WEP – Wine Economics and Policy Just Accepted Manuscript 1 Just accepted 1 2 3 4 Is a new EU wine policy coming? The unexpected role of regulatory measures 5 6 Eugenio Pomarici1, Roberta Sardone2 7 8 9 10 11 1 Università degli Studi di Padova, Dipartimento Territorio e Sistemi Agro-Forestali (TESAF) Via 12 dell'Università 16 - 35020 Legnaro (PD), Italy, E-mail: eugenio.pomarici@unipd.it 13 2 CREA - Centro Politiche e Bioeconomia, Via Barberini, 36 - 00187 Roma, Italy, E-mail: 14 roberta.sardone@crea.gov.it 15 16 17 18 19 Correspondence concerning this article should be addressed to Eugenio Pomarici, Università degli 20 Studi di Padova, Dipartimento Territorio e Sistemi Agro-Forestali (TESAF), Via dell'Università 16 - 21 35020 Legnaro (PD), Italy, E-mail: eugenio.pomarici@unipd.it 22 23 24 25 This article has been accepted for publication and undergone full peer review but has not been through 26 the copyediting, typesetting, pagination and proofreading process, which may lead to differences 27 between this version and the Version of Record. 28 29 Please cite this article as: 30 31 Pomarici E., Sardone R. (2022), Is a new EU wine policy coming? The unexpected role of regulatory 32 measures, Wine Economics and Policy, Just Accepted. 33 DOI: 10.36253/wep-13189 34 35 36 37 mailto:eugenio.pomarici@unipd.it mailto:roberta.sardone@crea.gov.it mailto:eugenio.pomarici@unipd.it WEP – Wine Economics and Policy Just Accepted Manuscript 2 Abstract 38 39 On January 1, 2023, a “reformed” Common Agricultural Policy (CAP) will come into force, which 40 is innovative by nature in structural terms, and focused on environmental and social sustainability 41 issues, aimed at a comprehensive digitization-based modernization of the agri-food sector. The new 42 CAP keeps the current structure based on expenditure and regulatory measures, but includes a new 43 planning tool, the national CAP Strategic Plan, a new CAP management model, and the new delivery 44 model (NDM). Concerning EU wine policy, the new regulations foresee a number of specific 45 amendments to existing rules, including changes that will apply to financial support for the wine 46 sector with a reduced budget and to the regulatory measures. Among the latter, the most globally 47 impacting are labelling rules, which require more information to consumers and allow the use of an 48 e-label, the use of hybrid grape varieties for the production of appellation wines, and the inclusion 49 among CAP regulated products of partially or totally de-alcoholised wines. 50 51 Key words: Common agricultural policy, de-alcoholised wine, hybrid grape varieties, labelling 52 53 Introduction 54 On January 1, 2023, a new system of regulations will come into force that defines the next EU 55 common agricultural policy (CAP), ending a long process that started in June 2018, when the 56 European Commission, led by Jean-Claude Juncker, presented a proposal that profoundly reshaped 57 the CAP with the aim of defining a new governance model for post-2020 European agriculture. 58 However, the approval process was slowed down by the issues of Brexit dependant budget cuts, the 59 reshaping of rules for the management of the EU Multiannual Financial Framework (MFF), the 60 settlement of a new EU Commission led by Ursula von del Leyen, which launched the European 61 Green Deal Strategy and the consequent From Farm to Fork agricultural Strategy, and finally, by the 62 COVID-19 pandemic. Therefore, the reform proposal adapted to the new context completed the 63 process of approval in December 2022, with the official publication of the new CAP regulations. 64 The “reformed” CAP has an innovative nature in structural terms, being much more focused on 65 environmental and social sustainability issues, as clearly expressed by the 3 general objectives1, each 66 of them detailed in three specific objectives, and aimed at a comprehensive digitization-based 67 modernization of the agri-food sector (1). 68 1 Reg. 2117/2021, art. 5: (a) to foster a smart, competitive, resilient and diversified agricultural sector ensuring long-term food security; (b) to support and strengthen environmental protection, including biodiversity, and climate action and to contribute to achieving the environmental and climate-related objectives of the Union, including its commitments under the Paris Agreement; (c) to strengthen the socioeconomic fabric of rural areas. WEP – Wine Economics and Policy Just Accepted Manuscript 3 As the wine sector in the EU is highly supported and regulated by CAP (2, 3, 4), and the EU is a key 69 actor in the global wine market, a new CAP may have a quite significant relevant effect on such 70 markets in terms of competitive scenarios, product innovation and institutional settings. Therefore, it 71 is of some interest to look at the key aspects of CAP reform in general and in relation to wine, whose 72 policy to date has been characterized by many peculiarities, which will be mitigated in the next 73 programming period, thanks to the New Delivery Model. Despite this, European wine policy remains 74 structured on two main blocks of interventions: expenditure measures on the one hand, and regulatory 75 measures on the other. For this reason, it is worth to reflect on what news and what effects can be 76 expected following its entry into force, starting from January 2023. 77 78 1 The main changes 79 In terms of general architecture, the new CAP maintains the current structure, which combines two 80 components of equivalent importance, expenditure and regulatory measures2. On the one hand, the 81 expenditure measures consist of direct payments to farmers to ensure income stability and to 82 remunerate them for public goods not normally paid for by the market, sectoral interventions to 83 stabilise and/or improve the functioning of the concerned markets, and rural development policy, 84 which provides for the structural strengthening of the agricultural sector and rural areas. On the other 85 hand, the regulatory measures, defined by a very large number of different provisions, include 86 provisions concerning many different areas of interest for agriculture and agri-food products. 87 However, beyond this element of continuity, the main novelty of the CAP 2023-2027 is a new tool, 88 the Strategic Plan, that each Member States can draw upon for the joint programming of all 89 expenditure measures to achieve the CAP objectives, also setting quantitative targets and milestones 90 consistent with the achievement of the “more ambitious” environmental and social targets (5). This 91 novelty, which actually empowers EU Member States in the shaping of the CAP intervention, is part 92 of the intended innovation of the CAP management, defined as a new delivery model (NDM) aimed 93 “to shift the policy focus from compliance to performance, and rebalance responsibilities between 94 the EU and the MS level with more subsidiarity [….] improving policy coherence across the future 95 CAP and with other EU objectives”3. 96 The rules concerning the CAP Strategic Plan and therefore the management of all expenditure 97 measures are laid down by the new Regulation 2115/2021 (CAP Strategic Plan Regulation). The 98 regulatory measures in force with the reformed CAP are those included in Regulation 1308/2013, 99 2 These measures define a complex framework which represents a characterising part of CAP; but nevertheless, the EU agricultural policy is frequently identified only with its expenditure measures. 3 Explanatory memorandum to reform proposals (6, p. 2). WEP – Wine Economics and Policy Just Accepted Manuscript 4 modified by the new Regulation 2117/2021 (Amendment Regulation). Below, a brief but complete 100 description is presented of the numerous and diverse changes that have been approved for the wine 101 sector as a result of this long and complex reform process in the final stages, with the approval of the 102 national Strategic Plans scheduled for the end of 2022. 103 104 2 Towards a new wine policy 105 The CAP reform introduces changes in the wine sectoral intervention and regulatory measures, but 106 does not turn upside-down the “EU wine policy” structure, consistently with the Commission view 107 on the effectiveness of the current asset of such policy: “while the successive 2008 and 2013 reforms 108 of the wine policy have overall reached their objectives, resulting in economically vibrant wine sector, 109 new economic, environmental and climatic challenges have appeared. Therefore, the regulation 110 foresees a number of specific amendments to existing rules to cope with these challenges”4. AS a 111 matter of fact, the analysis of the performance of the EU wine sector in the recent past has shown that 112 there is no evidence of satisfactory progress towards high levels of environmental sustainability and 113 a satisfactory exploitation of the potential of vitivinicultural activities in the development of marginal 114 areas (1). 115 116 2.1 The new financial support 117 The set of spending measures destined to the wine sectors will rely on a reduced budget with respect 118 to the “old” CAP (approximately 1 billion €/year, - 3.9%), but with an enlargement of the range of 119 the intervention types, or measures, that Member States may make available for wine actors5. 120 In the new policy framework, wine growers and wine producers and marketers will be potential 121 beneficiaries of seven types of “structural” measures that aim to strengthen the competitiveness of 122 the wine sector in MSs, allowing the financial support of improvements at different levels of the 123 supply chain. One measure sustains wine growers for “restructuring and conversion of vineyards” 124 with the objective of improving sustainability by changing the vineyard management techniques, 125 replanting the vineyard in better sites or using varieties more suited to the eco-physiological condition 126 of the farm. Four different measures sustain material (physical assets) and immaterial (software, 127 design costs, licenses, patents) investment and promote innovation activities and best practices to 128 achieve better wine quality from the perspective of sensory properties and environmental and social 129 sustainability. A new measure is included in this group, specifically designed to finance investment 130 4 Explanatory memorandum to reform proposals (6, p. 14). Such arguments are consistent with the last evaluation of CAP measures applicable to the wine sector (7). 5 The complete description of the new CAP sectoral interventions for wine is included in article 58 of Regulation 2021/2115 (CAP Strategic Plan Regulation). WEP – Wine Economics and Policy Just Accepted Manuscript 5 targeted to achieve specific improvements in terms of the carbon or water footprint. Two measures 131 are designed to improve the position in the market of EU wines, including within Third Countries, 132 which involves financing wine producer’s true promotion activities, public relations, advertising, 133 wine exhibitions, while inside the EU are admitted only actions limited to information campaigns 134 about PDO and PGI, to comply with the opposition of the Directorate General for Health and 135 Consumer Protection of the European Commission (DG SANCO) policies that could result in an 136 increase in alcohol consumption in the EU. 137 Three measures offer a set of tools to assist enterprises in facing different economic risks: harvest 138 insurance, mutual funds and green harvesting. These were conceived as preventive instruments able 139 to encourage a responsible approach to crisis situations after the dismantling of the traditional market 140 protection measures (price support, distillations, and private storage, with most aid in force until 141 2008) and are confirmed in the new CAP. 142 Two new measures finance actions undertaken by interbranch organisations recognised by Member 143 States6 in the wine sector aimed at i) enhancing the reputation of Union vineyards by promoting wine 144 tourism in production regions, and ii) improving market knowledge. 145 Finally, a new measure finances the access of companies in the wine sector to advisory services, 146 particularly concerning the conditions of employment, employer obligations and occupational health 147 and safety, explicitly introducing the social dimension within sectoral wine interventions. 148 It is up to each Member State to decide which measures to make available for its own actors in the 149 wine production chain7 and how to distribute the wine national budget, with only an obligation to 150 allocate at least 5% of the budget for actions with a positive impact on the environment, climate 151 change or sectoral sustainability. Interestingly, a first analysis of the projects8 of the CAP Strategic 152 Plan delivered by Member States to the European Commission shows that the resources assigned are 153 almost totally directed to the “old” structural measures, almost replicating the previous allocation 154 patterns (1, 8). The exclusion of the new measures is probably partially related to the fact that these 155 were introduced only in the last version of the regulation, when the draft of the CAP Strategic Plans 156 was already in an advanced phase, and the stakeholders did not have enough time to evaluate their 157 real interest. To this must be added the fact that the measures directed to interbranch organisation are 158 not applicable in all EU wine producers’ countries, as those existing are not always recognised under 159 the EU rules. The new measures could eventually be selected in the case of a future update of the 160 6 According to Regulation (EU) 1308/2013. 7 It is worth to remember that the wine sectoral interventions are addressed to different beneficiaries along the wine production chain, including nonagricultural actors. 8 The projects of CAP Strategic Plans are currently (October 2022) in a revision phase according to the comments that the Commission sent to Member States and will be fully operative before the end of the year. WEP – Wine Economics and Policy Just Accepted Manuscript 6 CAP strategic plans. Finally, it should be underlined that some (old and new) sectoral measures are 161 addressed to objectives also pursued through the rural development policy. In these cases, the interest 162 in their implementation under the sectoral interventions could be greatly reduced, as confirmed, for 163 example, by the limited resources allocated by MSs in favour of the risk management measures, 164 which are usually supported within the rural development policy framework. 165 If the wine sector, as a whole, is going to be less funded by sectoral intervention, more financial 166 resources should reach winegrowers9 through the renewed mechanisms for calculating the CAP direct 167 payments. Winegrowers are only receiving direct payments from 2013, and in some of the wine EU-168 producing countries, they received only a small amount of money10. Now, the new CAP should bring 169 good news for agricultural actors in the wine sector, as the reform has among its targets the 170 rebalancing of the distribution of such payments in all Member States. In the future, all winegrowers 171 should receive a payment proportional to the farm area similar to that received in other sectors, under 172 the condition that they comply with some basic requirements related to the adoption of sustainable 173 practices. Moreover, they could benefit, according to the national decision, from additional payments 174 in the case of the adoption of the new voluntary environmentally friendly practices laid down in each 175 CAP Strategic Plan (the so-called eco-schemes11). Regardless, the actual increase in the resources 176 coming from the direct payment budget will likely be different in each Member State, as both the 177 increase in the basic payment assigned or the number of eco-schemes actually accessible for wine 178 growers will depend on the single Member State decisions. 179 As already mentioned, in the “new” CAP, as in the “old”, actors in the wine sector may also apply 180 for financial support from the rural development policy in competition with actors belonging to other 181 agricultural sectors, as no preassigned budget for grape or wine producers exists. Regardless, in the 182 new policy framework, rural development measures open to vitivinicultural actors should be planned 183 consistently with those of sectoral intervention inside the CAP Strategic Plan, with the aim of 184 facilitating the accomplishment of the CAP objectives and of those specifically defined for the wine 185 sector12. 186 187 188 189 9 In the CAP, the definition of “winegrowers” refers only to producers which are also involved in the agricultural phase of grape productions. 10 The current value of the payment per hectare of vineyards is, in some Member States, different from other surfaces due to different rules in the Member States used in the implementation of the decoupling processes started with Agenda 2000 (9). 11 Reg. (EU) 2117/2021, art. 31 12 Reg. (EU) 2117/2021, art. 57. WEP – Wine Economics and Policy Just Accepted Manuscript 7 2.2 New rules 190 Most of the amendments to the EU wine policy announced by the Explanatory Memorandum to deal 191 with the new economic, environmental and climatic challenges concern the rules for the marketing 192 of agricultural products and the functioning of the agricultural sector, which are laid down by the 193 Amendment Regulation13 and includes relevant novelties. 194 The Amendment Regulation allows the inclusion of varieties coming from a cross between Vitis 195 vinifera and other species of the genus Vitis in the production of wines with a protected designation 196 of origin (PDO). This rule change is rather radical, as genetic purity has been, over time, a distinctive 197 aspect of the regulation of European terroir-linked wines (2). In introducing this change, the EU 198 recognises that these new varieties may represent a gamechanger for the future of sustainable 199 winemaking [10]. Indeed, genetic research and nursery activities are delivering new interspecific 200 hybrids obtained by multiple ‘backcrosses’ between some of the widely planted Vitis vinifera grape 201 varieties (e.g., Merlot and Chardonnay) with non-vinifera grape varieties, obtaining new varieties 202 with a high percentage of the Vitis vinifera genome, thus aiming to preserve most of the sensorial 203 properties of the “noble parent” [11]. 204 Such novel genotypes have an innate resistance against cryptogamic diseases, allowing a reduction 205 in the use of synthetic pesticides by more than 80% [12] - far greater than the 50% objective set by 206 the European Green Deal, allowing for approximately 60% savings/ha in the cost of treatments and 207 15% savings/ha in vineyard operating costs (13]. The first studies show a positive attitude of 208 consumers towards these new varieties, also known as PIWI14 (14), which therefore promotes all 209 three dimensions of sustainability. Their diffusion could be fostered by the subsidies for restructuring 210 and the conversion of vineyards under the sectoral intervention of the CAP described above. 211 Concerning new production options, the Amendment Regulation lays down the inclusion of the 212 products obtained by wine de-alcoholisation with an alcoholic degree lower than the minimum 213 indicated by the definition of wine15 among the products covered by the wine sector. Such products 214 can currently be produced and marketed only as beverages, but from January 2023, such products 215 will be labelled wine if they comply with the EU approved wine oenological practices16. The de-216 alcoholisation can be total and partial, but only partial de-alcoholisation will be authorised for wines 217 with a protected geographical indication or protected designation of origin. For such wine, the 218 13 Regulation (EU) 2021/2117, art. 1, concerning changes to Regulation 1308/2013. 14 From German: Pilzwiderstandsfahige (disease resistant). 15 Regulation (EU) 1308/2013, Appendix I: At least 8.5% in the northern part of EU (Wine-growing zones A and B); at least 9% in the south (Wine-growing zone C). 16 In the EU, products covered under the wine sector can be produced only by means of the oenological practices and using the substances listed in the EU Regulations: Reg (EU) 1308/2013, Reg. 934/2019, Reg 203/2012.. WEP – Wine Economics and Policy Just Accepted Manuscript 8 possibility of de-alcoholising must be included in the product specification, which should contain a 219 description of the partially de-alcoholised wine and, where applicable, the specific oenological 220 practices to be used to make the partially de-alcoholised wine or wines, as well as the relevant 221 restrictions on making them. 222 The Amendment Regulation recognises that further research and experimentation is necessary to 223 improve the quality of the de-alcoholised wines, but the inclusion of such products in the wine sector 224 allows producers to obtain subsidies for investments and R&D activities using sectoral intervention 225 or rural development measures, again showing the high level of interconnection among different 226 instruments (expenditures and regulatory measures) within the CAP for the wine sector. Regardless, 227 it will likely be necessary to define new specific rules for the production of such products as the 228 subtraction of alcohol, especially if the final result is zero or very low alcohol, requires specific 229 technological interventions to rebuild the sensory equilibrium, which are currently not included in 230 the list of EU oenological practices. 231 Interestingly enough, inclusion in the list of EU vitivinicultural products of de-alcoholised and 232 partially de-alcoholised wines was not considered in the first draft of the Amendment Regulation, as 233 a result of the co-decision process after the renovation of the EU Commission and Parliament in 2019. 234 Such novelty also represents a break from the traditional European wine regulation, as the alcohol 235 content was considered an essential part of the identity of wine in the European tradition. Not by 236 chance, within the OIV for years EU Countries, although with different nuances, have been against 237 the inclusion of such product in the wine categories of the OIV International Code of Oenological 238 Practices, pressing for their inclusion in the category of “Products derived from grapes, grape must 239 or wine”. Likely, most European wine stakeholders are now confident that the market opportunities 240 of such products are more important of the tradition17. The products of wine de-alcoholisation are not 241 new in the market, but only recently have experienced a relevant growth. In particular, they have 242 grown from US $7.8 billion in 2018 to $10 billion in 2022 in ten different key markets. Moreover, 243 IWSR forecasts that no- and low-alcohol product volumes will grow by +8% yearly between 2021 244 and 2025. 245 Further amendments of the EU wine regulatory framework concern rules about labelling, new 246 planting of vineyards and interbranch organisations related to PDO wines. 247 17 The preliminary statements of the Amendment Regulation (whereas 40) explain the choice concerning de-alcoholised wines only referring to market opportunities. But it can be assumed that such choice was supported also by the awareness that these products comply with the recommendations recently expressed by WHO in the framework of the Global Action Plan on Harmful Consumption of Alcohol (https://apps.who.int/gb/ebwha/pdf_files/EB150/B150_7Add1-en.pdf). https://apps.who.int/gb/ebwha/pdf_files/EB150/B150_7Add1-en.pdf WEP – Wine Economics and Policy Just Accepted Manuscript 9 To provide a higher level of information to consumers, complying with the EU general regulation of 248 labelling of food products, the wine label will include a nutrition declaration and a list of ingredients. 249 Producers will have the option of limiting the contents of the nutrition declaration on the package or 250 on a label to only the energy value, making the full nutrition declaration and the list of ingredients 251 available on electronic support18. The Commission is delegated to lay down rules for the indication 252 and designation of ingredients, with new rules coming into force after December 2023. The task of 253 the Commission is not trivial, as the listing of what is an ingredient, beyond grape and must, is not 254 straightforward. In principle, all the oenological substances listed in regulation 934/2019 as additives 255 should be labelled19, but professional organisations are lobbying to limit the obligation of labelling 256 to those that are not already present in the grape. 257 Moving on to the scheme of authorisations for vine plantings, in force since 1 January 2016, it is 258 extended from 2030 to 2045, with two mid-term reviews in 2028 and 2040 to evaluate the operation 259 of the scheme and, if appropriate, apply changes. It is therefore significantly extended, with minor 260 revisions, the current regime that allows Member States to make available each year authorisations 261 for new plantings corresponding to 1% of the total area actually planted with vines in their territory20. 262 This choice also confirms the impossibility of reallocating the area corresponding to the grubbed-up 263 vineyards in farms that give up viticulture to other farms. The outcome of the CAP reform results in 264 a substantial confirmation of the recently reformed scheme, which is effective in preventing structural 265 surpluses of supply, but that in progress could determine a depletion of the production potential and 266 hinder the structural strengthening of active and competitive farms in well developed areas, as well 267 the improvement of the socioeconomic fabric of marginal areas developing vitivinicultural activity, 268 which represents one of the few productive options for farmers. 269 The CAP reform introduces new rules that can empower interbranch organisation related to PDO and 270 PGI wines21 in managing the position of the wines of interest in the market and deal with the 271 distribution of added value along the supply chain. According to the new rules, interbranch 272 organisation of producers of PDO and PGI wines will be allowed to request of Member States to lay 273 down, for a limited period of time, binding rules for the regulation of the supply of their wines of 274 interest. Moreover, such interbranch organisations may provide non-mandatory price guidance 275 18 Anticipating the coming in force of the Amendment Regulation, some actors of the European wine industry developed the already operating U Label platform (https://www.u-label.com/) which can support wineries in implementing the e-labelling for wine products. 19 The substances listed in the Regulation 934/2019 are classified in additives and processing aids; the processing aids, which are the most numerous oenological substances and that could be present in the wine only as residues, must not be labelled. 20 As measured on 31 July of the previous year. 21 Recognised by Member States according to Regulation (EU) 1308/2013. https://www.u-label.com/ WEP – Wine Economics and Policy Just Accepted Manuscript 10 indicators concerning the sale of grapes for the production of wines of interest, provided that such 276 guidance does not eliminate competition with respect to a substantial proportion of the products in 277 question. In any case, the intention of the EU to empower interbranch organisations is also revealed 278 by the new measures introduced in the sectoral intervention reserved to these bodies. However, the 279 extension of the powers of interbranch organisations may raise questions about conformity with the 280 principles of competition law but up to now no concern has been expressed by stakeholders. 281 282 3. Potential impacts 283 In summary, the CAP reform is leading to interesting changes in the wine policy, which has potential 284 impacts in the wine market at the European and global levels. 285 The amount of financial resources to be transferred to wine actors is not expected to change much, 286 but complex rule changes should determine other substantial evolutions, such as the improvement of 287 the sustainability level that could make EU wine supply more consistent with the market demand and 288 comparable to non-EU competitors. Therefore, the balance of power on the market should not be 289 affected by the new CAP. Moreover, the scheme of authorisations for vine plantings represents a 290 remarkable contribution of the EU to the global market equilibrium, which, however, could hamper 291 the reaction of EU wine producers in the case of a wine demand rise. 292 More significative impacts of the CAP reforms will be on the labelling practices and innovation 293 options. 294 Concerning labelling, the new EU rules are going to define a new global standard for trading. Third 295 Country producers will be required to comply with such rules, and consumers of EU wines in Third 296 Countries will become accustomed to the new labelling rules. These could also be a driver for a new 297 OIV wine labelling standard22. However, beyond the aspects related to the technicalities of labelling, 298 the new regulation could have interesting indirect effects in terms of changes in oenological practices. 299 Such changes could result in a demand for new equipment or new services. In fact, most additives 300 (i.e., the substances subject to labelling), which do not correspond to substances already present in 301 the grape, can be substituted with physical treatments23. Therefore, wineries could be induced to 302 change their processes to limit, as much as possible, the list of labelled items. As such, physical 303 treatments require specific equipment that could be hard to pay back in small or medium wineries, 304 22 The EU decision to allow the electronic labelling of mandatory information is likely something without precedents; this is very relevant because the question of electronic labelling is being debated in Codex Alimentarius at the present time. 23 As suggested by prof. Moio in his contribution “Vers une logique de l’etiquetage du vin” presented at the Conference at the Bordeaux University, June 21, 2018. WEP – Wine Economics and Policy Just Accepted Manuscript 11 and a new demand for external services could emerge, which will proceed in parallel to the demand 305 for the supply of services for managing the e-label that will be linked with the physical label. 306 Moreover, the disclosure of a limited category of oenological substances could bring the attention of 307 media and of consumers to the whole of complex oenological substances and practices that are 308 allowed in the EU and are of common use elsewhere. The awareness of most consumers about how 309 the wine is produced is currently quite scarce, so the additional compulsory information could result 310 in an increasing demand for full disclosure on how wines are made, going beyond what is requested 311 by the new rules, resulting in pressure for the exclusion of practices and processing aids that could be 312 badly perceived by consumers. The final results could be positive, including a general orientation 313 towards a “light” or “precision” oenology, which rely on high-quality grapes and minimal 314 intervention in the winery. On the other hand, the higher transparency of the complex oenological 315 practices and substances commonly used in wine making should be accompanied by an appropriate 316 communication effort to prevent dangerous and unjustified trust issues. 317 Concerning the new rules about the partially or totally de-alcoholised wine and the use of hybrids in 318 the production of PDO wines, these will have practical impacts that are currently difficult to foresee. 319 The EU is opening to de-alcoholised products presented as “wine”, along with the contemporary 320 positive forecast of market analysis agencies, are now arousing the interest of many EU companies. 321 The resources of the sectoral intervention could ease access to indispensable investments, at least for 322 the larger of them. The actual market growth will depend, first on how much the interested companies 323 will be successful in delivering quality consistent wines, and second, on successfully managing 324 production costs that are rather high (15, 16). Moreover, the possible societal concern for the adverse 325 social (overcompensation alcohol assumption - 17) and environmental (energy use -18) implications 326 of these products may also play a role. In the case of wide consumer acceptance, it is possible to 327 foresee that new service providers will emerge, organised to manage in specialised plants, compliant 328 with the strict fiscal regulation of alcohol production and conservation, the dealcoholisation process 329 and complementary operations. 330 Concerning the new hybrid resistant varieties, the actual speed and dimension of their diffusion will 331 depend on the solution to many issues. Permission to include such varieties is increasing the interest 332 of producers and policy-makers, but new fungus-resistant grapevine varieties still represent an 333 immature technology whose adoption requires investments with a long payback (19). In fact, the 334 stability of resistance/tolerance to the targeted pathogens is unknown, and a strong research effort is 335 even now devoted to obtaining new fungus-resistant grapevine varieties with multiple genes for 336 resistance (11). Moreover, the implications of the use of such new varieties regarding other pathogens 337 are not clear. Last but not least, the choice of available new varieties is still restricted with respect to 338 WEP – Wine Economics and Policy Just Accepted Manuscript 12 the huge differences in wine styles, soil and climate conditions of viticulture, and a large uncertainty 339 persists concerning the optimal viticulture and oenological practices to adopt. 340 The EU wine sector is moving in the coming years towards a normative framework with many 341 differences with respect to the past. With regard to the new CAP organisation, only when the CAP 342 Strategic Plans, in particular, and the new delivery model, in general, will be in force will it be 343 possible to understand if this new organisation will be more effective in sustaining the wine sector, 344 also reducing the red tape burden frequently criticised by practitioners and scholars (2, 3). With regard 345 to the wine policy, EU wine producers will likely be better supported in achieving more ambitious 346 environmental targets and will be inspired to evaluate new options in terms of product and processes 347 and to deal with public opinion pressures that could result from the new labelling rules. The labelling 348 rules, at least in the short run, could result in an additional non-tariff barrier to trade (20, 21). 349 Regardless, a relevant consequence of the CAP reform is a significant change of some identity 350 elements of the “European wine charter”: the minimum alcohol degree is no longer a constitutive 351 element of the definition of wine, the wine is no longer the result of a magic (black) box fed only 352 with grape, and the (high) quality of the EU wine is no longer exclusively linked to the Vitis vinifera. 353 Dramatic changes, indeed, that could have unforeseen consequences on the global wine market. 354 355 References 356 357 1 Pomarici, E., Sardone, R. 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