Wednesday, December 19, 2007

Brave New World

Europe meanders into the wine market:
So strong is the Continent's attachment to the grape that the most radical reforms have been put off or toned down to give wine growers years to adapt.

Nevertheless, the changes agreed to Wednesday marked the start of a new phase in Europe's battle to compete better with reliable and well-marketed wines imported from the New World.
Under the deal, up to 175,000 hectares, or 432,000 acres, of vines will be removed to allow unprofitable producers to quit. A host of subsidies will end in 2012, rules will be amended to allow more wines to be labeled as grape varieties and successful producers will be able to plant as many vines as they like by 2018 at the latest.

"In the long term we were heading for the abyss," said Portugal's agriculture minister, Jaime Silva, who led the negotiation, adding that "this reform gives us the opportunity to change tack."

"The reform is quite clear: the guiding principle is that the market shall guide production," he said.

That idea has been anathema to producers in some European countries where wine is viewed as a special case because of its cultural significance. In France the notion of ripping up vines, abandoning traditional holdings and producing wine on a large scale provoked has fierce opposition.

But the heavily subsidized structure of the sector has become increasingly untenable as wine imports from countries like Australia, Chile and the United States have steadily grown.

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