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EU wine sector funding is ‘unjust’, say auditors

A fund of more than €1bn to promote European Union wines around the world is not an efficient use of public money, the European Court of Auditors has warned.

The European Commission’s wine reform plan has also involved grubbing up thousands of hectares of vines. Image: Chris Mercer.

There is no justification for the European Commission holding a specific fund for wine sector investment and marketing, the European Court of Auditors (ECA) said in a review of EU spending on wine.

Its verdict drew a sharp rebuff from the European Commission‘s agriculture department.

Under EU rules, each member state receives a wine funding ‘envelope’ from the Commission and can then decide on which national projects to back.

Europe’s wineries and trade bodies collectively spent €522m of EU money to promote their wines beyond EU borders between 2009 and 2013, as part of the European Commission’s wine sector reform plan, said the ECA.

But, it said there was little evidence of the money making much difference. Although overall exports of EU wine increased over those years, auditors said EU wines ‘lost market shares in the main countries targeted by promotion actions’.

They added, ‘The promotion actions are often used for consolidating markets, rather than winning new markets or recovering old markets.’ Large wine companies have also benefited from funding, which was intended only for small-to-medium businesses, they said.

For these reasons, auditors said the Commission cannot justify its decision to expand the wine promotion fund by 121% to €1.16bn for the years from 2014 to 2018.

The ECA argued that the Commission’s existing rural development fund should be used to help winemakers, if necessary.

But, the Commission defended having a separate fund for wine. It said the amount money set aside is appropriate and is not only for promotion, but also to improve the competitiveness of national wine sectors.

EU wine exports to third countries have risen by 64% since its wine reform package was adopted in 2008, it said.

The Commission also noted that millions of euros are no longer spent annually to distil unsold wine into industrial alcohol, after it encouraged producers to grub up vines in return for compensation. 

Written by Chris Mercer

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