FOREIGN AGRICULTURAL SERVICE
U.S. MISSION TO THE EUROPEAN UNION

 Last update:  June30, 2008

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Common Market Organization

The EU's Common Market Organization (CMO) for wine covers the following products: fresh grapes other than table grapes, unfermented grape juice and grape musts, wine of fresh grapes (including sparkling wines, liqueur wines and semi-sparkling wines), wine vinegar, wine-making by products, wine lees and grape marc. The aim of the CMO is to regulate supply by limiting replanting and granting premiums for grubbing up vines, and applying table wines a price and intervention scheme involving distillation.

On June 6, 2008, a new Council Regulation on the reform of the CMO for Wine was published .  The new regulation aims to reduce the EU's wine surplus through a number of measures regarding supply and demand, as well as promotion and marketing. Since the introduction of the CMO, the wine market has developed considerably.  It has been characterized by a very short initial period of equilibrium, followed by a very marked increase in production, against a constant level of demand, and finally, a continuous decline and a very noticeable qualitative change in demand from the 1980.  The Union has also been facing increasing production and competition from the producers of the New World Wine Agencies (NWWA).   

The wine sector in the EU needs a fast restructure which the reform provides for through a voluntary three year grubbing-up period.  This is expected to provide an alternative for uncompetitive producers and remove surplus and uncompetitive wine from the market. In the new regulation, subsidies for crises distillation and potable alcohol distillation will be phased out.  More funds will instead be used for measures like wine promotion on third country markets, innovation, restructuring and modernization of vineyards and cellars.

The council regulation can be found here: http://eur-lex.europa.eu/JOHtml.do?uri=OJ:L:2008:148:SOM:EN:HTML.

For more information see GAIN Report E48027 (March 2008) and the European Commission website.

Reports

	EU Wine Reform E48027 (March 2008)
	Reform of the EU Wine Regime E47062 (July 2007)
	EU Wine Labeling Requirements  E36067 (April 2006)
	Allergen Labeling on Wine - Authorized Languages E36066 (April 2006)
	For more information on wine labeling rules see U.S.-EU Wine Trade Issues.
	Annual Member State reports (2007): France, Germany, Spain, United Kingdom.
	An archive of EU and Member State wine reports is available at http://www.fas.usda.gov/scriptsw/attacherep/default.asp.