EU unlocks more money for wine producers

In the wake of tumbling sales to the US, the EU has found more money for wine producers, to help them sell their wines. Barnaby Eales reports.

Photo by Markus Spiske on Unsplash
Photo by Markus Spiske on Unsplash

The EU has agreed to increase aid for wine promotion activities by 10%, to help boost exports. The additional funding is aimed at supporting EU wine producers hit by the US government’s 25% increase in import duties on some EU still wines, which came into force in October.

“Promotional activity is financially burdensome for wine producers. We have to provide as many opportunities for them as possible,” said an EC spokesman.

Under the new regulations, agreed by the EU on 15 January, member states will provide 60% of funding for eligible EU wine promotional activities in “third countries” (countries outside the EU and European Free Trade Association).

The EU’s CMO (Common Organisation of the Markets) programme, for example, currently gives 50% of funding for commercial activities including trade missions, tastings and events. 

The programme typically attracts larger wine companies who have to fund the other 50% of the subsidy. 

But under the new rules, wine producers will only have to foot 40% of these costs, not half, according to the EC’s Agriculture Directorate General. 
It said the funding increase would also be applicable to EU wine producers who promote their wines within the EU.

More flexibility

The additional EU aid is part of a raft of new measures, which will allow wine producers to change their promotion activities, and the location of them, more than twice a year.

This means wine producers can switch their existing promotional activity from one market, such as the USA, to another like South Korea, without restriction. 

The current allocation for EU CMO wine promotion subsidies in third countries stands at €1.1 bn, for the period between 2019 and 2023. However, the new rules will remove the existing five- year funding cycle of promotion activities.

The EC said these new regulations would be adopted by the College of Commissioners this year, ahead of final approval by the European Parliament and Council.

Meanwhile, wine producers can also tap into EC farm products promotion activity funds, awarded annually. This separate funding mechanism lets wine producers promote their wines alongside other EU agricultural products.

Earlier this month, the EC announced that it had increased the annual funding available to for the promotion of EU farm products by 5.1%, from €191m last year to €200.9m for 2020.  

“Wine producers can access these funds, if they include other EU agriculture products with wine in promotional activities – for example, EU wine and cheese or EU wine and olives,” said the EC spokesman.

In one example last year, the Sherry wine board (CRDO Jerez) in Spain, was awarded €5.2m to promote wine together with vinegar and cider in the Netherlands.

Ignacio Sánchez Recarte, general secretary of European wine trade body, CEEV, welcomed the increase in funding for wine promotion activities, but he said they provided “more of a medium term solution” to the current problems faced by EU wine producers exporting to the US. “The EC needs to adopt emergency measures to address market continuity for EU operators affected by the additional tariffs in the US,” he told Meininger’s.

Barnaby Eales

 

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