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Monday, November 28, 2011

Vineyard expansion in Europe? What are they thinking???

It came as a real surprise to me to see this article in the Decanter magazine this morning: "European wine growing regions are battling European Commission plans to allow massive vineyard expansion." Full article here:

After years of pulling off vineyards and converting excessive wine production into ethanol for fuel - The European Union has distilled millions of hectoliters of wine into industrial alcohol because producers in Europe have been making more wine than they can sell - it is hard to believe that the EU wants to go in a total different direction.

The article says: "To boost the wine sector’s competitiveness by reducing production costs, the EU has included an amendment to liberalise planting rights, from January 2016, within proposals for the reform of the Common Agricultural Policy (CAP) - a policy which one lobbyist said would have 'catastrophic' consequences."

Really? Are they saying that planting vineyards in the Douro Valley in Portugal or in Rioja in Spain (where production costs are very high) is going to help with the competitiveness of the European wine sector by reducing its costs? My gosh! What are they thinking???

Someone said that "the effect of this could be catastrophic". Well, I couldn't agree more, but I would love to hear your thoughts on this.


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Peter said...

Myself I'm a winegrower in the South of France, where proper marketing of the wines has been a problem since decades. My colleagues around and myself are absolutely against this project. This will impoverish quality, do a lot of harm to the image of wine and will make life very hard for those who at the time are carrying the good image wine can have.
Most probably the project comes from lobbyists and large groups that want to gain market shares and are only interested in low prices. The effect would indeed be worst cathastrophy since the invasion of phylloxera.

Luiz Alberto said...

Peter, thanks for sharing your opinion. The word "INSANE" comes to mind when I think about this plan... and yes, it could well be worst disaster for the wine world since phylloxera. Let's hope these people come to their senses before it's too late!

Christian Briard said...

Dear Luis, dear Peter,
Nobody wants this; Champagne area is working hard to shoot this project.
Unconroled wines expenstion will sign the end of the Champagne like we know it today.
Christian Briard,

Kyrstyn said...

I wish I understood the economics of this better. Are they talking about simply allowing more vineyards to be planted, or are they talking about allowing the expansion of the AOC/DOC's, etc.? If it's the first, the libertarian in me is having a hard time finding fault (protectionism bad, freer markets good). If it's the latter, then yeah...I think that would destroy some long-standing brands and be disastrous. Then there's the entirely separate matter of one body being permitted to decide the fate of individual nations. I don't know enough about EU law and how it compares to what we've got here in America as far as the Fed vs. States, but if I was France and my citizens wanted to keep things the way they have been for centuries, I would think that should be her right. Let her sink or swim in the global economy based on whatever policy she decides to go with. But don't make sovereign nations go along with some blanket policy that might work for some but not for others.

Luiz Alberto said...

@Christian - I would imagine that everyone in Champagne (or France for that matter) will be against it. And with very good reason! I really hope this crazy idea don't go anywhere...

Luiz Alberto said...

@Kyrstyn, I think it is a very good point. To find what is changing ("simply" allowing more vineyards to be planted, or are they talking about allowing the expansion of the AOC/DOC's) is very important.
However, what I understood from the Decanter article is that some wine regions such as the Douro Valley in Portugal could grow their vineyard area by more than 5 times what it is today (45,000ha to 250,000ha.) and that, in itself, is a gigantic problem!
But, as you, I don't know enough about EU law... if anybody can shed some more light into this...

Matthew said...

As a manager of an Australian winery this is a huge problem. We do not really sell into the EU however Australia has its own issues with over production. I think a certain freedom is essential to competitiveness however once you flood the market with cheaper wine of a lessor quality it is a slippery slope and very difficult to claim back lost ground. If the EU makes more wine than it can sell then there is really no sound argument to allow for greater expansion.
However the EU has a history of fairly random decisions, the eradication of steel production in Naples being one that still has serious repercussions for the people of and around that region. So is it really that much of a surprise.
It is important however for us to remember that expansion will not ever ruin the quality of the wines we already see it will simply add layers of other wines which in itself is a danger to future generations of wine drinkers who will not be able to really know if what they are drinking is worth the hype or is indeed of any quality.
Better to grow less grape and make less wine and then sell it at a better margin to ensure the health of our industry.
However once you allow accountants to control the world the horse has already bolted and taken the wagon with it.

Fabio (Vinos Ambiz) said...

I believe the idea is not actually to actively expand vineyard area or grape production, but simply to do away with the existing system of obligatory "planting rights". This is just an extra administrative cost or tax that anyone who wants to produce grapes has to pay, be it for existing old vineyards or for newly planted ones.
The subsidised purchase of grapes for distilling into alcohol is a separate (but related) issue. I believe that that's going to be abolished too. basically that's just taxpayers subsidising grapegrowers and winemakers who produce products that noone wants! I imagine that it would be difficult to abolish in one feel swoop as so many people are dependent on it and it would cause too much social and economic upheaval.
anyway, I for one am glad I wont have to pay an unnecessay tax if I want to plant a vineyard. I imagine also that there's a lot of corporate vested interest in keeping the system as it is as a barrier to entry for new players.