EU still faces wine overproduction

EU still faces wine overproduction
# 13 July 2012 20:19 (UTC +04:00)
Baku-APA. The European Union (EU) is having difficulty in containing wine overproduction within its member nations despite large government subsidies to combat the problem, a special report from the European Union’s Court of Auditors (ECA) said Friday, APA reports quoting Xinhua.

"Despite billions in subsidies, there is still overproduction," said Harald Wogerbauer, a co-author of the report.

The EU produces 60 percent of the world’s wine. But due to a massive consumer slump in the industry over the past 20 years, the EU decided in 2009 to launch reforms.

Wine acreage are to be reduced through a EU-subsidized "grubbing-up" program in which wine plantations are replaced with other crops, and the quality of the wine is to be improved through various measures.

Since 2001, the EU has invested over 5 billion euros (6.1 billion U.S. dollars) in structural changes, but has not yet achieved its goal.

Wogerbauer used the Spanish region of Castile-La Mancha as an example of why the EU’s attempt to reduce production did not work.

"Production fell by 30 percent due to the grubbing-up scheme, but, due to structural improvements, increased again by 60 percent," he said.

"The excess amount produced remained the same -- only better in quality," he said.

He added that plans to liberalize the industry with freer planting rights in 2015 should wait until 2018 when evaluations over their impact can be made.