EBRD/FAO Cooperation. Macedonia: Technical Assistance to the Wine Sector

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1 EBRD/FAO Cooperation Macedonia: Technical Assistance to the Wine Sector STUDY TOUR on DEVELOPING GEOGRAPHICAL INDICATIONS (GIs) in MACEDONIA S WINE SECTOR SUMMARY REPORT The study tour took place in Cotes du Rhone, France, from 4-10 December 2011 Introduction The study tour was organised by the FAO Investment Centre from 4 th to 10 th December 2011 in Cote du Rhone, France. The general purpose for organizing this trip was continuation of project activities under the FAO/EBRD cooperation project through transfer of knowledge on Geographical Indications (GIs) thus supporting Macedonian wine producers in developing GIs. The specific goal of the study tour was for participants to receive a firsthand experience and observe and recognize the benefit from utilizing Geographical Indications in addition to obtaining answers to the questions on successful functioning of the GI system in France as one of the most prominent wine producing countries 1. The tour envisioned meeting with representatives of INAO, organization under authority of the Ministry of Agriculture responsible for financing and regulating Rhone Appellation that provided presentation of the Geographical Indications (GIs) of the Cotes du Rhone valley and insights of the ways of their implementation, control and promotion; visit to Inter Rhone, the Interprofessional Organization of the Rhone wine producers responsible for protection and promotion of the Rhone GIs and; a visit to the laboratory in charge of wine analysis located within the Wine University in Rhone; 2. Visits to wine producers, several small and large vineries and cooperatives with different GIs (AOC, VDP, VDT, Crus Appelation).

2 Study tour review 1. Implementation, control and promotion of Cotes du Rhone GIs Mr. Philippe Laville, regional delegate of INAO Rhone presented the role of National Institute for origin and quality in France, a public institution with administrative character dependent from the Ministry of Agriculture. This Institute is responsible for empowerment of legal provisions for implementing origin protection, at the same time representing the only institutions entitled to submit products origin protection proposals to the government. From the total annual budget of 20 mil. euro, high 70% of the means derive from the Government. Institute s main functions are: defining production geographic regions, defining products specifications, determining a product control system and contribution in protection of GIs Mr C.Paly, President of Inter Rhone and Mr. A. Pignol, Executive Director of Inter Rhone, presented the task and significance of Inter Rhone, the Interprofessional Organization of the Rhone wine producers and traders which oversees all of the Cote du Rhone vineyards and organizes the market for this PDO wine. Inter Rhone is an Association for protection and promotion of Cote du Rhone GIs with a management system governed by two bodies: Wine producers and Wine traders who are an integral part of the administrative council where decisions are made unanimously. Inter Rhone is financed by its members through a collectively voted mandatory fee per GI, while the amount per each GI differs ranging from 3 euro per hectolitre for AOC Cotes du Rhone to 8 euro per hl for the Creu GIs. The fee is paid the moment the wine is launched on the market. This organization has three main missions: (i) economic mission where Inter Rhone functions as a regulatory tool in economic sense ( has the right to block certain wines), intervenes in the whole process of wine production from the vineyards until the wine is launched on the market and in addition conducts economic analysis; (ii) communication and promotion of GIs as the major mission of this Association. Around 15 mil euro from the total annual budget of 22 mil euro is allocated for collective promotion of the GIs and; (iii) technical mission in terms of assistance in the area of research and development. Mrs Renee Payan, Director of the Wine University in Cotes du Rhone, incorporating the Rhone laboratory where analysis of wines of all protected geographic regions in AOC Cotes du Rhone GIs is conducted. Some of the key points deriving from the presentations and discussions during the visits are: - Implementation of a successful GI system is based on sharing common approach and common rules set by a group of producers organized through some type of organization which enables development of products with specific qualitative characteristics connected to the products origin; which have consistent quality and are related to the specifics of the area where produced. In the whole process, assistance from groups of experts is 2

3 inevitable particularly in the technical part: determining product s specifics (technical, historic and economic component). - In the process of PGI protection higher emphasis is placed on the quality and reputation of the wine, while the PDO allocates the cause-effect relation between quality and the geographic region (climate, soil ) - Application content for PGI or PDO specifications should contain: Product description, particularly its physical and chemical characteristics; Determining borders of the geographic area as well as description of its features (geological, climate..); Irrigation conditions; Yield; Types of international and local grape varieties; Description of production; Determining connection between the product and geographical region and geographic origin; Method of control - In France till 2006, control as one of the key aspects with GIs was responsibility of INAO, while starting from 2007 the control is conducted by separate bodies authorized and delegated by INAO. The group of producers, nominators of protection of origin nominate the control body as well, which proposes plan of control for particular GI. The control body should be entirely independent and follow EU standards and regulations. The main role of this body is not controlling wines sensory characteristics, but it should be based on particular, defined specifications on the specific GI. The French system is organized in a way that INAO delegates two control bodies: Organization for specification which submits plan for contro, conducts control and employs sanctions and Organization for inspection which is also entitled to conduct control, but is not authorized to employ sanctions. The latest submits report to INAO. - The group of producers submits an application for particular PDO or PGI to INAO which conducts specifications check and prepares a request for particular GI recognition. The request is submitted to the Government which reaches a decision for GI recognition and forwards it to the European Commission where after a 2 months procedure the GI is registered. - Application of GIs on labels develops value for the product if product s quality is consistent in a longer timeline, if sufficient marketing budget is allocated for GI promotion and if all chain participants share common image and product story. 2. Visiting wine producers with different GIs (AOC, VDP, VDT, Crus Appelation). During the study tour, participants visited the following wine producers: 3

4 - Chateau Beauchene, winery with a production capacity of bottles, 90% of which are intended for export. This winery produces wine with three protection indications: AOC Cotes du Rhone, Cotes du Rhone Village and Chateneuf du Pape.As a member of Inter Rhone, the winery pays different fees for different Gis: 3 euro/hectolitre for Cotes du Rhone, 5,56 euro/hectolitre for Cotes du Rhone Village and 8,85 euro/hectolitre for Chatenauf du Pape. Due to differences in specifications per different GIs, grape harvesting is done manually in Chateneuf du Pape, whereas in other GIs is done automatically. The yield in Crus Appleation Chatenauf du Pape is set to 35hl/ha. - Cave de Rasteau-Ortas cooperative, with capacity for production of 3 million bottles. 40% of the total production is sold through supermarkets whereas 20% is exported. This winery produces wine from 3 GIs: Cote du Rhone, Cote du Rhone Village and Appellation Rasteau Controlee and as members of Inter Rhone they pay different amount ranging from 3 to 6 euro for each of the protected areas. - Vignerons de Beaumes de Venese cooperative with capacity of 7 million bottles of which 15-20% are sold through their own shops. They have separate vinification for each of the protected areas. - Laudun - Chusclan is the second largest in France for the ownership of vineyards and it is 100% owned by grape growers. It has total production of hl of which 95 hl are in PDO and hl of wine from PGI. 25% of the total of 250 farmers contributes with 50% of the production. 45% of the total production goes to export and 12% through their own stores. - Les Vignerons de Caractere Vacqueyras cooperative, with annual production of 3 mil. bottles 45% of which is for export. The winery produces wine from 3 different AOC: Appellation Makeras Controlee, Appellation Gigondas Controlee and AOC Muscat. - Chateau La Gardine, winery with total capacity of hl, 80% of the total production is exported. It produces wine from 4 different Appellations: AOC Cotes du Rhone Village, Appellation Rasteau Controlee, Appellation Lirac Contorlee and Appellation Chateauneuf du Pape Controlee. Depending on the appellation the particular yield per hectare is determined by law on 33 hl/hectare for the Chatenauneuf de Pape wines, up to 46 hl/hectare for Cotes du Rhone Village. The selling price of their wines in ranging from 5 euro for wine produced from AOC Cotes du Rhone, to 90 euro for wine produced from Chatenauneuf de Pape. Conclusion: Organization of production in cooperatives is often in France and presents a system of joining together where all members are shareholders in the cooperative. It serves as an instrument for joint contribution of grape growers. A cooperative has two elements: every member has one vote regardless of the size and every member must give the total yield to the cooperative. The length of membership in the cooperative is defined to 10 years and after this period 4

5 members can sell their shares at a certain date determined by the Cooperative General Assembly. The value of shares is fixed and may be sold only to the cooperative which decides on future owner of shares i,e, to whom the shares will be sold. This system of cooperatives enables better control of grape quality and percentage of sugar units (brix) needed for wine production on one side and persistent contribution and joining members financials on the other. Payment of co-operant grape growers is per kilograms grape depending on the GI, and up to 3 years from harvest. Specifications for Appellations as well as for the different GIs are defined by the producers referring to the age and maturity of vine, the ratio between hectares and quantities of grapes (in the system of GIs division from bottom to top the yield is decreasing), grapes originating from different zones must undergo separate vinification, irrigation of vineyards is not allowed ( due to previously obtained permit from INAO 1% of the vineyards is irrigated), fermentation length also depends on the GI ( for AOC wines the fermentation lasts 2 weeks, for wines for Appellation Crus, 3 weeks). There is a General Union in Cotes du Rhone AOC where all GIs wine producing wine producers are members who comply with the commonly defined rules of vine cultivation and production of wine; and Organization for promotion of GIs Inter Rhone where members respect the common rules on placement of wine on the market (defines minimal price), the common rules on GIs image and their joint promotion. 5

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