Examination of Witnesses (Questions 112
- 119)
WEDNESDAY 28 FEBRUARY 2007
MR JOHN CORBET-MILWARD, MR PHILIP GOODBAND AND MR
PATRICK MCGRATH
Q112 Chairman:
Hello and welcome. Thank you very much for finding the time to
come and help us with our inquiry and for all the effort you have
put into preparing your written evidence. Thank you very much,
we are very grateful. At this stage of the proceedings, I have
to point out that this is a public session and it is actually
being webcast, so do not get carried away! There is a possibility
that somebody may be listening to it, though it is a very remote
possibility, but it is technically there. After the evidence-gathering
session, you will receive a transcript of the proceedings which
you can correct in terms of any errors which have slipped in.
We will proceed with questions, but it would be helpful if you
could introduce yourself and make any initial statement which
you think it might be helpful for us to hear. So, over to you.
Mr Corbet-Milward: I am John Corbet-Milward,
and I would just like to say a few words about the Wine and Spirits
Trade Association. We are a typical trade association. We have
300 members and we are particularly strong on marketing and holding
the movement. We do not represent growers. There should have been
a fourth member of our team, but he was hijacked by the Committee!
That was, someone from the UK Vineyards Association. We have links
at a national level to Defra, which is our sponsoring department,
we do a lot of work with the Food Standards Agency and we have
links to DTI, the Department of Health and every other government
department there is. At a UK level, we have trade links to the
Comité du Vins, which is the European trade, and that trade
association consists of mainly trade-orientated national trade
associations, plus a few big companies. So in Comité there
is of trade as well as roots going down into the growing community
within the European community. At a global level, we have links
to the International Federation for Wines and Spirits, FIVS, and
FIVS has observer status on a number of intergovernmental bodies,
including the OIV, which is the intergovernmental body for wine.
The Wine and Spirits Trade Association's involvement with the
CMO began in February 2006 at the Commission. The Commission set
up three working parties and we, the WSTA, played quite a leading
role on the working party that was dealing with the consumer end
of the supply chain. There was also an advisory committee meeting
after that initial meeting at the Commission and the result of
these discussions in Brussels was a Commission Consultation Document
which came out in, as I recollect, July of 2006. There has not
been a Proposal that has come out of the Commission yet and we
are still talking about a Consultation Document. Broadly, the
Comité du Vins is in full support of the proposals that
have been put forward by the Commission and the music which is
coming out of the Commission is very clear—namely that the
wine regime is extremely expensive and there are a lot of things
wrong with it, so perhaps it is time that a good look was taken
at it and some reforms put into place. We very much support the
Commission's line which is one for "Profound Reform"
and we have also of course worked closely with Defra, our sponsoring
department, in relation to ensuring as far as possible that some
co-ordinated thinking takes place before we make our submissions
and before we get into the detailed discussions on the reform.
That is where we are and who we are. We are a trade association
and we focus on trade mainly.
Q113 Chairman:
Would you just introduce your colleagues.
Mr Corbet-Milward: Yes, Philip Goodband, on
my right, is a Consultant Master of Wine, and he does a great
deal of work for an international company called Constellation.
And, on my left, Patrick McGrath is the Managing Director of an
SME company and is very experienced in brand-building, and he
has interests both in wines coming from Europe and also wines
coming from third countries. I do not know if you want to say
any more, Philip or Patrick?
Mr Goodband: No, that is probably sufficient.
Q114 Chairman:
Can I start off, and I suppose it is really going to first principles.
Reading your evidence, I detected a certain tension in your view
of the desirability for even having one regime to begin with,
because you rightly point out its complexity, that it is inflexible
and, most of all, which is something I alighted on, that it is
"restricting the ability of producers to adjust to changes
in consumer preferences", which is absolutely fundamental
to the system.
Mr Corbet-Milward: Yes.
Q115 Chairman:
However, you are not in favour of complete deregulation. I am
really teasing out how these things sit together—a damning
criticism of the regime and saying, "Ah, but we can't go
all the hog towards deregulation". What is the justification
for sitting on the fence?
Mr Corbet-Milward: Well, we are pragmatic people
and we know very well that, if you go to complete deregulation,
then the farmers will be dumping manure on the Élysée.
We are not locked into our relationship with Comité du
Vins, but we did discuss this at a European level and we realised
that a step-by-step approach would probably be the best way forward.
We fairly quickly set aside complete deregulation option largely
because of the impossibility of achieving it, and we opted for
2A, which is what the Commission suggested. However, you are right:
I read the evidence that Defra gave to this Committee and I know
that you posed the same question to officials, and you were quite
right to do so. We would dearly like complete deregulation, but
whether we can achieve it within the time available is highly
questionable.
Q116 Chairman:
That is fine, because what I wanted to clear up in my mind was
whether you had a justification for a regulated market, that it
brought any benefits, but you are basically saying, "No,
we would prefer deregulation, if it was a viable option, but we
take the view that it is not actually achievable". Is that
a fair summary?
Mr Corbet-Milward: Correct.
Mr Goodband: That is correct.
Q117 Lord Bach:
Could I press you on that a little bit. I am delighted to hear
that your real view, if I can call it that, is that deregulation
is the preferred of the options. Do you think you are not just
being a little too over-pragmatic in settling for what the Commission
seems at the moment at least to be arguing for? Is not the best
way to get as close to deregulation, to be pushing for it and
then to see where it is that we actually end up? Is not the real
concern that, if we all settle, as it were, for what is described
as "Profound Reform" (and, whenever I see the word "profound",
it makes me think it means actually the opposite), is not the
way to get towards deregulation, which is what you favour and
perhaps some of us favour, actually to argue for it and then see
where we end up? What can be the reason for not doing that?
Mr Corbet-Milward: That is quite a good tactic,
but I suspect that within the European wine mix the UK is a tiny
pimple on the bottom of the elephant, and we would risk being
laughed out of court. So I would suggest that the UK would be
better off if it worked with people who were inclined to our way
of thinking, such as the Poles, the Danes and the rest of the
northern European states, and then applied as much pressure as
we could to effect change. Maybe we should put the issue of full
deregulation into the debate or ask those questions: there is
nothing wrong with that. But I guess what I am saying is, do not
be surprised if the growers say, "But you are a very small
producer, so why should we listen to you?"
Q118 Lord Bach:
The danger surely is that, if you, as it were, adopt a pro-Commission
view at the present time, you will be taken along with the Commission,
whatever it is they actually argue for in the end, and that may
be not really what you want at all.
Mr Goodband: It seems to me that the tactic
here, and it is something we subscribe to, is bringing as many
of the north European countries along with us and pushing for
as much deregulation as we can achieve, but having those allies
alongside and creating the consensus amongst those north European
states.
Q119 Baroness Jones of Whitchurch:
I would like to explore a little bit more with you your views
on quality and how we can maintain, and drive up, quality. You
say somewhere in your submission that you are concerned that,
if we do away with the current quality wine system, there is a
danger it will lead to homogeneity. On the other hand, then you
go on to praise the "New World" which has a branding
system which gives quality and branding. Could you just give us
a little bit more of your insight into what you think the best
way of maintaining quality? What is, in the future, the best way
of maintaining those quality standards? Is it the current EU quality
wine standard either in its current or a moderated form?
Mr Corbet-Milward: I will defer to my colleagues,
who are much more expert in branding and that side of things than
I am.
Mr Goodband: The strengths of the existing system
have been built up over many centuries. And, if we take Bordeaux,
Burgundy, Champagne, the top appellations, for example,
these are world-standard benchmarks. The real problem lies below
that level, even within the upper appellations. If we take
Bordeaux as an example, the tiny fraction of wines which are the
international world standard for fine wine represent probably
less than five% of the total production of Bordeaux. At the lower
levels, there are a million hectolitres of structural surplus.
They are producing six and a half million hectolitres a year and
they are able to sell five million, much of it at knock-down prices
and of very questionable quality. In order to raise that, there
is a need to remove that structural surplus and there is a need
for each of the appellation regions to strengthen the quality
(it is called the "label" in French), the certification,
of wines sold under the appellation name. At the moment,
there is too much wine being sold which simply does not meet the
standard and has nothing at all to do with that top 5%. So, if
we were to deconstruct the appellation regulations, what
we would lose is the ability of the producers of good-quality
wine to produce wines with specificity, and that specificity comes,
for example, from the regulations which have within them the grape
varieties which can be grown within that appellation. If
that were removed, you would certainly get people planting and
producing grape varieties from other parts of the world.
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