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Tuesday, 18th December 2007

A vintage EU farce

4:26pm

I'm not normally one to take interest in EU agricultural subsidies but I am one to take interest in wine - especially when the EU is messing about with it. There's a vote later today on the millions and millions of Euros that are given to continental wine makers to subsidise them for all the wine they can’t sell. This has led to producers making wine just to get subsidies, in turn creating 'lakes of wine' that can't be sold. Apparently there's enough unsold wine sitting about to fill about 160 Olympic swimming pools. It then takes a further subsidy of half a billion euros to turn this wine into industrial alcohol or biofuel.

The EU Farm Commissioner Mariann Fischer Boel wants to do away with these subsidies, but the French won't have it. The booming UK wine industry could soon fall foul of this. Currently if you produce over a certain amount of wine per country you aren’t allowed to plant anymore vines. This is idiocy and massively protectionist. (The up side is you do then get subsidies but this misses the point as I shall explain).
The UK wine industry is growing exponentially and will soon cross this vine planting threshold. However unlike our freeloading French cousins the UK industry doesn’t want any handouts; just to be left to get on with it. I spoke to the head of the UK Vineyards Association who said the industry should be left to market forces - if you can’t sell your wine then you should be out of a job. 

It's exactly this mindset of reliance on the Continent that has allowed the new wine producers - the Ozzies in particular - to storm into the market. They are hungry to win and know there isn’t handout waiting for them if they fail.

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