15 June 1998
EU seeks 30% subsidy boost for wine industry

THE European Commission is expected to sanction subsidy increases of up to 30% for wine producers as part of a drive to fight off competition from New World wines.

It wants to simplify legislation, to ease tight controls on grape planting and to increase financial aid so that producers can upgrade vineyards.

Franz Fischler, European Union (EU) agricultural commissioner, will seek support from fellow commissioners for a plan to hike subsidies for the sector to about Ecu1.3 billion (£870m). This is a rise of about one-third on this years Ecu1bn.

Fischlers proposals are likely to arouse anger in the USA, Australia and other countries already concerned about EU agricultural subsidies. But the Commission says its proposals comply with commitments to the World Trade Organisation.

The Commissions proposals are part of a wide-ranging reform of the EUs Common Agricultural Policy and are scheduled to take effect in 2000.

The plans retain tight restrictions on new planting, but foresees a more flexible allocation system so that unused planting rights can be transferred to other producers more easily.

EU countries rejected wine reform proposals four years ago, but these were aimed at a different set of problems, which included overproduction.

  • Financial Times 15/06/98 page 1, page 2, page 23