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Shortly before Christmas 2007, she hammered out an agreement with Europe’s 27 member states to reform its ailing wine sector. Although long in preparation, she was only able to push through a portion of her proposals – and then only in amended form. Meininger's spoke to her in her office in Brussels about her rescue plans for Europe’s wine industry.
Meininger’s: You were raised on a farm in Denmark. What makes wine different from the fruits and cereals that you still grow there?
Fischer Boel: My experience in wine when taking office was limited, but I quickly realized that wine was something different because of the traditions, the culture and the fact that production has been in families for generations. That is something that I had never seen at that level in any other agricultural sector.
Meininger’s: Wine accounts for only 5% of Europe’s agricultural output. As such, it’s only a small part of your job, but it seems to be a very contentious sector. Are there more vested interests in wine than in tobacco or vegetables?
Fischer Boel: Because wine is different, I have tried my best to gather an impression of the people, their different production methods and their individual traditions. The Mosel region in Germany is a good example. If you had no vines on those slopes, there would be no agricultural production at all. It is too steep for anything else. But because wine growing is totally integrated into nature there, you have the possibility to attract tourists. From a purely economic point of view the importance might appear less significant, but it’s not like that.
Meininger’s: In your original proposals you were opposed to chaptalisation. Why was this such an issue for you?
Fischer Boel: I still think it is possible to produce high quality wine in Europe without adding sugar, but I had to take the political realities into account. There are 20 member states that were against my proposal because chaptalisation had a long tradition in their countries. I’m not working in a vacuum. When we talk about wine and agriculture, I’m operating in a very real world.
Meininger’s: What’s your philosophical objection to sugar?
Fischer Boel: We have another possibility, which is to use rectified grape must. From a consumer point of view, this appears to be more natural than sugar. I’m not sure that consumers are aware that sugar is added to some of the wines they’re drinking.
Meininger’s: Your goal now is to lower the amount of enrichment involved. Will that change much?
Fischer Boel: The reason for reforming the wine sector was because we saw that both European production as well as foreign imports were increasing, but consumption was actually declining. When we |
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projected those figures over the ten years ahead, we saw that we would face true difficulties, especially in some parts of the Union. In Ireland, for example, 75% of the wine consumed is imported from outside Europe.
Meininger’s: From the New World?
Fischer Boel: That new customers are interested in these wines in one thing, but I see no reason why we should give away obvious markets for our wines to foreign producers. That said, we have a surplus production. From a taxpayers’ point of view it is, of course, not acceptable to spend €500m each year to distil wine nobody wants to drink. Something had to be done.
Meininger’s: You want to phase out planting restrictions by 2015. Wasn’t limiting planting rights the wrong way to address the problem in the first place?
Fischer Boel: In 1999 it was agreed that planting rights were to be abolished by 2010. From my point of view, there is no reason why a successful estate should not be able to increase its production if it is able to sell the wine. Logically, there’s a link between abolishing distillation and liberalising planting rights. The producers must be held accountable.
Meininger’s: Will the agreements from Portugal ensure that producers will be allowed to plant what they want after 2015?
Fischer Boel: There are restrictions in areas where you have geographical indications. So you will not see an explosion of wine production. The regions themselves must manage the potential increase, but we’ve also agreed that table wines are allowed to bear a vintage and the grape variety, which I think has been the success of much imported wine. As consumers have been buying the varietal more than anything else, I’m very happy that we’ve given this possibility to our own producers.
Meininger’s: You were talking about crisis distillation as a way of balancing supply and demand. One of the other projects was grubbing up vineyards. If there’s no crisis distillation, isn’t it a mute point how many hectares of vineyards there are in Europe?
Fischer Boel: For me there was a link between the abolition of crisis distillation and the economic difficulties that some of those producers would face that used crisis distillation as a tool. It was actually the social element in the grubbing up scheme that I thought important. How can we give wine producers a possibility to leave the sector – or grow something different – without going bankrupt?
Meininger’s: Some of the member states were not very supportive of allowing table wine to be bottled with varietal and vintage. What was their concern?
Fischer Boel: They were afraid that it might damage the reputation of their high quality wines, that geographical indications would be competing with |
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table wines, but my argument was simply that it was precisely here that we had seen a surge in imported wines. I’ve seen labels with only a kangaroo, the variety and a vintage. It sells because it’s Australian and people like it.
Meininger’s: One of the other issues with the New World is the use of certain oenological practices that are condoned in California or in Australia, but not here. What sort of liberty does Europe need at that level to be able to compete?
Fischer Boel: I think that all of our wine producing member states are a part of the International Wine Organisation (OIV) where these practices are discussed. Wood chips were one of the issues, but I mean it’s not an obligation; it’s only a possibility for those that want to use these new methods. As some of the wine
imported is produced that way, I think we should at least allow some of our wine producers to experiment. However, this was not part of the wine reform; it was decided 18 months ago.
Meininger’s: What’s the argument against something like South Eastern Australia, which is fairly vast region, happening in Europe? Why are people opposed to that?
Fischer Boel: Europeans consider the history and the traditions in their specific regions as something special.
Meininger’s: The positive aspect of the recent agreements is that the monies that were wasted on less productive things like crisis distillation will be used for promotion, but is that really the government’s or Europe’s job. Isn’t that something that’s better left to the industry itself?
Fischer Boel: In the beginning we discussed an annual sum of €120m for promoting European wine. That turned out to be a disadvantage for some members, because they couldn’t use the money for anything else. In the final agreement there is no explicit amount for promotion. It’s now on the menu of possibilities within the national envelope.
Meininger’s: Europe currently has about 3.6m hectares of vineyards. How many will it be in a generation if we are to balance supply and demand?
Fischer Boel: The 400,000 hectares to be uprooted mentioned in our original communication were based on calculations that we had made to balance supply and demand. As it was not a very scientific figure, we were open in our discussions.
Meininger’s: Europe currently has about 2.4m grape growers and wine producers. The future will certainly mean fewer farmers on larger plots of land. What sort of implications might it have for the regions affected?
Fischer Boel: I don’t know who is going to invest in the future of wine. Certainly it will be those that have a strong export market, but I’m sure as well that you’ll see quite a lot of smaller producers grow the size of |
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their vineyard from four to five hectares. That is a significant increase.
Meininger’s: It is often said that the French and Italians are not producing for the market, but rather doing what their forefathers did and making wine modern consumers no longer want to drink. Doesn’t Europe need to change its way of thinking?
Fischer Boel: That’s a very sinister explanation. I think the success of the New World wines is stable quality, reasonable price and easy to drink style. You refine your taste, though, over time. You drink less, but more elegant wines.
Meininger’s: Are New World wines exclusively entry level?
Fischer Boel: No, because you have some extraordinarily elegant imported wines as well. One of the reasons we needed this reform was that New World wines were actually very good. European wine producers have been evolving their production to the taste of the consumer for years. We need to support this trend.
Meininger’s: For many European producers, there’s this feeling that moving to grape varietals and vintages is a loss of tradition. Is there any other way for Europe to compete?
Fischer Boel: This new reform gives producers the tools to make wines that consumers would like to buy. Distillation aid has blinded some producers to reality. There was always be a safety net.
Meininger’s: China and India are potentially large export markets, but they’re also becoming producer countries.
Fischer Boel: I’m sure that China will try to increase its wine production. I don’t try to avoid global competition. We have some excellent wines in Europe that will always be able to compete everywhere – and their reputation is quite high.
Meininger’s: In Europe, there is a commissioner in charge of wine. Europeans look up to her to give them guidance and, in the case of crisis distillation, to solve their problems. In the New World the industry is left to itself. Might not the European wine industry be better off if it was left to itself as well?
Fischer Boel: Perhaps, but there are special systems everywhere, be it tax rebates or, as in Australia, managed investment schemes that are similar to our support in Europe. Subsidies exist everywhere. They may have different colours or labels, but they exist.
Meininger’s: Are you under pressure from the World Trade Organisation to lower subsidies for the agricultural sector?
Fischer Boel: Domestic support and import duties are two different things. Further, wine is only one of the agricultural sectors that we support. In our reform we have tried to ensure that the aid follows international guidelines.
Meininger’s: Was that in response to any specific |
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pressures?
Fischer Boel: No, but it’s been our goal since the beginning to try to make our producers adapt to the market. If you tie their hands with aid that is linked to specific uses then you won’t see any response to the market. On the other hand, the WTO is trying to lowering import duties, not only in Europe, but in other parts of the world as well to facilitate more free and open trade, which I think is what creates wealth.
Meininger’s: We were saying earlier that wine is only 5% of the total agricultural output. The €1.3b is certainly a much higher percentage of agricultural subsidies.
Fischer Boel: Total agricultural support is about €42b, so it’s about in line.
Meininger’s: The Tescos and the Wal-Marts have new and completely different demands. Isn’t that going to put the wine industry in Europe under a different kind of pressure forcing larger and larger units of production?
Fischer Boel: The European model of agriculture provides room for the big and the small farms. I know that the retail sector is becoming very strong and that it’s difficult for a small producer to find space on supermarket shelves – and that is the reason why quite a lot of them are selling locally. I think that is a good route for them to take. Although large producers are strong in the big supermarkets because they have built a strong brand,
you still see quite a lot of smaller producers that sell direct or through local companies.
Meininger’s: To what extent do you think we’re going to see a shift in the wine industry towards Eastern Europe?
Fischer Boel: I’ve been in the Czech Republic, Slovakia, Romania and Hungary. They all have a long reputation for certain special wines. I’m sure that with the money available in their national envelopes that they will be able to improve the quality, plant new vineyards and respond to consumer demand. But you also see a growing demand from consumers in those countries. Their incomes are now rising and they are looking for better quality.
Meininger’s: What does wine have to learn from other industries in the European Union?
Fischer Boel: I don’t think that you can compare them. Besides, I’ve never said ‘wine industry’. If you look at my speeches you will not find wine and industry linked together, because wine is something special. Wine production, yes, but not industry.
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