Travelling today between Singapore, Hong Kong and Beijing to host a couple of very significant wine dinners for Compuware, the business systems management specialist, I came across a very interesting piece of reporting in Asia’s Financial Times that referred to the ongoing crisis of wine over-supply in Europe. If you thought things were crook in Australia, it’s time to get real. Mariann Fischer Boel, agricultural commissioner to the European Union (EU) has given a powerful indication that she is not prepared to hold back on the issue of wine aid reform across Europe. Due to unveil her intended reforms on June 22, she has let it out that one of the options being considered is a vine pull scheme to uproot 12.5% of the EU’s 3.2 million hectares of vineyard and to help fund producers to cut back excess production. This equates to 400,000 ha. To put this figure into some perspective, the entire Australian fruit-bearing area under vine is a comparatively minor 155,000 ha, of which our most indentifiable region, the Barossa Valley, accounts from a mere 11,000 ha. In other words, they are talking of pulling out more than two Australias, or more than thirty-five Barossa Valleys. France, Italy, Spain and Portugual, which account for 80% of EU wine production, have already reacted by stating their intention to maintain the practice of ‘crisis distillation’, in which surplus wine is converted into fuel and industrial alcohol. This practice currently costs the EU A$840 million each year, a figure Ms Fischer Boel clearly believes is entirely out of kilter with the EU’s comparatively meagre annual spend of A$34 on wine promotion and marketing. This sort of reality check is just the first in what is likely to be a very painful series of major adjustments that will be so far-reaching in their impact that the entire rural landscape of traditional European wine-producing countries could be affected. Now that the New World, especially Australia, has taken such a significant share of export markets, it is simply no longer viable for the European wine industries and cultures to pretend that nothing has happened.
