“The new common market organization
COUNCIL REGULATION No. 1493/1999 of May 17, 1999 on the common organization of the market in wine
1- WHY A NEW OCM?
Whereas:
(1) The operation and development of the common market in agricultural products must be accompanied by the establishment of a common agricultural policy which must include, in particular, a common organization of agricultural markets which may take various forms depending on the product;
(2) The aim of the common agricultural policy is to achieve the objectives set out in Article 33 of the Treaty, in particular, in the wine sector, to stabilize markets and ensure a fair standard of living for the agricultural community concerned; these objectives can be achieved by adapting resources to needs, based in particular on a policy of adapting wine-growing potential and on a quality policy;
(3) The existing framework for the common organization of the market in wine was established by Regulation
(EEC) No. 822/87, as last amended by EEC Regulation No. 1627/98; in the light of experience gained, it should be replaced in response to the current situation in the wine sector, which is characterized by the fact that while structural surpluses are less frequent, surpluses over several years are nevertheless possible, in particular because of the risks of variations in production from one harvest to the next, inherent in the sector;
(4) The implementation of the Uruguay Round agreements in 1995 has led to a wider opening of the Community market, which is now much less sensitive to the impact of traditional intervention measures, and to a reduction in the possibilities for subsidized exports, forcing Community producers to improve their competitiveness; most exports are already made without subsidies;
(5) The main market problem currently facing certain players in the Community wine sector is their limited inability to adapt quickly enough to changes in competition, both on the internal and external markets. The current common market organization has offered no solution for wine-growing areas whose production clearly has no remunerative outlets, while areas with expanding markets have not benefited from sufficient flexibility to open up development prospects;
(6) In 1994, the Commission presented a proposal for the reform of the common organization of the market in wine, which was not adopted; in the meantime, the market situation has changed;
(7) To ensure the flexibility needed to adapt to the new situation, UNE
REFORM OF THE COMMON ORGANIZATION OF THE WINE MARKET ESSENTIAL
TO ACHIEVE THE FOLLOWING KEY OBJECTIVES:
- maintain a better balance between supply and demand on the Community market;
- give producers the opportunity to exploit expanding markets;
- enable the sector to become more competitive in the long term;
- abolish the use of intervention as an artificial outlet for surplus production;
- support the wine market and, in so doing, promote the continuity of supplies of wine distillation products to segments of the potable alcohol sector that traditionally use this alcohol;
- take regional diversity into account;
- formalize the potential role of producer groups and industry organizations;
(9) Regulation EEC No. 822/87 provides that the Council shall lay down the general rules for its application; this has resulted in a complex regulatory structure; the above-mentioned regulations contain numerous technical details which have necessitated frequent amendments; consequently, the present regulation must, in GENERAL, contain all the GUIDELINES NECESSARY for its application; the Council must confer on the COMMISSION all the powers of EXECUTION NECESSARY, in accordance with Article 211 of the Treaty; for reasons of clarity and simplification, a single text is now proposed.
II – THE CMO:
This basic text redefines:
1/ Planting policy
This is an element of quality policy, which should, through a system of planting rights reserves, enable a balance between supply and demand. Some unsuitable wine-growing areas will disappear or undergo conversion. However, since vineyards are a heavy, long-term investment, few people will give up or uproot their vineyards. Overproduction therefore remains endemic. The Council therefore confirms the ban on new plantings. These will be blocked until 2010. Until 2003, 68,000 hectares of new vineyards may be planted in healthy regions.
Indeed, the desire to eliminate unsuitable wine-growing areas remains. Thanks to the creation of reserves, planting rights will be able to flow more easily towards quality vineyards (relocation of vineyards from the plains to the hillsides, agreement to change certain vine varieties, development of new techniques to lower production costs). Funding for these operations is conditional on the presentation of a viticultural inventory: if there is no land register, no accurate balance sheet, it will not be eligible for rest111cturation funding. 50% of expenditure is financed through the F.O.E.G.A. This proportion can rise to 75% in priority areas.
2/ The distillation system
It will take the following forms:
- compulsory distillation of wine-making by-products
- compulsory distillation of wines from grapes not classified as wine grapes, to prevent fraud from table grapes;
- distillation for the potable alcohol market;
- Crisis distillation is a new feature of the CMO: it will have to meet unspecified criteria.
The Council decided to maintain all viticultural outlets, not just those for human consumption (e.g. vinegars, juices, musts for enriching potable alcohol).
3/ Oenological practices
They will be reviewed with the aim of eliminating certain discriminations (e.g. enrichment with sucrose or MCR, acidification).
4/ Creating producer groups
They will influence production and marketing methods.
5/ Labelling first protects the interests of the consumer, then those of the producer
A simplification of labelling rules is also planned:
- mandatory product identification information;
- optional information.
The protection of geographical indications concerns products from the E.E.C., as well as those from third countries that are members of the World Trade Organization.
6/ The desire to pursue a policy of quality even further requires a new definition of V.Q.P.R.D. and the possibilities for downgrading them.
7/ Exchanges with third-party pars
They are subject to accompanying documents, import and export certificates, and the Commission has the power to manage tariff quotas arising from international agreements.
8/ Lastly, the member states are responsible for enforcing the rules they have set themselves, in collaboration with the Commission within the Management Committee.
CONCLUSION
The CMO will come into force on August 1, 2000. The implementing procedures will be determined by the Commission, and are not yet known. They will have to respect the fundamental principles of the European Union, which it may be useful to recall:
- The specialty rule:
Europe must only intervene within the limits conferred on it and the objectives assigned to it by the Treaties (Treaty on European Union of February 6, 1992, known as the Maastricht Treaty). National competence is the rule, Community competence the exception.
- The proportionality rule :
The decisions taken by the Bl1Ixelles authorities must always be proportionately measured and qualitatively appropriate to the desired goal. This means using the most restrictive means only as a last resort, and prioritizing support measures over regulation, mutual recognition over harmonization, and framework directives over more detailed measures wherever possible.
- The principle of subsidiarity :
This was the most debated topic during the ratification of the Maastricht Treaty. This principle is set out in Article 5 of the new Treaty, which reads: “The Community shall act within the limits of the powers conferred upon it and of the objectives assigned to it by this Treaty. In areas which do not fall within its exclusive competence, the Community shall take action, in accordance with the principle of subsidiarity, only if and insofar as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community. Action by the Community shall not go beyond what is necessary to achieve the objectives of this Treaty.
In areas of overlapping competence between the Community and national levels, competence will be attributed to one or the other according to the effectiveness of the action. The Brussels authorities must justify their intervention in shared areas by demonstrating that the national level has sufficient capacity. The Court of Justice monitors the application of this principle. Finally, it should be remembered that any member state may adopt provisions that are more restrictive than those laid down by the framework law, Regulation No. 149311999 on the common organization of the market in wine.