The purpose of this evaluation of the European Commission measures is to assess the effects of the several instruments applicable in the wine sector under the Common Market Organisation Regulation. Among these instruments there are: national support programmes, authorisation scheme for planting vines, marketing and labelling rules, rules on wines with protected designations of origin (PDO) and protected geographical indications (PGI), rules on certification, monitoring and control systems, oenological practices and restrictions, vineyard registers and marketing rules to regulate supply. The analysis covers the period following the 2013 CAP reform, notably from January 1st, 2014. For 2014-2018, the overall budget allocated to the national support programmes amounted to €5 507 million. The budget for all CAP measures applicable to the wine sector amounted to € 6 243 million (including the budget transferred to the Single Payment Scheme).
Regular evaluation of policies is an obligation in the general 2018 Union budget and in the horizontal regulation of the CAP.
This paper assesses the common evaluation criteria, namely causal analysis, effectiveness, efficiency, relevance, coherence and European added value of wine policy in relation to its objectives in terms of competitiveness and market adaptation of the EU wine sector, agricultural incomes, market balance and quality.
Effects on economic performance along the wine supply chain
Wine-growers have higher incomes and productivity rates than the EU farm average (around 40% higher in 2017) and both have continued to rise. The restructuring and conversion measure, accounting for 50% of wine policy expenditure and covering more than 10% of EU vineyards, has accelerated the evolution of production systems and vineyard management practices. On the other hand, production costs per hectare have increased in most Member States. Although mechanization led to lower labour costs, the emphasis on quality implied higher costs. In addition, the investment measure was widely used by operators to become more efficient in wine processing (reducing winemaking costs), bottling and marketing. It has supported the establishment of processing facilities on farms, leading to an increase in the number of independent winemakers, and has facilitated the development of on-farm sales through the construction of tasting cellars.
At the international level, EU rules on oenological practices offer a guarantee in terms of quality and safety, and the rapid adaptation of EU rules to changes in international standards also helps to improve marketing conditions.
Effects on market adaptation
Wine consumption in the EU has fallen almost continuously since 2008, especially in traditional consumer countries, although it is tending to stabilise. Nevertheless, consumption has risen sharply in some non-EU countries, which represents a new potential for development for EU wine producers. While production has augmented in non-EU countries over the last decade, EU production remains stable. However, the EU is still the world’s largest wine producer, with more than 60% of the world production. Over the same period, EU wine exports have increased considerably (+6% per year). They are mainly composed of PDO / PGI wines and are directed towards Canada, China, Russia and the United States.
In 2016, European wine formed the predominant part of the importing countries’ wine imports. EU wines also remain predominant among wines sold by online retailers. These positive results can be linked to the efforts made by the EU producers to improve their performance. Moreover, national support programmes have contributed to improving the competitiveness of EU wine producers/products in the context of very positive market developments. The promotion measures were particularly appreciated by the beneficiaries in the light of intense competition from third countries.
The restructuring and conversion measure have contributed to a general improvement in the quality of grapes and derived products, the development of varieties adapted to the market and a better differentiation of varieties. In addition, Member States, notably France and Italy, have made extensive use of the investment measure (as well as the restructuring and conversion measure at producer level) to develop new products (e.g. rosé in Languedoc-Roussillon and Prosecco in Veneto). In addition, the promotion measure has enabled producers to better identify consumer tastes and expectations on foreign markets.
The area under GIs increased by 6% between 2009 and 2018, covering 88% of the EU’s vineyards.
EU rules on oenological practices help preserve the reputation and tradition of EU wines by providing guarantees of quality and safety. EU labelling rules generally meet consumers’ legitimate expectations. Consumer and public health organisations have expressed the need for more information, in particular on nutritional values and ingredients.
The certainty that the budget will be available over a 5-year period is a major factor in the high implementation rate of national support programmes. This has brought visibility and security, and therefore it helped the implementation of operations. The absence of national co-financing measures has also increased the effectiveness of the programme.
Concerning support for promotion, the analysis showed a high level of administrative burden, in particular for beneficiaries. On the one hand, the level of budgetary commitments ensured that only very relevant projects (based on market analysis by applicants) were supported. On the other hand, the sector spent a lot of time and money on grant management, which hampered the effectiveness of the measure.
The monitoring and control systems are considered highly reliable. Their effectiveness has been considerably improved by the digitalisation of the information and by the setting up of control plans based on risk analysis.
Coherence of measures in national support programmes
National support programmes are generally consistent with EU environmental objectives. However, they have not been designed to directly promote sustainable management and climate action, except for the distillation of by-products and the introduction of priority criteria on environmental sustainability. There are no major inconsistencies between the measures in the national support programmes and the EU health objectives.
Overall, the EU wine policy is fully compatible with the economic and social objectives of the EU and with the CAP. The national support programme measures have contributed to sustainable food production, economic growth in the regions and Member States concerned and balanced territorial development by helping to maintain agricultural and downstream activities in remote rural areas.
There is a comprehensive interaction between rural development programmes and national support programme measures, including investment and restructuring and conversion measures.
Relevance and European added value
The measures in the national support programmes are generally tailored to the needs of the sector, in particular because they offer a range of tools that can be adapted to the different levels of development of local supply chains in the EU (restructuring and re-conversion, investment, promotion).
To address risks, support for crop insurance against natural disasters seem relevant. On the other hand, support for mutual risk management funds has not been implemented. In a context of relative market equilibrium, green harvesting has only been implemented to a very limited extent, notably due to its complexity. The distillation of by-products is relevant to encourage producers to choose the most environmentally friendly disposal process, which also promotes innovative uses of wine by-products for energy or industrial purposes.
However, certain needs are not – or not sufficiently addressed – by the EU wine policy. These include maintaining or adapting smaller operators, the need for a better trained workforce, the challenges of intergenerational renewal, environmental issues (adaptation to climate change, biodiversity and the use of pesticides) and adapting to market demand for less alcoholic and sustainable wines.
EU rules on wine grape varieties are needed, as no international standards have been defined for vine varieties suitable for wine production. On the other hand, international standards for oenological practices exist and EU rules are broadly aligned with them.
The definition of rules at EU level for oenological practices and wine grape varieties brings real added value, limiting the risk of distortions between Member States, recognising specific local situations and filling a gap in international standards.
Uniform EU labelling rules provide overall added value at EU level by ensuring a level playing field and fair competition for economic operators, facilitating trade and the functioning of the single market and providing clear information to consumers. However, the added value of the PDO/PGI scheme at EU level is not well recognised by consumers as EU logos almost never appear on labels.
Main lessons learned
Member States do not provide adequate justification for their strategic choices regarding the measures implemented, nor adequate monitoring of the effects achieved by these different measures. The examination of the implementation reports of the evaluation revealed that the type and quality of the information provided is not homogeneous between Member States. Strategic choices concerning the measures applicable to the wine sector could be better justified. More attention should also be paid to the monitoring of programmes. Market adaptation could be improved, in particular to meet the demand for varietal wines, wines with low alcohol content (especially in the context of climate change) and wines produced using environmentally friendly practices. Although the objective of the vineyard restructuring and conversion measure is to improve the competitiveness and quality of wine production, the evaluation found that it also contributes to climate adaptation, as producers have switched to varieties more resistant to drought and irregular rainfall. But more could be done. In particular, the restructuring measure could play a greater role in adapting EU vineyards to climate change and protecting biodiversity.
Opportunities for simplification have been identified regarding the administrative burden of justifying expenditure under the promotion measure. This could lead to a higher take-up of the measure. As regards innovation and information on responsible wine consumption, there may be other policies better placed to promote them than wine policy.
After two programming periods involving national support programmes, new support needs have emerged in some Member States, such as the possibility for Member States to use part of the budget for ad hoc measures.
Finally, the report notes the maintenance of production management rules via planting authorisations, and the percentage of vineyard growth possible within this framework which has replaced that of planting rights. However, it sees these planting authorisations as a transitional arrangement until 2030, tending towards a liberalisation of the wine sector. The positions adopted by the European Parliament and the Council on this subject (extension of planting authorisations respectively until 2050 and 2040) in the framework of the CAP reform reflect a different vision of the co-legislators on this subject.