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EU Wine Industry Must Shrink to Compete

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EU Wine Industry Must Shrink to Compete

World

EU Wine Industry Must Shrink to Compete

EU Wine Industry Must Shrink to Compete

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Europe is the world's largest producer, consumer, importer and exporter of wine. But competition from new world producers and complex regulations has created a surplus that has led to quality problems. The European Union's top farm chief unveiled a plan to save the troubled industry.

RENEE MONTAGNE, host:

Europe is essential to wine. It's the world's largest producer, consumer, importer and exporter of wine. Still, competition from the New World has created a vast surplus of the stuff. Yesterday, the European Union's top farm chief unveiled a plan to save the troubled industry.

But as Eleanor Beardsley reports, the proposed reforms already have many wine growers seeing red.

ELEANOR BEARDSLEY: EU Agriculture Commissioner Marianne Fischer Boel presented her our plan before the European Commission in Brussels. She said if the Continent's wine industry wants to stay competitive, it must shrink itself by ripping out 50,000 acres and stop paying wine growers to distill their unsold wine into industrial alcohol.

Ms. MARIANNE FISCHER BOEL (Agriculture Commissioner, European Union): We are just now actually losing market share to dynamic producers in other parts of the world. Consumption is falling, and imports are increasing by approximately 10 percent. I must say that up till now, we have been spending the money in a very inefficient way. Almost half a billion euros goes every year to the disposal of wine for which there is actually no market.

BEARDSLEY: Fischer Boel's plan would pay farmers to diversify into other crops rather than continue to overproduce sometimes poor-quality wine. It sounds logical, but on a continent where winemaking is often a part of national culture, the reality is more complicated.

Efforts to reduce the size of the industry have touched raw nerves like few other European proposals. As one Eurocrat put it, people tend not to get so passionate about fruit and vegetables. Fischer Boel's ideas have annoyed several EU governments, especially the main southern wine countries of France, Spain and Italy. The trio accounts for 80 percent of the EU vine area and 1.4 million wine-related jobs.

(Soundbite of French news broadcast)

Unidentified Man: (French spoken)

BEARDSLEY: French television news showed rioting winemakers actually breaking into supermarkets and smashing cases of Chilean wine in the southern French region of Lan Doc Cusion(ph). Many French winemakers say they are penalized by the country's strict rules.

They are not allowed to irrigate their vineyards and complicated classification system. French wines are named after the chateau and land on which they are grown, and not after their grape variety.

(Soundbite of song, "I Want to be Loved by You")

Ms. MARILYN MONROE (Actress): (Singing) I want to be loved by you, just you...

BEARDSLEY: Jacques Tea's(ph) zinc-countered wine bar La Pos Te Voir(ph) is tucked into a small side street by the Paris Opera House. Jacques Tea, a longtime wine merchant, says the quality wines will always do well. But winemakers have to wake up to the new realities of the world market.

Mr. JACQUES TEA (Wine Merchant): (Through translator) But, of course, we have to pull up the vines. There's too much wine on the market. And there's just not room for some of them. We let everybody believe they could make money growing wine, and they just can't. What if everybody in Normandy started making cheese? Well, it's the same thing.

BEARDSLEY: New EU wine plan hopes to win back export markets lost to Australian, Chilean, South African and U.S. producers. If all EU foreign ministers agree, it will go into effect in August 2008. While many European growers are certainly destined for a period of pain, Fischer Boel warns that the cost of doing nothing would be far worse, as overproduction continues to erode prices and farm income.

For NPR News, I'm Eleanor Beardsley in Paris.

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