EU approves additional measures to support struggling wine industry

The European Parliament on Tuesday approved a Commission regulation to extend market support measures for the wine sector until 2021. The decision was passed at the plenary voting session without a vote, as no objections were raised.

The measures were originally aimed at helping the wine industry recover from the crippling drop in overall consumption due to pandemic restrictions, but now has the additional aim of bolstering the sector at a time when it is being ravaged by the latest US sanctions related to the Airbus-Boeing trade dispute, as well as by post-Brexit transport delays.

The yearly financial envelope allocated by the European Union to the wine sector stands at €1.1 billion. There is no money in the Covid-specific recovery fund aimed at supporting wine producers, although they may be able to access projects for agriculture.

These newly announced measures do not entail additional funding, but rather allow for increased flexibility for wineries in relation to what they can use previously approved funding for. For example, the measures allow for the previously prohibited use of EU funding for green harvesting, a process whereby extra grape bunches are removed from a vine with the aim of balancing leaf area and fruit weight for a crop and achieve better ripeness. At a time when consumption is down anyway, the increased flexibility in measures will allow wineries to focus on quality. They will also allow funding to be used for promotional activities and storage.

Norbert Lins, chairman of the German Agriculture Committee said that ‘the European Parliament has taken an important step to ensure that the affected wine sector continues to receive the help it needs and that it quickly reaches those who desperately need it’.

As well as an eight per cent decrease in wine consumption within Europe, the industry has suffered as a result of US tariffs that have been applied to European wines and spirits as part of an ongoing Boeing-Airbus trade war. The dispute follows two decisions by the World Trade Organisation (WTO) allowing tariffs to be imposed and relates to the unfair advantage attained by plane makers thanks to generous government subsidies. Wine is one of the products that has been subject to US import levies and as such the industry has been struck another blow at a difficult time.

Further, the EU wine industry has had to face extended times and queues for customs operations, new phytosanitary regulations, increased bureaucratic actions and extra costs. Getting wine across the Channel has become challenging due to post-Brexit changes, according to the International Wine and Vine Organisation (OIV).  Much of the alarming issues were unexpected, and are hurting revenue.