- Title: HUNGARY/FILE: Hungarian wine producers up in arms over EU wine reform proposal
- Date: 16th August 2007
- Summary: (CEEF) BUDAPEST, HUNGARY (RECENT) (REUTERS) STREET IN CITY CENTRE WITH BUILDING WHERE EU OFFICE IS LOCATED HUNGARIAN AND EU FLAGS FLYING ON FACADE
- Embargoed: 31st August 2007 13:00
- Topics: European Union
- Reuters ID: LVA3ITGRV3D712Y0OQ26K5G9M049
- Story Text: The new EU wine proposal has sparked fierce criticisms among Hungarian and other Central European wine producers who say the proposal treats newly joined countries as second class citizens.
Wine producers from Hungary and other new European Union member states in central and eastern Europe fear that the EU's new wine reform plans will come at their expense, harming their producers and wine industry.
The European Commission's wine reform proposal would introduce sweeping changes next year as part of an ambitious plan that offers them generous cash rewards to dig up vines and end years of the EU's notorious "wine lakes."
But wine producers in new EU member states say that they will lose out under the new measures because the proposal would distribute funds in an unequal way and punish countries that are not responsible for the surplus problems.
Wine producer Peter Gal in Hungary's famous Eger wine region owns 10 hectares of vines and produces 25,000 bottles in a family business. He is appalled by what he calls an unfair treatment of the new members by the strong western European lobby.
"They would distribute the money in proportion of the previously allocated funds. I cannot find any objective explanation for this apart from the one that the lobby of the old EU members was strong. I cannot accept this standpoint at all. We are equal members, the Hungarian and Slovak wine producers are worth the same as the Portuguese and French producers. Therefore this standpoint can hardly be defended. Let alone the fact that it was precisely the old EU members who have so far produced the majority of the surplus," Gal said.
Producers say new members have tapped less EU money and have lost out on extra funding by not producing large quantities of surplus wine. The EU spends half a billion euros every year just getting rid of surplus wine.
The planned allocation of national funds has angered wine producers across Hungary. At the Balaton Lake wine region where harvest began early this year, the country's largest winery owners are also unhappy about the proposal.
The co-owner of the Varga winery said the present proposal does not tackle the real problems the EU wine industry is facing.
"The plan would conserve the present structure of funds until 2013. That means that it would basically concentrate on cutting out vines and distillation. Our problem with this whole proposal is that it practically serves the interest of the western European producers by maintaining their income. The biggest problem with EU wine making at present is that it is not competitive with the new New World wines, and we should therefore improve the competitiveness instead," Balint Varga said.
The reform plan has also sparked criticism from western European winemakers for different reasons. Quality EU labels like Chianti, Rioja and Chablis fear that centuries of their wine-making traditions will be put at risk as consumers turn to rival New World wines.
EU Agriculture Commissioner Mariann Fischer Boel recently told reporters in Brussels that reform was crucial to put European wine production back on top. But she expects a fight on her hands.
"I genuinely believe that my proposal will re-invigorate European wine sector and put it back where it belongs, actually on the top of the world. But of course I am not naive. I realise that the wine sector is very emotional. And that many, obviously, will have objections to my ideas. But I think this should not deflect us from the fact that a reform is crucial,"
The European Union representative in Budapest admitted that the planned subsidies will be unequal between the western and eastern countries but he compared it to other transitional advantages such as Hungary's derogation in land ownership rights according to which no foreign citizen can buy land in Hungary for 7 years.
"We ensure a transition for those countries that have got used to a higher level of wine subsidies for a transitional period when the land based subsidies for European wine producers will be levelled down to a lower level than today. But different subsidies will appear which could be very important from a Hungarian point of view. We obtain certain rights such as the right to indicate year and origin of table wines," Gyorgy Gabor, EU representative in Budapest said.
But winemakers say that the advantages they may get are far fewer than the price they will have to pay for the reforms.
They are also concerned about the cutting out of vines. Winemakers who wish to leave the sector would be offered a subsidy if they dig up their vines, with a target of 200,000 hectares as the total vine area to be removed from production.
But according to Hungarian winemakers, this will mean that the size of the vineyards in Hungary and the region could be halved as poorer farmers in central and eastern Europe are more likely than big southern producers to dig up their vines in exchange for EU money, even though surplus production is not such a concern in the area.
"For a Hungarian wine-maker from the Alfold region, for example, who is struggling with rather low incomes, it would be more viable to cut out the vines than for a wine maker in Languedoc. Even if the Hungarian wine maker has a certain buyer for his products," Gal said.
According to some wine makers however the present proposal may not get the necessary majority votes as northern wine producers and the new members could block it if they were to join forces.
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