Commission Delegated Regulation (EU) 2024/1995 of 19 July 2024 on a temporary exceptional crisis distillation measure to address the market disturbance in the wine sector in Portugal in the marketing year 2024/2025
Commission Delegated Regulation (EU) 2024/1995of 19 July 2024on a temporary exceptional crisis distillation measure to address the market disturbance in the wine sector in Portugal in the marketing year 2024/2025THE EUROPEAN COMMISSION,Having regard to the Treaty on the Functioning of the European Union,Having regard to Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007OJ L 347, 20.12.2013, p. 671, ELI: http://data.europa.eu/eli/reg/2013/1308/ojb., and in particular Article 219(1) in conjunction with Article 228 thereof,Whereas:(1)In order to prevent market disturbances in the Union wine market for marketing year 2023/2024, the Commission adopted Delegated Regulation (EU) 2023/1225Commission Delegated Regulation (EU) 2023/1225 of 22 June 2023 on temporary exceptional measures derogating from certain provisions of Regulation (EU) No 1308/2013 of the European Parliament and of the Council to address the market disturbance in the wine sector in certain Member States and derogating from Commission Delegated Regulation (EU) 2016/1149 (OJ L 160, 26.6.2023, p. 12, ELI: http://data.europa.eu/eli/reg_del/2023/1225/oj). including exceptional crisis distillation in certain Member States. The aim of the measure was to reduce the excessive stocks levels registered in certain of the main Union wine producing regions, affecting in particular red and rosé wines, as a consequence of the cumulated impact of different crises during the previous years as well as the general trend of reduction of wine consumption in the Union and of exported volumes in a context of high inflation for consumer and high costs for wine producers.(2)As a result, more than 3,5 million hectolitres of red and rosé wines were removed from the market in six producing Member States (Germany, Spain, France, Italy, Hungary and Portugal). The removal of these volumes, combined with the decrease of production in the Union in 2023 (–10,5 % compared to the previous year) and in important producing Member States (-24 % in Italy and -21 % in Spain) has translated into a more balanced market for the current marketing year in general, even if the market situation remains fragile in the whole Union.(3)In contrast, Portugal experienced the highest harvest increase among Member States producing wine in 2023 (+ 10 % above the previous year, and +15 % for the segment of red wines bearing a protected designation of origin or a protected geographical indication) reaching a total production of around 7,5 million hectolitres. In the meantime, domestic sales of Portuguese red wines protected by a denomination of origin or a geographical indication in the national market have only marginally recovered by +2,3 % until March 2024 compared to the same period in 2023, while exports until April 2024 have decreased by –1,5 %. This situation is weighing particularly on the market segment of Portuguese red wines protected by a designation of origin or a geographical indication, which level of stocks is estimated to further increase by 29 % by July 2024 compared with 2023, and by 46 % compared to the trimmed average of the 5 previous years.(4)The cumulation of stocks exerts a considerable pressure on prices in the Portuguese wine market. If no action is taken rapidly, the situation threatens to further disturb the national market with the arrival of the 2024 harvest, as wine producers will have no storage capacity left for the new production and will be forced to sale at even lower prices. The current pressure in the Portuguese wine market and the urgency for Portuguese producers to make available enough storage capacity for the new harvest risk to a certain extent to affect as well other Member States wine markets that could receive part of the excess of supply in Portugal and be sold at low price, with or without their original denomination of origin or geographical indication.(5)Removing from the Portuguese wine market part of the volume in stock for the most affected market segment of red wines protected by a denomination of origin or a geographical indication, should help Portugal to address the market imbalance and prevent the current disturbances from turning into a more severe or prolonged crisis in Portugal, and from spreading to other Member States’ wine markets. In spite of the measure adopted in 2023, the stock of red wines protected by a designation of origin or a geographical indication in Portugal are expected to be, by end July 2024, 2,25 million hectolitres higher than the record level of a year before, which represent 63 % of a whole average harvest. The cumulated stocks for these categories will reach, by the end of the current marketing year, two and a half times the volume produced in 2023, while in average ending stocks are less than two times an average harvest.(6)In order to reduce pressure on the market it would be necessary to remove at least 15 % of the stocks’ increase, which amount to around 340000 hectolitres. At a compensation level 20 % below recent market prices the measure would require some EUR 15 million. Portugal has declared its incapacity to remove from the market the volume of wine in excess with national payments under Article 216 of Regulation (EU) No 1308/2013. Any other measures available under Regulation (EU) No 1308/2013 appear to be insufficient or not suitable. Therefore, it is pertinent to make use of the agricultural reserve to implement a targeted crisis distillation in Portugal.(7)To avoid distortion of competition, the use of the obtained alcohol should not be permitted for the food and drink industry and be limited to industrial purposes, including disinfection and pharmaceutical, and energy purposes. To avoid any abuse or overcompensation following the implementation of this exceptional measure, it is pertinent to request the concerned Member State to target the measure exclusively to the wine categories with major market imbalance, and to limit the compensation to be provided to a level below the relevant recent market prices.(8)In order to increase the effectiveness of Union financial resources that can be allocated to this crisis distillation, Portugal should be allowed to complement the Union financial support with national payments covering up to 200 % of the Union support provided for in this Regulation.(9)Portugal should communicate to the Commission detailed information about the implementation of this Regulation, to enable the Union to monitor the efficiency of the measure introduced hereby.(10)For budgetary reasons, the Union should finance the expenditure incurred by Portugal to implement the measure provided for in this Regulation only where such expenditure is made by a certain eligibility date. The support for this exceptional measure should therefore be paid by 30 April 2025.(11)As no payments are to be made after 30 April 2025, Article 5(2) of Commission Delegated Regulation (EU) 2022/127Commission Delegated Regulation (EU) 2022/127 of 7 December 2021 supplementing Regulation (EU) 2021/2116 of the European Parliament and of the Council with rules on paying agencies and other bodies, financial management, clearance of accounts, securities and use of euro (OJ L 20, 31.1.2022, p. 95, ELI: http://data.europa.eu/eli/reg_del/2022/127/oj)., providing for a proportional reduction of the monthly payments effected after the deadline, is not to apply.(12)To protect the financial interests of the Union, the national competent authorities of the Member State applying the exceptional crisis distillation measure are to perform checks to verify the compliance with the conditions and requirements set out in this Regulation.(13)For imperative grounds of urgency, considering the ongoing market disturbance as well as the short time available to Portugal to start implementing the measure included in this Regulation before the forthcoming harvest in September 2024, it is necessary to take immediate action and remove the excess of supply from the market as soon as possible. Otherwise, the market situation would further deteriorate, and the current imbalance would be carried over into the new marketing year threatening to cause a prolonged crisis in Portugal that could also affect other Member States wine markets. Therefore, delaying action would risk to reduce its efficacy to stabilise the Portuguese wine market.(14)In view of the above-referred imperative grounds of urgency, this Regulation should be adopted pursuant to the urgency procedure laid down in Article 228 of Regulation (EU) No 1308/2013.(15)In view of the necessity to take immediate action, this Regulation should enter into force on the day of its publication in the Official Journal of the European Union,HAS ADOPTED THIS REGULATION: