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08 July 2021

Reform of the Common Agricultural Policy 2021-2027 The main innovations for the wine sector

On 1 January 2023, the reform of the Common Agricultural Policy 2021-2027 will come into force. After the agreement reached in the recent end-of-June trilogy between the Commission, the Council and the EU Parliament, a number of innovations have been introduced. It will be a greener CAP, as mentioned last 30 June, during the webinar organized by Veronafiere and the Food Trend Foundation, by Hon. Paolo De Castro, S&D group leader in the Agriculture Committee at the European Parliament. At the same time, it will also be a CAP that pays closer attention to workers' rights, with the introduction of the so-called "Third Pillar" on social conditionality: EU funds will not be assigned if the rights of workers are not respected.

The future CAP represents 31.95% of the total EU budget for the period 2021-2027, with funds coming to 386.6 billion euros supporting almost 7 million European farms.

The CAP reform - which will be subject to a mid-term review in 2025 - also presents interesting innovations for the wine sector. We list the main ones, taking as a reference the dossier published as a guideline by Hon. De Castro (you can refer to his site at www.paolodecastro.it for a more complete look at all the measures in the new 2021-2027 CAP).

European wine will receive 1.1 billion per year. Financial assistance from the European Union to the wine sector will amount to approximately €1.1 billion per year. Italy will be the leading beneficiary with 323.88 millions, followed by France and Spain.

Focus on sustainability and climate change. Member States will have to ensure that (at least) 5% of funds are directed towards at least one project aimed at achieving environmental protection objectives, adaptation to climate change, improvement of the sustainability of production systems and processes, reduction of the environmental impact of the EU wine sector, as well as energy saving and efficiency.

Promotion on third-country markets. Promotional activities in third countries can be supported by up to 80% and must aim to improve the competitiveness of the wine sector, and the opening, diversification and consolidation of market outlets. Activities focusing on consolidating market outlets will be limited to a maximum duration of 3 years and will only involve EU geographical indications.

Greater competitiveness and transparency towards consumers. A number of regulatory changes are being introduced that are designed to make the wine sector more competitive and transparent towards consumers.

Planting authorizations until 2045. The planting authorization system for vineyards is now extended until 2045, compared to the current deadline of 2030, with the obligation for the Commission to develop two functional assessments, one in 2028 and the second in 2040.

The duration of the maximum interval envisaged for replanting vines passes from 3 years at present to 6 years.

As regards the conversion of planting rights in the portfolio, as of 1 January 2023 an area equivalent to that covered by planting rights valid until 31 December 2022 and not converted into authorizations will remain available to Member States; Member States will be able to reallocate these areas by 31 December 2025. This possibility joins the usual annual allocation of an extra 1% of wine-growing potential.

The grape varieties currently not allowed to make wine (Noah, Othello, Isabelle, Jacquez, Clinton and Herbemont), as well as varieties from Vitis lambrusca, are excluded, in order to protect production quality. On the other hand, it will be possible to use hybrid vine varieties to produce all wines with a geographical indication.

With reference to PDO identification and recognition, the criterion relating to the importance of the human factor is restored and defined.

Inter-branch organizations. Inter-branch organizations (IBs) can be recognized by Member States not only at national level but also at regional or economic zone levels in order better to adapt to the needs of protection consortia wishing to obtain such recognition.

Yes to lower alcohol content, no to adding water. In order to help producers to enter new markets and regulate wines with low alcohol content by including them among wine-growing products, total de-alcoholization (alcoholic strength less than 0.5%) is now authorized for table wines. On the contrary, PDO and PGI wines may only be partially de-alcoholized (alcohol content higher than 0.5%). It is also clarified how labels must clearly indicate that these are low-alcohol wines and, above all, practices that involve the addition of water and other elements not obtained directly from the de-alcoholization process are not allowed.
Nutritional labelling. Rules concerning nutritional labelling and indications of ingredients are upgraded for all wines (including those which are partially and totally de-alcoholized) with the aim of ensuring greater transparency for consumers.

The nutritional declaration may be limited to the indication on the label of the energy value, expressed using the symbol 'E' for energy. The complete declaration - which includes energy value, fat content, saturated fatty acids, carbohydrates, sugars, proteins and salt - can instead be de-materialized provided that electronic means (QR code) are available on the label. Similarly, the list of ingredients can be provided by electronic means identified on the label or packaging.

Other opportunities for IBs. Inter-branch organizations (IBs) bringing together farmers, processors and distributors of wine products with geographical indications will be able to adopt agreements to share value, costs and profits without being subject to EU competition rules. However, these agreements should not seek to set prices for end consumers, eliminate competition or bring about imbalances in the production chain.