Can the EU Save Its Wine Industry?

The European Commission has recently called upon member states to join a High-Level Group on Wine Policy, a forum designed to address the evolving challenges and opportunities within the wine sector. This initiative, spearheaded by EU Agriculture Commissioner Janusz Wojciechowski, will hold its inaugural meeting on September 11, 2024, bringing together various stakeholders to present their assessments and perspectives.

Announced during the Agriculture and Fisheries Council meeting on May 27, 2024, the formation of this High-Level Group responds to the pressing needs of the European wine sector. Over the past two decades, the EU wine industry has been a remarkable success story, driven by a comprehensive regulatory framework that has positioned the EU as a global leader in the market. The value of exports has tripled, making a significant contribution to the EU's GDP. However, recent shifts due to the Covid-19 pandemic, changing consumer preferences, and a less stable international trade environment have posed substantial new challenges. Additionally, climate change is increasingly causing unpredictable production conditions and harvest outcomes.

To navigate these challenges, the wine sector must adapt, and the policy framework must support this transition. The High-Level Group aims to provide a platform to discuss these issues and explore potential solutions. Scheduled to meet at least three times, the group is expected to present conclusions and recommendations for future policy development by early 2025.

The EU wine sector is not only vital to Europe's cultural heritage but also to its economy, society, and rural areas. The wine value chain enhances the quality, sustainability, and competitiveness of the agricultural sector, creating approximately three million full-time direct and indirect jobs, primarily in rural regions. It contributes around €130 billion to the EU's GDP, including value generated throughout the supply chain. This sector operates under a comprehensive regulatory framework and is supported by national support programs in producing countries.

The EU leads the world in wine production (60%), consumption (48%), and export value (60%). Despite this, social and demographic changes are affecting the quantity, quality, and types of wine consumed, with current consumption at its lowest in three decades. Traditional red wines are being replaced by fresher, lighter options, non-alcoholic wines, and other beverages catering to new tastes. Export markets are also shifting due to geopolitical factors and declining consumption, resulting in more erratic import patterns. Moreover, production is becoming increasingly unpredictable due to the sector's vulnerability to climate change.

The European Commission, in collaboration with member states, is actively working to help the sector adapt to these new and complex realities. This initiative has gained momentum following protests in countries such as Spain, France, Portugal, Italy, and Belgium.

Commissioner Wojciechowski emphasized at the AGRIFISH Council that the goal of the High-Level Group is to tackle the challenges facing the European wine sector, explore solutions, and present policy recommendations by early 2025. The Commission has invited representatives from member states to the first meeting on September 11, where interested organizations will also participate to share their insights and perspectives. The group plans to convene at least three times before the end of the year or early 2025.

Officials from the Directorate-General for Agriculture and Rural Development (DG AGRI) describe the EU wine sector's development over the past two decades as a "success story." This success is underpinned by a complete regulatory system and support programs in major producing countries, with exports tripling in value over the same period.

As the sector faces an uncertain future, the establishment of the High-Level Group on Wine Policy represents a proactive approach by the European Commission to ensure that the EU remains at the forefront of the global wine market, maintaining its competitive edge while adapting to new realities. The outcomes of this group's discussions and the subsequent policy recommendations will be crucial in shaping the future of the EU wine industry.