EU top quality wines under threat, producers say

BRUSSELS, Nov 22 (Reuters) Burgundy, Chianti, Rioja and other quality European wines will be under threat if radical EU reforms are approved next month, top winemakers say.

Producers from France, Italy, Spain and Portugal warn that the reform plan, which EU farm ministers are due to vote on in mid-December, will undermine their future viability and would be challenged in court.

They are incensed by ideas to scrap the EU's existing ban on planting new vines after 2013 and another that, they claim, appears to encourage using its geographical indication (GI) system to limit output of protected-label wines.

The problem is that areas planted with vines in such regions are usually far smaller than the entire area that is designated as ''protected'' for producers who tend vines there and make wine.

The Rioja region encompasses 350,000 hectares but only 60,000 hectares of vines are planted there. Chianti has 35,000 hectares but only 17,000 hectares covered in vines.

In total, the EU has more than one million hectares of new ''quality'' potential, were it not for the plantings ban.

What the GI producers fear is that, after 2013, removing the plantings ban would result in a free-for-all to exploit the unused ''protected'' land, causing lower prices due to oversupply and an undermining of quality and their long-established labels.

''The liberalisation of planting rights can only destabilise the GI sector, which is the main asset of the EU wine sector on an increasingly competitive world market,'' said Christian Paly, who makes Tavel rose wine in France's Rhone valley and is also president of French ''appellation controlee'' producer body CNAOC.

''...we have to bear in mind that some countries are very keen to get rid of planting rights...,'' said Michael Mann, the Commission's agriculture spokesman.

''And there is absolutely no way that our intention is to undermine the quality of current GI regions and definitions.'' LEGAL CHALLENGES? The GI wine producers commissioned a legal analysis of the Commission's reform plan, which they said contained various elements that appeared to be open to legal challenge, both inside and outside the European Union.

''If the Commission sticks with its proposal ... it's clear that there will be tens of thousands of legal cases against it from wine producers,'' Paly said.

The plan would require many existing GI wines -- and there are several thousand -- to comply with various criteria for their protection to continue, including a demarcation of the geographical area as well as maximum yields per hectare.

That provision, the analysis said, was tantamount to a mechanism to limit wine production and could therefore run into serious legal problems, including a possible breach of World Trade Organisation (WTO) rules as well as EU competition law.

''The Commission says you can redefine the planting area to just cover the area that is planted today and so you can control production,'' said Bernard O'Connor of Brussels-based law firm O'Connor and Company and author of the analysis that was presented to the EU executive's agriculture unit this week.

''This is an abuse of the idea of GIs in itself,'' he said, adding that the proposal effectively introduced the idea of economic control, an element not contained in WTO rules.

The EU is the world's largest producer, consumer, exporter and importer of wine. In recent years it has lost part of its traditional export markets to cheaper wines from Australia, Chile and also the United States, and seen a surge in imports.

REUTERS ARB RK0900