Copa-Cogeca asks to add the presentation of its document European wine: A special product that requires specific treatment to the agenda.

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1 Advisory Group Wine 20 October Adoption of the Agenda: The chairman announces that today s meeting will not be devoted to the topic quality, which is now an internally discussed subject to be submitted for Member States (MS) approval. asks to add the presentation of its document European wine: A special product that requires specific treatment to the agenda. Chairman welcomes Mr. Federico Castellucci from the International Organisation of vine and wine (OIV), invited to the meeting. 2. Wine sector market situation Today is the World Statistics Day, a good sign to discuss the price situation. The harvest has posted lower figures, following a similar trend during the last four years: less than 170 million hectolitres (hl), possibly only 165 million hl and probably only 158/157 million hl will be processed to make wine. What are the reasons behind this decline in production since 2007 (which produced 200 million hl)? Probably, the forced grubbing up measure is one of the reasons, but the main cause is the low production levels in several countries (e.g. Hungary, Germany, Romania, Cyprus, Czech Republic), due to unfavourable weather conditions, such as lack of sun that did not allow the vines to grow. In Italy for the first time ISTAT and ISMEA provided the same harvest figure of 45 million hl. In some MS we can observe a increasing production trend: +4% increases in Spain as a final result of an 8% increase of yield, compensated by the grub up. At the Italian regional level we registered contrasting figures, showing that average figures are hiding singular realities. We do not yet have data on July stocks, but some indications suggest that stock will remain high. Even in Germany the crisis is not having a positive effect on prices. The chairman He asks for figures on the surface cultivated, which are not available in the report nor in the tables. In Portugal data shows a positive trend +9%, but the real increase would be +15%, similar to Spain, this is due to the good weather conditions. Low yields, depressed market and grubbing up, three contingencies that will contribute to the disappearing of vineyards in Europe, together with the exodus of young people from rural areas. Moreover, in terms of quality, there is a tendency to plant not autochthonous varieties, so that the vines are less controlled, less adaptable to our soil types, more fragile and they last less time. 1

2 VC The situation in France is complicated, but what is happening in the European market of consumers? this reaction came from Mr. Infalt and his vision is included in the last paragraph on this item (Many members asked to organise the Advisory Group only when the can propose more reliable data). CEEV After the CMO we asked for more transparency and fair prices, but we did not agree to create together a common Market Observatory to monitor the market situation. The information we have is fragmentary and we have not a clear idea on the market situation. We need a common method to register data. E.g. Spain is the country which the lowest level of individual consumption. We register a decline in Sicily but an increase of production in other regions: why? The implementation of the two measures of the grubbing up and green harvest applied at the same moment. This was not the case of Puglia or Emilia Romagna, where only grubbing up measure had been applied. The two measures need to be reconsidered, because they did not impact on the market and on the prices of grape. A Market Observatory on wines and vines is absolutely necessary for Copa- Cogeca, but how can we work together? Surely, in synergy with CEEV. In the EU the quality is high but we lack coordination, so that statistics data arrive too late while the biggest firms from the new world can base their research on observations and can access with more efficiency the emerging markets. These new firms are also imposing a new vision of wine culture different from the EU and the EU does not have efficient tools to propose its own traditional vision of wine making. To promote transparency in France we proposed to modernise the sector, by monitoring profit margins. It is difficult to obtain clear statistics on prices due to the enormous variety of wines and categories. Without grubbing up the current market situation would have been even worse. If we want to have a global picture of consumtion we need the stock data from 31/07. We observed a negative trend in the restaurant sector, but the decline in production is not directly impacting on prices (see p.5, table). In Germany the 80% of wines is sold by the discount chains, the consumption is stable. The October meeting can only be based on forecast figures, the March meeting on stock and production declarations. Many members asked to organise the Advisory Group only when the can propose more reliable data. 2

3 3. CMO implementation Presentation on a draft proposal to modify the Commission Regulation on oenological practices, in line with the 2008 reform. The reform of 2008 has introduced several reference to OIV: methods of analyses, oenological practices of OIV for wine from third countries, new oenological practices based on the OIV resolutions. Presentation on a draft proposal to modify the Commission Regulation on oenological practices, in line with the 2008 reform. The reform of 2008 has introduced several reference to OIV: methods of analyses, oenological practices of OIV for wine from third countries, new oenological practices based on the OIV resolutions. The draft proposal introduces the new oenological practices recently approved at the OIV: use of chitosan of fungal origin, of chitin-glucan of fungal origin and acidification by electromembrane treatment. This proposal includes references to the International Oenological Codex published by the OIV. - (...) OIV After a short description of the OIV, members of the group are invited to attend the 34th World Congress of Vine and Wine "A conspiracy of art and knowledge" and to the 9th General Assembly of the OIV in Porto. CMO: positive measures that need to be improved. Member States should be free to choose how they want co-finance these measures, if from Pillar 1 or Pillar 2. VC Critics to the grubbing up measure, a difficult choice during crisis was the first year of the implementation of the national support programme in the wine sector. This is a key element introduced by the wine reform which allowed Member States to use their share of the Community funds in accordance with their national and regional needs. The overall execution rate was high (94%) especially taking into the account the problems encountered by MS such as the necessity to implement in a very short time the programmes which included completely new measures. For 2010, the execution rate is expected to be higher (around 99%). As a consequence the already existing measures remained most successful: restructuring and conversion of vineyards (44% of the funds spent). Market measures also remained attractive: potable alcohol distillation (19%) and byproducts distillation and use of concentrated grape must (each 11%). The new measures introduced such as promotion and investments were far less popular, but MS expect them to attract more interest in the coming years. 3

4 Concerning the voluntary grubbing up scheme, after the 3 wine years 2008/2011, an amount of Mio euro will be allocated to producer Member States, for a vineyeards grubbing up of ha. 4. Analysis on the food chain Better functioning food supply chain in the EU: see PowerPoint presentation attached. Key points: - Reduction in EU price support, which is offered in different ways than direct payments - is monitoring prices trend since High level group on agro-food competitiveness proposed 30 recommendations - A call for more transparency along the food chain - Increasing in price volatility - See initiatives p.16 of the PPT presentation: in December the will launch the Food supply chain forum General comments from the participants: - The should multiply its effort to communicate to the EU citizens the lack of transparency and the unfair competition rules - The wine sector is a different one and cannot be treated like the other sectors along the food chain. Wine is not a primary good like bread or milk, it is also a personal choice of the consumers to buy it or not. - The wine sector has been a precursor during the last years of reform: the first to ask for a quality regime and for control on prices, but now it is suffering from lack of scientific method to collect data - The wine sector in EU needs to be recognised according to its regional and traditional diversities - Need to analyse the possibility of a common legislative framework to coordinate the production system and the big scale distribution 5. Trade policy: Canada, India, US Constructive meetings in Washington and positive trend to find common ground in terms of definitions and standards. US remains concerned with certain cases of mislabelled EU wines: - US is not reassured that the wine Brunello di Montalcino is produced according to the rules of the Consorzio (100% Sangiovese); - Scandal on the fake Pinot NoirNoir exported from France to the US. A bill which would give US States more powers to regulate trade in alcoholic beverages could have negative implications for EU exports (HR 5034 "CARE Act").A bill which would give US States more powers to regulate trade in alcoholic beverages could have negative implications for EU exports (HR 5034 "CARE Act"). 4

5 Worrying situation in the trade with Brazil: EU wine exporters pay +27% excises tax, while wine producers from Chile only + 4%. Need for the to put pressure on trade quotas and to reduce taxes. The US is basing their request for more protection on the EU regulations, but this request comes from the private sector not by the Federal Government. On quotas and taxes it is necessary to see how the negotiation with MERCOSUR evolves. 6. Labelling of Allergens Information on the voting of the Commission's proposal amending Commission Directive 2007/68/ as regards labelling requirements for wines in the framework of the Standing Committee on the Food Chain and Animal Health on 5 th October Pursuant to this amendment, the transitional period of exemption from the obligation of labelling the allergenic substances used in winemaking is extended till 30th June The Commission's main argument supporting the proposal was that pending EFSA's scientific assessment, the objective of this delay is to avoid the additional costs that would have been implied by the changes in labelling rules. CEEV Thank you to DG Agri and DG Sanco but there is a need for simplification: less writing and more pictures to improve the communication. 7. AOB presents its document European wine: A special product that requires specific treatment European wine is a special product that needs to be treated under specific measures, with more continuity and an adequate budget. Disclaimer "The opinions expressed in this report represent the point of view of the meeting participants from agriculturally related NGOs at community level. These opinions cannot, under any circumstances, be attributed to the European Commission. Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of the here above information." 5