EU’s wine policy leaves a sour taste

A report published today by the European Court of Auditors voices concern about the effect of the EU’s intended actions for wine growers. The EU’s wine policy not only falls short of environmental objectives, but its measures also fail to target the competitiveness of the sector directly.

The EU wine sector is highly regulated and supported. Wine growers have received around €500 million of EU money per year to restructure their vineyards and become more competitive. Since 2016, wine growers have also been able to request authorisation to plant additional vines. The purpose of this is to allow controlled growth of production potential (up to a maximum yearly increase of 1 %), while avoiding oversupply.

“Fostering the competitiveness of the wine sector is essential and particularly relevant for the EU, but it should go hand in hand with improved environmental sustainability,” said Joëlle Elvinger, the ECA member who led the audit. “The least we can say is that, in either objective, EU action still has to deliver.”

In the EU, wines can be red, white and rosé, but the way they are grown is rarely “green”. The auditors lament the fact that, despite the large amount of funding involved, the EU’s wine policy has done little for the environment. The restructuring measure in particular shows little consideration for green goals. In practice, EU money has not been channelled to projects to reduce the impact of wine growing on the climate and/or the environment. Indeed, it could even have the opposite effect, such as switching to grape varieties that need more water. Similarly, the 1 % annual increase in vineyard areas, which was extended by an additional 15 years (until 2045), has never been assessed from an environmental perspective.

The outlook is not much brighter: in the new common agricultural policy (CAP), the environmental ambition for the wine sector remains limited. In the past, EU auditors have recommended that payments to farmers – including those made to wine growers – should be explicitly linked to environmental requirements. But in the new CAP, such conditions on funding for restructuring have been discontinued. Also, EU countries will have to use only a minimum 5 % of the money earmarked for the wine sector on actions linked to climate change, the environment and sustainability. The auditors find this figure of 5% rather low, given that, under a greener CAP, 40% of all agriculture expenditure is expected to target climate-related objectives.

Nor has EU policy proved success in making wine growers more competitive. In the five countries audited, projects are funded irrespective of content or ambition, and without regard to any criteria for fostering competitiveness. Non-structural changes to or normal renewals of vineyards are also financed, even though such actions are not eligible. Also, beneficiaries are not required to report on how restructuring has made them more competitive. Moreover, neither the European Commission nor the member states assess how the projects that are supported actually help to make wine growers more competitive.

The same is true of the planting authorisation scheme. Firstly, the maximum percentage of a 1 % annual increase was proposed and adopted without any justification, or any analysis of whether it was suitable and relevant. Secondly, only few eligibility and priority criteria linked to competitiveness are used when granting such authorisations.