Select Committee on European Scrutiny Twenty-Sixth Report


BOTTLING OF QUALITY WINES PRODUCED IN SPECIFIED REGIONS


(18900)

6356/98

COM(98) 86


Draft Council Regulation amending Regulation (EEC) No. 823/87 laying down special provisions relating to quality wines produced in specified regions.
Legal base: Articles 36 and 37 EC; qualified majority voting
Department: Agriculture, Fisheries and Food
Basis of consideration: Minister's letter of 24 July 2000
Previous Committee Report: HC 155-xxiii (1997-98), paragraph 8 (1 April 1998)
To be discussed in Council: No date set
Committee's assessment: Politically important
Committee's decision: Not cleared; awaiting further information

Background

  3.1  The wine régime under the Common Agricultural Policy includes special provisions relating to quality wines produced in specified regions, which enable the Member State concerned to set minimum quality standards by such means as defining the area of production, the vine varieties to be grown, husbandry and wine-making practices, and maximum yields. In February 1998, the Commission put forward a proposal which would have extended this principle by allowing Member States to make bottling of quality wines in the specified region of production compulsory, subject to certain conditions. These were that such bottling gives the wine special characteristics, and that the overwhelming majority of the operators in the sector are in favour of such an obligation. The Commission justified this on the grounds that transporting a wine involves the loss of some of its natural aroma; that the distinctive characteristics of certain wines are acquired only after bottling and a certain period of ageing in the bottle; and that it implied stricter checks on authenticity. There would, however, have been a five year transitional period during which operators outside the designated region who had been bottling a quality wine for three years before the entry into force of the regulation could continue to do so.

  3.2  In commenting on this proposal, the Government pointed out that, although some Member States currently required bottling at source, this was the subject of a case before the European Court of Justice, in which the United Kingdom had intervened in support of a Belgian bottling company which had challenged restrictions imposed by Spain. If agreed, the proposal could affect those in the UK who currently bottle quality wine bought in bulk from the region of production, and it could set a precedent for other products with protected designations of origin (though some UK producers, such as those in the Scotch Whisky sector, might see this as helpful).

  3.3  In the conclusion to our Report of 1 April 1998, we said that we found it odd that the Commission should have brought this proposal forward whilst a case seeking to determine the legality of compulsory bottling at source was currently before the European Court, and that we remained to be convinced that the Commission had produced an adequate rationale for a measure which seems to us tantamount to a quantitative restriction on exports (and could best be left to the market to resolve). We also said that, before taking a view, we would like to know the outcome of the consultation which the Government had undertaken, and to have a better idea of the impact of the proposal on the bottling of quality wines in the United Kingdom. In the meantime, we did not clear the document.

  3.4  We subsequently received a number of letters from MAFF Ministers. These indicated that the value of imports of bulk quality wine was around £20 million, and that between 12 and 15 bottling firms might be directly affected by the proposal. Also, although the Scotch Whisky Association saw certain advantages, other organisations, including the Wine and Spirits Association, were opposed. We were also told that the Government remained opposed to the measure, but that early discussion in the Council appeared to be unlikely until the European Court had delivered its ruling on the case before it, following a finding in favour of Spain by the Advocate General.

Minister's letter of 24 July 2000

  3.5  We have now received a letter of 24 July 2000 from the Minister of State (Commons) at the Ministry of Agriculture, Fisheries and Food (The Rt. Hon. Joyce Quin) informing us of the latest position. She says that the European Court has now confirmed the Advocate General's Opinion that the Spanish legislation requiring bottling at source was not incompatible with Community law, and that accordingly Spain is not in breach of its Community law obligations. Although the Court had found against a Spanish supplier of Rioja in an earlier case (on the grounds that bottling at source could only be justified if this preserved the particular characteristics associated with the wine originating in that region), the Court had now been convinced by new evidence suggesting that, if bottling was not carried out in accordance with strict requirements in terms of filtering, clarifying and cooling, the quality might be seriously impaired. It also accepted other arguments relating to intellectual property.

  3.6  The Minister goes on to say that, while it remains the case that Community law does not explicitly permit compulsory bottling at source, the Court ruling in favour of Spain clears the way for other wine regions to introduce similar restrictions. She adds that the Commission proposal would in its current form make such explicit legal provision permitting the compulsory bottling at source of quality wines under certain circumstances, and that it now remains to be seen if the proposal will be revived in the light of this judgment. She says that it is not clear if the Commission considers such legislation is no longer needed, and that the ball is therefore firmly in the court of the French Presidency, which has not so far shown any signs of wishing to revive the proposal. However, should the proposal be tabled for substantive discussion, she has said she will write to us again indicating the line the UK proposes to take.

  3.7  As regards the impact within the UK, the Minister points out that about 10% of all wine consumed in this country is bottled or boxed by those involved in this trade, and that, although there is unlikely to be any immediate impact (since the judgment affects only Rioja), UK bottlers could be adversely affected, depending on how producer organisations in other wine regions react. She does, however, make the point that the Office International de la Vigne et du Vin (OIV) recently recommended a Code of Good Practice for the bulk transport of wine, based on existing UK guidelines. She suggests that, provided this Code is adhered to, many of the concerns raised by the Court should be addressed, and that producers of quality wine may be less inclined to call for bottling at source.

Conclusion

  3.8  We are grateful to the Minister for this information, from which we note the recent European Court ruling in favour of Spain. We also note that it is unclear whether discussion will proceed on the Commission's proposal, but that, if it does, she will write to us again on the line which the UK would take. In view of these various uncertainties, and the potentially adverse effect which the proposal would have on most of the UK interests involved, we are maintaining our scrutiny reserve.


 
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