Wine Industry Romania

Wine industry affected by EU reform
Nine O’Clock February 8, 2008

If it weren’t for Germany’s support, Romanian wine production would suffer major losses.

In August 2008 the European Commission will start a wide-ranging reform in the wine industry, a reform that will provision among other things the annual spending of no less than EUR 500 M from the community budget. The sum is meant to support the EUR 1.3 bln worth wine industry by subsidizing its losses, ‘Financiraul’ daily recently informed. According to the mentioned source, the losses will be supported by the tax paying citizens of the EU member states. The losses occur because of the erroneous policy of subsidizing the European producers, a policy that led to gluts. ‘We are witnessing a real battle waged between the important European producers that try to eliminate their competition by way of lobbying the European Commission and by way of diplomacy. In this context, the problem is what is Romania set to lose but most importantly, what is Romania set to win, what are the Romania wine producers and consumers set to win after paying this bill that does not belong to them’ Radu Podgoreanu, former member of the Committee on Agriculture within the European Parliament and active participant to the negotiations over the reform package, has stated.

For example, one of the provisions of the European Commission’s reform proposal consisted of banning sugar in wine. If the MEPs within the Committee on Agriculture would not have opposed it, 85 per cent of the production would have become illegal and 2.5 million employees would have lost their jobs. Fortunately for Romania, the interests of countries such as Austria, Germany and Belgium would have been equally damaged, so that the end of 2007 saw the successful negotiation of a compromise with the European Commission.

Romania not to receive same subsidies like older member states

On the other hand, our country will not benefit from the same wine industry subsidies that the older member states benefit from. The formula put forward by the European Commission includes criteria similar to the historical subsidies awarded to the old member states but applicable to the new member states. According to Ovidiu Gheorghe, the president of the National Wine and Vineyard Employers, ‘a low budget for Romania would be a blow for the wine industry, affecting production, labor force and consumers, but the partnership with Germany, the country that has significant clout in negotiations, can solve the problem’.

Romania’s wine competitiveness drops
Robert Comanoiu
Bucharest Daily News – Mar 29, 2006

Romanian wine exports to Germany decreased by 20 percent in 2005 compared with the former year, mainly because of the powerful competition on the market and incompatible prices. Romania exported 112,197 liters of wine in Germany, in 2005.
Bazil Zarnoveanu, the vice-president of the Association of Wines Producers and Importers (APEV) in Romania, said that the German market is very selective regarding wines coming from Romania. “Romania can compete with other countries only at a quality level because the prices are too high compared with the market’s offer,” said Zarnoveanu at the ProWein Fair held in Dusseldorf.
Zarnoveanu added that Romanian wines are exported in bulk at a price that fluctuates between 50 eurocents and 1.2 euros per liter. Bottled wine is rarely sold and in small quantities, at a price of 1.54 euros per liter.
Most of the Romanian wine producers present in Düsseldorf believe that Romanian wine does not have a good image abroad. Some of them stated that they would prefer to sell on the Romanian market at prices higher than those for export, where clients are paying much attention to quality. “Romanian wine is regarded with reticence by German consumers because it comes from an Eastern European region and the price is not less profitable compared with other offers,” said the exports director of wine producer Cramele Recas, Elvira Cox.
Romanian exports amounted in 2005 at 269,564 hectoliters, down 30 percent compared by 2004. The main export destinations were Germany, Moldova, Great Britain and the U.S.A.

Wine exports increased 47%
Robert Comanoiu
Bucharest Daily News – Nov 7, 2005

According to the data offered by the Wine Producers and Exporters Association in Romania, in 2004 the producer occupied the third place regarding the quantity of wines exported.
Last year, Romania exported 37.5 million liters of wine, worth 26.2 million dollars, accounting for a 47% increase compared with 2000.
According to the Association, Romania exported the largest quantities of wine to Germany, the total exported quantity in this country being 13.4 million liters at a value of 9.4 million dollars. The second largest exports were carried out to the Moldavian Republic, with 4.7 million dollars, followed by Great Britain – 1.6 million liters totaling 2.6 million dollars and the United States – 0.7 million dollars.

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