Commission Pulls Plug on EU Wine Lake

The winemakers of Italy and France have another reason to weep into their glasses and get angry at their New World counterparts. Yesterday, in order to cease the continent’s wine from spilling into the inland sea, the European Commission declined to compensate for producing excessive wine and cautioned them as well as other countries in the European Union to expect less subsidy and make less wine.

Italian and French producers hoped that the Commissioner for Agriculture and Rural Development, Mariann Fisher Boel, would pay them to convert millions of liters wine into alcohol that can be used as biofuel in industry. She wanted winegrowers to uproot 400,000 acres of vines— and replace them with other crops.

Although she did agree to spend €131m (£90.3m) on the "crisis distillation" of 260m liters of Italian wine and 300m litres of French wine, the subsidy couldn’t meet what the winemakers originally demanded. Similar requests from Spain and Greece are also being taken into consideration.

Ms Fischer Boel said, “ Crisis distillation is becoming a depressingly regular feature of our Common Market Organisation for wine.

"While it offers temporary assistance to producers, it does not deal with the core of the problem - that Europe is producing too much wine for which there is no market."

She further adds, "We must increase the competitiveness of the EU's wine producers, strengthen the reputation of EU quality wine as the best in the world, recover old markets, and win new ones,".

"We must create a wine regime that operates through clear, simple rules, and ensures a balance between supply and demand. And we must create a system that preserves the best traditions of EU wine production and reinforces the social and environmental fabric of wine producing regions."

Europe has witnessed a decline in demand for its wine due to cheaper wines produced by New World countries such as Australia, Argentina, New Zealand, Chile and South Africa. France’s €5.7bn industry, employing 500,000 people saw a drop of nearly 10% in exporting some of its finest wines in 2004.

The commissioner promised to present revised proposals on June 22.