First there is a subsidy to produce wine and then another subsidy to
destroy it. The current cost to EU taxpayers of getting rid of surplus
wine is €500 million. Plus ça change...
The ineffectiveness of EU wine policy is made all the more evident by
falling European consumption of its own wines.
The US, South Africa, South American countries and Australia have
significantly liberalised wine trade among themselves since 1998, giving
entrepreneurs new opportunities to invest competitively.
The effect on the European market is obvious in any supermarket. 'New
World' wines have taken off and their share of the market has been
growing at an annual 10% for several years now. Last December an
agreement was finally reached by EU agriculture ministers to reform the
Union's wine policy, to stabilise European production, and balance
supply and demand. The reform also sought to make European wines more
competitive, to conquer new markets and to simplify regulations.
While reforms such as giving producers more responsibility for avoiding
the current waste go in the right direction, others miss the target or
do not go far enough. The message of the market – which can be learned
for nothing by simply going shopping – has not been heard.
There are still obstacles to the necessary free self-adjustment of
supply and demand.
This is a vestige of the bad old days, Europe's traditional wrong way
round, with producers' decisions guided by a system of subsidies rather
than by consumers' real needs.
The inefficiencies of the current system of managing exploitable land
will stay until 2015. Worse: member states will be allowed to carry on
as before at national level until 2018. Why should companies wishing to
expand have to wait so long? Why extend a system to subsidise vine
removal rather than encouraging the sale of land to other producers who
want to expand? And do Brussels technocrats really have a monopoly of
wisdom in the matter of defining the quality of wine, or the best way to
make it? Why not let producers and consumers decide on this as well?
From a policy point of view, the ultimate proof of this dubious vintage
is the bottom line. About this there can be no argument. Total
subsidies, while reallocated under different names, will remain
essentially the same and European taxpayers will have to pay for wine
promotion both inside and outside Europe. Why? An opportunity has been
missed for a reform which might have actually helped European wines to
improve as well as to compete effectively.
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