Stands for European Union, previously known as the European Community, a group of 28 advanced Western industrialized countries co-operating on both economic and political fronts. Twenty-four of the 28 members produce wine (of which seven only in marginal quantities), making the Union the world’s leading wine economy, producing around 175 million hl/4,623 million gal every year, and accounting for 45% of the world’s wine-growing areas, 65% of production, 57% of global consumption, and 70% of exports.
The area under vine in the EU stood at 3.48 million ha/8.6 million acres in 2013, down from almost 4 million ha in 1987. This represents nearly 47% of the total global vineyard area (these oiv statistics include vines used to produce drying grapes and table grapes, and these two categories represent a higher proportion of total vineyard area in Asia than in Europe). According to official EU data, of the 3.2 million ha of vines planted for wine production in the EU, over 2 million ha produce grapes for pdo wines, almost 0.7 million ha for pgi wines, and nearly 0.5 million ha for wine without geographical indication. Spain has the most extensive area under vines in Europe (958,000 ha planted for wine), and indeed the world, although Italy produces more wine than Spain, which used to have the lowest-yielding vines in the EU (see spain for how this has changed).
The EU wine-producing countries are, in descending order of average wine production: Italy, France, Spain, Germany, Portugal, Romania, Greece, Hungary, Austria, Croatia, Bulgaria, Slovenia, Czech Republic, Slovakia, Luxembourg, Cyprus, Malta, the United Kingdom, and Belgium. (denmark, the netherlands, poland, ireland, and sweden also produce a small amount of wine.) In 2012–13, total EU production of wine was around 152 million hl/4,015 million gal (world production in 2012–13 was approximately 277 million hl, according to oiv statistics). Official figures for yields in EU wine-producing countries averaged 47 hl/ha (2.69 tons/acre) in 2012–13. Germany, Italy, and Luxembourg reported the highest yields in 2012–13 (88 hl/ha, 71 hl/ha, and 66 hl/ha respectively), and Cyprus, Slovakia, and Romania the lowest (13 hl/ha, 17 hl/ha, and 20 hl/ha respectively, but as with all such collated data, national reporting is often inaccurate).
Although the EU includes some of the most industrialized nations of the world, it is in Europe that wine production is of greatest social and economic importance. Wine accounted for 3.9% of the EU’s agricultural production by value in 2010–11. In France, the proportion was 13.4%, 8.8% in Austria, 3.9% in Italy, 2.6% in Spain, and 5.8% in Portugal.
The EU is an important net exporter of wine, and the trade was worth 8.1 billion euros in 2011, representing 22.8 million hl, over 14% of production. The EU’s imports from outside the Union were 13.6 million hl in 2011, worth 2.4 billion euros. In 2011, the four top exporters to the EU were Australia, Chile, South Africa, and the United States, representing almost 85% of wine imports from outside the EU. Wine imported into the EU, known as ‘third country wine’, must conform to European wine law and may not be blended with wine made within the EU.
According to OIV figures, the EU’s citizens drank an estimated 120 million hl of wine in 2010 (at that time only 16 member states), just over 23 l per inhabitant, considerably more than the world average for consumer countries. Between 1995 and 2010 consumption fell by about 8 million hl, most noticeably since 2008.
The EU wine sector is subject to an overarching regulatory framework called the ‘common market organization’ (CMO), which is part of Europe’s common agricultural policy (CAP). The wine CMO includes rules on the free movement of wine between member states, winemaking practices, and labelling and trade with ‘third countries’ outside the common market. Its defining feature, until 2008, was the segregation of the wine sector into quality wine, which was regulated to manage ‘quality’, and table wine, which was granted subsidies to control production and the market. This essentially political and cultural divide was imported from France’s wine law, reflecting that country’s efforts to manage production in the poorer Midi while protecting the more privileged producers of well-known wine regions.
From the very first wine CMO in 1970, it was evident that accommodating the more liberal rules (and cheaper wines) that existed in Italy and the stricter regime prevailing in France within a single market would be a significant challenge. Blockades and violent protests through the 1970s and early 1980s, fuelled by rampant overproduction of table wine and nationalistic sentiment, testified to the difficulty of the task. The accession of Spain, Portugal, and Greece in the mid 1980s multiplied the complexity of the problems.
The wine CMO went through several iterations over the years, resulting in a proliferation of subsidies and controls, such as distillation, grubbing up of vines, planting rights, and price supports, ostensibly intended to bring supply and demand in the wine sector into balance. These largely failed because policymakers were torn between maintaining the incomes of the poorer table wine producers and realigning the wine sector with the demands of the modern wine market. Usually the political imperative to prop up the table wine producers won out, resulting in a ballooning budget.
By the mid 2000s, a rethink of the wine CMO had become essential and politically achievable. The sharp decline of traditional table wine, soaring production of wines with a geographical indication, the accession of new EU member states, budget constraints, and competition from the new world were all factors.
The reform introduced in 2008 took the radical step of dissolving the quality wine and table wine categories. In their place a new hierarchy was created: protected denominations of origin (pdos—covering AOC, DOC, DO, etc.); Protected Geographical Indications (or pgis—covering vin de pays, igt, Landwein, Vino de la Tierra, etc.); and wines without geographical indication. The last were granted permission to use grape variety names on the label, thereby allowing the creation of a new class of varietal wines. Each member state has its own precise terminology based on these overarching categories. The new hierarchy brought wine into alignment with the PDO/PGI system for other foods in the EU.
A revised set of support measures was made available to all categories of wine (not just wines without geographical indication), with a total budget of around 1.2 billion euros per year. In the first years of the reform, a key focus of support measures was, as before, to balance supply and demand, with grubbing up measures contributing to a reduction in the total EU vineyard of 370,000 ha (10%), an exercise considerably more successful in some countries than others. Winemaking rules were linked to OIV recommendations as a means of benchmarking them internationally. Labelling was also simplified and liberalized to some extent. Whether or not these changes will be sufficient to align EU wine production with the contemporary wine market remains to be seen.
Alonside the wine CMO, the EU has negotiated a series of agreements with several non-EU wine-producing countries, including Australia (1998, 2008), Canada (2003), Chile (2002), South Africa (2002), Switzerland (2002), and the USA (1984, 2005). These agreements cover concerns such as reciprocal arrangements regarding oenological practices, the reciprocal protection and control of wine denominations (which in some cases implies the phasing out of generics), trade facilitation, dispute-resolution procedures, and in some cases tariff quotas. On the EU side, these agreements form a key part of a long-term strategy to secure protection for their geographical indications, while for non-EU countries the incentive has been to improve their ability to compete in the EU market.
The thorny issue of planting rights was still unresolved in 2014.