EU to reduce aid to winemakers

  • Wednesday 10 May 2006

In a drive to end the overproduction of wine in its member states, the European Union is set to reduce the amount of financial aid it gives to winemakers.

As part of a report to be presented to the European Commission on 21 June, EU officials are asking that the budget for subsidies be divided between member states and not taken from a central pool. The amount each country receives will depend on previous levels of production.

Although this means traditionally large wine-producing countries such as France and Italy will receive more money than countries like Greece or Portugal, it is hoped the move will prevent countries asking Brussels for further subsidies, stemming overproduction.

‘According to sources within the EU, this will cause certain countries to reduce mass production and even abandon vineyards,’ said news agency Reuteurs.

Brussels is currently spending around €500m (£340m) to ‘get rid of’ unsold wine, with the sector as a whole absorbing €1.3b (£890m) of the EU’s yearly budget.

Last year’s crisis distillation alone is set to cost the EU nearly €200m (£140m).

‘We are spending too much money,’ said European Agriculture Commissioner Mariann Fischer Boel.

The move is part of an overhaul of wine regulations within the Common Agricultural Policy – a controversial set of rules governing the production, trade and processing of agricultural products throughout the EU. In the case of the wine sector, this was last reviewed 7 years ago.

After the commission’s report is presented next month, legislative proposals are expected to be drawn up later this year.

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