05 FEBRUARY 2003

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Labour’s wine boomerang

EU’s strict wine labelling regulations also apply to non-EU traders

By Kurt Sansone
It appeared to be a trump card for Alfred Sant’s anti-membership campaign, but the controversy raised over the wine labelling regulations of the European Union will come back to haunt him if a prospective Labour government decides to negotiate a free trade agreement with the EU.
The Malta Financial and Business Times can reveal that the EU’s strict wine labelling regulations apply to all the trading partners with which the Union has an agreement.
The agreement on trade in wine signed between the European Union and Australia in 1994 clearly stipulates that for Australian wines to be exported to the EU they had to adhere to the strict labelling regulations.
Malta cannot expect to be treated differently whether in or out of the EU. Wine labelling is essentially a consumer issue and at the centre of EU trading policy.
Upon membership Maltese wine producers cannot label their wines as ‘Maltese quality wines’ unless the grapes used to produce the wine are wholly grown and harvested in Malta.
The same would apply under a free trade agreement, laying to rest claims by the Opposition that partnership is a more flexible solution than membership.
Article 2 of the EU-Australia agreement states: " ‘wine originating in’ shall mean, when followed by the name of one of the Contracting Parties, a wine made within the territory of that Contracting Party from grapes which have been wholly harvested and produced in the territory of that Contracting Party."
Currently the wine industry imports almost 70 per cent of its grapes and wines produced in this way cannot carry the label ‘wine originating in Malta’ under EU regulations.
Aid to wine industry
On Sunday the Labour leader quoted from a letter that three of the largest wine producers had sent to the relevant authorities in December last year. Quoting from the letter, Dr Sant said that implementing EU regulations would wipe out 99 per cent of the wine producing industry in Malta.
However, during the negotiations with the EU, government obtained a special concession by which the amount of land used for growing vines would be able to increase to 1000 hectares from the current 300 hectares. This concession was obtained despite the EU’s policy to limit the increase in the amount of land dedicated to vine growing.
The negotiated position means that in a couple of year’s time wine producers would have enough grapes harvested in Malta to be able to produce ‘Maltese quality wines’ that strictly adhere to EU regulations.
Two of the producers mentioned by Dr Sant, namely Marsovin and Delicata have been on record saying that they were ready to face up to the challenge. Both have embarked on investment programmes earmarked to make them competitive in the new trading environment.
Under the negotiated agreement government would be allocating Lm2.1 million to encourage farmers to plant quality vines. Producers would also benefit from more than Lm1 million to be able to import grapes for the production of ‘table wine’.
Already EU compliant
But for one Maltese producer the whole controversy is of no concern. Roger Aquilina, oenologist at Meridiana Wine Estate told The Malta Financial and Business Times that their wine conforms 100 per cent to EU regulations.
"We have always conformed to EU regulations and the current issue does not concern us at all. We already export ‘quality wines’ to EU member states without any problems. The strong point of our product is not just that it is a good wine, of which there are hundreds in Europe, but that it is a good ‘Maltese’ wine."
Mr Aquilina said that from a consumer’s perspective it is only right to provide correct labelling. He then described the current situation by drawing an analogy. "Imagine a Spanish producer exports potatoes to Holland and says that they are a produce of Malta, knowing full well that Maltese potatoes are highly prized in Holland. We have a similar scenario where wines produced from imported grapes are being labelled as ‘Maltese’ wines."
Mr Aquilina continued: "I believe that from a farmer’s perspective current practices contribute to the depreciation of the Maltese farmer’s crop."
New Zealand’s wine fury
The EU’s strict labelling regulations were at the heart of a heated controversy between the European block and New Zealand last year.
New regulations that came in force in January this year were heavily criticised by New Zealand wine producers because they were perceived as restricting trade in the EU. The New Zealand producers even described the new regulations as the "Brussels edict."
This goes to prove that non-membership of the EU still means that Malta would have to take upon it a number of trade obligations that could pose a challenge for Maltese manufacturers.
New Zealand can never be an EU member state but to continue enjoying access to the EU’s internal market wine producers from down under have had to adhere to the strict labelling regulations.
kurt@maltamag.com



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Editor: Saviour Balzan
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