EU Reacts: Demand Goes Up, Vineyards Branch Out


The best way to meet demand is to increase supply.
That's the opinion of the European Union, who recently passed a law which allows vintners to increase the area of their vineyards by small increments each year.
“Under the new rules, which come into effect on January 1, 2016, vintners will be able to increase the size of their vineyards by a maximum of 1 per cent each year,” Europe Online Magazine reported this past Thursday.
According to the story, the change in laws is due to “strict rules in the European Union” which limited the winemakers' ability to expand the acreage of their vineyards. 
The change comes in the face of stiff competition, the story said.
“Traditional wine growing regions in Spain, France and Italy have long faced competition from countries such as Australia, New Zealand, Argentina or the United States,” Europe Online Magazine reported. 
European Union Agriculture Commissioner Phil Hogan said the new law  will make for a more agile European wine industry.
“The new system provides flexibility for the European wine sector to gradually expand production, in response to growing world demand,” Hogan said.
Statistics from the past few years show that the Old World powerhouses are starting to lose their grip in the world wine scene, the story said. 
“According to a recent study, the EU is losing market share on world wine markets, while consumption around the world is set to rise over the next 10 years,” the article said. “The strongest increases are expected in China and the United States.”
United Kingdom-based Harpers elaborated on the results of the study.
“The changes come of the back of a report … that stated the EU was losing market share to wines from the New World, despite growth in the volume and value of EU exports to third countries since 2008 and a marked improvement in the trade balance,” Harpers reported. “It claimed the market trend showed that the EU wine sector would be increasingly depending on exports from other wine producing areas in the future.”
Though the move looks to be a positive one for the continent, there were some wine industry insiders who weren't too pleased with the decision to increase vineyard acreage. 
“The decision – which has already been approved by EU member states and the European Parliament – was controversial, as critics feared that it would lead to a fall in wine prices,” the article said. 

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