(1)

The Community regime applying to the wine sector is laid down in Council Regulation (EC) No 1493/1999 of 17 May 1999 on the common organisation of the market in wine (3) and its implementing regulations.

(2)

Wine consumption in the Community has been steadily diminishing and the volume of wine exported from the Community since 1996 has been increasing at a much slower rate than the respective imports. This has led to a deterioration of the balance between supply and demand which in turn puts producers' prices and incomes under pressure.

(3)

Not all the instruments currently included in Regulation (EC) No 1493/1999 have proved effective in steering the wine sector towards a competitive and sustainable development. The market mechanism measures have often proved mediocre in terms of cost effectiveness to the extent that they have encouraged structural surpluses without requiring structural improvements. Moreover, some of the existing regulatory measures have unduly constrained the activities of competitive producers.

(4)

Thus the current legal framework does not appear to enable the objectives set out in Article 33 of the Treaty, and in particular stabilising the wine market and ensuring a fair standard of living for the agricultural community concerned, to be attained in a sustainable manner.

(5)

In the light of the experience gained it is therefore appropriate fundamentally to change the Community regime applying to the wine sector with a view to achieving the following objectives: increasing the competitiveness of the Community's wine producers; strengthening the reputation of Community quality wine as the best in the world; recovering old markets and winning new ones in the Community and worldwide; creating a wine regime that operates through clear, simple and effective rules that balance supply and demand; creating a wine regime that preserves the best traditions of Community wine production, reinforcing the social fabric of many rural areas, and ensuring that all production respects the environment. It is therefore appropriate to repeal Regulation (EC) No 1493/1999 and to replace it by this Regulation.

(6)

This Regulation has been preceded by an evaluation and consultation process to better identify and target the needs of the wine sector. An external evaluation report was commissioned and published in November 2004. To give stakeholders an opportunity to express their opinions, the Commission organised a seminar on 16 February 2006. A communication from the Commission Towards a sustainable European wine sector was published on 22 June 2006 along with an impact assessment listing a number of options for a reform of the wine sector.

(7)

From July to November 2006, discussions took place at Council level. In December 2006, the European Economic and Social Committee and the Committee of the Regions adopted reports on the proposed wine reform options as set out in the communication from the Commission. On 15 February 2007, the European Parliament adopted its own-initiative report on the communication outlining conclusions which have been taken into account in this Regulation.

(8)

Council Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) (4) should eventually cover the wine sector as well. The Single CMO Regulation includes provisions of a horizontal nature, in particular on trade with third countries, competition rules, controls and penalties, exchange of information between the Commission and the Member States. To allow for easy future incorporation into the Single CMO Regulation, the provisions of this Regulation dealing with these horizontal issues should be aligned as much as possible on those contained in the Single CMO Regulation.

(9)

It is important to provide for support measures which are liable to strengthen competitive structures. While those measures should be financed and defined by the Community, it should be left to Member States to select the appropriate set of measures to meet the needs of their regional bodies, taking their particularities into account, where necessary, as well as to integrate them into national support programmes. Member States should be responsible for the implementation of such programmes.

(10)

The financial key to allocating the funds for the national support programmes among Member States should be related to the historical share of the wine budget as the main criterion, the area planted with vines and the historical production. However, this key should be adjusted with respect to situations where using the historical share of the wine budget as the main criterion would lead to an undue distribution of the funds.

(11)

One key measure eligible for national support programmes should be the promotion and marketing of Community wines in third countries. Restructuring and conversion activities should continue to be covered on account of their positive structural effects on the wine sector. Support should also be available for investments in the wine sector which are geared towards improving the economic performance of the enterprises as such. Support for by-product distillation should be a measure available to Member States which desire to use such an instrument to ensure the quality of wine, while preserving the environment.

(12)

Preventive instruments such as harvest insurance, mutual funds and green harvesting should be eligible for support under the support programmes so as to encourage a responsible approach to crisis situations.

(13)

Keeping some traditional measures for a transitional period is justified so as to alleviate the otherwise abrupt termination of the usual market measures so far financed through Community funds. The measures concerned are support for potable alcohol distillation, support for crisis distillation and support for the use of concentrated grape must.

(14)

Lastly, for various reasons Member States may prefer granting decoupled aid under the Single Payment Scheme to farmers. This possibility should therefore be open to Member States, and because of the particularities of the Single Payment Scheme any such transfer should be irreversible and reduce correspondingly the budget available for the national support programmes in subsequent years.

(15)

The financing of the eligible measures by the Community should, where practicable, be dependent on compliance by the producers concerned with certain environmental rules in force. Any non-compliance detected should give rise to corresponding reductions in payments.

(16)

Support for the wine sector should also come from structural measures under Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) (5).

(17)

The following measures pursuant to Regulation (EC) No 1698/2005 should be of interest for the wine sector: setting up of young farmers and investments in technical facilities and marketing improvements, vocational training, information and promotion support for producers' organisations after entering quality schemes, agri-environment support, early retirement to be granted to farmers who decide to stop all commercial farming activity for the purpose of transferring the holding to other farmers.

(18)

In order to increase the financial means available under Regulation (EC) No 1698/2005, a gradual transfer of funds to the budget under that Regulation should be put into place where the relevant amounts are sufficiently important.

(19)

Certain regulatory measures should apply in the wine sector, in particular for reasons of health, quality and consumer expectations.

(20)

Member States producing more than 50 000 hectolitres per year should continue to be responsible for classifying the wine grape varieties from which wine may be made on their territories. Certain wine grape varieties should be excluded.

(21)

Certain products covered by this Regulation should be marketed in the Community in accordance with a specific classification of grapevine products and the corresponding specifications.

(22)

Products covered by this Regulation should be produced in accordance with certain rules on oenological practices and restrictions, which guarantee that health concerns as well as consumer expectations as regards quality and production methods are met. For reasons of flexibility, keeping those practices updated and approving new ones should be taken care of at the level of implementing measures except in the politically sensitive areas of enrichment and acidification, for which the Council should remain competent as regards changes.

(23)

Increasing the alcohol content of wine should be subject to certain limits and should, where applied, be carried out by adding concentrated grape must or rectified concentrated grape must to wine or sucrose where this has been permitted. The limits on permitted enrichment increments should be made stricter than has been the case to date.

(24)

In view of the poor quality of wine obtained from over-pressing, this practice should be prohibited.

(25)

In order to meet the international standards in this field, the Commission should as a general rule base itself on the oenological practices recommended by the International Organisation of Vine and Wine (OIV).

(26)

Coupage of a wine originating in a third country with a Community wine and coupage between wines originating in third countries should continue to be prohibited in the Community. Similarly, certain types of grape must, grape juice and fresh grapes originating in third countries should not be turned into wine or added to wine in the territory of the Community.

(27)

The concept of quality wines in the Community is based, inter alia, on the specific characteristics attributable to the wine's geographical origin. Such wines are identified for consumers via protected designations of origin and geographical indications, although the current system is not fully developed in this respect. In order to allow for a transparent and more elaborate framework underpinning the claim to quality by the products concerned, a regime should be established under which applications for a designation of origin or a geographical indication are examined in line with the approach followed under the Community's horizontal quality policy applicable to foodstuffs other than wine and spirits in Council Regulation (EC) No 510/2006 of 20 March 2006 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs (6).

(28)

In order to preserve the particular quality characteristics of wines with a designation of origin or a geographical indication, Member States should be allowed to apply more stringent rules in that respect.

(29)

To qualify for protection in the Community, designations of origin and geographical indications should be recognised and registered at Community level. To ensure that the respective names meet the conditions laid down by this Regulation, applications should be examined by the national authorities of the Member State concerned, subject to compliance with minimum common provisions, including a national objection procedure. The Commission should subsequently scrutinize these decisions to ensure that applications satisfy the conditions laid down by this Regulation and that the approach is uniform across the Member States.

(30)

Protection should be open to designations of origin and geographical indications of third countries where these are protected in their country of origin.

(31)

The registration procedure should enable any natural or legal person having a legitimate interest in a Member State or a third country to exercise his rights by notifying his objections.

(32)

Registered designations of origin and geographical indications should enjoy protection against uses which unduly take advantage of the reputation that complying products command. So as to promote fair competition and not to mislead consumers, this protection should also affect products and services not covered by this Regulation, including those not found in Annex I to the Treaty.

(33)

Procedures should be provided for to permit amendment of product specifications after protection, and cancellation of the designation of origin or geographical indication, in particular if compliance with the corresponding product specification is no longer ensured.

(34)

The designations of origin and geographical indications protected on Community territory should be subject to controls, where possible in compliance with Regulation (EC) No 882/2004 of the European Parliament and of the Council of 29 April 2004 on official controls performed to ensure the verification of compliance with feed and food law, animal health and animal welfare rules (7), including a system of checks to ensure compliance with the product specifications of the wines concerned.

(35)

Member States should be authorised to charge a fee to cover the costs incurred, including those incurred in examining applications for protection, statements of objections, applications for amendments and requests for cancellations under this Regulation.

(36)

Existing designations of origin and geographical indications in the Community should for reasons of legal certainty be exempt from the application of the new examination procedure. The Member States concerned should, however, provide the Commission with the basic information and acts under which they have been recognised at national level failing which they should lose their protection as designations of origin or geographical indications. The scope for cancellation of existing designations of origin and geographical indications should be limited for reasons of legal certainty.

(37)

Quality policy is regulated at national level in certain Member States according to national provisions and practices. Such provisions and practices may continue.

(38)

Certain terms are traditionally used in the Community and convey information to consumers about particularities and quality of wines complementing the information conveyed by designations of origin and geographical indications. So as to ensure the working of the internal market and fair competition and to avoid consumers being misled, those traditional terms should be eligible for protection in the Community.

(39)

The description, designation and presentation of products covered by this Regulation can have significant effects on their marketability. Differences between the laws of the Member States on the labelling of wine products may impede the smooth functioning of the internal market.

(40)

Rules should therefore be laid down which take into account the legitimate interests of consumers and producers. For this reason, Community rules concerning labelling are appropriate.

(41)

These rules should provide for the obligatory use of certain terms so as to identify the product in accordance with the sales categories and provide consumers with certain important items of information. The use of certain other optional pieces of information should also be addressed at Community level.

(42)

Save as otherwise provided, labelling rules in the wine sector should be complementary to those laid down in Directive 2000/13/EC of the European Parliament and of the Council of 20 March 2000 on the approximation of the laws of the Member States relating to the labelling, presentation and advertising of foodstuffs (8), which apply horizontally. Experience has shown that a differentiation in terms of labelling rules according to the category of wine product is often not expedient. The rules should therefore in principle apply to all the different categories of wine, including imported products. In particular, they should allow the indication of a wine grape variety and a vintage on wines without a designation of origin or a geographical indication, subject to requirements and exceptions concerning the veracity of the labelling and the respective monitoring as well as the risk of confusion of consumers.

(43)

The existence and formation of producers' organisations continue to have the potential to contribute to the attainment of the needs of the wine sector as defined at Community level. Their usefulness should lie in the scope and efficiency of the services they offer to their members. The same holds true for inter-branch organisations. Member States should therefore recognise organisations which meet certain requirements defined at Community level.

(44)

In order to improve the operation of the market for wines, Member States should be able to implement decisions taken by inter-branch organisations. The scope of such decisions should, however, exclude practices which could distort competition.

(45)

The creation of a single Community market involves the introduction of a trading system at the external borders of the Community. This should include import duties and should, in principle, stabilise the Community market. The trading system should be based on the Community's international obligations, in particular those flowing from the World Trade Organisation (WTO) agreements.

(46)

Monitoring trade flows is above all a matter of management which should be addressed in a flexible way. Accordingly, a decision on the introduction of licence requirements should be taken by the Commission taking account of the need for import and export licences for managing the markets concerned and, in particular, for monitoring the imports of the products in question. General conditions concerning such licences should, however, be laid down in this Regulation.

(47)

Where provision is made for import and export licences, the lodging of a security should be required in order to guarantee that the transactions for which such licences are granted are carried out.

(48)

The import duty system makes it possible to dispense with all other protective measures at the external borders of the Community. The internal market and duty mechanism could, in exceptional circumstances, prove to be inadequate. In such cases, in order not to leave the Community market defenceless against possible disturbances, the Community should be able to take all necessary measures without delay. Such measures should comply with the international commitments of the Community.

(49)

In order to prevent or counteract adverse effects on the Community market which could result more particularly from imports of grape juice and grape must products, such imports should be subject to payment of an additional duty, if certain conditions are fulfilled.

(50)

To ensure the proper functioning of the market in wine and, in particular, avoid market disturbances, the possibility of prohibiting the use of inward and outward processing arrangements should be provided for. To succeed, this type of market management instrument usually needs to be applied without major delays. The Commission should therefore be entrusted with the relevant powers.

(51)

Products imported from third countries should be subject to the Community rules on product categories, labelling and designations of origin and geographical indications. They should be accompanied by an analysis report.

(52)

It is appropriate, under certain conditions, to confer on the Commission the power to open and administer tariff quotas resulting from international agreements concluded in accordance with the Treaty or from acts of the Council.

(53)

The surplus production of wine in the Community has been made worse as a result of violations of the transitional prohibition on new plantings. A significant number of unlawful plantings exist in the Community, which constitutes a source of unfair competition and exacerbates the problems of the wine sector.

(54)

A distinction should be made between unlawful areas planted before and after 31 August 1998, in so far as the producers' obligations towards those areas are concerned. Unlawful areas from before 1 September 1998 should be afforded a last opportunity for regularisation under the conditions of Article 2(3) of Regulation (EC) No 1493/1999. Accordingly, the corresponding provision in this Regulation should have retroactive effect.

(55)

So far, unlawful areas from before 1 September 1998 are not subject to any grubbing-up obligation. The producers concerned should be obliged to regularise them against payment of a fee. If the areas concerned are not regularised by 31 December 2009, producers should be under an obligation to grub up the areas concerned at their own expense. Non-compliance with this mandatory grubbing-up should entail penalty payments.

(56)

Those areas which have been planted in violation of the relevant prohibition after 31 August 1998 should be grubbed up, this being the sanction laid down in Regulation (EC) No 1493/1999. Non-compliance with this mandatory grubbing-up should entail penalty payments.

(57)

Pending the implementation of the regularisation and grubbing-up measures, wine from areas planted in violation of the prohibition and not regularised in accordance with Regulation (EC) No 1493/1999 should not be put on the market other than for distillation at the expense of the producer concerned. The presentation of distillation contracts by producers should ensure better monitoring of this rule than has been the case hitherto.

(58)

While the transitional prohibition on new plantings has had some effect on the balance between supply and demand in the wine market, it has at the same time created an obstacle for competitive producers who wish to respond flexibly to increased demand.

(59)

As a market balance has not yet been found, and as the accompanying measures such as the grubbing-up scheme need time to take effect, it is expedient to keep the prohibition on new plantings in place until 31 December 2015, at which juncture, however, it should be definitely lifted in order to permit competitive producers to respond freely to market conditions. However, Member States should be given the possibility to extend the prohibition for their territories until 31 December 2018 if they consider doing so necessary.

(60)

The existing permission for new planting of areas intended for graft nurseries, land consolidation and compulsory purchase as well as wine-growing experiments has proved not to disturb unduly the wine market and should therefore be continued subject to the necessary controls.

(61)

Replanting rights should continue to be awarded where producers undertake to grub up equivalent areas planted with vines, as the net effect of such plantings on production tends to be nil.

(62)

Furthermore, it should be possible for Member States to authorise the transfer of replanting rights to another holding, subject to strict controls, provided that this transfer is in pursuit of quality, concerns the areas intended for graft nurseries or is connected with the transfer of part of the holding. These transfers should be maintained within the same Member State.

(63)

In order to improve the management of wine-growing potential and to promote the efficient use of planting rights and thus to further mitigate the effect of the transitional restriction on plantings, the systems of national or regional reserves should continue to exist.

(64)

Member States should maintain broad discretion in the management of the reserves, subject to the necessary controls, so as to permit them better to align the use of the rights to plant such reserves with local needs. This should include the opportunity to purchase planting rights, to fund the reserve and to sell planting rights from the reserve. To this end, Member States should continue to be allowed not to apply the reserve system, provided that they can prove that they already have an efficient system of managing planting rights.

(65)

The grant of specific benefits to young wine producers may facilitate not only their establishment but also the structural adjustment of their holdings after their initial establishment, and such producers should therefore be eligible for the grant of rights from the reserves free of charge.

(66)

To ensure that resources are used in the most efficient manner and better to align supply with demand, planting rights should be used by their holders within a reasonable time. Failing that, they should be allocated or reallocated to the reserves. For the same reasons, rights in the reserves should be awarded within a reasonable time.

(67)

Member States where the planting right regime did not apply by 31 December 2007 should be exempt from the transitional prohibition on new plantings.

(68)

As a further accompanying measure aimed at creating a wine sector which is attuned to market conditions, a grubbing-up scheme should be introduced. Where producers consider that the conditions in certain areas are not conducive to viable production, they should be given the option of cutting their costs and permanently withdrawing these areas from wine production and should be enabled either to pursue alternative activities on the relevant area or to retire from agricultural production altogether.

(69)

Experience has shown that to leave it to Member States to allow grubbing-up against payment of a premium risks rendering the measure and the attendant effects on supply ineffective. Therefore, in contrast to the current regime, producers should generally be eligible for entering the grubbing-up scheme and have the sole right to decide whether to apply. In return, they should be granted a premium per hectare of grubbed-up vines. However, Member States where wine production is below 50 000 hectolitres per year should not have access to the grubbing-up scheme, as they do not substantially affect production in the Community.

(70)

Member States should be able to fix, on the basis of objective criteria, the specific levels of the grubbing-up premium within certain scales determined by the Commission.

(71)

In order to guarantee the responsible treatment of the grubbed-up areas, entitlement to the premium should be dependent on compliance by the producers concerned with the applicable environmental rules. Any non-compliance detected should give rise to a commensurate reduction of the grubbing-up premium.

(72)

To avoid environmental problems, Member States should be able to exclude grubbing-up in mountain, steep-slope and some small-island areas and in the case of environmental concerns in accordance with specific conditions. In accordance with the policy for the outermost regions of the Community, the grubbing-up scheme shall not apply in the Azores, Madeira and the Canary Islands. Member States should be enabled to discontinue grubbing-up where the total grubbed-up area reaches 8 % of their areas planted with vines (10 % at regional level).

(73)

Where in a Member State the area grubbed-up would exceed 15 % of its total area planted with vines, it should be made possible to cap the grubbing-up at 15 % in that Member State so as to avoid disproportionate concentration of the grubbing-up resources at the expense of other Member States. In addition, it should be made possible to stop grubbing-up in a given year when the area grubbed-up in that year reaches 6 % of its total area planted with vines.

(74)

The agricultural area formerly used for vine-growing, once grubbed up, should qualify as an eligible area under the Single Payment Scheme and be granted the average regional decoupled direct payment which, for budgetary reasons, should not exceed a certain sum.

(75)

The proper working of the single market would be jeopardised by the unqualified granting of national aids. The provisions of the Treaty governing State aids should therefore in principle apply to the products covered by the common market organisation for wine. However, the provisions on the grubbing-up premium and certain measures under the support programmes should not by themselves preclude the granting of national aid for the same purposes.

(76)

For a better management of wine-growing potential, it is desirable that Member States communicate to the Commission an inventory of their production potential. The information contained in it should be based on the vineyard register, which should be maintained and regularly updated. Details of the register should be established by a Commission implementing regulation. Council Regulation (EEC) No 2392/86 of 24 July 1986 establishing a Community vineyard register (9) should therefore be repealed. To encourage Member States to communicate the inventory, support for restructuring and conversion should be limited to those Member States which have communicated the inventory.

(77)

So that the information necessary for making the relevant policy and administrative choices is available, producers of grapes for wine making, of must and of wine should submit harvest declarations. Member States should be able to require merchants of grapes for wine making to declare each year the quantities marketed from the latest harvest. Producers of must and wine, and merchants other than retailers, should declare their stocks of must and wine.

(78)

In order to provide for a satisfactory level of traceability of the products concerned, in particular in the interest of consumer protection, provision should be made for all the products covered by this Regulation to have an accompanying document when circulating within the Community.

(79)

In order to address justified cases of crisis even after the end of the transitional crisis distillation support measure foreseen under the support programmes in 2012, Member States should be able to provide aid for crisis distillation within an overall budgetary limit of 15 % of the respective value of the Member State's relevant yearly budget for its national support programme. Any such aid should be notified to the Commission and approved under this Regulation before it is granted.

(80)

The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (10).

(81)

Expenditure incurred by the Member States as a result of the obligations arising from the application of this Regulation should be financed by the Community in accordance with Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy (11).

(82)

Member States and the Commission should keep each other supplied with the information necessary for applying this Regulation.

(83)

To guarantee compliance with the obligations laid down by this Regulation there is a need for controls and the application of penalties in the event of non-compliance with such obligations. The power to set up the corresponding rules including those concerning the recovery of undue payments and the reporting obligations of the Member States, should therefore be conferred on the Commission.

(84)

Member States' authorities should be responsible for ensuring compliance with this Regulation, and arrangements should be made for the Commission to be able to monitor and ensure such compliance.

(85)

To make provision for the incorporation of the wine sector into the Single Payment Scheme, all actively cultivated wine-growing areas should be made eligible for the Single Payment Scheme provided for in Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers (12).

(86)

Vine-growers in Bulgaria, the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Romania, Slovenia and Slovakia should benefit from the introduction of the wine component in the Single Payment Scheme under the same conditions as vine-growers in the Community as constituted at 30 April 2004. Therefore, the wine component in the Single Payment Scheme should not be subject to the application of the schedule of increments provided for in Article 143a of Regulation (EC) No 1782/2003.

(87)

Regulation (EC) No 1782/2003 and Council Regulation (EC) No 3/2008 of 17 December 2007 on information provision and promotion measures for agricultural products on the internal market and in third countries (13) should be amended accordingly.

(88)

The change from the arrangements in Regulation (EC) No 1493/1999 and the other Regulations in the wine sector to those in this Regulation could give rise to difficulties which are not dealt with in this Regulation. In order to deal with that eventuality, provision should be made for the Commission to adopt the necessary transitional measures. The Commission should also be authorised to solve specific practical problems,