principle of the planting rights measures is that vines cannot be planted unless a right to replant or a right to make a new planting is held by the vine-grower. The CMO in 2013 abolished the total ban on the planting of new vineyards and replaced the transitional planting rights from 2016 to 2030 by a new system of authorizations for vine planting, for which Member States shall make available each year authorizations for new plantings corresponding to 1% of the total area actually planted with vines in their territory, as measured on 31 July of the previous year. Planting rights granted to producers, which have not been used by those producers, may be converted into authorizations as from 1 January 2016. Member States may decide to allow producers to submit requests to convert rights into authorizations until 31 December 2020. As a replacement, personal authorizations are granted free of charge, which are no longer transferable to the market.

(1) Single payment scheme, (2) promotion in third countries, (3) restructuring and reconversion, (4) green harvesting, (5) mutual funds, (6) harvest insurance, (7) investments, (8) use of concentrated grape must, (9) by-product distillation, (10) potable alcohol distillation, and (11) crisis distillation. The first nine measures were called definitive measures (2009–2013), which could be activated for the new CMO’s entire programming period. The others (such as potable alcohol distillation, crisis distillation, and aid for the use of must for enrichment or concentrated musts) could be used for a maximum of four years (phasing-out measures) and are taken from the market support mechanisms provided for in the previous CMO.

The new programs no longer contain potable alcohol distillation, crisis distillation, funds for grape must, or funds for the use of concentrated grape must.

Among the wine literature, the political economy mechanism that created the existing set of European quality wine regulations is shown by Meloni and Swinnen (2013) and Gaeta and Corsinovi (2014); while other authors develop a political economy model of the size of geographical indications (Moschini et al. 2008; Deconinck and Swinnen 2014).

DG AGRI Working Document on international protection of GIs: objectives, outcomes, and challenges, 25 June 2012.

It should be specified that when the first European pioneer from the “old country” made wine in California from Vitis vinifera grapes that looked, smelled, and tasted like what they knew at home, they called it by old country names. By the early 1880s, names like Champagne, Burgundy, and so on were commonly used to describe wine similar to those grown in France (Muscatine et al. 1984).

The E-Bacchus database is the register of EU PDOs and PGIs protected under the single CMO. This includes the list of GIs and DOs for third countries protected in the EU following the implementation of bilateral agreements on trade in wine and signed between the EU and the third countries concerned. E-Bacchus also includes the list of traditional terms protected in the EU under the single CMO Regulation.