New Delhi: The European Union (EU), which wants India to reduce high import duties on wines, is facing a glut of the beverage at home and is taking steps to protect local producers from new rivals like Australia and the US.
EU’s urgency to pressurize India to open up its market stems from the fact that “it is left with large quantities of wine for which there is no outlet”, an EU official said.
Over the past five years, average production in the EU amounted to 178 million hectolitres worth around 16.1 billion euros. The EU’s total wine production amounted to about 165 million hectolitres in 2005-2006 and contributed 65% of the world production in the alcoholic drink.
The overstock in EU is due to declining consumption in domestic market and sharp surge in imports from ‘new producers´ such as the US, Australia, South Africa and Chile.
EU spends an estimated 500 million euros every year to dispose of, store and distill wine surpluses into alcohol. Seeking a solution to tap the outflow of money in overstock, the European Commission will adopt legal measures on July 4 aimed at improving market balance, boosting quality and promoting sales of European wines, the official said.
The reforms in EU Common Market Organisation Policy aim at managing production by limiting planting rights and supporting structural improvement. The reforms would seek to adapt quality and quantity to consumer demand. EU Agriculture Commissioner Mariann Fischer Boel had also recently said the 25-nation bloc was overproducing.
“We in Europe are producing too much wine for which there is no market... consumption is down, and exports from the new world are making huge inroads into the market. We spend far too much money disposing of surpluses instead of building on quality and competitiveness,” she had said.