In a report published by the European Court of Auditors, concerns are raised regarding the impact of EU actions on viticulturists.

The EU's wine policy fails to meet environmental objectives, and the measures in place do not effectively target the competitiveness of the sector.

The EU's wine sector is heavily regulated and well-subsidized. Viticulturists receive approximately €500 million annually from EU funds to restructure their vineyards and enhance competitiveness.

Since 2016, viticulturists can apply for permits to plant new vines. The goal is to allow controlled growth in potential production (up to an annual increase of a maximum of 1%) while avoiding overproduction.

"Promoting the competitiveness of the wine sector is crucial and highly relevant for the EU, but it should go hand in hand with improving environmental sustainability," said Joëlle Elvinger, a member of the Court who led the audit. "We can say, at the very least, that EU actions have not yet achieved either of these two objectives."

In the EU, wine can be red, white, or rosé, but the way grapevines are cultivated is rarely "green." Auditors lament that despite the significant funding involved, the EU's wine policy has not done much for the environment.

In particular, the restructuring measure pays little attention to green objectives. In practice, EU funds have not been directed toward projects aimed at reducing the impact of viticulture on climate and/or the environment.

On the contrary, the funds allocated could even have the opposite effect, such as encouraging the planting of grape varieties that require more water. Likewise, the annual 1% increase in the vineyard area, which has been extended by 15 years (until 2045), has never been assessed from an environmental perspective.

The future does not look much more promising: in the new Common Agricultural Policy (CAP), the level of environmental ambition for the wine sector remains low. In the past, Court auditors recommended that payments to farmers – including those to viticulturists – be explicitly conditional on environmental requirements.

In the new CAP, however, such conditions for restructuring funding have been discontinued. Additionally, the minimum proportion of EU funds allocated to the wine sector that EU countries must devote to climate, environmental, and sustainability-related actions is only 5%.

In the auditors' view, this 5% figure is quite low, especially considering that, in the context of greening the CAP, 40% of total agricultural expenditures should be dedicated to climate-related objectives.

EU policy has not proven to be a success for increasing the competitiveness of viticulturists either. In the five audited countries, projects are funded regardless of their content or level of ambition, without regard to competitiveness criteria.

Funding is also provided for non-structural changes or normal vineyard renewals, even if such actions are ineligible. Moreover, beneficiaries are not required to report on how restructuring has improved their competitiveness.

Additionally, neither the European Commission nor the member states evaluate how supported projects actually contribute to increasing the competitiveness of viticulturists.

The same can be said for the vine planting authorization system. Firstly, the maximum 1% annual growth rate was proposed and adopted without providing any justification or assessing whether it is appropriate and relevant.

Secondly, when granting such authorizations, few eligibility and priority criteria related to competitiveness are used.

Background Information

The EU is the world's largest producer, consumer, and exporter of wine. In 2020, there were 2.2 million wine-producing farms in the EU, and vineyard plantations covered approximately 2% of the Union's utilized agricultural land. About 80% of the wine produced in the EU comes from Italy, France, and Spain.

Viticulturists and wine producers are eligible for financial support from the CAP. This can include specific support under the common organization of the wine market (mainly through national support programs) as well as direct payments and support for rural measures and/or horizontal promotion measures.

The special report No 23/2023, titled "Restructuring and planting vineyards in the EU – Unclear impact on competitiveness and limited environmental ambition," is available on the Court's website.