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EU Aims to Shake Up Wine Industry With Root-and-branch Reform

The European Commission on Wednesday proposed uprooting excess vineyards and launching an overseas marketing blitz under a new wine industry strategy aimed at soaking up glut and countering New World producers.

Farm Commissioner Mariann Fischer-Boel warned that the European Union's annual wine budget of 1.3 billion euros (1.8 billion dollars) was currently spent in "a very inefficient way" despite huge challenges facing the sector.

"We are now actually losing market share to dynamic producers in other parts of the world, consumption is falling and imports are increasing by about 10 percent," Fischer-Boel told journalists.

With 500 million euros currently spent each year getting rid of unsold wine, her proposed solution focused on abolishing measures used to dispose of excess wine and paying farmers to uproot uncompetitive vineyards.

"The proposals aim first of all to boost the competitiveness of the European wine producers, try to win back markets, drain the infamous wine lakes and of course make things more simple," she said.

EU attempts to turn around souring wine market

Although Europe remains by far the biggest wine producer and exporter, it faces growing competition from so-called New World competitors, notably Australia, the US state of California, Chile and South Africa.

In Europe, wine heavyweights such as France, Italy and Spain are increasingly feeling the squeeze as consumption falls at home and they lose market share to New World imports in traditionally large markets like Britain and Germany.

Under the root-and-branch reform, the distillation of excess wine, aid for private storage and export refunds would all be abolished while incentives would be increased to encourage farmers to uproot a targeted 200,000 hectares (494,000 acres) under vines.

The Commission also wants a budget of 120 million euros per year, funded partially by
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