EFOW’s President interview – GAMBERO ROSSO

Original version of Mr Bernard Farges interview published in Italian on Gambero Rosso on 18 February 2016:


You may find here below the English translation by EFOW’s Secretariat:

1/ The European Commission proposal to simplify the wine sector legislation is considered by EFOW as undermining the current provisions for GI wines. You talk about a risk of ‘fragmentation’ of Regulation 607/2009. Why?

EFOW considers that through the simplification of implementing and delegated acts the European Commission is calling into question the wine legislation. This is of great concerns to us for two main reasons.

First, it is unacceptable that only parts of the texts are currently on the table. These texts aim to replace others and it is currently impossible for us to conduct a global analysis of the proposal. Furthermore, dismantling one of the basic texts of the sector (Regulation 607/2009) by scattering its provisions in several legislative texts which are sometimes of a horizontal nature (ex. marketing standards) does not represent a real simplification. From our perspective, we do not see anywhere a real simplification for operators.

Second, we have the feeling that the European Commission is undermining the delicate balance found during the last wine-related reforms (the 2008 wine reform and the 2013 CAP reform). After a first analysis of the texts, we noted that these texts do not include a number of rules that apply to our sector, especially to origin wines. More specifically, we no longer find in the texts key provisions such as the prohibition for non GI wines to indicate on their label a geographical origin smaller than the Member State origin.

Furthermore, we note that the proposal contains in-depth changes to the current legislation which regard, for instance, traditional terms, wine grape varieties, bottle shapes and many other topics. Consequently, EFOW is asking the European Commission to review its working method and not to change the current wine legislation’s provisions.

2/ Agriculture Commissioner, Phil Hogan, has reassured Italy, and Minister Maurizio Martina, on the fact that there are no risks for autochthonous vine grape varieties. Italy is concerned for its Lambrusco, Vermentino and many other designations. Can we trust Commissioner Hogan? Which countries are pushing for this liberalisation?

Commissioner Hogan should take into account and maintain the delicate balance achieved in 2008 during the last reform of the European wine legislation. Many in the sector, in the Member States and in the European Parliament are satisfied with the current provisions and are against a revision of the legislation. We hope that Commissioner Hogan will carefully consider the issues at stake and the sensitivity of this question before taking any further steps that might have an impact on the European wine legislation.

3/ TTIP. The United States are currently fully focused on the Presidential race. We have the feeling that, from now on, there will be a slowdown in the negotiations. Unfortunately, the wine file has not yet been addressed in these negotiations. Meanwhile, at the end of 2015, the US signed the Trans Pacific Partnership (TTP) with the Asian area. Can we say that the current situation is not ideal?

The US is our largest export market and US wine consumption has significantly increased in the last decade. In fact, since 2013, it is the largest wine market in the world. Negotiations on GI wine issues have been blocked since the entry into force of the first phase of the 2006 EU-US wine agreement. However, the European Parliament, an important number of Member States and the European Commission have made this a non-negotiable item. This means that US negotiators have to enter into discussion to find a concrete solution. It will be difficult to have an agreement before the end of 2016 but we believe results matter more than speed.

A real battle is taking place in the Pacific. As for the TPP provisions, some are of concern to us; this is why EFOW will follow closely the ratification process. This part of the world is a growing market and represents a real development opportunity for our sector. We believe that the European Commission needs to pay more attention in its negotiating efforts on this part of the world. It should also finalise and ratify a number of agreements as quickly as possible.

4/ Free Trade Agreements cannot only deal with the tariff barriers’ removal. What is EFOW asking for?

Increasingly, International trade barriers concern not only tariffs but also very often non-tariff issues. EFOW believes that all trade negotiations should allow for a better access to third countries’ markets. From our perspective, this means the recognition and protection of our GI wines. The fact that a third country producer can freely use our wine names to produce and market a wine causes us serious harm. In fact, this has an impact not only on our market shares and consumer loyalty but it also dilutes the GI concept in the long run.

5/ Within the European wine-growing scene there is an Italian specificity which stems from the fact that Italy has a very high number of native vine varieties. France, however, has less designations but has managed to develop a few very well. You come from Bordeaux. What is your development plan?

Bordeaux has historically built its reputation and therefore its value through its wines’ quality but also through its Châteaux and famous wine estates.

This recognition has been built by the diffusion worldwide of these wines often by foreign wine traders. Many merchant houses in Bordeaux still have English, Dutch, Austrian, Belgian sounding names.

With the creation of the appellation system in the 1930s, wine producers moved towards the production of PDO wines. For now more than 25 years, almost all the wine production in the Bordeaux region is made of PDO wines. This clear strategy has allowed our wine region to focus on improving the value of its wines before increasing volumes by searching for new export markets. We always enter new market with our prestigious wines with appellations, then our Bordeaux, Bordeaux Supérieur and, eventually, the rest of the wines’ range follow suit.

The important number of exporters present on the market contributes to the development of this strategy. Every day, all our operators are working hard to maintain and increase our market share in a very competitive market.

6/ The authorisation system for new vine plantings came into effect on 1 January 2016. A number of major producing countries, such as Italy, will likely prompt the EU to increase the limit of 1% for their national vineyard. They will do so in 2017 during the CAP revision. Does EFOW believe there will be a need to increase the production potential above 1% to satisfy the market’s demand?

This system has just entered into force and it is difficult, at this stage, to concretely measure its effects on our terroirs and on the development of our vineyards. We will do a first assessment at the end of April 2016, once all the requests have been made. Only then will we know if the actual needs of the producers exceed or not the limit established at the national level. We do not exclude the possibility to ask the Commission to improve the current rules. We are very much satisfied that a tool allowing us to manage our production potential has been maintained. Nowadays, the wine sector is the last sector in the EU which benefits from such a management mechanism. Many agricultural sectors envy us.

7/ EFOW also deals with the social aspects of wine consumption. What concrete plans do you foresee in 2016? Are you planning any special events? How do you assess the increase in consumer preferences for wines with a low degree of alcohol?

EFOW members believe that promoting a responsible consumption of wine is the best policy to curb alcohol abuse. The European Commission extension of the European Alcohol and Health Forum is a vote of confidence in this direction. The publication of the study regarding the labelling of ingredients and the nutritional value for alcoholic beverages will be an important milestone this year. EFOW and more largely the wine sector must be proactive on this matter.

The increase of low alcohol content wines is the result of some consumers’ demand for light products. We need to adapt our offer to this new reality as new consumers often discover the world of wines through this kind of product which are often easier to understand and thus to enjoy. These wines are also an excellent means to bring new consumers to discover our more traditional wines.

8/ Internet in the future will be one of the key channels to sell wine. However, this is precisely an area where defending GIs is particularly difficult. What can be done?

Up to now international negotiations have mainly focused on the real world (offline) and have not lent enough attention to the virtual world (online). However, in recent years, with the spread of information and communication technologies, the Internet has become increasingly used by consumers to access information and to purchase goods. To quote a few figures, online wine sales have increased by 30% per year. The Internet will become one of our biggest markets if not the biggest in the near future. It is hence essential to define the rules that will apply on this market to ensure a fair and open competition.

The battle led by EFOW on the ‘.VIN’ and ‘.WINE’ dossier has helped highlight the challenges we are and will be facing. We were able to negotiate a satisfactory commercial agreement but this is not enough. More than 1930 new generic top level domain names (gTLDs) have been created following the liberalisation of the Internet without a real reform of the Internet governance. EFOW believes that the European Commission, in collaboration with the Member States, civil society and many sectors of the economy should launch an in-depth debate on this matter and address this new reality before it is too late and potential opportunities for our producers are taken by cyber-squatters.