Spain's Castilla La Mancha (CLM), Europe’s biggest vineyard area, is reeling from one of the worst harvests in decades, highlighting concerns over the European Union's restructuring and conversion of vineyards program, which accounts for the lion's share of EU wine sector funding.
This year, yields of Tempranillo (known as Cencibel locally) and other red grape varieties in CLM have plunged by between 30 and 50 percent, as a result of drought, extreme heat and storms, putting growers – already faced with increasing production costs and low grape prices – on a knife edge, according to regional grower organizations.
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In recent years, the replanting and expansion of Tempranillo, which accounts for about half of CLM's vineyard area, has seen bush vines converted into vertical shoot positioning (VSP) viticulture to allow for mechanized harvests and greater production efficiencies.
Yet attempts to increase yields – which require substantial use of water – have been implemented when water is scarce, with drought periods rising.
Bush vines require less water and are, according to Spanish Professor Vicente Sotes, more resistant to climate change than VSP vines. Sotes, one of Spain's leading experts in viticulture, has for several years been a vocal critic of Tempranillo plantings in CLM, which he has said fare less well in the region.
Back in 2012, EU funding watchdog, the European Court of Auditors (ECA) said that increasing yields, (to the detriment of quality) and reducing labor costs, had reduced the impact of balancing supply and demand through the grubbing up vineyards.
And now, in a report into the restructuring and conversion of vineyards, the ECA says that annual €500 million ($528m) restructuring vineyard program has had "little or no environmental ambition" and "no clear impact on competitivity".
Betting on red
According to a Spanish government report on restructuring of February 2023, Spain has received €2.48b ($2.62b) in EU vineyard restructuring funds since 2001, affecting more than half of the country's vineyards.
In the case of Castilla La Mancha, (CLM), which has received more than half of Spain's EU restructuring funds, its move to increase yields for red grape varieties appears to have backfired. In September, the CLM's regional government said a staggering 11 million hectoliters of surplus stocks red wine remained unsold.
"We have a little problem with red wine," Julián Martínez Lizán head of agriculture at the CLM region government told Castilla La Mancha Radio station, attempting to play down concerns.
Between 2017 and the 2022, CLM authorities excluded Airen, a native white grape variety known for its resistance to extreme heat and drought, from the list of available varieties for the restructuring measure in order to favour varieties such as Syrah, that could better respond to market expectations.
The European Court of Auditors report says the European Commission backed CLM because it believed that replacing Airen, with other grape varieties with higher grape prices would increase the turnover of wine companies.
The ECA report comes amidst the surplus red wine production in key European regions such as Bordeaux and concerns over drought in the Rhône valley.
In its report the ECA criticizes the EU for requiring member states to provide only a minimum of 5 percent of the wine allocation funds towards environment and climate objectives with restructuring funds allocated without environmental goals.
It says: "EU policy has not proved successful in making wine growers more competitive. In the five countries audited, projects are funded irrespective of content or ambition, and without regard to any criteria for fostering competitiveness.
"Non-structural changes to or normal renewals of vineyards are also financed, even though such actions are not eligible. Also, beneficiaries are not required to report on how restructuring has made them more competitive. Moreover, neither the European Commission nor the member states assess how the projects that are supported actually help to make wine growers more competitive."
ECA vs European Commission
In its report, the ECA lambasts the EC over its decision to end environmental conditions on the allocation of restructuring and planting of vineyards funding.
The report criticizes the EU for ending cross-compliance for restructuring funds – a mechanism whereby payments to farmers are subject to meeting environmental requirements over the next five years.
Replying to the ECA report, the European Commission has said that there are now greater environmental goals within the wider scope of the reformed Common Agricultural Policy (CAP), and that these changes should be bought into consideration.
However, speaking to Wine-Searcher, Joëlle Elvinger, Dean of Chamber at the ECA who led the restructuring of vineyards report audit said: "The EC referred to other instruments of the wine policy that target more environmental objectives, as well as other measures of the common agricultural policy which are also available to wine growers (e.g. conversion to organic farming, agro-environment-climate measures, etc.).
"However, our remark concerned the lack of environmental ambition of the interventions within the restructuring and conversion measure and/or within the allocation of new plantings or the authorization for replanting, i.e., the key features of the sectorial policy directly targeted at the wine sector. Since the restructuring measure represents half of the budget of the wine policy, ECA considers that it is crucial, considering the new challenges that the wine sector will face (drought, natural calamities, etc.) to take environmental considerations into account when vineyards are planted."
Tuscany increases irrigation
The findings of the ECA report follows visits to key European wine regions including Italy’s Tuscany and Spain’s Castilla La Mancha.
"In Italy, we analyzed in depth the case of the Tuscany region, which is among the first beneficiaries of the restructuring measure," Elvinger said.
“Here the changes on the training system were not so radical as in CLM (where the requirement for more water could be linked either to the switch to a vertical position, but also to the switch to a more water-intensive wine variety). Changes in Tuscany concerned more the plant density than the training system itself (for example from Guyot simple to Guyot double). Thus, in Tuscany we did not see any restructuring project that moved from bush to trellis.
"While the installation of an irrigation system is not eligible under the restructuring measure in Spain and in Greece, it is eligible for growers in Italy. In Tuscany, we saw holdings where irrigation was installed while restructuring a vineyard parcel. Growers told us that they would use it only in the first three years of the plant and for emergency irrigation. Yet, this, potentially increases the water used."
