Would a free-for-all on vine planting within the EU allow European producers more scope to compete, or simply make the economics of wine even less attractive?
Amongst all the macro issues likely to affect the UK wine sector over the next 10 years or so, one of the most important could be the new EU planting regime that comes into effect in January 2016. In summary, countries within the EU will be allowed to increase their area under vine by up to 1% per year until 2030 when the regime will be reviewed.( On a parochial note I should point out that nothing will change for regions such as the UK which have less than 50k hectares of vineyard planted and are not currently subject to any restrictions ).
This brings to an end nearly 40 years of constraints on planting, culminating in a serious grubbing-up initiative, which took 160k hectares out of production between 2009 and 2012. To put this figure in context: although it represented only 4% of area under vine in the EU, it was the equivalent of ripping out all the vineyards in Australia.
The planting restrictions were designed to deal with the issue of chronic oversupply, which has bedevilled our industry for so long, and has been a major factor in keeping prices and profits below a sustainable level.
Sympathy for the “free traders”
Hence the importance of this change, which comes after several years of bitter debate. At one point it looked as if all restrictions on planting might be removed. The arguments for this were actually very strong. Outside the EU there are of course no real constraints. Anyone can plant what they like, and one’s own skills in production and marketing will determine one’s level of success. Thus, it was argued, abolishing restrictions would allow the EU to compete fairly with the rest of the world, while dynamic and successful producers would not be constrained from realising their potential.