EU wine crisis: Calls for digital labeling and sustainability amid climate challenges and consumption dip

12 Sep 2024 --- The European Committee of Wine Companies (CEEV), an association representing the wine sector, recently outlined its vision to address the challenges plaguing EU wine companies in crucial talks with member states. The committee proposed solutions to ensure sustainability and competitiveness, including easing bureaucratic rules and implementing a digitized, robust labeling system for more effective cross-border sales of wine online.

The meeting comes months after the European Commission invited countries to participate in a “high-level” wine policy group to present their assessment of the industry and potential solutions to problems.

“It is fundamental to better connect with consumers. We have elaborated a detailed proposal to improve the EU promotion measure and requested the simplification of the e-commerce procedures for wine companies,”  Ignacio Sánchez Recarte, secretary general of CEEV, tells Food Ingredients First.

Recarte warns that competitiveness is also about slashing unnecessary operational costs.

“It is critical to secure the functioning of the single market and avoid non-harmonized national legislations that disrupt wine trade.”

Critical challenges in EU wine sector

This July, the Commission also called on the wine industry to adapt to the “new realities” of a volatile market and production inadequacies to retain its market dominance amid a backdrop of declining wine consumption.

According to the World Trade Organization, France, Italy and Spain are the world’s biggest wine exporters in terms of value. The EU notes that Europe is the global leader in wine production, holding 60% of the market share and 48% of wine consumption. The wine industry contributes an estimated US$142 billion (€130 billion) to the EU’s GDP.

However, CEEV is growing increasingly concerned that grape and wine supplies are facing critical shortages due to increased production costs, burdening stakeholders along the value chain. Moreover, climate change has marred harvests as long-term structural wine consumption has dipped in key markets, which form the core of the EU’s wine crisis.

Mauricio González-Gordon, president of CEEV, emphasizes the need to reform the sector.

CEEV proposes a language-free system for wine labeling supported by a comprehensive digital strategy.“The EU wine sector is confronting both structural and immediate challenges. This meeting was timely and essential for a strategic discussion on the future of EU wine policy and we are grateful to the Commission for taking this initiative.”

“The future of the EU wine sector rests with operators committed to its sustainability and development, and EU policies should focus on them and prioritize their needs.”

The association urges comprehensive solutions that consider wine markets and consumers and do not simply prioritize improving the supply chain.

Policy recommendations

As global trade disputes continue escalating, specifically between China and the EU, experts predict the wine sector will be hit even harder.

Therefore, the CEEV outlines key recommendations to strengthen EU wine companies’ resilience and sustainability, including supporting competition among wine operators and their capacity to respond to market demand.

The association highlights improving the resilience of stakeholders in adapting to climate-driven challenges and calls for appropriate mitigation methods. There are calls for simplifying administrative processes to improve the efficiency of national support, particularly in promotion and communication.

More specifically, CEEV proposes a language-free system for wine labeling supported by a comprehensive digital strategy.

“We want EU companies to be able to move their bottles within the EU with a unique label and [for] the EU wine policy [to] embrace an ambitious digital strategy to secure ‘language-free’ labels for wine,” Recarte tells us.

CEEV encourages adapting regulations to make online wine sales more accessible across borders and developing a clear legal framework for producing and labeling dealcoholized and partially dealcoholized wines.

“As new consumers are interested in no- and low-alcohol products, we have also asked for the development of a detailed qualitative legal framework for dealcoholized and partially dealcoholized wines. Our wine companies need to be able to offer wine products in the growing no- low- market.”

“We achieved the inclusion of these two new categories, ‘dealcoholized wines’ and ‘partially dealcoholized wines,’ within the wine family during the last reform of the Common Agricultural Policy. The Commission should only modify secondary regulations to adapt the production and the labeling rules —  a legal process that could technically be done in less than one year,” Recarte continues.

“We just need political willingness at the EU and national level.”

Increasing sustainability

The CEEV is urging authorities to define principles for sustainable wine production and communication.The CEEV is urging authorities to define principles for sustainable wine production and communication. It believes the sector can benefit from enhanced procedures to boost exports and address technical barriers to trade.

“[There is] no need to reinvent the wheel as the International Organisation of Vine and Wine has already agreed on them at international level. With these principles in mind, companies will be able to focus their action on the hotspots of their production system and, in parallel, it will be easier for them to get a certification that should be globally recognized,” notes Recarte.

The industry representative pushes to extend the deadline for re-planting authorization to eight years from the current three-year mark to improve production capacity. It mentions that the EU should not use public money to encourage grubbing-up — the practice of uprooting vines and replacing them with other crops to lower costs.

According to the association, the EU spent more than €1 billion (US$1.10 billion)on grubbing-up subsidies between 2009 and 2011. However, production yields have not decreased between 2011 and 2023.

“We presented to the Commission and member states our recommendations for this balance, stressing that green harvesting should be the sole ‘corrective’ measure employed and strongly advising against introducing a generalized grubbing-up mechanism. If public funds were to be allocated for such actions, strict conditions must be applied,” Recarte concludes.

By Anvisha Manral