Evaluation of the CAP measures applicable to the sector

Case study report: – Castilla-La-Mancha

Written by Agrosynergie EEIG Agrosynergie November – 2018 Groupement Européen d’Intérêt Economique AGRICULTURE AND RURAL DEVELOPMENT

EUROPEAN COMMISSION Directorate-General for Agriculture and Rural Development Directorate C – Strategy, simplification and policy analysis Unit C.4 – Monitoring and Evaluation

E-mail: [email protected]

European Commission B-1049 Brussels

EUROPEAN COMMISSION

Evaluation of the CAP measures applicable to the wine sector Case study report: Spain – Castilla-La-Mancha

Directorate-General for Agriculture and Rural Development 2018 EN

Europe Direct is a service to help find answers to your questions about the .

Freephone number (*):

00 800 6 7 8 9 10 11

(*) The information given is free, as are most calls (though some operators, phone boxes or hotels may charge you).

LEGAL NOTICE The information and views set out in this report are those of the author(s) and do not necessarily reflect the official opinion of the Commission. The Commission does not guarantee the accuracy of the data included in this study. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible for the use which may be made of the information contained therein.

More information on the European Union is available on the Internet (http://www.europa.eu).

Luxembourg: Publications Office of the European Union, 2019

Catalogue number: KF-03-18-454-EN-N ISBN: 978-92-79-97276-8 doi: 10.2762/717506

© European Union, 2018 Reproduction is authorised provided the source is acknowledged.

Images © Agrosynergie, 2018

EEIG AGROSYNERGIE is formed by the following companies:

ORÉADE-BRÈCHE Sarl & COGEA S.r.l. 64 Chemin del prat Via Po 102 31320, Auzeville 00198 Roma ITALIE Tel. : + 33 5 61 73 62 62 Tel. : + 39 6 853 73 518 Fax : + 33 5 61 73 62 90 Fax : + 39 6 855 78 65 Email: [email protected] Email: [email protected] Represented by: Represented by: Thierry CLEMENT Francesca ANTILICI

This case study was carried out by the following Oréade-Brèche experts: Juliane Papuchon, Pierre Milliard and Alexandre Lyse.

Table of contents

1. DESCRIPTION OF THE WINE SECTOR IN CASTILLA-LA-MANCHA ...... 1 1.2 MAIN WINE PRODUCTS IN THE REGION ...... 2 1.3 AREAS AND WINE PRODUCTION EVOLUTION, STRUCTURE OF THE PRODUCTION ...... 3 1.4 OVERVIEW OF THE ORGANISATION OF THE WINE SECTOR OF CASTILLA-LA-MANCHA ...... 5

2. THEME 1: NATIONAL SUPPORT PROGRAMMES ...... 8 2.1 DESCRIPTION OF THE IMPLEMENTATION ...... 8 2.2 EFFECTS ON THE NSP AT THE LEVEL OF GROWERS ...... 15 2.3 EFFECTS OF THE NSP AT THE LEVEL OF PRODUCERS AND PRODUCTS ...... 18 2.4 EFFECTS OF THE PROMOTION MEASURE ...... 22 2.5 EFFECTS OF THE INFORMATION MEASURE...... 27 2.6 EFFICIENCY OF THE MANAGEMENT OF THE NSP ...... 28 2.7 COHERENCE OF THE NSP ...... 31 2.8 RELEVANCE OF THE NSP ...... 34 2.9 EU ADDED VALUE AND SUBSIDIARITY ...... 37

3. THEME 2: SCHEME OF AUTHORISATIONS OF VINE PLANTINGS ...... 39 3.1 SYNTHESIS OF THE LITERATURE ...... 39 3.2 SYNTHESIS OF THE INTERVIEWS ...... 40 3.3 CONCLUSION OF THE EXPERTS ...... 40

4. THEME 3: WINE PRODUCTS DEFINITION, RESTRICTIONS ON OENOLOGICAL PRACTICES AND AUTHORISED WINE VARIETIES ...... 41 4.1 DETAILED DESCRIPTION OF THE IMPLEMENTATION AT MEMBER STATE AND REGIONAL LEVEL ...... 41 4.2 COMPETITIVENESS DISTORTIONS DUE TO SPECIFIC RULES ON OENOLOGICAL PRACTICES ...... 41 4.3 SYNTHESIS OF THE INTERVIEWS ...... 42 4.4 COMMENTS AND CONCLUSIONS OF THE EXPERT ...... 44

5. THEME 4: EU RULES ON LABELLING AND PRESENTATION ...... 45 5.1 DESCRIPTION OF THE LABELLING RULES APPLIED AT MEMBER STATE AND LOCAL LEVEL ...... 45 5.2 EXISTING NATIONAL DATA ON NON-COMPLIANCE WITH LABELLING RULES ...... 46 5.3 SYNTHESIS OF THE INTERVIEWS ...... 46

6. THEME 5: CERTIFICATION PROCEDURES, MONITORING AND CHECKS ...... 49 6.1 DESCRIPTION OF THE LOCAL IMPLEMENTATION OF THE RULES ...... 49 6.2 EXISTING NATIONAL DATA ON NON-COMPLIANCE AND WORKLOAD ...... 52 6.3 SYNTHESIS OF THE INTERVIEWS ...... 53

ANNEXES ...... 55 ANNEX I – LIST OF THE INTERVIEWS ...... 55 ANNEX II: DOCUMENTS AND REPORTS COLLECTED ...... 56 ANNEX III : LIST OF PDO AND PGI ...... 58 ANNEX IV- WINE GRAPE AREA PER VARIETY IN 2015 AT NATIONAL AND REGIONAL LEVEL (IN HECTARE) ...... 59 ANNEX V - EVOLUTION OF WINE GRAPE VARIETIES IN CASTILLA-LA-MANCHA BETWEEN 2013 AND 2017 ...... 60 ANNNEX VI DESCRIPTION OF THE NSP MEASURES ...... 62 ANNEX VII: STANDARDS COSTS FOR ELIGIBLE OPERATIONS OF RESTRUCTURATION AND RECONVERSION MEASURE ...... 64 ANNEX VIII: STANDARDS COSTS FOR ELIGIBLE OPERATIONS OF INVESTMENTS MEASURE ...... 66

AGROSYNERGIE – Case study report: Spain – Castilla-La-Mancha Evaluation of the impact of the CAP measures applicable to the wine sector i

LIST OF TABLES Table 1: World wine area under vine in ha between 2012 and 2016 ...... 1 Table 2: Number of wine growing holdings in Castilla-La-Mancha ...... 3 Table 3: areas and production in Castilla-La-Mancha ...... 3 Table 4: industry structure in Castilla-La-Mancha ...... 5 Table 5: NSP annual financial allocation programmed and expenditure at national level (Millions of euro) ...... 8 Table 6: Output indicators cumulated on the 2014/2017 period ...... 8 Table 7: Implementation choices on the restructuration and reconversion measure ...... 9 Table 8: Implementation choices on the investments measure ...... 11 Table 9: Implementation choices on the Promotion measure ...... 12 Table 10: Implementation choices on the Innovation measure ...... 13 Table 11: Detail of operation implemented through the restructuring and conversion measure in Castilla- La-Mancha ...... 15 Table 12: Rate of achievement of the foreseen expenditures per measures in Spain ...... 28 Table 13: Main criteria/procedure(s) ensuring the relevance of the selected applications ...... 28 Table 14: Measures with similar objectives opened to wine growers/producers ...... 32 Table 15: SWOT analysis of the wine sector in Castilla-La-Mancha ...... 34 Table 16: Prioritization criteria of the demands for new plantations ...... 39 Table 17: Detail of requested area in Castilla-La-Mancha in 2017 (in ha) ...... 39 Table 18: Area admissible and granted in Castilla-la-Mancha in 2016 and 2017(in ha) ...... 39 Table 19: Description of main local specificities in authorised wine grape varieties ...... 41 Table 20: Workload induced by the certification and control. Exalxample of a certification body of PDO ...... 53

List of figures Figure 1: Wine products distribution in volume in Castilla-La-Mancha (Triennale average 2014-2017) ...... 2 Figure 2: Vine area under PDO in Castilla-La-Mancha ...... 2 Figure 3: Area distribution of wine grape in 2015 in Castilla-La-Mancha (left: white varieties, right: red varieties) ...... 4 Figure 4: Distribution of expenditures from 2014 to 2017 per measures in Spain ...... 8 Figure 5: Restructured and reconverted area per main varieties in Spain 2014-2017 (ha) ...... 16 Figure 6: Evolution of exports share, intra and extra EU (m$) ...... 23 Figure 7: Evolution of the Spanish exportation – in volume and value – between 2000 and 2017 ...... 23 Figure 8: Main destination of Spanish exports by type of products (tons) ...... 23 Figure 9: Wine imports in by country of origin ...... 24 Figure 11: Evolution of Castilla-La-Mancha wine exports in intra EU and extra EU markets (in k€) ...... 24 Figure 11: Evolution of Castilla-La-Mancha wine exports in the 10 main markets (in k€) ...... 24

AGROSYNERGIE – Case study report: Spain – Castilla-La-Mancha Evaluation of the impact of the CAP measures applicable to the wine sector ii

Glossary

CAP Common Agricultural Policy COMTRADE United Nations International Trade Statistics Database CMEF Common Monitoring and Evaluation Framework CMO Common Market Organisation CN Combined Nomenclature CTR Criterion EAGF European Agricultural Guarantee Fund EAFRD European Agricultural Fund for Rural Development EAV European Union added value EC European Commission EEA European Environment Agency EEC European Economic Community EEIG European economic interest group EQ Evaluation question EU European Union EUROSTAT Statistical Office of the European Commission FADN Farm Accountancy Data Network FAO Food and Agriculture Organization of the United Nations FNVA Farm net value added GATT General Agreement on Tariffs and Trade MIO Million € MS Member State NGO Non-Governmental Organization NSP National Support Programmes OIV International Organisation of Vine and Wine PDO/PGI Protected Designations of Origin (PDO) and Protected Geographical Indications (PGI) PO Producer Organisation PPS Purchasing Power Standard RD Rural Development RDP Rural Development Program RDR Rural Development Regulation SDG Sustainable Development Goals SME Small and Medium Enterprises SO Standard Output SPS Single Payment Scheme SSG Special Agriculture Safeguard SWOT Strengths, Weaknesses, Opportunities, Threats TEU Treaty on the European Union TFEU Treaty on the Functioning of the European Union UAA Utilised Agricultural Area USA United States of America USDA United States Department of Agriculture VAT Value Added Taxes WTO World Trade Organisation

AGROSYNERGIE – Case study report: Spain – Castilla-La-Mancha Evaluation of the impact of the CAP measures applicable to the wine sector iii

1. DESCRIPTION OF THE WINE SECTOR IN CASTILLA-LA-MANCHA

1.1.1 Introduction to the case study area

With nearly one million hectares of vines, Spain is the Member State with the largest area devoted to the production of wine in 2015, representing 30% of the total EU area. Spain gathers 36 % of the total EU area dedicated to the production of PGO/PGI wines1. In addition, it has become the world's largest exporter of wine in volume since 2012, as displayed in the Table 1 below, representing 11% of the total volume of wine exported worldwide before France (9%) and Italy (8%). Spain is one of the top leading suppliers of bulk wine in major import markets in UE such as France, Germany and the United-Kingdom. Nevertheless, to meet the expectations of domestic and international markets, Spain is moving towards a greater valuation of its wine by improving its quality.2 Table 1: World wine area under vine in ha between 2012 and 2016 Figures (thousands of ha) 2012 2013 2014 2015 2016 % of total Spain 969 973 975 974 975 11% France 792 793 789 785 785 9% Italy 713 705 690 682 690 8% Portugal 231 224 219 199 195 2% 192 192 192 191 191 2% USA 430 449 448 443 443 5% Turkey 497 504 502 497 480 6% China 706 757 796 830 847 9% Argentina 222 224 226 225 224 3% Chile 206 208 213 214 214 2% South Africa 135 133 132 130 130 1% Australia 162 157 154 149 148 2% Iran 226 223 223 223 223 3% 142 137 140 140 140 2% Rest of the World 1840 1844 1834 1833 1836 21% Source: OIV, 2017

With nearly 14% of the total area under vines in the EU, Castilla-La Mancha (434 000 ha) is the most important wine region in the EU in 2015. The region represents 47% of the Spanish vineyard - with an area of 79,443 km² - and 51% of the Spanish wine production. Therefore, it is the most important region both in terms of surface area under vines and production of wine.

1.2 Main wine products in the region

Figure 1: Wine products distribution in volume in Castilla-La-Mancha (Triennale average 2014-2017) As shown in Figure 1, the production of wine represents 80% of the wine products (wines, must, Wines pomace) in Castilla-La-Mancha. The production of PGI without wine without PDO/PGI represents more than half of wines; PDO/PGI; wine products produced in the Region (with 56,5%), 12,86% 56,50% the preserved must represents the second most important represents a significant part of wine product totalling 19,3% of the volume produced in the region. The PDO wine production only represents 10;85% of the production of the region, while PGI PDO represents 12,86% of it. The two other must rectified wines; Preserved 10,85% Rectified must; concentra Concentra 19,30% 1 Eurostat 2017 ted must; ted must; 2 CNIV, FAM, 2016 0,10% 0,38% Source: MAPAMA

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 1

concentrated must and concentrated must share a small portion of the total production.

In Spain, PDO and PGI are declined in various categories, which are traditional Spanish terms: Figure 2: Vine area under PDO in Castilla-La-Mancha . PDO:

Source : IPEX, 2015

o Denominación de Origen (DO) o Denominación de Origen Calificada (DOC) o . PGI: o .

In Castilla-La-Mancha only DO, Vino de Pago and Vino de la Tierra are produced, as detailed in Annex II. The PDO La Mancha represents the largest PDO in the region in terms of area cultivated gathering 72% of the regional area under vines. In 2016, almost 40% of the vineyard in the region is under PDO. Only one PGI is produced in the region: Castilla. With a production of 2,281,547 hL in 2016, Castilla represents 72% of the Spanish PGI production3. In 2017 the total PGI production of Castilla-La-Mancha represents 6% of the overall wine production in the Region.

Bulk wine represents the most important wine category exported in 2016, reaching 300 million of euros, followed by bottled wine with a value of more than 200 million of euros4.

3 MAPAMA 2017 4 ICEX 2017

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 2

1.3 Areas and wine production evolution, structure of the production

1.3.1 Wine growers

The number of wine growing holdings in Castilla-La-Mancha is steadily decreasing (-4%) between 2012 and 2015 while their average size is increasing (+8%) on the same period. In Castilla-La-Mancha, the average vineyard area of holdings is 5 times higher than the Spanish average: in 2014, the regional average vineyard area per holding was of 5.03 hectares5, and 1.53 hectares for Spain. Table 2: Number of wine growing holdings in Castilla-La-Mancha 2012 2013 2014 2015 2016 2017 Total 88,743 87,527 85,672 84,820 n.a. 82,723 Average size (ha) 4.92 5.03 5.14 5.31 n.a. n.a. Sources: MAPAMA, 2016

1.3.2 Evolution on vineyard and wine production

As detailed in Table 3, the vineyard area of Castilla-La-Mancha in 2017 is of 458 911 hectares, which represents 49% of the national vineyard area. The regional vineyard seems to be stable with a slight increase of 5% between 2012 and 2017. With a total production of 17 million of hectolitres, the region reaches almost 52 % of the total national production. In Castilla-La-Mancha, while the area under vines is covered by PDO or PGI, produce only a part of their production under PDO or PGI. Indeed, winemakers in Castilla-La-Mancha produce mainly wine without PDO/PGI. Since 2013, even if a significant decrease of 40 % has been observed (see Table 3), the overall volume of wine production in 2017 remains higher than it was in 20126. Although the production of wines without PDO/PGI remains dominant, since 2012, the PDO/PGI production increased significantly (+25%). Castilla-La-Mancha hence is slowly turning its production toward PDO wines. Table 3: Vineyard areas and production in Castilla-La-Mancha 2012 2013 2014 2015 2016 2017 PDO Vineyard area (ha) 424,060.68 427,307.67 427,628.58 423,320.81 445,289.05 446,402.24 Production (hl) 2,459,924 3,162,005 2,623,966 n.a. n.a. 2 471 469 PGI Vineyard area (ha) 12,478 12,724 12,809 12,200 12,604 12,508 Production (hl) 1,540,650 1,297,665 2,424,008 1,844,994 2,281,547 2,557,108 Wine without PDO/PGI Vineyard area (ha) 0 0 0 0 0 0* Production (hl) 10,707,038 19,400,844 14,993,963 n.a. n.a. 6,280,971 Liqueur wine Production (hl) n.a. n.a. n.a. n.a. n.a. 2,600 Sources: MAPAMA, 2018 and Regional department of agriculture, environment and rural development of Castilla-La- Mancha, 2018

It has been observed an increase of the production of must, concentrated grape must and rectified concentrated grape must between 2012 and 2013, and a general decrease the following year. Since 2014 the production of concentrated grape must has increased significantly (+129% between 2014 and 2017) while the production of preserved grape must and rectified concentrated grape must seem to have stabilized.7

5 MAPAMA 2015 6 In 2012, unfavorable weather conditions led to very poor harvests in several European countries, including Spain and Castilla-La-Mancha, so volume produced in 2012 are lower than an average production, due to low yields.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 3

The weight of the regional production in the national production of grape must keeps increasing considerably with 80% of Spanish production in 2015 and 98% in 2017.

1.3.3 Wine grape varieties distribution

Figure 3: Area distribution of wine grape in 2015 in Castilla-La-Mancha (left: white varieties, right: red varieties)

4% 86% 7% 10% 8% 8% 3% 18% 2%

4% 6% 36%

1% 1% 1% 2% 1% 1% 1% Airen , PROVECHON GARNACHA MONASTRELL Pardillo GARNACHA TINTORERA Sauvignon Blanco TINTO DE LA PAMPA BLANCA Moscatel De Grano Menudo Other varieties <0,3% of representativeness Other varieties <1% of representativeness 8 9 Source: MAPAMA’s survey, 2015 As shown in the Figure 3, the Airén grape variety is dominant among white varieties planted over 86% of the regional surface area under vines. This very productive variety, native of Castilla-La-Mancha is particularly adapted to dry climate and poor soils. The second main white variety is the Macabeo, planted on 6% of the regional surface area under vines. Although the Airén dominates the vineyard landscape, 27 other varieties of white grape make up the regional vineyard, including 20 with less than 500 ha. The distribution of red grape varieties is more balanced, even if two varieties cover more than a half of the red : the grape varieties Tempranillo and the Bobal Provechon stand out from the others covering respectively 36% and 18% of the regional area under vines. It is also observed a great diversity of grape varieties planted in Castilla-La-Mancha. There are 20 red varieties not represented on Figure 3 because of their little representativeness of the regional viticultural landscape (less than 1% of the area under vines planted). In addition, as detailed in Annex IV, Castilla-La-Mancha shares a large part of the total national area planted with white grape varieties: the Airén (96% of national share), Moscatel De Grano Menudo (66%),

8 Other White varieties with 0,3% representativeness: Mezcla, , , LUISA BLANCA, GARNACHA BLANCA, XARELLO, MERSEGUERA, FINO, PLANTA NOVA, TORRONTES, PERRUNO, ALCAÑON, BEBA, ALEDO, BORBA, MOSCATEL DE ALEJANDRIA, PEDRO XIMÉNEZ, , MAYOR, , VIOGNIER, , MALVAR and TORTOSINA 9 Other red varieties with 0% of representativeness: , TINTO VELASCO, FRASCO, MORAVIA DULCE, MAZUELA, ROJAL TINTA, , GARNACHA PELUDA, , MORAVIA AGRIA, FORCALLAT TINTA, , MENCIA, TREPAT, , PRIETO PICUDO, MOLLAR, JAEN TINTO, VALENCI TINTO, RUFETE, PANSE NEGRO

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 4

(64%) and (62%). For red grape varieties the same observation can be made: Rojal Tinta and Petit Verdot represent both 84% of the total area, then Garnacha Tintorera (65%), and Syrah variety (62%). Some wine grape varieties are very specific to Castilla-La-Mancha, covering more than 95% of national area (such as the Airén). It either concerns specific varieties planted in few small vineyards (less than 5 000 ha) - such as Pardillo (100% of national share), Moravia Dulce (99%), Tinto Velasco Frasco (100%) and Tinto De La Pampa Blanca (100%) - or more widespread variety as the Airén (more than 200 000 ha, 96% of the national share).

1.3.4 Planting rights

Castilla-La-Mancha has not allocated its planting right areas according to area under PDO or PGI. Therefore, the data available on planting rights does not take into account this information. There were 1.081 demands presented - totalling an area of 3.716 ha - of which 955 were eligible –3.134 ha-, all eligible demands were attributed. The 126 rejected demands represented only 582 ha (i.e. 15%). The application rate is 84% which is significant10.

1.3.5 Industry structure

Table 4: industry structure in Castilla-La-Mancha 2012 2016 Total of Wine producers (number) 580 699

. Of which co-operatives 218 265 Distilleries of wine products (number) n.a. n.a. Total n.a. n.a. Source: MAGRAMA The cooperatives play a major role in the wine sector in Castilla-La-Mancha. Indeed, they represent 59% of the turnover of the wine sector in the region11 and gather 38% of the wine producers in 2016. The cooperatives in the region play a historical role in the region. In fact, after the civil war, the government fostered the development of cooperatives in the provinces where the vineyard had a great importance and where no spontaneous cooperative had been created before the Civil War. Those provinces have suffered the most from the decline in wine prices. Castilla-La-Mancha especially beneficiated from this support because it absorbed 23.5 % of the help granted enabling it to significantly increase the production capacity of its cooperative warehouses12.

There are two types of distribution channel for the cooperatives:  The main one: to domestic and foreign bottling companies, wholesalers and large distribution.  The less important one: to traditional store - small business, Hotel Restaurant Catering services (HORECA) and large distribution13 1.4 Overview of the organisation of the wine sector of Castilla-La-Mancha

. Administration At national level, Ministry of Agriculture, Fisheries, Food and Environment is in charge of the wine sector and the management of the National Support Program (NSP), planting rights, oenological practices rules and wine grape varieties. At regional level, the Regional Ministry of Agriculture, Environment and Rural Development of Castilla-La- Mancha is the competent authority of the Autonomous Community of Castilla-La Mancha and is responsible for the proposal and implementation of the guidelines of the Government Council on agricultural policy, agriculture and specifically . More specifically, two General Directorates are concerned:

10 MAPAMA 2016 11 Agri food cooperative, 2015 12 MEDINA-ALBALADEJO, 2014 13 Agri food cooperatives, 2015

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 5

- the General Directorate of Agri-food Industries and Cooperatives (DGIAC) and - the Vine service of the General Directorate of Agriculture and Livestock (DGAG) The DGAG is in charge of the overall grape production in the region, it is competent in matters of restructuring and reconversion measure, the new scheme of plantation authorisations, vineyard register and grape varieties. The DGIAC deals with the elaboration and commercialization at regional level, therefore the investment and promotion measure, control and fraud, oenological practices and as well the PDO/PGI certification aspects.

. Wine grower’s organisations

At national level In Spain there is no organization specifically dedicated to wine growers. The vine department of farmers' unions represent the interests of winegrowers. Farmers ‘union have offices in all Autonomous Communities and have representatives at national level.

At Regional level In Castilla la Mancha, the Agricultural Association of Young Farmers of Castilla-La Mancha (ASAJA) is the most representative agricultural union in the wine sector. Its role is to represent, manage, defend and promote the professional interests of the agrarian sector in general. The Coordinator of Farmers and Ranchers Organizations (COAG) represents, manages, promotes and defends the specific interests of affiliated unions and agricultural professionals before any public or private institution. They participate in the elaboration, management, monitoring and control of the agrarian policy, in collaboration with the authorities. The Union of Small Farmers of Castilla-La Mancha (UPA) is a member of the Committee of Agricultural Professional Organizations of the European Union (COPA). The UPA is also a Professional Agricultural Organization that defends at regional, national and European level the interests of the agrarian family farm. it offers its members services - among others - processing CAP files, updating the vineyard register, and restructuring the vineyard14.

. Wineries organisation

At national level The Spanish Wine Federation (FEV) is the most representative private organization that brings together the downstream part of the spanish wine sector, both processors and marketers of all types of wine products. The objectives of the FEV is to enhance the competitiveness of the wine sector. It influences political decision, and acts as representatives of wine producers and marketers. The FEV is also involved in bringing together the wine companies. The federation works with national and regional administrations and therefore it has been recognised since 1987 as a Collaborating Entity.

Agri-food Cooperatives Organization groups (Cooperativas Agroalimentarias de España) all the Spanish cooperatives including the wine sector. The Vine and Wine Department carries out studies, analysis, consultancies and interpretation and dissemination of all regulations. Market follow-ups are carried out and circular letters are prepared for associates.

At Regional level FEVIN is the most representative business organization of the sector in Castilla-La Mancha, being integrated in CECAM, in the Spanish Federation of Wine (FEV).

14 UPA, 2018

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 6

The Agri-food Cooperatives Union of Unión Castilla-la Mancha (UCAMAN) is the entity that represents, defends and promotes the cooperative food industry of the region. It is the regional variation of the national agri-food cooperatives organization. Their organization provides the services to make this sector more competitive. It represents a total of 450 cooperatives in Castilla-La Mancha. This sector employs 4,800 workers and regroups more than 163,000 members.

. Interbranch organization In Spain all the branches are grouped together by the PDO managing organisation. In Castilla-La-Mancha, one of the main PDO managing organisation is “Consejo regulador DO La Mancha” – since PDO La Mancha represents most of the area cultivated under PDO in the region. It manages the PDO at all levels: wine growers, wineries, cooperatives, etc. Its main objective is to ensure the quality of the products that are included in the denomination, so that producers adhere to a series of standards that maximize the quality of the wine. In addition, in Castilla-La-Mancha, producers of grape must, are represented by the Group of Producers of Grape Must and Juices of Castilla-La Mancha (AZUMANCHA). The organisation has a Strategic Plan for Grape Must and Juices, whose main objective is to protect the diversification of the region's wine production and guarantee the necessary raw material for the elaboration and commercialization of musts and grape juices15.

15 Alimarket, 2012

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 7

2. THEME 1: NATIONAL SUPPORT PROGRAMMES

2.1 Description of the implementation

2.1.1 Financial allocation

Over the 2014-2020 programming period, Spain has implemented Figure 4: Distribution of expenditures four measures at national level: Restructuration and reconversion, from 2014 to 2017 per measures in Spain Investments in enterprises, Promotion and By-product distillation. By- Promoti In Spain, only the Innovation measure is implemented at national product on level. For the other measures, the competent authority is the distillati 15% on competent body of the autonomous community, for the 10% processing, resolution and payment of the supports under the Investm wine CMO referred to in the Royal Decree 597/2016. A framework ents in enterpri Restruct regulation is defined at national level (criteria, eligibility) and each ses uration autonomous community can adapt the regulation according to his 37% and local context. In addition, the total budget of Spain is a sum of the reconve proposals of the autonomous communities and of an arbitration rsion 38% with national criteria. As detailed in Table 5, Spain executed the previous expenditures in Source: Financial monitoring data of the NSP, DG Agri 2015 and 2016 and executed 91% on 2014 and 96% on 2017. The expenditure under the promotion measure increased between 2014 and 2017, whereas the expenditures under the restructuration and reconversion measure decreased. The expenditures under the innovation measure concern only 2016 and 2017. Lately, the By-product distillation and the Investments measure have a quite stable expenditure, with a low start in 2014. Table 5: NSP annual financial allocation programmed and expenditure at national level (Millions of euro) 2017 2016 2015 2014

progr. exp. progr. exp. progr. exp. progr. exp.

Promotion 50.00 41.62 50.00 49.65 44.00 44.35 50.00 39.44 Restructuration reconv. 72.53 77.36 72.53 74.93 80.08 80.32 120.02 112.49 Investments in enterprises 55.88 51.15 56.97 55.29 56.00 57.96 8.51 9.37 By-product distillation 31.80 31.71 30.80 30.39 30.25 29.40 31.8 30.41 Innovation 0.12 0.04 0.03 0.01

Source: Ministry of Agriculture, Environment and Rural Development Table 6: Output indicators cumulated on the 2014/2017 period Number of Number of Total area Budget 2014- Execution 2014- Measure beneficiaries operations covered (ha) 2018 (in M€) 2017 (in M€) Promotion 1938 3177 171,045 164,540 Restructuration and 33719 56 95218,67 428,915 430,550 reconversion Green harvesting 0 0 0 0 0 Investments in enterprises n.a. n.a. - 411 401,783 By-product distillation 77 n.a. - 111 125,303 Innovation 5 5 0 0 0 Source: Ministry of Agriculture, Environment and Rural Development

2.1.2 Restructuration and reconversion measure

The restructuration and reconversion measure is implemented at regional level, with an annual call for applications. The assignation of expenditure for each Autonomous Community is decided at national level annually: each Autonomous Community communicates to the central administration his financial needs for the next year. This allocation will be made taking into account, the area under vines and the need to restructure some vineyards as a result of the failure to adapt their productions to the market.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 8

In addition, a prioritization criterion for collective plan has been defined at national level and additional criteria may be established by the autonomous community. Castilla-la-Mancha choose to establish some prioritization criteria concerning wine growers in the period 2014-2016 and additional ones for the period 2017-2018, which are detailed in Table 7. Table 7: Implementation choices on the restructuration and reconversion measure

Compensation for loss of incomes The compensation to the winegrowers for losses of income will be 25% of the average value of the grape of the last three seasons of the region. Type of aid and 2014-2016: For Castilla-La Mancha the indicated compensation is fixed at 404 €/ ha. rate of support 2017-2018: For Castilla-La Mancha the indicated compensation is fixed at 501,80 €/ha. Contribution to the costs of restructuring and conversion: max 50% on the basis of actual costs or on standard costs detailed in Annex VII.

A wine grower may only be a beneficiary in a single project. Vineyard owners whose vineyards are used to produce grapes for and are located in the territory of Castilla-La Mancha and who meet the following requirements at the end of the deadline for submitting applications, may be eligible for aid for the restructuring and conversion of vineyards.: - It must appear in the Viticulture Registry as the vineyard operator for which the aid is requested or have requested the change of ownership. - The vineyards for which the change of vase to trellis or reconversion is requested must be duly registered in the Viticulture Registry or have requested the change of ownership, to the end date of the presentation Beneficiaries period of requests. - When they provide their own replanting rights for the restructuring of the plots, they must be registered in the Viticultural Register in their name, and their validity must be adequate to carry out the planned plan, except when a transfer or resolution is pending. request of rights to the Regional Reserve.

Winegrowers who contravene the regulations in force regarding plantations of vineyard, for any of the vineyard areas of their farm may not be beneficiaries. Those who are involved in any of the causes of prohibition provided for in the regulations applicable to subsidies may not obtain the status of beneficiary.

The following operations are not supported: a) The normal renewal of the vineyards that have reached the end of their natural cycle: the replanting of the same plot of land with the same vine variety and the same driving system. b) The areas that have benefited from the aid for the restructuring and reconversion of the vineyard in any of the previous calls. The surfaces cannot be included either as initial plots or as final parcels. c) The start-up and planting of vineyards planted under a concession of new plantations granted, until past 10 years of said plantation. d) The change of vineyard gobelet-trained to treillis-trained from vineyards planted before 1990. e) The operations of daily management of a vineyard. f) The change from goblet-trained vines to trellis-trained vines or reconversion of plots of vineyard in associated crop. g) Operations performed with second-hand material. h) Value added tax (VAT).

Eligibility Eligibility In 2014-2016: only collective plan may be supported

Area per plot and per winegrower to be supported Minimum area per plot= 0.5 ha Maximum area per winegrower = 25 ha (2014-2016) 15ha (2017-2018) When the measure to be carried out is that of reconversion or the change of glass to the trellis, the minimum surface will be the initial one.

Eligible wine grape varieties In 2014-2016: All wine grape varieties are authorized. In case of the Airén variety, coefficient of 0.50 will be applied to the amount of the aid calculated based. In 2017-2018: All varieties authorized in Castilla-La-Mancha, except Airén for 2017-2018.

2014-2016 2017-2018 Priority criteria NATIONAL PRIORITY Collective plan must be priority

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 9

REGIONAL PRIORITIES

By type of restructuring plan: Not established in 50 points a) Collective plans this period 1 point b) Individual plans

Quality aspects Applicants submitting an undertaking to ensure that the production of Not established in the restructured plots is taken to a plant where the payment of the 30 points grape is made according to the quality. The duration of this this period commitment will be 3 years and must be fulfilled within 6 years after the execution of the plantation By type of wine grower, among the following criteria: a) Young farmers engaged in agriculture or Young Farmers of New Incorporation or Young Farmers with help to the incorporation b) Priority holdings c) Farmers with a main title or Professional farmers a) 25 points d) Holdings of shared ownership a) 10 points b) 15 points

b) 4 points c) Farmers with a For other winegrowers not included in section 1, in case of insufficient main title: 7 points budget to attend, measures will be approved by the following order of c) 4 points Professional prioritization: d) 1 point farmers: 4 points. a) Restructuring. d) 30 points b) reconversion The score may be cumulative, without c) Improvement of management techniques: Change from gobelet- The score may be trained vines to trellis-trained vines. in any case exceeding 10 points. cumulative, without in any If within each operation prioritized in the previous section there is not case exceeding 30 enough credit, priority will be given to winegrowers that have more points surface requested under the operation and, in case of a tie will be attended to the date of presentation and registration number of your complete project

Applicants who in 2016 have hired agricultural insurance on their farm. Not established in 7 points In the case of being holders of vineyard, at least they must have secured this period this crop.

Applicants who at the end of the application period belong to a supranational priority association entity (EAPS), in accordance with Law 13/2013, of August 2, promoting the integration of cooperatives and other associative entities of agro-food character, or a priority Not established in 7 points associative entity of regional interest of Castilla-La Mancha (Eapir), in this period accordance with the Decree 77/2016, of 12/13/2016, by which the requirements for the recognition of associative entities are established priorities of regional interest of Castilla-La Mancha (Eapir).

By type of operation: a) Applicants with more than 50% of the surface area on their application form for the restructuring activity Not established in a) 5 points. b) Applicants with more than 50% of the surface area of their this period b) 4 points. application form for transformation of goblet-trained to trellis-trained vines.

Applicants who request a form of advance payment for any of the plots Not established in 5 points on their application form at the time of submission this period

Applicants who in their declaration of 2016 have destined a part Not established in of their production to Protected Designation of Origin (PDO) production 2 points this period / Protected Geographical Indication (PGI) production.

In case of equal scoring, they will be prioritized by the date of submission of the project application form. The projects that are approved will have all their measures and, therefore, with the totality of their eligible plots. Implementation 2014-2018 period Source: Regional order 126/2017 of the Regional department of agriculture, environment and rural development of Castilla- La-Mancha, 12th of July and regional order 04/12/2013, Royal decree 597/2016 and Royal decree 548/2013

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 10

2.1.3 Investments in enterprises

All approved applications concerning the Investments measure are from the first and second call in 2014 and 2015 and all have been submitted to the competent authorities before January 31, 2015. These applications have covered all the provision for the measure from 2014 to 2018. Since then, no other call has been opened. Table 8: Implementation choices on the investments measure

Capital grant, maximum 50 % of eligible costs for micro and SME, 25% for companies with less than 750 employees and a turnover < 200 million euro; 19% for companies with more than 750 employees and a turnover > 200 million euro.

Type of aid and Maximum expenditure eligible for support 1.500.000 euros by applicant and minimum 50.000 euro. In the case of rate of support projects that involve also construction, modernization and / or improvement of the bottling line, the total amount of the project can be raised up to a maximum of € 2.500.000. For individuals and legal entities holding companies with less than 750 employees or whose turnover is less than 200 million euros, the maximum support will be reduced by half.

a) Individuals or legal entities that own micro firms and small and medium-sized companies (as defined in Recommendation 2003/361 / CE, of the Commission, of 05/06/2003), which produce, market or perform both processes for the products described in Annex XI ter of Regulation (EC) No. 1234/2007 of the Council, of 10/22/2007, and that have taken place in the Spanish territory, that have activity at the moment of presentation of the application or that they initiate it with the project presented with the application, and that they are responsible end of project financing. Beneficiaries In the case of holders whose activity is only the commercialization of at least 80% of their billing of the last closed financial year shall come from the commercialization of the products of Annex XI ter of the Regulation (EC) No. 1234/2007, of the Council, of 10/22/2007. In the case of beneficiaries who start their activity in the field of marketing, they must submit a written commitment that at least 80 percent of your billing will come from the commercialization of the of Annex XI ter of Regulation (EC) No 1234/2007 of the Council of 10/22/2007.

Maximum term of financing = 4 years (pluriannual project are eligible)

Selection criteria (defined at national level) Characteristics of the applicant: 1.1 Small and medium enterprises: 5 points 1.2 Woman or young farmer: 2 points 1.3 SAT or Cooperative under 150 members: 3 points 1.4 Cooperative greater than 150 partners: 4 points 1.5 Cooperative greater than 250 partners and resulting from a merger processing the last two years 5 points prior to the request: 1.6 Cooperative host to the Order APA / 180/2008, of January 22: 6 points 1. Subtotal : 25 points

2. Quality and effectiveness of the project: 2.1 At least 50% of the cost of the investment is made with own funds 5 points 2.2 The applicant belongs to a PDO / PGI or other recognized quality figure 5 points Eligibility and 2.3 Investment project for the transformation and commercialization of the own production of the 10 points priority criteria applicant 2.4 Creation of net employment with respect to the average of the previous 3 years 5 points 2.5 Level of training and professionalization (incorporation of oenologist or technician equivalent) 2 points 2.6 The applicant has a quality assurance certification (BRC, IFS, ISO 9000) or environmental 3 points 2. Subtotal 30 points

3. Characteristics of the projetc 5 points 3.1 The wine maker maintains a contractual link with wine growers. 3 points 3.2 The investment is made in insular territory 5 points 3.3 International implementation and export experience 5 points 3.4 Structure and own technical capacity for the execution of the project 7 points 3.5 The investment involves the transfer of facilities from urban to industrial areas 3. Subtotal 25 points

4. Commercial response capacity: 4.1 Availability of distribution in the destination market 5 points

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 11

4.2 Reach at least 10 percent of export over total billing of 5 points sales during the period of durability of the investment 4.3 Increase at least 10 percent of the sales volume in bottled products during the period of 10 points durability of the investment 20 points 4. Subtotal 100 points Total

5. Corrective indices (apply to the total): Total × 1.10 5.1 If the project includes production, transformation and commercialization Total × 1.20 5.2 if the project is aimed at international marketing

Implementation 2014-2018 period Source: Regional order of Regional department of agriculture, environment and rural development of Castilla-La-Mancha, 13th of January 2014

2.1.4 Promotion

Spain hasn’t activated the information operation. Promotion projects on third countries may include the following operations: . Public relations, promotion and advertisement to highlight in particular the advantages of EU products in terms of quality, food safety and respect for the environment.  Activities: Commercial missions, advertising campaigns of diverse nature (TV, radio, press, events, etc.)., promotions at points of sale, web portals for outdoor promotion, reverse trade missions, information offices, press office, product presentations . Participation in fairs and exhibitions of international importance.  Activities: Fairs and international exhibitions, etc., Sectorial or general, for professional and consumers. . Information campaigns, in particular on the EU systems of designation of origin, geographical indications and organic production.  Activities: Business meetings.  Conferences, seminars, tastings, tastings, etc. . Studies of new markets, necessary for the search of new commercial outlets.  Activities: Studies and market reports. . Evaluation of the results of promotion and information measures  Activities: Evaluation studies of the results of the promotion measures, audits of execution of measures and expenses of operations Table 9: Implementation choices on the Promotion measure

Type of aid and

rate of support

Wine companies Wine producer organisations, associations of wine producers - including temporary business ones that are Beneficiaries representative of the sector, wine inter-branch organisations Public bodies with legally established competence to develop actions to promote Spanish wines in markets of third countries.

Products eligible: - Wine products under PDO or PGI - Varietal wine

Eligibility and Markets eligible: All, with priority : priority criteria GRUPO 1: Estados Unidos., Canadá, Japón, China (incluidos Hong Kong y Taiwán), Suiza, Rusia, México. GRUPO 2: Corea del Sur, Brasil, Noruega, Australia, Perú, Colombia, Singapur, República Dominicana, Cuba, Costa Rica, Panamá. GRUPO 3: India, Malasia, Filipinas, Vietnam, Puerto Rico, Tailandia.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 12

The actions and programs will be clearly defined, specifying the third country or countries or regions of the third country or countries to which they are directed, the types of wines included, the operations/activities that are intended to be carried out and the estimated costs of each one of them. The shares will be distributed in periods of twelve months, which will begin on June 1 of each year. The messages will be based on the intrinsic qualities of the product and must comply with the regulations applicable in the third countries where they are intended to be sold. In the case of wines that have a geographical indication, the origin of the product should be specified as part of the information and promotion actions or programs. References to trademarks, where appropriate, may form part of the message. A collegiate body may establish annual guidelines to promote consistency and effectiveness of the measure on information and promotion campaigns, which shall be regulated by the provisions of this section. Implementation 2014-2018, with one call a year period Source: Royal Decree 597/2016

2.1.5 Innovation

Table 10: Implementation choices on the Innovation measure

In order to improve the commercialization and competitiveness of wine products, support will be given to tangible or Type of aid and intangible investments for the development of new products, procedures and technologies related to the products rate of support described in Annex VII Part II of Reg (EU) 1308/2013 and that have occurred in Spanish territory. - wine companies that, at the time of application, produce or market the products mentioned in Annex VII, Part II of Reg (EU) 1308/2013 organizations of wine producers, recognized in accordance with Article 152 of said Regulation, and the temporary or permanent associations of two or more producers of the products mentioned in Annex VII Part II of the said Regulation. - However, in the case of companies whose activity is only commercialization, at least 80% of their turnover for the last financial year must come from the commercialization of the products of mentioned in Annex VII Part II of the said Regulation. - In the temporary or permanent associations of two or more producers, a representative of the group will be appointed. The representative of the group must have sufficient powers to be able to fulfill the obligations that correspond to the aforementioned group as beneficiary of the aid, as established in article 11.3 of Law 38/2003, of November 17. The projects may involve the participation of research and development centers. Beneficiaries The interprofessional organizations may be associated with the projects. Applicants who are in any of the following circumstances may not be beneficiaries of the support:  When in a crisis, as defined in the Guidelines on State aid for rescuing and restructuring non-financial companies in crisis (Communication 2014 / C 249/01, of the Commission, of July 31, 2014).  When they are in the process of requesting the voluntary bankruptcy declaration, have been declared insolvent in any proceeding, be declared in bankruptcy, unless in it has acquired the effectiveness of an agreement, be subject to judicial intervention or have been disqualified under the Law 22/2003, of July 9, without having concluded the period of disqualification set in the sentence of qualification of the contest.  When they do not prove that you are up to date with your tax obligations and with Social Security, as well as your obligations for the reimbursement of subsidies.  When they have received subsidies for the same purpose and object, that could be established by other public administrations or other public or private entities, national or international. Eligible criteria: a) The projects and their underlying shares are clearly defined, investment actions described and the estimated cost are mentioned. b) Guarantees that the costs of the proposed operation do not exceed normal market prices. The expenses eligible for assistance presented with a request for assistance must meet the following criteria of cost moderation: in general, the applicant must provide at least three offers from different suppliers, prior to the provision of the service or delivery of the goods , when the amount of eligible expenditure, excluding VAT or IGIC equals or exceeds 18,000 euros except when, due to their special characteristics, there are not enough market offers on the market. The choice between the bids submitted, which must also be submitted together with the request for payment, will be made according to criteria of efficiency and economy, the election must be expressly justified when the most advantageous economic Eligibility proposal is not chosen. c) Guarantees that the beneficiaries have access to sufficient technical and financial resources to guarantee the effective execution of the project. The projects for which support is requested will receive tangible or intangible investments, including the transfer of knowledge, for the development of: => New products related to the wine sector or by-products of wine. => New procedures and technologies necessary for the development of wine products. => Other investments in new procedures and technologies that add value at any stage of the supply chain.

Eligible costs will include pilot projects, preparatory actions in the form of development and testing of designs, products, processes or technologies, as well as tangible or intangible investments related to them, before the

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 13

commercial use of the new products, processes or technologies developed.

The following costs would be considered eligible: - Personnel costs, as long as they occur during the preparation, execution, evaluation or monitoring of the subsidized project. These include, among others, the costs of the personnel hired by the beneficiary specifically for the project as well as the costs corresponding to the proportion of the work hours invested in the project by the permanent staff of the beneficiary. - For justifying the personnel costs, the beneficiary must provide supporting documents that show the details of the work actually performed in relation to the project.

Characteristics of the projects The projects must demonstrate that a previously obtained discovery is applied through research and that this improves the products, procedures or technologies used by the applicant or that value is added at any stage of the supply chain. The projects must have clearly defined the final objective, which cannot be altered by modification as established in article 67 and must be fulfilled in order to be entitled to the aid as established in article 70. The innovation projects will be clearly defined, specifying the actions and detailing the expenditure concepts that make up each action and the estimated costs of each of them. Projects may be annual or multi-year, but the resolution of concession may only collect actions to be justified before the competent administration in the EAGGF 2018 exercise. Implementation 2016-2018, with one call a year period Source: Royal Decree 597/2016

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 14

2.2 Effects on the NSP at the level of growers

2.2.1 Information on the implementation of the restructuring and conversion measure

In Castilla-La-Mancha, the entire area under vines is covered by a PDO or a PGI. Thus, according to the regional authorities, all wine plots are potentially in a PDO or PGI area. As highlighted in the table below, the first activity supported under the restructuring/conversion measure was replanting vineyards. The following operations can be supported under the replanting activity: . Grubbing-up vines . Preparing the land: disinfecting, removing stones from the soil, ground levelling . Vines planting . Individual protection of plants . Trellising / Tying-up vines

As highlighted in Table 11, in Castilla-La-Mancha, 81% of the budget is allocated to replanting activities. To be more precise, 30% of the budget spent under the measure was allocated to planting, while 27% of the budget was allocated to Trellising/Tying up vines. In the end, 57% of the budget in Castilla-La-Mancha was used for planting and trellising.

Table 11: Detail of operation implemented through the restructuring and conversion measure in Castilla-La- Mancha Completed operations + 2014 2015 2016 2017 Amount of advanced payment Area (without compensation for loss Budget (€) Area (ha) Budget (€) Area (ha) Budget (€) Area (ha) Budget (€) (ha) of income) Grubbing up (including the 3,776 901,935 2,920 444,070 3,399 488,243 5,971 884,611 collection of strains) Soil 11,513 7,801,223 8,906 2,683,167 7,548 2,087,553 8,968 2,701,539 preparation Disinfection 2,888 2,868,184 694 467,036 774 548,274 1,120 781,688 Stone removal 6,236 1,125,353 3,579 470,281 3,190 370,136 3,303 465,419 Replanting Ground the vineyard 163 52,159 12 2,066 38 14,536 29 4,673 levelling Plant and 18,822,54 10,459,52 10,664,56 11,647 9,582 8,041 8,257,849 9,093 plantation 3 1 2 Individual protection of 10,863 5,205,821 7,969 2,632,072 6,860 2,086,058 7,850 2,635,012 plants 16,885,62 10,013,96 Trellis 10,976 8,633 9,406,630 7,247 7,270,070 8,783 7 7 Variety Grafting 0 0 10 10 491 0 0 35 50,332 reconversion Change from Improvement gobelet- s in vineyard trained vines 4,719 7,678,603 3,439 5,059,080 999 1,410,710 698 1,000,349 management to trellis- techniques trained vines 5,743.4 3,654,99 3,162,82 2,803,87 Loss of income 8,530 5,963 4,389 6,717 9 9 2 1 64,996,44 34,797,23 25,337,30 33,983,27 TOTAL 16,366 12,986 9,040 9,817 6 5 0 2 Number of beneficiaries 3,778 4,219 2,762 2,997 Source: Regional department of agriculture, environment and rural development of Castilla-La-Mancha, 2018

At national level, as shown in the Figure 5, there is an increase in grape varieties demanded by consumers for the quality of wine produced, such as: Tempranillo (+52,3), Macabeo (+ 37.17%), and Verdejo (286%). Restructured and reconverted area with grape varieties mainly cultivated for their productivity or their adaptation to local conditions have been reducing since 2014, such as Bobal (-94.5 %) or Airén (-41%).

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 15

Figure 5: Restructured and reconverted area per main varieties in Spain 2014-2017 (ha)

Source: Implementation report 2016

According to the implementation report of 2016, vineyard of Castilla-La-Mancha has been replanted with varieties such as Syrah, Cabernet Sauvignon, Sauvignon Blanc, Macabeo. The area under vines with these varieties have greatly increased. These grape varieties provide richness in the productions and possible elaborations made from them. Therefore, the restructuring measure has contributed to the increase of vineyard with red grape varieties, more demanded by the market. However, the area under vines planted with white varieties other than the Airén variety has been significant. These changes mean that a wider range of wines can be produced, and the production is better adapted to the market (given that Castilla-La Mancha was a region where traditionally was produced, mainly using Airén).

However, these analyses must be nuanced: the vineyards under Cabernet Sauvignon and Syrah have slightly decreased since 2013 and one can notice that vineyards under Airén have slightly increased since 2013 (even if its weight in the regional vineyard area decreased from 47.5% to 46% between 2013 and 2017), as detailed in Annex IV.

2.2.2 Information from the literature

. At national level According to the NSP implementation report, the area and budget executed have been respectively reduced by 33.36% and 28.85% from 2014 to 2016 in Spain. During these first three years of the programming period, the number of beneficiaries of the restructuration and reconversion measure has been increasing from 2014 to 2015 and decreasing from 2015 to 2016. It was noted that the number of beneficiaries per year under this measure is greater than for the year from the previous programming period (2010 and 2011). During the previous programming period, the level of executed funds was equivalent to the years 2014 to 2016. Therefore, it was concluded that the objective of maintaining the interest of wine growers to continue to restructure and reconvert in the sector has been met. Finally, it was considered that the objective of increasing the competitiveness and profitability of the vineyard has been fulfilled, since 99% of the executed surface area has been affected by the re-implantation activities (83.15%) or the improvement of the vineyard management (16.22%). Over the 2014-2016 period, an increase in plantations with grape varieties apparently more demanded by consumers has been observed: Tempranillo (+52,3), Macabeo (+ 37.17%), and Verdejo (286%) while the percentage of grape varieties cultivated for their productivity or better adaptation to the environment have been reduced, such as Bobal (- 94.5 %) or Airén (-41%).

. At regional level, According to the implementation report, trellis trained vines facilitate mechanisation and thus, reduce costs of production for wine growers. In Castilla-La-Mancha, 95% of the restructuring area have been replanted in trellis trained vine. It led to an increase of the profitability of the vine cultivation activity. In addition, the re-implantation operations led to a better structure of the vineyard thanks to the change of the layout which facilitated mechanisation and increased the size of the restructured plots. In Castilla-La-Mancha, the average size of a winegrowing holdings has increased of 0.47 ha since 2009. Moreover, the maintenance of vines has an environmental importance, since this perennial crop avoids erosion, especially in regions such as Castilla-La Mancha.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 16

2.2.3 Synthesis of the interviews

IQ 1.1 To what extent did the restructuring and conversion operations supported by the NSP impact the production potential of vineyards, in terms of quantity? In terms of quality? at the level of the region / of the Member State?

At regional level According to regional authorities and local representatives, the quantity of wine produced has decrease because of the planting of foreign grape varieties. These foreign grape varieties (such as Syrah) are less productive than autochtonous ones that are more adapted to the local climatic conditions (specifically the white variety “Airén”). They also mentioned that the measure allows to adapt the vineyard to the consumer demand, producing more red wine grape variety whereas Castilla-La-Mancha had traditionally vineyards with a majority of white varieties (Airén). According to wine growers’ organisation, because of the lack of research and assessments, sometimes the foreign grape varieties used aren’t well adapted to the climatic conditions of Castilla-la-Mancha. In these cases, the is low, and some vines need to be uprooted (Syrah for instance). Even if some wine grape varieties are demanded by the markets, some grape varieties shouldn’t be planted because of their poor adaptation to local climatic conditions. For some cooperative, while the variety Airén is very well adapted to local climatic conditions of Castilla-La-Mancha, there is a risk of decline of its area because of its ineligibility for restructuring and conversion measure since 2017.

IQ 1.2 /1.3 Did the NSP measures intend to support changes in the vineyard management practices or foster specific practices (i.e. organic agriculture, low mechanised systems, etc.)? To what extent did the NSP resulted in changes in the management practices of vineyards? Which practices were introduced/abandoned? Did those changes have an impact at national or regional level (e.g. acting as role model)?

At national and regional level In Spain, and in Castilla-La-Mancha, the measure has supported in majority restructuring activities including changes from goblet-trained vines to trellis-trained vines, which allow better mechanisation and low cost. In addition, in Castilla-la-Mancha, when it was possible, the wine growers relocated their production in zones where the yield could be easily increased and where it is possible to mechanize and to implement an irrigation system. Thus, one indirect effect of the measure was the implementation of irrigation system in vineyards leading to a greater use of water resource in vineyards. In addition, some wine growers have partnered to jointly invest in common agricultural equipment. At regional level, authorities considered that NSP programmes did not foster the production of organic farming.

IQ.1.4 Have the NSP measures impacted the costs of production? At national and regional level (authorities, wine growers’ organisation and beneficiaries) According to all interviewed stakeholders, the restructuration and reconversion measure allowed to decrease the need of workforce, improving the mechanisation of the vineyards, thanks to the changes from goblet to trellis trained vines and a change of the vineyard layout16. As workforce is the highest cost in grape wine production, the measure allows to decrease the costs of production and to maintain the vine cultivation activity in Castilla-La-Mancha (changes from manual harvest to a mechanised one). Indeed, beneficiaries insist that without the NSP, it would have been complicated to mechanize because of the costs induced.

IQ.1.5 Have the NSP measures resulted in a better adaptation of the vineyards structure and management practices to market demands? E.g. in terms of variety, quality

16 The plantation layout is obtained from the combination between the distance between vines in the same row and the distance between two rows.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 17

At national and regional level: The restructuration measure allows to adapt the vineyard to the consumer’s demand, producing more international and red wine grape variety. However, according to producers’ organisation, because of the lack of research and assessment, sometimes the red foreign wine grape varieties demanded by the market and planted in the region aren’t well adapted to the climatic conditions of Castilla-la-Mancha. In these cases, the yield is low, and some vines should be uprooted (Syrah).

In terms of quality, wine growers and the producer’s organisation consider that some cooperatives still pay for the volume produced rather than for the quality of the production even if some priority criteria for quality production have been implemented.

IQ 1.6 Have the NSP measures had an impact on the income of wine growers? At national and regional level (authorities, beneficiaries and wine growers’ organisation) According to public authorities, the measure allows to improve the competitiveness of winegrowers in Castilla- La-Mancha because the costs have been reduced and the income have increased. However, producers’ organisation nuances the above statement considering that the winegrowers try to adapt their production to the market demand but in Castilla-La-Mancha, some international red grape wine varieties aren’t well adapted to the climatic condition and have low yield. In these cases, the yield is low, and the incomes haven’t increased. 123/5000. Thus, even if the cooperatives and companies apply more and more differentiated prices according to the quality and the grape variety cultivated, it does not compensate the additional costs induced related to the maintenance of these varieties of quality for example. (price paid to a winegrower follow the market prices).

2.2.4 Conclusion of the expert

. Impact of the NSP on the production potential in terms of quantity and quality The restructuring measure helped to reduce the quantity of wine produced and to better adapt to the market demand thanks to the planting of international varieties that are less productive but more demanded on the markets. However, one of the most replanted variety is still Airén while it is not promoted by the restructuration measure. This observation may be explained by the fact that this grape variety is very well adapted to the region specificities. No major increase in quality have been assessed in Castilla-la-Mancha even if it is one of the main goal of this measure, but it was observed a diversification in wine variety produced. . Impact of the NSP on the vineyard management practices The restructuring measure had a huge impact on vineyard management practices, helping to switch from goblet trained vines to trellis trained vines, that foster mechanisation. In addition, modification of the plantation layout and relocation of the vineyard allowed the implementation of irrigation system, which could be considered as an indirect effect of the measure. . Impact of the NSP on the competitiveness of wine growers The measure enabled to reduce the costs of production, allowing the decrease of the need of workforce and fostering the mechanisation of the vineyards (thanks to the changes from goblet to trellis trained vines and a change of the plantation layout). In addition, whereas the Airén remains the first variety present in Castilla-La- Mancha, wine growers have diversified their production: international varieties and red varieties have been planted, to meet the consumer demand. Thus, overall, competitivity have been improved.

2.3 Effects of the NSP at the level of producers and products

2.3.1 Effects on the competitiveness key factors of wine producers

2.3.1.1 Synthesis of the interviews IQ 1.7 Could you please explain what are the current issues encountered by the wine sector in your Member States /region and describe the strategies implemented by the wine producers to address them? . At national level According to national representative of the sector, there is a change in the structure of wine sector to better sell wine but especially to increase exports to third countries. Wine consumption in Spain is low and even more

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 18

since the 2008 economic crisis. As the national consumption is lower than the Spanish production17, the current trend is to export (on intra and extra EU markets). Cooperatives tend to merge to better export their products: it enables them to diversify their product lines, to develop commercial services and thus, to better capture international markets. According to the national representatives of agri-food cooperatives, wine industries need to be better structured: there are currently too small and atomized wineries. A better organization of the sector would lead to achieve stability throughout the production chain and the value will be better distributed along the supply chain until wine growers. In addition, climate change is a great factor influencing the volume of wine grape produced and its quality. It impacts directly wine production and its commercialization.

. At regional level According to wine growers union, Castilla-la-Mancha produces traditionally white grape. In the past ten years, red wine grape varieties have been planted to adapt the production to consumer demand. However, the demand is slightly evolving: nowadays, a demand for white wine is also observed, such as Chardonnay, Sauvignon Blanc or Verdejo – while red wine demand is still higher. However, sometimes the demand doesn’t meet the local possibility of vineyard adaptation. Indeed, in Castilla-La-Mancha, red wine grape varieties are not as profitable as white varieties because they are not well adapted to the local climate conditions.

IQ 1.8 Did the actions undertaken by the wine producers with the support of the NSP contribute to improve the competitiveness key factors of EU wine products? Please explain how.

Better management of the costs . At regional level According to wineries and cooperatives, the NSP did not have a significant impact on the costs of production but had an impact on the turnover of the company. In terms of marketing, the NSP contributed to start or increase their promotion activities across the world. For some cooperative, the NSP was estimated essential in the increase of the company’s turnover. In addition, regional authority mentioned the investment measure as a tool to improve efficiency regarding the use of energy.

Organisational structure of the supply chain and positioning of the operator . At national level According to national authorities and national representatives of cooperatives, the structure of the sector has been slightly influenced by the NSP measures. The better structuring of cooperatives is a challenge in Spain and is supported at national level18. In Spain the RDP prioritizes cooperatives (collective projects) but there is a lack of coherence between Article 50 of the CMO regulation and the rules of the EAFRD in collective projects when dealing with cooperatives: - CMO: the support rate for large companies, (among them are the cooperatives) equals half of the support rate for small and medium size companies. In Spain, these large companies are often large grouping of cooperatives not only specialized in the wine sector. These large companies shouldn’t be considered as one company but a gathering of several smaller companies. - While in the EAFDR, the support rate for collective projects remains the same regardless of the size of the applicant’s structure: cooperative or wineries.

Thus, it slows down the structuring of the sector.

. At regional level No specific collaboration with other firms have been identified. Some cooperatives without specific commercial services will delegate the promotion operations to specialized companies. These specialized companies will

17 45MhL produced versus 10MhL consumed in Spain 18 Law 13-2013 establishes promotion policies of integration of cooperatives. It aims at the expansion and integration of agri-food cooperatives to have a greater weight in exports.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 19

promote in specific markets during fairs, exhibitions or other activities, products coming from several cooperatives.

Technical know-how and innovation capacity . At national level According to national authorities and representatives of wine sector and cooperatives, the Investment measure helps winemakers (cooperative and companies) to invest in more performing / modern building and machineries improving winemaking techniques. The measures helped to invest in thermoregulated machineries, pneumatic press, wooden barrels, machineries for selecting the best at the entrance of the /cooperative. Thus, the measure supports the improvement of quality. Through the support of investments in bottling machines, the NSP also contributed to increase the production of wine in bottles which correspond to consumer demand and thus increase the added value. . At regional level Regional stakeholders added that in Castilla-La-Mancha, many tanks were established outside without thermal regulation and the measure allowed to invest in cooling systems, thermoregulated machineries and help to improve the energy efficiency of plants and machineries.

Access to customers: promotional strategy, marketability of products and distribution channels used.

. At regional level Regional authorities mentioned that thanks to the investment measure wineries and cooperatives invested in the development of online shops, which helped to diversify the channel distribution of wine products and the access to customers.

IQ 1.9 What were the impact of the NSP measures on your supplies, in terms of quality, volume and origin? . At regional level According to wine grower cooperatives and wine companies, the NSP measure allowed to diversify the wine grape varieties but not to increase the volume. On the contrary, in some wineries, the wine grape volume has decreased since 2013 due to lower yields of some international varieties less adapted to the regional climatic conditions (sauvignon blanc for instance). In addition, thanks to the investment made under the NSP, the companies and cooperatives could, improve the selection of the wine grapes at the entrance of the winery/ cooperative by better differentiating the grapes quality via a specialised machine. No changes in origin of supply have been reported.

IQ 1.10 Did the actions undertaken by the wine producers with the support of the NSP contribute to changes as regard the organisation and coordination of the operators in the supply chain? Please explain how. . At national level According to national authorities and national representatives of cooperatives, the structure of the sector has been slightly influenced by the NSP measures. The better structuring of cooperatives is a challenge in Spain and is supported at national level. In Spain the RDP prioritizes cooperatives (collective projects) but there is a lack of coherence between Article 50 of the CMO regulation and the rules of the EAFRD in collective projects when dealing with cooperatives. Thus, it slows down the structuring of the sector. (see details in I.Q.1.8)

. At regional level No specific collaboration resulting from some action undertaken with the NSP support have been identified. However, in Castilla-La-Mancha, 7 producer groups composed of cooperatives or companies have been formed with RDP support.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 20

2.3.2 Effects on the capacity of operators to adapt to customers’ expectations

2.3.2.1 Synthesis of the interviews IQ 1.11 Did the NSP measures contribute to the capacity of operators to adapt to customers’ expectations, using innovative integrated approach? Stakeholders at both national and regional level agree on the fact that the NSP measures enable the operators to adapt to customer’s expectations. It concerns mainly the Restructuration measure through the planting of grape varieties more demanded and the Investments measure. All the winemakers interviewed (companies and cooperatives) stated that the NSP and especially the investment measure has greatly helped them to adapt to customers’ expectations. Indeed, the investment measure allowed them to diversify more their production, increase the range of their products developing more wines of better quality and bottled wines instead of bulk wine. No specific innovative integrated approach was specifically mentioned during the interviews.

IQ 1.12 What types of supported investment were made to adapt to the evolving demand? Stakeholders at both national and regional level indicated that investments have been made to meet the consumers’ expectations, in terms of selection of grape varieties planted, the wine quality, the packaging of the product and online purchase: - Grape varieties: the restructuration measure help to replant more demanded varieties (international and red grape varieties) - Wine quality: thermoregulated machineries, cooling systems, pneumatic press, filters, machineries for selecting the best wine grapes at the entrance of the winery/cooperative. - Packaging: bottling machines - Online purchase: investment in online store

IQ 1.13 Did the promotion measure was used to support studies of new markets to identify consumers’ preferences? . At national level According to national representatives of wine sector, the promotion measure was not much used to support studies of new markets to identify consumers’ preferences. They have been marginally financed, and mainly the first year of implementation the programming period 2014-2018.

. At regional level For some wineries, this type of study is useless because of the speed of evolving demand: the study is obsolete almost as soon as they are published.

2.3.3 Effects of other factors on the competiveness and overall performance of wine producers

2.3.3.1 Synthesis of the interviews IQ 1.14 How did the market shares evolved for your major wine products? on intra and extra EU markets? What are the main factors explaining these changes? . At regional level According to the D.O La Mancha managing organization, China is the first market of PDO La Mancha wines. The China market shares have increased in the past few years, both concerning all wines from the Region and PDO La Mancha. The extra EU exports, mainly concerning China, and United States, have greatly increased in Castilla-la- Mancha while intra EU exports have decreased.

IQ 1.15 What are the other factors that could have had an impact on the competitiveness. product quality and market orientation of the EU wine sector (e.g. evolving demand, increased competition, climate change, etc.)?

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 21

Both national representatives of the sector and wineries highlighted the great importance of negotiating for trade agreement between EU and third countries to avoid technical and tariff barriers. These agreements help to export in a given country. One winery pointed out an indirect effect of new trade agreements: when settled, more wine salers would like to enter in the market. It will penalize Spanish wine salers already in place because of a possible higher competitiveness between EU wine products. In addition, evolution of exchange rate could impact national consumption. It was the case in Russia when the rouble felt in value: it led to a drop in Russian consumption, and sales in the wine sector were affected.

2.3.4 Conclusion of the expert on the effects of NSP measures on the competiveness and overall performance of wine producers

The NSP measures had a great impact on the competitiveness and overall performance of wine producers. The restructuration measure has fostered winegrowers to diversify wine grape varieties planted, and thus to better adapt to consumers’ expectations. The Investments measure allowed wine-producers to improve the quality wine production through the elaboration chain and allowed to increase the bottling activity. All these investments allowed stakeholders to better control the wine characteristics and to adapt to consumer’s demand. All these factors are as much arguments to sell the wines and lead to greater competition with international acknowledged wines sold around the world. Wine production costs has not been reduced but the added value of the wine increased. The promotion measure helped wine producers/ wholesalers to promote their wine in third countries. The effect of promotion missions is not easy to determine knowing that to start trading with third countries, it takes several years and other factors could impact trades. However, the Promotion measure help advertisement of their wines and help to increase trades and turnover.

To resume, the NSP measures helped stakeholders to adapt to consumers’ demand, improve the efficiency of wine elaboration and the quality of the final product and increase advertisements around their products to export them. These factors are major ones to boost competitiveness and overall performance of wine producers.

2.4 Effects of the promotion measure

2.4.1 Effects of the promotion measure on the recovery/capture of foreign markets

2.4.1.1 Evolution of the market shares of national wines on the main foreign markets 2.4.1.1.1 Spanish wine exports

Generally speaking, exports of Spanish wines have greatly increased since 2000, in value (+186%) and in volume (+731%), as shown in Figure 7. Spanish wines are mainly exported to EU markets, thought exports to third markets are increasing since 2000: third markets represented 27% of the exports on 2000 and 41% on 2017.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 22

Figure 7: Evolution of the Spanish exportation – in Figure 6: Evolution of Spanish wine exports share, volume and value – between 2000 and 2017 intra and extra EU (m$)

3500 3500 3500 3000 3000 3000 [CELLRANG[CELLRANG[CELLRANG 2500 2500 [CELLRANG E] E] [CELLRANG 2500 E] [CELLRANG[CELLRANG 2000 2000 E] E] [CELLRANG E] E] 1500 1500 2000 [CELLRANGE] 1000 1000 1500 E] 500 500 [CELLRANG[CELLRANG[CELLRANG 1000[CELLRANG [CELLRANG [CELLRANG[CELLRANG[CELLRANG 0 0 [CELLRANG E] E] E] E][CELLRANG E] E] E] E] 500[CELLRANGE] E] E] 0 Wine exports in value (m$) 2000 2005 2010 2011 2012 2013 2014 2015 2016 2017

Wine exports in volume (t) Intra-EU Extra-EU

Source: Comtrade Source: Comtrade

According to the implementation report, packaged wines exported to third countries have increased by 2,6% each year since 2011. The average price for this category of exported product have been quite stable since 2009, with 2,85€/L, after a great increase in 2010. As detailed in Figure 8, the growth of sparkling wines and PDO/PGI wines is particularly relevant since 2000. Since 2010, Germany and the United Kingdom are the main export markets for Spanish bottled wine. In 2017, after a great increase, France became the third export market of Spanish wine, in volume. The latter however is challenged by third countries as China and United States. Indeed, since 2010, bottled wine volume exported to China have spectacularly increased, making China the first extra EU export market. Figure 8: Main destination of Spanish wine bottle exports by type of products (tons) 160000 140000 120000 100000 80000 60000 40000 20000

0

Chine Chine Chine

Japon Japon Japon

Russie Russie Russie

Suisse Suisse Suisse

France France France

Canada Canada Canada

Belgique Belgique Belgique

Pays-Bas Pays-Bas Pays-Bas

Etats-Unis Etats-Unis Etats-Unis

Hong-Kong Hong-Kong Hong-Kong

Allemagne Allemagne Allemagne

Royaume-Uni Royaume-Uni Royaume-Uni 2000 2010 2017

VSIG Variety Wine Sparkling Red/ Wine with PDO/PGI White wine with PDO/PGI

Source: Eurostat Since 2011, while the exported volume increased, the Spanish market share in China has decreased by 7% in 2013 in the wine sector. The market share in 2012 is being recovered gradually thanks to an increase of 4 points since 2013. However it still hasn’t reached the level of 2013. However, in value, the market share of Spanish wine is steady since 2011.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 23

Figure 9: Wine imports in China by country of origin

(000 T) (MILLION $)

700 2500 [CELLRAN [CELLRAN [CELLRANGE] 600 [CELLRANGE] GE] GE] [CELLRAN[CELLRAN [CELLRAN 2000 [CELLRANGE] GE] [CELLRANGE][CELLRAN 500 GE] GE] GE] [CELLRAN GE][CELLRAN [CELLRAN [CELLRAN 1500 [CELLRAN[CELLRAN GE] GE] [CELLRAN[CELLRANGE] 400 [CELLRAN [CELLRAN [CELLRANGE][CELLRAN GE][CELLRAN [CELLRAN[CELLRAN [CELLRANGE][CELLRAN GE] [CELLRAN[CELLRANGE] [CELLRAN GE] [CELLRAN [CELLRANGE][CELLRAN GE] GE][CELLRAN [CELLRAN [CELLRANGE] GE] GE] GE] GE][CELLRAN GE] GE][CELLRAN [CELLRANGE] GE] GE] [CELLRAN GE] [CELLRANGE] [CELLRAN [CELLRAN[CELLRAN 300 GE] [CELLRAN[CELLRAN GE] [CELLRAN [CELLRAN GE] GE][CELLRAN 1000 [CELLRAN [CELLRANGE] GE] [CELLRAN[CELLRANGE][CELLRAN GE] GE] [CELLRANGE] GE] GE] GE] [CELLRANGE] [CELLRANGE][CELLRAN [CELLRANGE] [CELLRANGE] GE] GE][CELLRAN [CELLRAN [CELLRANGE] [CELLRAN [CELLRAN [CELLRAN [CELLRANGE] GE][CELLRAN GE] [CELLRANGE] GE] [CELLRANGE] 200 [CELLRANGE][CELLRAN GE][CELLRAN GE] [CELLRANGE] GE] [CELLRANGE] GE] GE] GE] [CELLRAN[CELLRANGE] GE] GE] [CELLRANGE] [CELLRAN GE][CELLRAN [CELLRAN 500 [CELLRAN [CELLRAN [CELLRAN GE] GE] [CELLRANGE] [CELLRAN GE] GE] GE] [CELLRAN [CELLRAN [CELLRAN[CELLRANGE] 100 [CELLRANGE] [CELLRAN GE] GE] [CELLRAN[CELLRAN GE] GE] GE] GE][CELLRAN [CELLRANGE] GE] [CELLRAN [CELLRAN GE] GE] [CELLRAN[CELLRAN GE] GE] GE] GE] 0 GE] GE] 0 2000 2005 2010 2011 2012 2013 2014 2015 2016 2000 2005 2010 2011 2012 2013 2014 2015 2016

France Italy Spain Australia France Italy Spain Australia Chile USA RoW Chile USA RoW

Source : Comtrade

2.4.1.1.2 Wine exports of Castilla-La-Mancha

In Spain, EU market is the first outlet of wine from Castilla-La-Mancha, with France, Germany and Italy being the three main destination markets. Nevertheless, exports are steadily decreasing in value in the main intra EU markets, while they rose in the 3 main extra EU markets. The most spectacular increase concerns China. Indeed, since 2013, this market has jumped from the 10th to 3rd place in the ranking of importers of wines from Castilla-la-Mancha, and is, in 2016, the first most important third-country in imports of wines from

Figure 11: Evolution of Castilla-La-Mancha wine Figure 11: Evolution of Castilla-La-Mancha wine exports exports in intra EU and extra EU markets (in k€) in the 10 main markets (in k€)

500,00 400,00 2016 300,00 2015 200,00 100,00 2014 0,00 2013 2014 2015 2016 2013

Intra EU Markets* 0 100000 200000 300000 400000 500000

Extra EU Markets** FR DE CN IT GB RU NL PT CZ US

* FR, DE, IT, GB, NL, PT, CZ ** CN, RU, US Source: Agrosynergie elaboration based on Wine Sector report of Castilla-La-Mancha, 2017, Secretary of State for Commerce, Chambers of Commerce and ICEX from data of Custom Department Castilla-La-Mancha.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 24

2.4.1.2 Information collected in the implementation reports The promotion measure in third countries is very appreciated and is considered essential. The measure has been used at a particularly important moment of necessary internationalization of Spanish wine. Operators showed high interest in the measure. Within this measure, different actions have been performed to a different extent according to the type of beneficiaries, the size of the company, their experience, their presence in the market and their objectives.

Generally speaking, for collective beneficiaries, the predominant actions have been those related to communication and product presentations. To a lesser extent, reverse missions have also been considered as important operations to support private brands and small-size companies with less experience.

For companies, the most frequent operations performed under the measure have been trade missions and product presentations, both in small-exhibitions and in outlets, i.e. operations involving distributors / importers, followed by participation in exhibitions/shows, trade missions and, to a much lesser extent, general communication and advertisement. A small part of the budget was used for acquisition of relevant market information and for support for evaluating the effect of the measure itself.

The analysis showed that the most used operation depends on the type of company, its level of marketing experience, its relationship with the distributor and its size. All these factors greatly influence the choice of the consumer segment aimed by a company. Companies with high volumes generally focused on distribution operations and on popular segments while the niche companies focus on segments of consumers interested in high quality products.

The following trends have been identified: . Participation in exhibitions is extremely important in the initial phases of exports, i.e. when the exporter is willing to communicate on its wine products for the first time. However, the more experience the exporter gets, the less sense there is in participating in exhibitions. Thus, the exhibitions are slowly replaced by more direct actions with the importers. . In almost all cases, great importance is given to reverse trade missions which bring people to know you, to see the winery, to understand what is behind a brand, to understand the seriousness of the export effort that is being made and, most especially, to understand the culture of wine in a given area. Clients tend to buy the wine for its intrinsic quality as a product and also for the history that surrounds it. These supported business trips allow exporters to teach professionals, importers and consumers, the value of the wine culture in their geographical zone and the origin of the product. It is considered an essential task that will eventually pay in the long run. Sometimes these reverse missions can be associated with awards or incentives. In the end, in addition to the trip and the visit itself, the reverse mission could become an extraordinary brand recognition formula. . In markets such as the United States and Canada, for its very special characteristics, promotion operations in outlets are essential. This way, the promotion operations reach the final customer and that is why the brand becomes relevant, improves the producer’s turnover and allow its brand to stand out from the other brands in the importer's portfolio. . In Asian countries it is perhaps where more innovative operations are performed, with actions also aimed at reaching the final consumer, both popular and with very high standings, for which imaginative actions are required, including strong activity in social networks, contests or massive presentations.

Evaluation of effectiveness of the Promotion measure: As stated in the National Support Program Implementation report, the evaluation of the measure is more complex than usual. Quantitative and objective criteria are sought to define whether the support meets its objectives and, among them, the evolution of sales in the markets where it is applied. But the sales and the corresponding market share do not react immediately or directly to the promotional activities that are carried out. In addition, sales and market share may be affected by many other factors different from such activities, such as the evolution of exchange rates, consumption in destination, the conditions of competition, changes in legislation and particularly in taxation or barriers to entry. It is commonly agreed that promotional activities are an essential element to boost marketing and that it has clear effects in the medium term that benefit the whole sector, but it is not easy to assess the immediate effects of it.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 25

2.4.2 Effects of the promotion measure on the reputation of EU wines

2.4.2.1 Synthesis of the interviews IQ 3.1 What are the EU wine products benefiting from the best reputation abroad? Please specify: o Their origin (France/Italy/Spain/etc.) o Their category (red/white/sparkling/etc.) o Their quality (PDO/PGI/wine variety) For national authorities and some wineries, the wine reputation and its marketing depend on the market. In Russia and Chile, bulk wine is better sold while in the United States PDO wine is. In China, some region are demanding only PDO/PGI wines, while in Shangaï or Pekin, a varietal wine with an attractive label is better sold.

IQ 3.2 Did the promotion measure contribute to strengthen the reputation of the national wines? The Spanish Wine Federation stated that it is complicated to measure the effect of the promotion measure on the reputation of national wines since several other factors can have a considerable impact on a wine reputation.

On the other hand, the other interviewees at national and regional level stated that the promotion measure was very important to boost reputation of Spanish wine and especially for intermediate wine cooperatives that wouldn’t have been able to enter a market without this measure. The promotion measure has contributed to strengthen the reputation of the wines even if it is very much time consuming to work on the reputation of wine products in third countries.

IQ 3.3 Apart from the NSP, were there any other factors that could have impacted the reputation of national wine products abroad? . At national level The Spanish Wine Federation stated that multilateral trade agreements have great impact on the quantity of wine sold in the import market, and thus can play a role in the reputation of the wine exported. The importance of trade agreements was also mentioned at regional level by a notorious group of wine companies. Thanks to the current commercial agreements Spain has with China and Chile, higher quantity of Spanish wine being sold in these countries benefiting to the Spanish wine sector.

2.4.3 Effects of the promotion measure on wine companies’ income

2.4.3.1 Synthesis of the interviews IQ 3.4 Are there spill-over effects of the promotion support on wine producers’ income? . At regional level According to the regional authorities and wineries, as mentioned before, the exports of wine products from Castilla-La-Mancha increased over the years. Same observation was made for Spanish wine in general. Because the promotion measure directly helps to increase exports, the measure may have probably influenced the wine producers’ turn over, while the effect on their income still has to be studied.

IQ 3.5 Were there any other factors that could have impacted the wine producers’ income? . At regional level Interviewees from regional authorities to beneficiaries of the NSP stated that the investments in the elaboration of wine via the investment measure may have positively impacted the quality of the wine produced and increased the added value of products sold. Moreover, multilateral/bilateral partnership with third countries were mentioned by the local group of wine companies as a direct factor influencing the level of trades and thus impacting the wine producers’ income. The fluctuation in the value of foreign currency has also an influence on the quantity of wine traded and may impact the wine producers’ income.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 26

2.4.4 Additional benefits or negative effects in third countries generated by the support for promotion

2.4.4.1 Synthesis of the interviews IQ 3.6 Are there any additional benefits or negative effects arising from the promotion operations implemented in third countries? . National authorities . Representatives of the sector/interbranch organisations/ industry unions The administrative workload relating to supporting documents to prove the eligibility of the operations performed under the measure was considered excessive by the beneficiaries and by regional authorities. The negative effect is that only large size companies with a large task force could dedicate the necessary time to apply and justify the operations under this measure while little companies will give-up. This observation has been made by winegrowers/wine producers union. To face it, some smaller wineries or cooperative outsourced their promotion operations to specialized organisations. The negative effect would be that only large companies size benefit from the measure and the promotion measure would boost exports of these companies already benefiting from a network of importers in third countries while little companies struggle to export their products and to make a living out of the wine activity. No additional benefits or negative effects arising from the promotion operations implemented in third countries were mentioned during the interviews.

2.4.5 Conclusion of the expert on the effects of the promotion measure

Several years are needed to begin selling a product in a new market. Indeed, some effects of the 2014-2018 Promotion measure are difficult to assess. Furthermore, the promotion measure had great positive effects on the exports of wine from Castilla-La- Mancha and from Spain, helping the operators to internationalize. It can be assumed that the measure helped to improve the reputation of wines from Castilla-La-Mancha in third countries. In addition, the measure helped to capture new markets: . For the small cooperatives that did not internationalize their product before, it helped to enter new markets. Thanks to the NSP support, some cooperatives have developed an export department, with an export manager. This way, they benefit from enhanced skills that remain within the structure. Due to the administrative complexity of the measure, small cooperatives tend to outsource their export operations. Nevertheless, this effect is not quantified. . For wineries and cooperatives that have already an export department or that are used to export their products, it seems that the measure helped them to discover new markets. As regards operations in important markets such as the United States or China, the same operations/activities would have been done without the measure anyway. Furthermore, 5 years aren’t enough to secure trades in a given market. For smaller operators which did not export in a given third country before, there is a risk of leaving the market after the supported 5-year period because of too much necessary economic resource to maintain their activities/operations in the third country. Finally, it can be assumed that the Promotion measure helped to develop marketing of bottled wine in third countries rather than bulk wine. The complementarity with the investments measure which supported bottling machine and storage area have enhanced this effect.

2.5 Effects of the information measure

2.5.1 Effects of the information measure on responsible consumption of wine

2.5.1.1 Other national campaigns on responsible consumption of wine/alcohol The information measure has not been opened in Spain for the following reasons: . The Information Measure does not allow the participation of private companies as beneficiaries of the measure. . Commercial brands cannot benefit from the measure and the measure has restrictive rules regarding mentions to the origin of the product. Programs can only deal with responsible consumption and

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 27

information on PDOs / PGIs. . Its inclusion in the NSP would have meant a reduction of funds for the other measures such as the Promotion Measure in third countries, of greater interest to the sector. . This type of action can be supported through the Horizontal Promotion Regulation (EU) 1144/2014 or through Rural Development Programs. . There are other types of organizations such as the Spanish Wine Interprofessional Organization and the Spanish Wine Federation, among others, that carry out information activities.

2.6 Efficiency of the management of the NSP

2.6.1 Achievement of the technical targets of the NSP

Table 12: Rate of achievement of the foreseen expenditures per measures in Spain 2014 2015 2016 2017 Promotion 79% 101% 99% 83% Restructuring & conversion 94% 100% 103% 107% Investment 110% 104% 97% 92% By product distillation 96% 97% 99% 100% Innovation 30% 36% Source: DG Agri, March 2018

2.6.2 Selectiveness of the management procedures

Table 13: Main criteria/procedure(s) ensuring the relevance of the selected applications Promotion Detailed previously in § 2.1.4 Restructuring & conversion Detailed previously in § 2.1.2 Investment Detailed previously in § 2.1.3 Innovation Detailed previously in § 2.1.5

2.6.3 Description of the management procedures of application files

2.6.3.1 Restructuring measure

Selection and processing For all measures from the NSP: investment, promotion and innovation measures, an annual call is managed by the Regional authorities. The eligibility of all applications is analysed at regional level by the Regional Department of Agriculture, Environment and Rural development of Castilla-La-Mancha. Only National public bodies are required to submit their applications to the Ministry of Agriculture, environment and rural development. The regional department oversees the classification and selection of the admissible applications. Once the first analysis performed, the eligible application forms are transmitted to the central team at national level (Ministry of Agriculture, Environment and Rural Development). This list is presented at the sectoral conference on agriculture (composed of the Spanish Ministry of Agriculture and the representatives of agriculture of each Autonomous community) that decides on the final list. Then the projects that are in their territories are followed by regional authorities from the Autonomous Communities. The Autonomous Communities carry out the final approval of the operations that will be financed in the financial year. Promotion programmes can have a maximum duration of three years for a specific beneficiary and country, and they may be extended once for up to two years or twice for up to one year.

Monitoring and payment Support related to the Restructuration and Conversion Measure are financed entirely by the European Agricultural Guarantee Fund (FEAGA), through the Paying Agency of Castilla-La Mancha. The amount of subvention will be given to the beneficiary only once all the operations described in the application form have been carried out and checked on the ground.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 28

After the completion of all operations, the beneficiary must submit a request for payment. The Regional authorities must issue a payment resolution once it has been checked that all the operations have been executed. The Services of the Regional Department of Agriculture19 at provincial level assess the payment applications, and authorize the payment, remitting the authorization to the General Directorate of Agriculture and Livestock.20

The monitoring of the projects supported are performed by the regional authorities. Two types of controls are performed: - administrative controls of all the document supporting the expenditures related to the supported operations - on-the-spot controls: before the activities supported started and when finalized before giving the subvention.

Up-front payment: As established in Article 19 of European Commission Regulation (EC) 555/2008, beneficiaries may request an up-front payment that may not exceed 20% of the public investment support, as long as a they provide a bank guarantee up to 110% of the up-front payment. The guarantee will be given back when the amount of the actual expenses exceeds the amount of the up-front payment.

2.6.4 Synthesis of the interviews

2.6.4.1 Questions related to the effects of the financial parameters

IT 2.5 Compared to a budget that would have been manage on a 5-year period, have the yearly management of the NSP’s budget fostered an orderly implementation of the measures on all the duration of the programme? . National and regional authorities Concerning the investment measure, The investment measure is managed at national level. National authorities mentioned that the budget allocated to the investment measure for the programming period 2014-2018 has been entirely distributed in approximately 2 years and no more budget was available for new applications since 2016. Thus, a yearly budget management has not fostered an orderly implementation of the investment measure for all the duration of the programme. The national authorities stated that they are lacking budget under the investment measure since 2016 because they have chosen to approve most of the eligible projects in the calls of 2014 and 2015.

Concerning the restructuring and reconversion measure, The regional authorities reported an important issue relating to the budget management. The interviewees stated that the difference in the definition of the area eligible for the measure and the area under vines as declared in the vineyard register for a same vineyard lead to a difference between the requested amount and the eligible amount. Indeed, beneficiaries, when filling-in their application forms do not measure precisely the eligible area because they have not yet thought about the new vineyard framework. As a result, some of the allocated budget under this measure won’t be executed while there were other applicants that were eligible but weren’t approved because of too much demand at the beginning of the campaign. Funds not executed due to resignations or uncomplete executions of budget granted cannot be redistributed among Autonomous Communities. The budget that hasn’t been spent can be absorbed by Autonomous Communities only if they choose to fund projects based on a pro rata/minimum payments system and not if they have chosen to select projects based on a ranking system.

19 Services at provincial level. 20 Regional order 126/2017 of the Regional department of agriculture, environment and rural development of Castilla-La- Mancha, 12th of July and regional order 04/12/2013

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 29

Concerning the promotion measure, According to regional authorities, the only issue with a yearly budget is that some expenditure could be lost for the measure. Indeed, an execution rate of 100% is quite impossible.

IT 2.7 Have the yearly management of the NSP’s budget fostered/hindered the selection of the more relevant applications? Have it been an obstacle to the support of multiannual projects or structuring projects? The analysis is different per measure. For the restructuring measure, under the NSP programme, the Autonomous Community of Castilla-La-Mancha decided to authorize only annual and biannual project to be supported. . The design in terms of time granted to beneficiaries to perform supported activities was inappropriate. The imposed short time laps to perform the activities under the restructuration measure may be due to the yearly budget management. To benefit from the measure, applicants must plan annual or biannual projects while the NSP propose 5-years projects under this measure. The decision of support annual and bi-annual projects was decided at regional level only. However, the winegrowers explicitly stated that more time is needed in order to prepare the soil before replanting for example. They stated that the soil must rest for several years in order to be appropriate for vineyard cultivations. . Under the investment measure, beneficiaries can apply for pluri-annual projects, even if there is an yearly managed budget. Thus, there was no negative effect of the yearly budget management on the type of applications approved.

IT 2.10 Have the absence of obligatory national co-financing facilitated the management of the funds at the level of the managing authorities? According to regional authorities, the absence of obligatory national co-financing facilitates the implementation of the programme.

2.6.4.2 Questions related to the overall effectivness of the programme IT 8.1 Have the traceability of the expenses been improved compared to the previous programming period? If so, how? The degree of traceability of the expenses hasn’t been improved compared to the previous programming period.

IT 8.2 How do beneficiaries demonstrate their actual need of EU support, and that normal operating costs are not financed by the EU budget? Please detail per measure if needed. Administrative and on-the-spot controls (for some measures) are performed by regional Paying Agency in order to check conformity of the operation with the NSP requirements. While there is no specific procedure to ensure the actual need of support of the beneficiaries, regional authorities assess the eligibility of each application. Furthermore, for the promotion measure, the complexity related to the application limited deadweight effects.

IT 8.3 Do you think that the measures have supported actions that would have been carried out anyway (without the EU support)? Please detail per measure if needed. Based on interviews with producers’ organisation, interbranch organisation and beneficiaries: without the NSP, the operations would not have been carried out as quickly as observed and the technical modernization would not have reached the current level. . Thus, the restructuration and conversion measure has led to a diversification of the grape varieties planted to better adapt to the market and improve quality. In addition, this measure allows a massive change of vineyards layout allowing mechanization of cropping system management. The restructuration and reconversion of vineyards would have been undertaken by some winemakers but would have taken more time. . Regarding the investment measure, the smaller operators would not have carried out investments in modern equipment without the support. Thus, the NSP has acted as a significant leverage effect to improve the winemaking processes, storage and packaging of wine products. Moreover, probably only the companies and cooperatives already structured and with sufficient liquid assets would have made the

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 30

investments without support. But again, they would have taken more time to perform all the investment they did. . The promotion measure allowed smaller companies and cooperatives to internationalize their products. It is particularly the case for the operators without an export department or export manager: without the NSP, operators wouldn’t have spent as much time as they did in third countries to promote their products. They would have undertaken small promotional activities probably not sufficient to export as much wine as they did. For bigger companies already exporting their wine products, the NSP support allowed them to search for other new markets.

IT 8.4 How do you make sure that the costs of the supported operations correspond to the market prices for similar operations? Please detail per measure if relevant. For the restructuration measure, reference costs are described in the Royal decree and adapted at regional level. Details are led down in Annex VII For the investments measure, the applicant must provide at least three offers from different providers in the case of expenditure exceeding 50 000€ or 18,000 in the case of expenses of purchase of machinery, facilities, supplies and services. The choice between the offers submitted, which must also be submitted together with the request for payment, will be made according to criteria of efficiency and economy.21 Details are led down in Annex VIII

For the promotion measure, maximum eligible amount is defined in the regional order of Castilla-la-Mancha.

2.6.5 Conclusion of the experts on the effect of financial parameters and the relevance of the selected application and risk of deadweight

. Effects of the financial parameters The yearly budgetary limits led to less flexibility to manage the overall program expenditure: it is not possible to allocate a residual budget of one year to the next one. Thus, it was considered very constraining for managing authorities. However, the execution rate is around 100%, thanks to an effective management of the budget. The flexibility in the budget allocation management between the different measures helps the authorities to optimize the budget every year. Furthermore, for the restructuration and conversion measure, yearly management expenditure has led public authorities to allow only annual and biannual project to be supported, making the measure less adapted to the vineyard operations and thus, less interesting for winegrowers. At last, the absence of obligatory national co-financing is a guarantee of an annual envelope for the sector, protecting it from competition from other sectors . Relevance of the selected application and risk of deadweight effect Priority criteria have been defined for all measures in Spain and Castilla-La-Mancha. However, for the Investments measure, an insufficient minimum of points has been decided and it led to the approval of most of the applications during the first two first years. Therefore, no subvention was made available for new projects after two years of implementation. However, generally speaking, priority criteria have permitted to select the most relevant application, except for the investment measure.

2.7 Coherence of the NSP

2.7.1 Coherence of the objectives of the NSP with other EU/CAP objectives

2.7.1.1 Synthesis of the interviews IQ 12.1 According to you, are the objectives of the NSP coherent with: - the EU overall objective of environmental sustainability?

21 Regional order 2014/373 of the Regional department of agriculture, environment and rural development of Castilla-La- Mancha, 13th of January 2014.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 31

According to public authorities and interbranch organisation at both national and regional level, there were no environmental criteria within the priority criteria defined under the restructuration measure, while there will be some for the next 2019-2023 period. However, this measure could enable the maintenance of vine in disadvantaged areas or areas with natural handicaps: there is an environmental importance of the maintenance of this perennial crop since it prevents erosion, particularly in Castilla-La-Mancha. Regarding the investments measure, there is only one environmental criterion to prioritize projects (2.6 The applicant has a quality assurance certification (BRC, IFS, ISO 9000) or environmental) but it represents only 3 points out of 100. This priorization criterion had no effect since all applicants have been approved during the two first years of the program, without being prioritized.

- the EU overall objective of balanced territorial development? All stakeholders at national and regional level (authorities, interbranch organisations, wineries and wine growers) considered that NSP measures helped to increase the competitiveness and efficiency of the processes for wine producers and have allowed a better mechanization of the cropping system and therefore improved productivity (viable food production). In addition, some wineries, emphasised on the fact that the NSP has allowed to maintain people in rural areas. Indeed, it was observed in Spain an urban migration until the 2008 economic crisis. Since the crisis, people returned to rural areas, and the NSP helped to maintain viable economic activities in these areas where the production of wine represented the one of the most profitable agricultural activity. The NSP encouraged the development of the viticulture activity in these areas, boosted the competitiveness of wine producers and increased the employment in this sector. In that way, the NSP is coherent with the objective of balanced territorial development. In addition, according to national authorities the innovation measure was coherence with the economic growth and balanced territorial development EU objective since it supports the competitiveness of the wine producers (added value) and the knowledge transfer. However, this measure has been removed since there are other funds financing broader innovative initiatives with less restrictive requirements than the innovation measure (for example. The EAFRD fund).

2.7.2 Coherence and complementarity of the NSP measures with corresponding measures

2.7.2.1 Identification of measures with similar objectives Table 14: Measures with similar objectives opened to wine growers/producers

Policy Measure Similar objectives Demarcation criteria concerned

4.1: Investments in agricultural Investment in irrigation aren’t holdings” supported in the NSP

4.2“Investment in Enhancing farm viability and When the Investments measure EAFRD - RDP processing/marketing of agricultural competitiveness of all types of was opened, the wine sector products” agriculture wasn’t eligible to this RDP measure

4.3.: Investments in agricultural, Investment in irrigation aren’t livestock and forestry infrastructures supported in the NSP

Priority axis 1, Thematic Objective 1, Strengthening research, "Strengthening research, Only for international enterprises technological development and technological development and innovation R+D+I projects are eligible innovation"

Operations dedicated to small and ERDF medium enterprises to begin to Priority axis 3, Thematic Objective 3, export or consolidate markets "Improve the competitiveness of "Improve the competitiveness of SMEs The support could provide SMEs", assessment for developing the export strategy and is available only for Source: based on interviews and www.icex.es

2.7.2.2 Synthesis of the interviews IQ 13.1 According to you, are there synergies/complementarities between the NSP measures and: - the corresponding measures in the RDP? Please explain.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 32

- the corresponding measures contained in the horizontal regulation on promotion measures of agricultural products? - the corresponding measures contained in other EU policies?

. Restructuring and conversion: At national and regional level, authorities and representatives of the sector considered that there is a complementarity between the NSP restructuring measure and the RDP measures 4.1 and 4.3.3 to support investments in irrigation system while it is not part of the operations eligible for support under the NSP. However, there is an inconsistency between the RDP grant to maintain old vines and the NSP grant to restructure the vineyard. The NSP encourages grubbing-up of old vineyards while the RDP foster the conservation of these old vines for biodiversity. . Investment: According to national and regional authorities, wine producers can benefit from the RDP measure 4.1 to support investments. Risks of double financing have been addressed when writing down the national decree and the NSP and RDP programmes. Indeed, one beneficiary of the investment measure under the RDP cannot benefit from the RDP support under the measure 4. In the wine sector, when the Investments measure is opened, the wine producer cannot benefit from support under the RDP measure 4 and vice versa. According to the authorities and the national representatives, there is a lack of coherence between the Art. 50 of the CMO and the EAFRD rules regarding “collective” projects of cooperatives, which limit wine sector restructuration: - CMO: the support rate for large companies, (among them are the cooperatives) equals half of the support rate for small and medium size companies. In Spain, these large companies are often large grouping of cooperatives not only specialized in the wine sector. These large companies shouldn’t be considered as one company but a gathering of several smaller companies. - While in the EAFDR, the support rate for collective projects remains the same regardless of the size of the applicant’s structure: cooperative or wineries.

Thus, there is a lack of coherence between the regulations provided by the national royal decree 13/2013 for agri-food cooperative restructuration and the need of the sector to be better structured with larger cooperatives.

. Innovation: According to national authorities, the NSP innovation measure didn’t work very well because of the complexity of the measure, the little number of type of eligible actions and the possibility to finance a wider range of operation with other funds, such as ERDF. (not only innovation but Research + Innovation + Development). . Promotion Some beneficiaries have benefited from EFDR support before the NSP. It allowed them to start internalizing.

IQ 13.2 Is the risk of overlapping avoided? The regional authorities explicitly mentioned that there was no risk of overlapping between the programmes. Both programmes were designed taking into consideration the possible risk of overlapping. A wine producer cannot benefit from grants under the measure 4 for operations that could be supported within the NSP under the investment measure. One applicant cannot benefit from two programmes for similar operations. It is strictly forbidden, and they made the management of these programmes in a way that the overlapping was not possible.

2.7.3 Conclusion of the experts on the coherence of the NSP

NSP is not much coherent with the overall objective of environmental sustainability: there is only one environmental criterion to prioritize the projects, but it only represents 3 points out of a 100 and finally and it had no impact, given that all the applicants have benefited from the support under the measure. In addition, it doesn’t encourage particularly environmental practices. However, all NSP contribute to a balanced territorial development because the measures enhance the productivity of wine growers (restructuration), the efficiency of processes and competitiveness of wineries (Investments and Promotion) and the knowledge transfer for all the sector (Innovation) – even if taking into account the low number of projects supported, it impact is very low.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 33

There is a potential complementarity between RDP and NSP in Castilla-La-Mancha, without risk of overlapping. Operations for support are usually different according to the programme and when eligible operations are similar, an applicant cannot receive grants from both programmes. It is strictly forbidden and controlled. For wine producers, winemakers may benefit from RDP measures for investments only if Investments measure of the NSP have been fenced. However, there is a potential overlapping between EFDR programme and NSP programme, which is supposed to be avoided by an administrative verification by the authorities. The potential overlapping concerns the Innovation measure and the Promotion measure. Nevertheless, concerning the Promotion in third countries, if used properly, there can be a real complementarity between the NSP and EFDR supports. Indeed, EFDR could support the “first step” in the export activity for operators not yet internationalized while the NSP could support other promotion activities.

2.8 Relevance of the NSP

2.8.1 Analysis of the needs of the sector

Table 15: SWOT analysis of the wine sector in Castilla-La-Mancha STRENGHS WEAKNESSES

. Large quantity of exported bulk wine with low added value . Low share of bottled wine in the global wine production . Production with a competitive cost, in the EU context . Little domestic consumption of wine in Spain . Adaptation of wine categories to consumers’ demand (more . Small companies and cooperatives with low weight in red wine produced in the past few years) negotiation and with less development possibility than larger companies . Lack of skills to export in cooperatives and small companies

Specific to Castilla-La-Mancha: First vineyard region in ha in EU Specific to Castilla-La-Mancha: Dry climate, which induces and in the word. significant variations in yield if there is no irrigation OPPORTUNITIES THREATS

. Development of exports in third countries . Improvement of wine quality . Development of the reputation of regional wines (including PDO/PGI wines) . Effects of climate change . Increase the volume of bottled wine produced, which have . Potential trade restrictions in important markets (USA, UK better added value due to Brexit, Russia) . Growth of agritourism through the creation of wines route . More structuration of the sector with more integration and larger wine companies and cooperatives

Specific to Castilla-La-Mancha: Decrease of adapted varieties Specific to Castilla-La-Mancha: Continue the irrigation such as Airén because of promotion of international varieties, less development adapted to the local climatic conditions Source: Oréade Brèche, based on interviews

The main needs of the sector are the following: 1. Increasing exports via a. Entering new markets with wine consumption potential b. Consolidating traditional markets 2. Improving the quality of the wine produced via a. Modernizing the production chain b. Better select the wine grapes from the supply side

2.8.2 Synthesis of the interviews

IQ 15.2. From your point of view, are the NSP measures suited/well designed to address the need of the wine sector at the EU level? national level? At regional level? All the interviewees at national and regional level put the emphasis on the fact that having a program and budget specific to the wine was is highly relevant. Moreover, regional authorities stated that the NSP measures considerably helped the wine sector in Castilla-La-Mancha. However, some additional developments would better allow the measures to be adapted to the challenges faced by the wine sector.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 34

. Restructuring and conversion measure According to all stakeholders, the measure is very valuable and well designed as a whole to address the need of the sector. However, some elements could be improved to be more adapted to the sector. According to some beneficiaries, one or two years to carry out projects22 is too short. To perform the necessary operations in the vineyard (grubbing, disinfecting and planting), 5-years period to carry out project would be more appropriate. Furthermore, the incentives of planting international varieties have led winegrowers to plant varieties unadapted to local climatic conditions because of the lack of preliminary studies and research.

. Promotion measure Even if this measure is very benefiting to wine exports to third countries, regional authorities and beneficiaries mentioned that this measure was not well designed, because of too much administrative burden for the authorities and the beneficiaries: relating to supporting documents of operations carried out under the measure. Some beneficiaries stated that the measure benefited mostly to large size companies, being the only type of companies to handle this amount of work. In addition, regional authorities stated that the limit of a 5-years period in the same market is suitable to avoid the support of casual operating costs related to selling products in third countries. However, beneficiaries and national representatives of the wine sector mentioned that a period of 5 years isn’t enough to enter and consolidate a market, especially in the United States or China. Indeed, it usually requires more time to properly enter an international market, i.e. to find an importer and appeal to local consumers. Some beneficiaries stated that bulk wine is more purchased by third country’ importers but this type of wine is not eligible in the promotion measure.

. Investment measure For some national representative and public authorities, the fact that the support rate for the larger companies is lower than for others is not adapted to the Spanish wine sector because of the lack of flexibility in the definition of “larger companies”. Indeed, large companies in Spain are mainly agri-food cooperatives producing various type of agricultural products, not necessarily in coming from vineyards. Currently, the definition of large companies under the NSP, includes these types of cooperatives well spread across Spain. Spain intent to better structure his wine sector by more integrating the supply chain. However, CMO regulation does not consider these larger cooperatives as a grouping of several different smaller cooperatives. Thus, the rate of support is low, and it limits the wine sector restructuration.

. Innovation measure According to national authorities, the measure is too restrictive because it deals only with a part of the R + D + i, while many projects also include a research part not eligible for the Innovation measure.

IQ 15.3. How did the increase of the NSP budget in 2014 impact the management of the NSP? . At national level According to national authorities, the increase of NSP budget in 2014 allowed to relocate some budget between the different measures.

IQ 15.4. Are the budgets on each measure appropriate to address the needs of the sector? . At national level The national budget allocated to the Investments measure for the 4 years programming period 2014-2018 has entirely been planned to be spent in the first two years of the programme (2014-2015). The following years, the operations have been supported through the EAFRD. National authorities wished they could have had more budget to support all the new applicants that applied the following years. For the moment, they can only benefit from part of the budget of the restructuring measure that hasn’t been spent.

22 The restriction of annual or biannual projects have been decided at Castilla-La-Mancha level.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 35

At national level, authorities did not mention specific problems with the budget allocated to the other NSP measures.

. At regional level The authorities stated that all demands for the Restructuration measure have been supported. The budget under this measure is lower since 2017 and for the next calls, less applications will benefit from the support because of this reduction. At regional level, authorities did not mention specific problems with the budget allocated to the other measures.

IQ 15.5. From your point of view, can the NSP and the scheme of authorisation allow for the development of the wine production and consumption? . Development of the wine production

Expert’s point of view based on all interviews: In Spain, the need of the sector is to better valorise their products improving the quality of the wine produced and not the volume. The NSP measures have been implemented to this end. In Castilla-La-Mancha, the relocation of vineyards in areas where the use of engines and the implementation of an irrigation system are possible have been offset by the plantation of international grape varieties less productive in Castilla-la-Mancha (because not adapted to local climatic conditions).

. Development of wine consumption The interviewees did not mention an effect of the NSP and scheme of authorisation on the development of wine consumption. However, the goal of improving the quality of the wine produced could potentially lead to more people consuming wine.

IQ 15.6. From your point of view, are those schemes needed to maintain the supply/demand balance? . At national level National authorities stated that the limit of 0,5% of increase of the surface under vines is necessary to maintain the supply/demand balance. However, more time is needed to assess the relevance of the scheme since it has been implemented for only 2 years.

2.8.3 Opinion of the expert

Relevance of the NSP to address the needs of the sector As a whole, the NSP is relevant to address the need of the wine sector in Spain and in Castilla-La-Mancha. However, the Innovation measure seems to be irrelevant because the operation does not cover research operations and investments for commercial production. The requirements to be eligible for grants under the innovation measure seems to be too restrictive. In addition, the following points that concern the other measures limit the effect of the NSP: - For the Investments measure, a lack of flexibility in the definition of micro, small medium and large enterprise in the Art. 50 of the CMO lead to consider large cooperative composed by different smaller companies specialized in different agricultural products as a large enterprise and not as an aggregation of medium or small enterprises. It limits the structuration of wine sector in Spain. - For the Promotion measure, the limit of a 5 years-period in the same markets is too short to allow beneficiaries to consolidate new markets. - In addition, the complexity relating to the filling-in of the application form and the justification of the operations carried out under the measure limit the access of smaller companies and cooperatives. Some cooperatives will outsource the administrative work relating to the promotion measure and the justification of promotional activities performed to an external company that will handle the grant file. The complexity of the promotion measure generates job and new companies specialised in filling-in application and grant files.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 36

- For the restructuration measure, the yearly budget management is not adapted. The regional authorities authorized only annual or biannual projects. But these annual and biannual projects aren’t adapted to operations in the vineyard (grubbing + disinfecting + planting). 5-years project are more adapted.

Coherence between the budget spend and the actual needs In Spain and Castilla-La-Mancha there is a great need of investments in winemaking to improve the quality of wine products and the efficiency of the processes. In the two first years of the programming period (2014 and 2015) the national budget allocated to the Investments measure has been entirely planned to be spent over the 4 programming years. During the following years, new applicants have been supported via the EAFRD fund. To boost competitiveness of Spanish wine products, it would be necessary to increase the budget allocated to the investments measure, and to a lesser extent to the restructuring and reconversion measure (almost all budget allocated to Castilla-La-Mancha).

2.9 EU added value and subsidiarity

2.9.1 Synthesis of the interviewes

IQ 17.1. In your opinion, what would have been done (/how would have the wine sector been supported) at national or local level, in the absence of the EU NSP?

According to all stakeholders, the absence of the EU NSP would have resulted in less investments in the sector. Indeed, from their point of view, the NSP measures allowed to invest in projects more important (in size, in cost). In addition, some operators indicated that they would have not done promotion actions without the NSP. Indeed, before benefiting from the support, these stakeholders tried to promote their wine in some third markets but trades with importers wouldn’t be effective and wouldn’t last. In the end, the trades would stop.

IQ 17.2. From your point of view, did the fact that the support was provided to the wine sector in the framework of EU regulation create an added value? i.e. - it results in more effectiveness than if actions would have been carried out at national level only? - it is more efficient than actions that would have been carried out at national level only? - it creates more synergies between instruments and policies than actions that would have been carried out at national level only?

. At national level According to a national representative of the wine sector, a national regulation with a national subvention management system would have been less effective. The EU regulation allowed to perform more operations than if subventions would have been only at national level. According to the representatives, a national management would have resulted in less budget for the wine sector in some Member States, such as Spain. Finally, the representatives highlighted the fact that an EU framework allowed an alignment of Member States’ rules and thus a better equity in trades.

. At regional level If stakeholders did not explicitly state that the EU framework created an added value, almost all stakeholders recognized that the situation would be worse without an EU framework even if many stakeholders reported that there was still room for improvement.

IQ 17.3. Do you know of any specific cases in which a lack of flexibility in the EU framework has hindered the added value of the programme? . At national level Authorities and national representatives pointed out that more flexibility was necessary in some EU definitions such as the definition of small, medium and large enterprise (Art. 50 of the CMO Regulation). Indeed, large agri- food cooperatives in Spain often include different plants specialized in different agricultural productions and the agri-food cooperatives are considered as large companies by the CMO regulation. Spain intends to better structure his wine sector by more integrating the supply chain. However, it was stated that the CMO regulation

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 37

hinder the structuration of the Spanish wine sector by not taking into account these large cooperative as an aggrupation of small or medium cooperatives. As a consequence, the support rate for these large-size companies was reduced.

. At regional level Under the restructuration measure, beneficiaries and wine growers’ organisations have reported an inadequate time period to perform eligible operations (annual or biannual) for carrying out operations between 2014 and 2018. However, it was stated that the short inadequate time period was a regional issue, and was due to an inappropriate decision from the regional NSP managing authorities. Regional authorities stated that the yearly budget management constrained them to allow only annual or biannual applications and more flexibility concerning the management of the budget would solve many managing issues.

Under the promotion measure, it was stated by regional authorities and the beneficiaries interviewed that too much supporting document is needed for the operations performed under the measure, and some requirements are not appropriate to the type of operation. As a consequence, many of stakeholders do not apply for the promotion measure anymore while promoting the regional wine is still a topical issue.

2.9.2 Conclusion of the expert

The management of the NSP at the European level was reported as a real added value. However, the need of flexibility under some measures was often mentioned (for ex. more than 5 years on the same market under the promotion measure or taking into account the specificity of large agri-food cooperatives in Spain when attributing a differentiated support rate according to the types companies). The absence of EU framework would have created market distortion between the Member States with a domination of large size companies over little family companies. Less stakeholders would have been able to adapt themselves to market demand via improving the wine elaboration chain. In addition, a greater wealth gap would have been observed between large and small companies at national level. Finally, at EU level, a greater gap would also have been observed between Member States according to the budget they would have decided to allocate to the wine sector. To conclude, the EU framework provides more equity.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 38

3. THEME 2: SCHEME OF AUTHORISATIONS OF VINE PLANTINGS

3.1 Synthesis of the literature

3.1.1 Description of the implementation of the scheme of authorisation in Castilla- La-Mancha

In Castilla-La-Mancha, there is no quota. In 2016-2018, 2 criteria were applied at national level, allowing to classify the demands into 4 groups (see Table 16). Since 2018, a new criterion has been added, to prioritize small or medium holdings. In addition, some requirements concerning the applicant’s professional skills have been included. Table 16: Prioritization criteria of the demands for new plantations

Scheme of plantation 2016-2018 Scheme of plantation 2018

 New young winegrower  Good behavior

 New young wine grower Group of priorization:  Good behavior  Group 1: "young new winegrower" + also meets the criterion of "good behavior" = 20 points.  Small or medium holding  Group 2: "good behavior"+ not "young new wine growers” = 10 points.  Group 3: They have abandoned vineyard area = 9 points.  Group 4: They own an illegal vineyard and does not meet any criteria = 0 points Source: Guidelines for the application of the regime of authorizations of vineyard, January 2018, Ministry of agriculture, food, fisheries and environment Report of the new scheme of authorization, 2017, Ministry of agriculture, food, fisheries and environment.

On the 30th of June, the Ministry informed the Autonomous Communities of the surface area that can be granted for each request based on the score obtained in the national ranking, so that they can resolve requests for authorizations for new plantings before the 1st of August, as established in the regulations of Autonomous Communities. As of that moment, the beneficiary shall have 3 years from the moment of notification to carry out the plantings, which should be communicated in the according Autonomous Community. If the surface granted is less than 50% of the total requested by the applicant, the latter is allowed to refuse to plant the surface granted as long as he notified within the month following the notification by the Autonomous Community. As the regional total area under vines in Castilla La Mancha is entirely covered by PDO or PGI area, almost all requests concern area under PDO, as detailed in Table 17. Table 17: Detail of requested area in Castilla-La-Mancha in 2017 (in ha)

With PDO With PGI Without PDO or PGI Total

2016 3,665 48 3 3,716

2017 7,496 321 0 7,818 Source: Report of the new scheme of authorization, 2016 and 2017, Ministry of agriculture, food, fisheries and environment

As shown in Table 18, in Castilla-La-Mancha, there is more demand than offer (30% of the eligible area have been granted in 2017 and 55% in 2016) and a pro-rata management system has been implemented by the regional authorities to allocate the authorizations. In addition, the demands have doubled between 2016 and 2017. It could be assumed that the new scheme procedure was better known in 2017. Moreover, it has been repeatedly mentioned that the pro-rata allocation encouraged wine growers to demand more area than they needed to be sure they will be granted the total area requested. To continue, in Castilla-la-Mancha, there are only a few new wine-growers applying for authorization of new planting.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 39

Table 18: Area admissible and granted in Castilla-la-Mancha in 2016 and 2017(in ha)

Group 1 Group 2 Group 3 Group 4 Total

admissible 122 3,012 0 0 3,134 2016 granted 122 1,597 0 0 1,719 (55% of admissible area)

admissible 176 7,123 1 0 7,300 2017 granted 176 2,253 0 0 2,428 (33% of admissible area) Source: Report of the new scheme of authorization, 2016 and 2017, Ministry of agriculture, food, fisheries and environment

3.2 Synthesis of the interviews

IT 11.1 Do you assume that the new scheme of authorisations will impact the structure of the vineyard (in terms of distribution of varieties, type of wine, size of holdings, age structure of the vineyard), at regional level? at national level? Are there already evidences of such effects? . At regional level According to regional authorities, the evolution of the area under vines was chaotic when the old system of plantation rights was implemented. A real trade of “plantation right” has been observed and was not anticipated by the regulation which did not provide any rules against it. The new scheme allows a better management of the evolution of the area under vines in the region and a better control via the priorization criteria.

According to wine-growers organisation, regulation of new vineyard is a good measure and the growth rate of 0,5 is adequate to regulate the area and the production in the way to improve quality instead of quantity. However, the organisation denounced the design of priorization criteria which have not favoured professional holding in vine culture. Likewise, the request for new areas under vines do not favour small holdings, allowing some large holdings to be granted an area larger than the average farm requested area.

Winegrowers indicated that there was more demand than offer with this new system. Some winegrowers had to wait 3 years to plant only one hectares because every year, they obtained only 30% of their demand. This is not suitable for several reasons. For example, some winegrowers stated that it was more expensive to plant one hectare in three times than in once. Finally, they assumed that this system could even lead to a decrease of the vineyard area due to vineyard abandonment by wine growers.

IT 11.3 Do you assume that the new scheme of authorisations will impact the economic value of vineyards? Are there already evidences of such an effect? . At national level Authorities had not assessed yet the effect of the new scheme on the economic value of vineyard. . At regional level According to wine grower organisation, the new scheme did not change the economic value of the vineyard because there is no speculation.

3.3 Conclusion of the experts

. Competitiveness of winegrowers Nevertheless, the priority criteria have been modified for the new programming period 2019-2023 and a criterion of professional capacity have been added with the possibility to Autonomous Communities to prioritize wine growing holdings according to the size of the holding. The effects of the new scheme of authorisation are difficult to assess, due to the early implementation and modification of priority criteria in Spain. However, it will help to increase the quality of wine products instead of the quantity produced which could lead to greater competitiveness of wine growers when wineries and cooperative will value mostly grape quality instead of quantity. . Increase of the production potential while keeping balance between demand and supply

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 40

The new scheme of authorization has major impact on the global growth of the regional area under vines. Thus, it allowed to control the production potential in the region (even if the surface area is not the only factor to take into account when dealing with production potential) and so to keep balance between demand and supply.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 41

4. THEME 3: WINE PRODUCTS DEFINITION, RESTRICTIONS ON OENOLOGICAL PRACTICES AND AUTHORISED WINE GRAPE VARIETIES

4.1 Detailed description of the implementation at Member State and regional level

. Oenological practices In Spain and Castilla-la-Mancha, there are no further restrictions on oenological practices than the one applied at EU level. . Wine grape varieties In Spain, the authorized wine grape variety list is a competence of the Autonomous Communities. Thus, each region could decide to define his proper list of authorized varieties. The variety must be on the commercial register of Spain or another member states, and some tests have to be carried out to assess the agronomic aptitude and the wine quality coming from the grape variety. Table 19: Description of main local specificities in authorised wine grape varieties Geographical Type of wine level for the rule product Description of the specific rule (compared to EU standards defined in the regulation) (MS or region) concerned  “ vinifera” L only Spain  Cross between “” L and other “Viti” White varieties: Airén, Alarije, Albariño, Albillo Real, , Chardonnay, Garnacha Blanca*, Gewürztraminer, Macabeo, Viura, Malvar, Malvasía Aromática, Meserguera, Montúa, Chelva, Moravia Dulce, Moscatel de Alejandría, Moscatel de grano menudo, Palomino, Parillo, Marisancho, Pardina, Jaen Blanco, Parellada, Pedro Ximénez, Planta Nova, Tardana*, Riesling, Rojal Tinta, Sauvignon Blanc, Syrah, Castilla-La- Tempranillo, Cencibel, Tinto de la Pámpana Blanca, Tinto Velasco, Frasco, Torrontés, Mancha Verdejo, Verdoncho, Viognier, Red varieties: Bobal, Cabernet Franc, Cabernet Sauvignon, Coloraillo, Forcallat Tinta, Garnacha Peluda, Garnacha Tinta, Garnacha Tintorera, Graciano, Malbec, Mazuela, Cariñena, Mencía, Merlot, Moravia Agria, Crujidera, Moribel*, Petit Verdot, Pinot Noir, Prieto Picudo White varieties: Airén, Chardonnay, Monastrell, (R), Gewürztraminer, Macabeo o Viura, Moscatel de grano menudo, Parellada, Pedro Ximenez, Riesling, Sauvignon Blanc, Torrontés, Verdejo, Viognier. PDO La Mancha Red varieties: Bobal, Cabernet Franc, Cabernet Sauvignon, Cencibel o Tempranillo, Red Garnacha, Graciano, Malbec, Mencía, Merlot, Monastrell, Moravía dulce o Crujidera, Petit Verdot, Pinot Noir y Syrah * varieties added to the regional list in 2017 Source: Regional order 70/2017

4.2 Competitiveness distortions due to specific rules on oenological practices

No specific competitor has been identified by the interviewees. Nevertheless, some national stakeholders have identified competitive distortion due to different oenological rules or other factors that could impact competitiveness of wine products:

 In some third countries, it is allowed to add other products to wine, while it is not permitted in EU (For example. In Chile, water can be added to the wine during the elaboration process).  Wine grape varieties: a national representative of the sector mentioned a distortion due to the EU restrictions on wine grape varieties used for wine production: in Brazil for instance, some very productive varieties are planted while they aren’t authorized in EU. It induces an unfair competition.  Low requirements regarding the traceability of the products and the minimum alcohol strength of wines products (for instance in Chile).

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 42

 Competition on the price: a national representative of the sector stated that the main factor of competition is the price: Spanish wines do not compete with American or Australian wines because they are more expensive.  Technical and administrative barriers: there is a need of a better coordination of regulations between third countries ad EU Member States. The barriers are more technical and bureaucratic barriers than oenological ones. It would be better to have clear and homogeneous international standards. Indeed, there is competition with third countries that have trade agreements with other third countries. Indeed. Each country must perform additional analyses for additives that could represent a risk to human health in the importing countries where these additives aren’t used for wine production. In such circumstances national representative stated that it would be important that EU helps operators to eliminate these technical barriers and support analyses to be able to export to third countries such as Japan.

In addition, a national representative of the sector stated that there is no particular competition due to the EU restrictions on oenological practices. Spanish wines can compete with third countries’ wine thanks to the implementation of the EU quality scheme in Spain allowing the consumers to distinguish quality. However, one national representative of the sector specified that strict oenological practices do not have any effect on the consumer.

4.3 Synthesis of the interviews

4.3.1 Effects of oenological practices on marketing conditions for producers and traders

5.10 Did oenological practices as applied in your Member State/region/PDO-PGI territory help to improve the marketing conditions of concerned wines? . At national level According to a national representative of the sector, the reputation of the wine is closely related to the quality of the wine. Among the factors influencing the wine quality, oenological practices is a major one. Oenological practices have an impact on the quality of the wine produced and could help to improve their marketing conditions. Moreover, the specifications on oenological practices are decided at PDO/PGI level and are part of the PDO/PGI managing organisation’s marketing strategy (selling the quality).

IQ 5.11 Were oenological practices as applied in your Member State/region/PDO-PGI area more or less constraining than for main competing wines?

Competing wines inside the EU At both national and regional level, it was mentioned several times as a competing factor, the EU rules on the enrichment of the wine, and the possibility to enrich the wine in different ways according to localisation of the EU regions. Some organisations and cooperatives considered that the use of concentrated grape must instead of sugar coming from other agricultural products (chaptalisation) would allow to better regulate wine market and stabilize prices, using the production surpluses of the years of great harvest. Furthermore, they stated that chaptalisation in regions where it is an historic practice is not problematic but the development of this practice in new regions is. Indeed, it changes the characteristics of wine, which loses its natural characteristics.

Competing wines of third countries At national level, according to a representative of the sector, the barriers to enter a new market are mainly administrative but also technical because of the third countries’ regulations differing from the EU regulations (the addition of additives etc.). There are different oenological practices between Spain and third countries, but it is difficult to say if they are more restrictive or not since they are different. The real problem comes from third countries that do not want to join the OIV and have different regulations causing trade issues (e.g. the United States, China, Brazil, Japan). It is important to standardize the oenological practices worldwide to facilitate exports. Therefore, following the practices of the OIV is essential, otherwise too much trade barriers will prevent the marketing of Spanish wines.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 43

At regional level, some wineries consider that in third countries, more oenological practices are authorised: EU rules on oenological practices are very restrictive compared to practices in third countries.

IQ 5.12 Are the decisions of the EC concerning the changes in marketing standards taken in a timely manner? Can you provide examples? . At national level National representatives stated that the lack of flexibility limits the adaptation to the market. Indeed, some third countries such as New Zealand are beginning to produce wine without alcohol, while in the EU, it is forbidden to call a product elaborated with wine grapes without alcohol, a “wine” product. It is an example of a limit of the EU regulation to adapt to the consumers’ expectations. Moreover, it was stated by many stakeholders at national level, that the European Commission and the OIV take too much time to decide on new rules, new lines of regulations. Interviewees declared that the decisions must be taken faster, at OIV and EU level, in particular on the authorisations of some new oenological practices that do not have effects on the taste and the quality of wine.

. At regional level All interviewees considered that there is no problem in terms of adaptation of the European Union to marketing standards, except regarding the production of wine with low alcohol content or without alcohol that is still forbidden by EU regulation.

4.3.2 Effect of oenological practices on the safety and quality of the products

IQ 5.1 How do EU rules on oenological practices contribute to the safety of EU wine products? At regional level, the interviewees stated that oenological practices ensure the safety of EU wine products.

IQ 5.2 Was there any major safety issue related to EU wine products in your Member State during the last 10 years? At regional level, the interviewees stated that there is no wine safety issue. However, some deterioration of wines has been observed for products marketed in Russia: it is necessary to prove that the wine can support the transport and the change in temperatures without any quality damage.

4.3.3 Relevance and added value of specific oenological practices and restrictions on varieties

IQ 14.2 For what reasons were restrictions regarding varieties initially set up? . At national level According to national authorities and representatives of the sector, the 6 varieties not allowed in the EU have been forbidden because of their vulnerability to the .

IQ 14.3 Are the initial justifications for restrictions still relevant today? . At national level According to national representative of the sector, this restriction is not relevant today because there is no more phylloxera.

. At regional level While some national representatives disagreed on the following statement, wine grower union stated that it is essential to maintain rootstock resistant to phylloxera because nematodes potentially vector of the phylloxera are still present in the soil under vineyards.

IQ 14.4 Today, what are the issues at stake regarding the use of varieties in wine production? . At national level and regional level Competitiveness / adaptation to climatic conditions According to the authorities and national representatives, the grape varieties used, the wine quality and the competitiveness of a winegrower/producer are slightly linked to the specificities of each vineyard. The issue is to adapt the cropping system management to local conditions (sometimes, it is possible to change the vineyard orientation or to add irrigation or reduce isolation for instance but sometimes no).

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 44

The adaptation to climate conditions is a great issue. Grape varieties tolerant to drought are being studied. The interviewees mentioned an incompatibility between the regional climate conditions and the grape variety planted: for example, some international grape varieties demanded by the consumer like Syrah are not well adapted to the climatic condition of Castilla-La-Mancha.

IQ 16.4 What would be the consequences of applying strictly OIV definitions, rules on oenological practices and rules concerning authorised wine grape varieties in the EU? In terms of oenological practices At national level, there are small differences between EU rules and OIV recommendations: there is a lack of harmonisation of rules between the EU and the OIV. Since the EU generally follows the OIV rules in terms of oenological practices of the OIV, there would be no significant consequences if applying strictly OIV definitions.

4.4 Comments and conclusions of the expert

4.4.1 On the effectiveness of EU rules on competitiveness and safety

From the expert’s point of view, the EU rules set the basic rules for the wine product elaboration. These EU rules are close to the OIV rules with some added specifications and restrictions. There was no safety issue with wine products within the last 10 years. It could be assumed that rules on oenological practices help to avoid some safety issues, but it was not specified by the stakeholders. Because of the possibility to perform some practises abroad prohibited inside the EU, the implementation of EU rules different from the OIV rules and some other countries’ rules may have caused some competition distortion between EU Member States and third countries. However, rules on oenological practices are not the main factor of competitiveness distortion. Other factors have greater impact, such as the lack of worldwide harmonization of the rules. Indeed, the differences with some countries lead to technical and tariff barriers that affect the competitiveness of wine products. It is important to standardize the oenological practices at the world level and essential to facilitate exports. Therefore, following the practices of the OIV is essential, otherwise too much trade barriers will prevent the marketing of Spanish wines.

4.4.2 On the relevance of EU rules and their added value compared to OIV rules

From the expert’s point of view, the OIV rules have the advantage of being followed by several third countries. These rules contribute to transparency between markets and reduce competition distortion. In Spain, the adoption of OIV rules instead of EU ones wouldn’t change the practices already implemented and performed by winemakers. For Castilla-La-Mancha, there is no added value concerning the adoption of EU rules compared to OIV rules.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 45

5. THEME 4: EU RULES ON LABELLING AND PRESENTATION

5.1 Description of the labelling rules applied at Member State and local level

5.1.1 Description of specific labelling rules applied in Spain and Castilla-la-Mancha

In Spain, in addition to the provisions laid down in Regulation (EC) 607/2009, other specific labelling rules are applied, laid down in the Royal decree 1363/2011: . Name of the producer: Spanish term “producer” (“productor” in Spanish) can be replaced by “processor” (“elaborador” in Spanish). For sparkling wines, in the case of an elaboration by order, the indication of the processor shall be completed by the terms "prepared for by" (“elaborado para por” in spanish). . Use of a code The code to replace the name of the bottler, producer, importer or seller when it consists of, or contain a PDO/PGI wine, will be the Spanish Wine Packer Registration number. If the product in question or the economic operator is not subject to registration in the Register of Wine Packers, the Identification Tax Code (CIF) will be used.

Optional requirement in Spain for PDO/PGI wines: . Fermentation or ageing in barrels: To indicate that the PDO/PGI wine products have been fermented or aged in wooden containers, operators can use also: o The term "Barrel“: can be used for PDO/PGI wine products that have been fermented, aged or aged in wooden containers. When this term is used, the period of time the wine has remained in the barrel must be labelled, in months or years. The maximum capacity of the barrel should be 600 liters. The indication "Barrel fermentation" may be used provided that the fermentation of the wine has taken place in the afore mentioned barrel. o The term "Oak" can be used for PDO/PGI wine products that have been fermented or aged in oak barrels. When this term is used, the period of time the wine has remained in the oak barrel must be labelled, in months or years, whose maximum capacity should be 600 liters. The indications "noble", "" and "oak" may only be used when the container is made of oak, while 'barrel' may be used when the container is of any kind of wood. These terms may not be used for the addition of chips during the elaboration process, even when the wine has also been aged in wooden barrel. . Traditional terms Traditional terms “crianza”, “reserva”, “gran reserva” and other traditional terms included in the EU data base E-Bacchus will be indicated on labels with characters whose dimensions do not exceed those who indicate the geographical name. . Geographical units greater than the area covered by a PDO/PGI The use, for PDO/PGI wines, of the name of a certain geographical unit greater than that corresponding to its production area is authorized, in order to specify its location. o The name of the largest geographical unit must include the latter. o This indication shall appear on the label of the corresponding PDO/PGI wine. o The competent Administrations shall inform the Ministry of the Environment, Rural and Marine Affairs of the actions carried out in accordance with this article, in order to add it into Annex V of the royal decree.

Requirement in Spain for varietal wines: . The variety “Albariño” can not appear on the label

In Castilla-la-Mancha, there is no additional requirements.

5.1.2 Description of the system set up for controlling the labelling

The system set up for controlling the labelling is included in the general system of control and check. It is detailed in the § 6.1.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 46

5.2 Existing national data on non-compliance with labelling rules

Not available

5.3 Synthesis of the interviews

5.3.1 Effects of labelling and presentation rules on the adequate information of consumers

IQ 6.2 Do EU rules on labelling allow an adequate, clear and sufficient information on the products? . At national level The National federation of agri-food cooperatives reported the increasing requirements from public authorities in terms of labelling rules, and the increasing demand of consumers for more information labelled on the wine products. The interviewees reported that it is complicated to follow both demands. The increasing requirements in labelling rules was considered as an issue by the interviewees.

. At regional level Cooperatives and wineries considered that the information labelled on wine products is currently sufficient. Some of them mentioned that some third countries are more demanding in terms of information labelled, and it is necessary for Spanish producers to adapt their wine labels to the market of destination by adding some information (China for instance).

IQ 6.3 Is the information provided sufficient as regards health warnings, alcohol content, calorie and nutritional aspects? . At national level The National federation of agri-food cooperatives bringing together wine cooperatives stated that wine operators can add more health warning message, such as “prohibited for minors” or add the logo of the pregnant woman only on a voluntary basis. However, the organisation stated that it should be compulsory to every operator. Indeed, if mandatory, the wine sector will show to the population that it is a responsible sector.

. At regional level Most of cooperatives and wineries considered that the information labelled is sufficient. Some of them mentioned that some third countries are more demanding, and it is necessary to add more information on the labels (when exporting to China for instance). In addition, a cooperative specified that even if not required in Spain, they add the logo of the pregnant woman on all their label. Most of cooperatives and wineries go beyond national requirements in terms of compulsory information to add on the label.

IQ 6.5 Is there any other type of information that would be necessary to add on the labels to ensure an adequate, clear and sufficient information on the products? . At national level National authorities interviewed didn’t mention any other type of information that would be necessary to add on the labels.

. At regional level Some wine operators stated that the information provided on the packaging was already sufficient and adequate, and if more information were to be added on the packaging, it should start with information concerning enrichment operations, with a distinction between adding sucrose or concentrated must. For many Spanish wine producers, it is important to declare on the label when the enrichment operation is performed with sucrose coming from another product than the wine grape.

IQ 9.1 To what extent do consumers understand the specificities of PDO/PGI labelling compared to non- PDO/PGI labelling?

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 47

It was mentioned by the national federation of agri-food cooperatives and some other wineries that the consumers do not always make the difference between a PDO/PGI wine and other wines. However, the interviewees stated that the issue does not come from the labelling rules but the lack of awareness from the consumer.

5.3.2 Effects of labelling and presentation rules on marketing conditions and fair competition between operators

IQ 6.6 Did the new rules on labelling allow an increase in the quantity of production marketed/traded? . At regional level The stakeholders at regional level couldn’t tell the relation between the increase in the quantity of marketed / traded production and the new rules on labelling. A winery stated that the EU requirement to specify “product in Spain” is an asset in some markets (China for instance) because it means for them a cheap and quality product.

IQ 6.7 Did the new rules on labelling allow an increase in the value of production marketed/traded? Same answer as above (IQ6.6)

IQ 6.10 Do the new rules contribute to ensure a fair competition between operators? . At national level The national representative of the sector reported the need to homogenise the labelling rules between EU Member States to ensure fair competition between operators within the EU and when exporting to third countries as well.

IQ 6.11 In your opinion, what changes would be necessary in the labelling rules to ensure a fair competition between operators? . At national level The Spanish Wine Federation stated that to ensure a fair competition between operators in a context of adding information, the addition of sugar in the wine should be specified on labels when sugar residues is found. Moreover, the national federation of agri-food cooperatives stated that the operation should be specified on the labelled. The interviewees mentioned that the opinion was shared by their counterparts in Italy. More over the interviewees reported increasing requirements from public authorities in terms of labelling rules, and the increasing demand for more information from wine consumers. The interviewees reported that it was complicated to follow both demands. At last, it was explicitly stated by the Spanish Wine Federation that there would be a fairer competition between operators if all Member States had the same labelling rules. Some wineries share the same opinion. The interviewees mentioned that they would benefit from less subsidiarity given to Member States and more explicit and defined EU labelling rules.

IQ 6.8 Were the rules on labelling simple to implement? National representative of the sector reported increasing requirements from public authorities in terms of labelling rules. According to the interviewees, these increasing requirements represent an issue for operators and it is necessary to simplify the EU labelling rules. Some interviewees suggested for example, the labelling of a QR code to avoid too much information on the label and keep it clean and simple. The operator would add all the information on a dematerialised website thanks to the QR code. It was mentioned by the interviewees that the operators are used to implement labelling rules since they haven’t changed for many years. What was denounced by the stakeholders were: - the possible differences in labelling rules observed in EU Member States because of subsidiarity given by the European Commission to Member States. - The difference in labelling rules between the EU and the OIV, and third countries

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 48

IQ 6.9 What would be the consequence of rules requiring more detailed information (on ingredients for instance)? . At regional level, Regional authorities and operators stated that more information on the label would imply more controls and more costs for the authorities and the operators. Moreover, operators have contrasting opinions: some wineries stated that it will be catastrophic to add more information, due to the huge additional cost it will involve (this winery would change his ingredient such as egg rather than add allergen aspect on the label) while other wineries consider that even if it means additional costs, nutritional information have to be included in the label since wine is a food product as any other agri- food product.

5.3.3 On the effectiveness of labelling rules on the adequate information of consumers

The rules on labelling provide the consumer with an adequate level of information. The consumer does not distinguish well the difference between PDO/PGI and varietal wine. However, it was mentioned several times that it does not come from labelling issues, but awareness issues. Indeed, it was stated that more promotional activities should be performed to make the consumers aware of the quality scheme that exist. More information campaigns are necessary.

5.3.4 On the effectiveness of labelling rules on marketing conditions and fair competition between operators

Having the same labelling rules at EU level with less subsidiarity given to Member States would lead to a reduction of costs and would ensure a fairer competition between operators. In addition, EU rules differ from other rules applied in third countries. These differences could mislead the consumer and operators may probably have to perform additional operations to be authorised to sell in these third countries. Thus, different labelling rules across the world induce additional costs for EU operators. It was reported that trade agreements with third countries may play a crucial role in wine trades and allow to avoid these additional costs mentioned before.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 49

6. THEME 5: CERTIFICATION PROCEDURES, MONITORING AND CHECKS

6.1 Description of the local implementation of the rules

6.1.1 Description of certificacion procedures applied in Spain and Castilla-La- Mancha

In Spain, the certification of compliance with the PDO/PGI specifications can be exercised directly by the Food Information and Control Agency, which is the competent authority to carry out the verification of compliance with the specifications specified by the General Directorate of the Food Industry. It also includes the possibility of delegating the certification activity with bidding conditions to one or more certification bodies. The certification bodies are accredited by the National Accreditation Entity (ENAC). The certifying bodies is also in charge of controlling the members producing under a given PDO/PGI. This way, certifying bodies have a clearer picture and a more appropriate management of the controls to be performed. All wineries and products are controlled before marketed.

In Castilla-La-Mancha, the competent authority is the Regional department of agriculture, environment and rural development of Castilla-La-Mancha, which have delegated the certification procedures of PDO/PGI wines to specific certifying bodies accredited by the ENAC. As mentioned in the Regional order 01/19/2010, Certification applicable to wines with designation of origin will be carried out by certifying bodies authorized by the Regional Ministry responsible for agri-food, in accordance with Decree 9/2007, of February 6, on authorization of the entities of control of agro-alimentary products in the Autonomous Community of Castilla- La Mancha and of creation of the Registry of the same (DOCM Num. 30 of February 9, 2007). 23 In Castilla-La-Mancha 7 certifying bodies certificates PDO/PGI and 6 certificates varietal wines. (A same certification body can certificate at most 3 PDO or PGI).

. Certification of PDO/PGI wines

General control and certification regime for PDO wines: The certification shall consist in the issuance by the certification body of a document proving the right to use the designation of protected origin together with the name of the corresponding denomination of origin for the wines that with this mention will be placed on the market the operator.

The certification body must demonstrate that they respect control conditions to the authority in addition of being accredited by the ENAC.

The operators  choose his certification body.  Perform auto control for all the traceability  Perform auto controls of wine, with their own laboratories or external ones

The certification body:  Have its own laboratories  Control all the PDO/PGI specifications  Perform administrative controls on declarations  Verify the auto-controls by performing analyses with accredited laboratories.  For each operator, verify a sample of 50% of all the lots  1 visit in situ for each operator

23 Order of 01/19/2010, of the Regional Department of Agriculture and Rural Development, which establishes the general control regime for wines with a protected designation of origin and certification of the designation of origin of the same. [2010/1139]

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 50

The PDO/PGI managing organization:  Verify that all operators have a certification body  Verify the coherence between the harvest declaration and the inward and outward registers. In case of inconsistency, the regional authority is informed.  When a lot is certified, the PDO/PGI managing organization gives the presentation of certification guarantee to the operator.

. Certification of varietal wines Only the variety and the vintage are certified. Operators have to carry on analysis of wine samples by a certified laboratory and perform auto-control along the elaboration chain to guarantee an appropriate level of traceability. The certification body controls wine samples and documentary sample.

6.1.2 Description of monitoring and checks procedures applied in Spain and Castilla-La-Mancha

The National Ministry of agriculture has a computerized system where producers must declare their production, sotck, movements. Managers of the Autonomous Communities have access to this program and use it to program on the spot controls. According to the Regional Ministry of Agriculture of Castilla-La-Mancha, they follow general norms for the control of the wine but it is an own procedure to the Autonomous Community for the controls / inspections. Each Autonomous community design his own control plan to control wine operators according to a fraud-risk analysis regardless of the type of wine they produce. A control sample is identified thanks to risk criteria. During these controls, the coherence between registers/declarations and physical observations is checked. Furthermore, operators are also controlled via alerts given by a third party (for instance, misused identity concerning PDO/PGI). In case of a fraud suspicion, an inspection is made. Depending on the type of fraud suspected, it can be from the field to the product. 14 operators out of the 79 controlled were in breach. Controls consist of checks regarding: Registration books (bottling / winemaking / accompanying documents / Traceability control / labeling / processes and suspect products) all controls concerning the commercial quality of wine.

. For PDO/PGI

Operators producing PDO wines must comply with the following requirements: a) The wine must meet all the requirements established in the corresponding specifications. b) All the declarations and accompanying documents of these wines must include the designation of protected designation of origin followed by the protected name in question, both in the entry of grapes or products suitable for obtaining these wines or of wines, as in all movements and manipulations carried out, including bottling. c) The operator must be registered in the registries of the corresponding body that manages the wine of the appellation of origin, with the exception of the wines for payment, or the declaration mentioned in said article.

For PDO and PGI wines, certification bodies are in charge of controls. When the certification bodies visit the operators, they control the product (50% of the certified wine of the PDO/PGI) and requirements of the PDO/PGI specification. Regarding PDO wines, certifying/control bodies must: - Perform regular checks on raw materials, processing, bottling and labeling, with a view to obtaining guarantees on the traceability of the wine and compliance with the specifications of each of the wines with designation of origin, verifying the origin of the wine grapes, the varieties from which the wine comes, the maximum yields per hectare, the winemaking methods, the specific oenological practices, where applicable, and the rest of the elements included in the specifications.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 51

This periodic check should be carried out systematically in all operators and will be carried out, at least, once a year. The performance of such checks will be materialized through periodic assessments that prove the correlation between the volumes of raw material, wine in the process of elaboration and wine elaborated, documented and present in the installation, which will request the display of the registration books, the accompanying documents and the rest of the documentation that affects them, and that at all times must be at your disposal. - In addition to these verifications, the certification body must verify that in all the wine consignments identified as wine with DO and samples have been taken to perform analytical and organoleptic tests. The certification body must sample and submit to operators the corresponding physical-chemical and organoleptic analyzes, of at least 50 percent of the total volume of wine produced during each campaign. Sampling will be based on the method established by the certifying body in its procedures, in which it will detail the rules that guarantee the representativeness of the samples. The samples must be taken at any stage of the production process, including the bottling phase or later, and must be representative of the relevant wines in the possession of the operator. The analytical and organoleptic tests of these samples must be carried out in laboratories that comply with and are accredited in the General Requirements related to the competence of the testing and calibration laboratories, standard EN ISO / IEC 17025 and shall demonstrate that the product examined meets the characteristics and qualities described in the corresponding PDO specifications. Notwithstanding, the Regional Ministry responsible for agriculture may designate, through the granting of a provisional authorization and while the accreditation process is underway, those laboratories in which such analytical and organoleptic examinations may be carried out. so that the accreditation entity can adequately evaluate whether the laboratory activity complies with the standard EN 17025. - Keep control of the declarations required, - control, where appropriate, the certification of DO that appears in the accompanying documents for wines with DO issued or received by the operator and its authentication. - Issue a report on the results of the control programs carried out during each quarter. This report will be submitted to the General Directorate competent in agri-food matters within 30 days of the quarter in which they are referred and will include the list of the operators on which the certificate has been issued and those in the process of certification. , the serious or very serious nonconformities detected in each of them and, if applicable, the time established for their correction. - Inform the Regional General Directorate competent in agri-food matters of the withdrawal or suspension of the certification, within 10 days following the one in which said withdrawal or suspension occurs. - Submit to the Institute of Vine and Wine of Castilla-La Mancha (IVICAM) a statistical summary of the wine-growing campaign for each denomination of origin This summary must be submitted within three months from the end of the campaign in question. - Inform the Regional General Directorate competent in agri-food matters, within 15 days of its detection, about any circumstance or action of the person subject to its control that may involve an administrative offense.24

. For varietal wines and vintage wines The Regional General Directorate of Rural development represents the competent authority regarding the certification and control of varietal and vintage wines.

Operators wishing to indicate the wine grape variety and the vintage year on the label of the wine product must comply with the following requirements: a) Possessing plants for winemaking registered in the regional register of agri-food industries of Castilla- La-Mancha b) Have a contract with a certification body authorized by the competent General Directorate in charge of the agri-food sector and control on agri-food products. c) The operator must make a request for each of his plants where the production of varietal and vintage wine will occur.

24 Order of 01/19/2010, of the Regional Ministry of Agriculture and Rural Development, which establishes the general control regime for wines with a protected designation of origin and certification of the designation of origin of the same.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 52

Regarding varietal and vintage wines, certifying/control bodies must: - Perform regular checks on raw materials, processing, bottling, labeling and inward and outward registers, to guarantee the traceability of the wine and compliance with the requirements. The performance of such controls will be materialized through periodic surveys that prove the correlation between the volumes of raw material, wine in the process of elaboration and wine elaborated, documented and present in the winery, as well as through controls of the facilities in which the products are located, in which they will be requested the display of the registration books, the accompanying documents and other related documentation. The control will be carried out systematically in all operators at least once per campaign and will consist of in the accomplishment of administrative verifications on the veracity of the variety or varieties of wine grapes and / or the year of the harvest that appear in the records and supporting documents and, where appropriate, in the labeling of the wines. - Take control of the declarations required. - Check, where appropriate, the indications regarding the variety or varieties of wine grapes and / or the year of harvest that appear in the product description of the accompanying documents issued by the operator next to the designation "varietal wines" or "varietal wines without PDO and PGI" are in conformity and that said documents include the legend indicated in article 7.2, letter d). - Issue a report on the results of the control programs carried out during each quarter. This report will be submitted to the General Directorate competent in agri-food matters within 30 days from the end of the quarter. - Inform the General Directorate competent in agri-food matters of the withdrawal or suspension of the certification, within 10 days following that in which said withdrawal or suspension occurs. - Send the Ivicam a statistical summary of the wine campaign of the "varietal wines” - Inform the General Directorate competent in agri-food matters, within 15 days of its detection, about any circumstance or action of the person subject to its control that may involve an administrative infraction.25

6.1.3 Description of the control system related to NSP implementation

The regional Ministry for Agriculture is in charge of monitoring all applications forms and projects of beneficiaries of the restructuring, investment and promotion measures. They will perform administrative and on-the-spot checks. For the restructuring measure, all operators and area under vines are checked to analyse the eligibility of an operator/area. In other words, ex-ante control of 100% of area under vines are controlled. inspectors will measure the eligible areas with a GPS and ex-post controls will be performed before granting the total amount of the planned support. For investment measures, administrative and on-the-spot controls are performed by regional authorities on all beneficiaries, (as stated in the section 2.6.3) For the promotion measure, the controls are mainly performed on the supporting documents provided by operators justifying the operations theoretically eligible for support. These controls are complex according the Regional Ministry of Agriculture. They imply controls based on pictures, videos, translated invoices, boarding passes etc. The service in charge of the promotion measure inside the regional Ministry is overwhelmed by these required control procedures.

6.2 Existing national data on non-compliance and workload

6.2.1 Data on workload linked to the certification, monitoring and checks system implementation

25 Order of 09/10/2009, of the Regional Ministry of Agriculture and Rural Development, which establishes the application provisions for the authorization, certification and control of wines without designation of protected origin or protected geographical indication that make mention in the labeled to the year of harvest and / or to the name of one or more varieties of wine grapes.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 53

Table 20: Workload induced by the certification and control. Example of a certification body of PDO La Mancha

Full time equivalent 3 to 4

Number of operators certified and controlled 98

Average=5h Duration of in situ control 5- 8h for 1 million L Source: based on interview

6.3 Synthesis of the interviews

IQ 7.1 to 7.3 Is the certification procedure simple to apply? Please distinguish wines with PDO/PGI, wines without PDO/PGI and traded wines

At regional level, the interviewees had difficulties to answer the question considering the fact that the certification procedures implemented in the Autonomous Community are the same since a long a time ago.

From the expert’s point of view, the certifying bodies and the other stakeholders in relation with the certification procedures seem to manage very well the certification and the control procedures.

IQ 7.4 When change occurred in the certification system, did it allow an increase in the quantity of wine marketed or exported?

No change in the certification system was mentioned during interviews with public authorities and regional certifying bodies. The certification system have been implemented as such for a long time.

IQ 10.1 Did you encounter any difficulties or problems in the implementation of monitoring and checks EU requirements?

No specific difficulties or problems were mentioned at national or regional level. Technological progress in the last few years, helped monitoring and controlling wine products via coherence checks between administrative documents. The Excise Movement and Control System is implemented in Spain and allow a traceability of all wine movements. Accompanying documents are checked by regional authorities (Regional Directorate of Agriculture and Rural Development). The Vineyard register gather all necessary information on winegrowers, while the INFOVI computerized system gather information on wine producers, storekeepers etc. These two computerized systems are managed by regional authorities with supervision in the case of the INFOVI system by the Information and Agri-food Control Agency.26 These control systems are controlling all type of wine product regardless of the quality scheme. The INFOVI system has been implemented since recently, in 2016.

IQ 10.2 Did you encounter any difficulties or problem in the implementation of the control system related to NSP implementation?

. At national level, The control of NSP is the responsibility of the FEGA, the National Agricultural Guarantee Fund, and all control aspects for each measure have been conceived taking into account the possibility of controlling the given aspects. Thus, every aspect of the measures is controllable by competent authorities.

. At regional level, It was stated by the controlling bodies, i.e. the regional authorities, that the control of the Promotion measure in particular was complicated and time-consuming. Indeed, the measure require from the beneficiary to justify all operations performed under the measure. The beneficiaries must gather pictures, videos, invoices, various

26 Real Decreto 739/2015, de 31 de julio, sobre declaraciones obligatorias en el sector vitivinícola.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 54

quotes in order to support activities. The high level of administrative burden was denounced, especially when the applicants wish to modify their projects once approved by competent authorities. It was also denounced by some interviewees from wineries, that some compulsory justifying documents were too complicated to collect from their trading partners in the third countries.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 55

ANNEXES

ANNEX I – List of the interviews

Organisation Date of interview

MAPAMA - Subdirección General de Frutas y Hortalizas y Vitivinicultura (Ministry of Agriculture, 22/05/2018 Fisheries, Food and Environment)

MAPAMA - Subdirección General de Fomento Industrial e Innovación (Ministry of Agriculture, 22/05/2018 Fisheries, Food and Environment)

MAPAMA - Subdirección General de Calidad Diferenciada y Agricultura Ecológica (Ministry of 21/05/2018 Agriculture, Fisheries, Food and Environment)

Federacion Española del Vino (Wine Spanish Federation) 21/05/2018

Cooperativas agroalimentarias (Agri-Food cooperatives federation) 22/05/2018

Consejería de Agricultura, Medio Ambiente y Desarrollo Rural – Direccion General de Industrias Agroalimentarias y cooperativas (Regional Ministry of Agriculture, Environment and Rural Development) 23/05/2018 Consejería de Agricultura, Medio Ambiente y Desarrollo Rural – Direccion General de Agricultura y Ganaderia – Servicio de vitivinicutura (Regional Ministry of Agriculture, Environment and Rural Development)

ASAJA Castilla-La-Mancha (Wine grower unión)

Wine grower 24/05/2018 Wine grower

Winery “Vino y Bodega”

Consejop Regulador “DO La Mancha” (PDO Managing organization of “PDO La Mancha”)

Wine cooperative San Isidro 25/05/2018

Wine cooperative “SAT Coloman”

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 56

ANNEX II: Documents and reports collected

- Eurostat, 2017, Structure of the vineyards in 2015, press release 57/2017, 4 p., internet source : http://ec.europa.eu/eurostat/documents/2995521/7964287/5-04042017-BP-FR.pdf/fc7b7cfb-2d34- 42ab-b27e-a51195098959 - Ministry of Agriculture, Environment and Rural Development (MAPAMA), Datos de las denominaciones de origen protegidas de vinos (DOPs), campana 2016-2017, 2018, information report, 56 p. - MAPAMA, 2018, vinedo anuario 2017-2012, data base, excel files - MAPAMA, 2016, o a) Reporte : Información sobre autorizaciones para nuevas plantaciones de viñedo 2016, internet source : http://www.mapama.gob.es/es/agricultura/temas/producciones- agricolas/160706informacionnnpp2016_tcm7-426224_tcm30-58989.pdf o b) Reporte, Análisis de la superficie y de la producción vitivinicola, internet source : http://www.mapama.gob.es/es/agricultura/temas/producciones- agricolas/160412pto2reunion12abrilanalisissuperficieyproduccionvitivinicola_tcm30- 58984.pdf - Consejo regulador , 2013, specifications, 14p., internet source: http://www.docava.es/wp- content/uploads/2015/05/PliegoCondicionesDOPCava_2013.pdf - Gobierno de La , 2018, reporte, 10p. - Institute (IFV), 2012, vins et vignobles d’Espagne, report, 26 p., internet source : https://www.vignevin-sudouest.com/publications/voyage-etude/documents/synthese-espagne.pdf - IVICAM Instituto de la Vid y del Vino Castilla-La-Mancha, 2013, El sector vitivinícola en Castilla-La- Mancha, 58 p. internet source : http://pagina.jccm.es/ivicam/formacion/documentacion/villarrubia.pdf - MAPAMA, Datos de las indicaciones geográficas protegidas (igps) de vinos - vinos de la tierra - campaña 2015/2016, 2017, report, 31 p. - ASAJA, Agricultural Association Young Farmers of Castilla-La Mancha, 2018, Presentation of the structure, website, internet source: http://www.asaja.com/asaja - UPA, Union of Small Farmers of Castilla-La Mancha, 2018, website, internet source: http://upaclm.es/accion-sindical/ - COAG, The Coordinator of Farmers and Livestock Organizations, 2018, website, internet source: http://www.coagclm.org/coa-clm/ - FEV, Spanish Federation of Wine, 2018, website, internet source: http://www.fev.es/v_portal/apartados/apartado.asp?te=6 - CECAM, 2018, website, internet source: http://www.cecam.es/organizaciones - FEVIN, Federación De Empresas Vitivinícolas De Castilla-La Mancha, 2018. - MAPAMA, Secretario de Estado de Comercio, database, 2018, internet source: http://datacomex.comercio.es/CabeceraPersonalizada.aspx?action=drilldown&eje=Columnas&valor= Total%20Fechas&unvalor=%5BFechas%5D.%5BTotal%20Fechas%5D&nivel=0&otroValor=total&otroNi vel=0&id=4 - OIV, 2017 World VitiViniculture Situation, Statistical report on World VitiViniculture, 2017, internet source: http://www.oiv.int/js/lib/pdfjs/web/viewer.html?file=/public/medias/5479/oiv-en-bilan- 2017.pdf - Foreign Promotion Institute of Castilla-La-Mancha (IPEX), 2018, wine map. - Ministry of Agriculture, Environment and Rural Development, El Gobierno de Castilla-La Mancha avanza en el Plan Estratégico del Sector Vitivinícola con la Asociación de Vinos de Castilla-La Mancha, article, 2018, internet source: http://www.castillalamancha.es/actualidad/notasdeprensa/el-gobierno- de-castilla-la-mancha-avanza-en-el-plan-estrat%C3%A9gico-del-sector-vitivin%C3%ADcola-con-la - ICEX, Espana, Exportaciones E inversiones, 2017, Informe Sectorial de Castilla-La Mancha, report, 12 p., internet source: https://www.icex.es/icex/GetDocumento?dDocName=DOC2017712367&urlNoAcceso=/icex/es/regist ro/iniciar-sesion/index.html?urlDestino=http://www.icex.es/icex/es/navegacion-principal/que-es- icex/donde-estamos/red-territorial-de-comercio/navegacion-principal/inform. - VÍCTOR DE LA SERNA, El Mundo Vino, El desafío de Castilla-La Mancha, 2013, article, Interent source: http://elmundovino.elmundo.es/elmundovino/noticia.html?vi_seccion=12&vs_fecha=201310&vs_not icia=1382963863 - Edgardo Díaz Araujo, María José Iuvaro, 2006, Vitivinicultura y derecho, p.336, internet source: https://books.google.fr/books?isbn=9870218113

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 57

- FAM, Circular relating to the setting up by FRANCEAGRIMER of an aid for wine producers, 2009, p. 22, internet source: http://www.franceagrimer.fr/fam/content/download/7104/41396/file/1269_CIRCULAIREGENERALE0 910_310709.pdfBoard of Castilla y Leon, obtención de derivados vínicos, p. 89, internet source: http://webcache.googleusercontent.com/search?q=cache:E56rg6ubP7kJ:cepamedinadelcampo.centro s.educa.jcyl.es/sitio/upload/manual_derivados.doc+&cd=2&hl=fr&ct=clnk&gl=fr - Agri food cooperative, WHAT'S AGRI-FOOD COOPERATIVES SPAIN?, 2018, website, internet source: http://www.agro-alimentarias.coop/5/uk/5_1_1.php - Alimarket, 2012, Azumancha presenta su Plan Estratégico, internet source: https://www.alimarket.es/alimentacion/noticia/89813/azumancha-presenta-su-plan-estrategico - MAPAMA, 2016, POTENCIAL DE PRODUCCIÓN VITÍCOLA EN ESPAÑA, report, 16 p., internet source: http://www.mapama.gob.es/es/agricultura/temas/regulacion-de-los- mercados/informepotencialproduccionvitivinicolaes2016_tcm30-135339.pdf - OEMV, Spanish observatory of the wine market, 2016, Superficie de viñedo en España 2016 La superficie de viñedo en España se sitúa en las 955.717 hectáre as en 2016 (+0,1%), 5 p., internet source: http://www.lomejordelvinoderioja.com/noticias/201512/01/superficie-vinedo-crece-rioja- 20151201005854-v.html. - Consejo regulador DOCa Rioja, 2017, MEMORIA 2017, 80 p., internet source: https://es.riojawine.com/multimedia/files/publicaciones/MemoriaConsejo_2017.pdf - Agri-food cooperatives, 2015, Las bodegas cooperativasen Castilla-La Mancha:Protagonistas en la cadena de valor, 140 p. - MEDINA-ALBALADEJO, 2014, Crisis, Cooperativas y Estado En El Sector Vitivinícola Español Durante El Franquismo, internet source: http://portal.uc3m.es/portal/page/portal/instituto_figuerola/programas/pccmr/continuidadycambios /Medina_Albaladejo.pdf - Le Point, 2017, Consommation de vin : les rapides transformations du marché chinois, internet source : http://www.lepoint.fr/economie/consommation-de-vin-les-rapides-transformations-du- marche-chinois-22-06-2017-2137346_28.php - Consejo regulador , 2017, Estadísticas 2017, El Rioja en cifras, reporte, 14 p. internet source: https://es.riojawine.com/multimedia/files/publicaciones/ESTADISTICAS_Rioja_2017.pdf - Regulation (Eu) No 1308/2013 of the European Parliament and of the Council, 2013, Regulation in the Official Journal of the European Union, 184 p., internet source: https://www.agriculture.gov.ie/media/migration/farmingschemesandpayments/commonagriculturalp olicycap/finaltextoncapreform/SingleCMO130813.pdf - Ministry of Agriculture, Environment and Rural Development Aplicación de la medida inversiones, Informe general de evaluación, ejercicio 2014, 4p,

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 58

ANNEX III : List of PDO and PGI wines

Denomination Spanish traditional term27 PGO Denominacion de Origen Calzadilla Vino de Pago Vino de Pago Vino de Pago Vino de Pago Vino de Pago Finca Elez Vino de Pago Vino de Pago Jumilla Denominacion de Origen La Mancha Denominacion de Origen Denominacion de Origen Mentrida Denominacion de Origen Mondéjar Denominacion de Origen Vino de Pago Ribera del Jucar Denominacion de Origen Uclés Denominacion de Origen Valdepenas Denominacion de Origen

PGI Castilla Vino de la tierra

27 Traditional terms may substitute in the labelling « PDO » or « PGI »

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 59

ANNEX IV- Wine grape area per variety in 2015 at national and regional level (in hectare)

Spain Castilla-La-Mancha Share

AIREN 215 484,14 207 063,53 96%

MACABEO 44 906,72 14 292,93 32%

VERDEJO 19 058,77 5 670,43 30%

CHARDONNAY 7 674,11 1 714,42 22%

SAUVIGNON BLANCO 5 086,56 3 167,03 62%

PARDILLO 3 407,02 3 391,33 100%

MEZCLA 2 133,57 647,24 30%

MOSCATEL DE GRANO MENUDO 1 901,72 1 253,61 66%

MALVASIA 1 419,78 170,57 12% White varieties White ALBILLO MAYOR 1 167,32 269,14 23%

MALVAR 362,84 121,39 33%

TORTOSINA 325,27 107,98 33%

VIOGNIER 234,60 150,84 64%

Other varieties with a share <5% or area <100 73 990,41 3 436,35 5% ha28

TEMPRANILLO 201 051,39 69 475,99 35%

BOBAL, PROVECHON 61 524,21 34 876,20 57%

GARNACHA 57 907,35 19 720,33 34%

MONASTRELL 43 049,18 15 975,13 37%

GARNACHA TINTORERA 22 572,20 14 600,64 65%

CABERNET SAUVIGNON 20 535,37 7 249,60 35%

SYRAH 20 155,11 12 456,20 62%

MERLOT 13 043,62 3 235,83 25%

MAZUELA 5 644,42 1 285,18 23% Red varieties Red TINTO DE LA PAMPA BLANCA 4 718,95 4 718,69 100%

GRACIANO 2 324,83 610,81 26%

PETIT VERDOT 1 865,75 1 568,07 84%

TINTO VELASCO, FRASCO 1 439,39 1 434,67 100%

MORAVIA DULCE 1 323,01 1 305,38 99%

ROJAL TINTA 736,41 619,22 84%

Other varieties with an area <500 ha29 2149,66 1303,46 61% Source: MAPAMA’s survey, 2015

28 White varieties with a share <5%: MOSCATEL DE ALEJANDRIA (433.36 ha), PEDRO XIMÉNEZ (379.11 ha), PARELLADA (317.45ha), ALARIJE (147.83 ha), PLANTA NOVA (16.05 ha), TORRONTES (10.33 ha), and CAYETANA BLANCA (2025.99 ha). White varieties with an area <100 ha: RIESLING (53.25 ha), LUISA BLANCA (48.12 ha), ALCAÑON (3.18 ha) and ALEDO (1.68 ha).

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 60

ANNEX V - Evolution of wine grape varieties in Castilla-La-Mancha between 2013 and 2017

Share Share of of the Evolution the Variety 2013 2014 2015 2016 2017 variety 2013- variety in 2017 in 2013 2017 AGUDELO, 0 0 0 2 0 0.0% 0.0% n.a.!

AIREN 207128 209035 210068 210206 211123 47.5% 46.0% 1.9% ALARIJE,MALVASIA RIOJANA, SUBIRAT 149 0 149 167 179 0.0% 0.0% 20.1% PARENT ALBARIÑO 0 143 0 0 7 0.0% 0.0% n.a.

ALBILLO REAL 292 284 279 272 261 0.1% 0.1% -10.6%

BEBA, EVA 0 0 0 0 0 0.0% 0.0% n.a.

BOBAL 37582 37302 36528 34504 34903 8.6% 7.6% -7.1%

BONICAIRE, EMBOLICAIRE 0 0 0 8 0 0.0% 0.0% n.a.

BORBA 0 0 0 1 0 0.0% 0.0% n.a.

CABERNET FRANC 411 406 382 369 363 0.1% 0.1% -11.7%

CABERNET SAUVIGNON 7572 7478 7392 7310 7353 1.7% 1.6% -2.9%

CAYETANA BLANCA 0 0 0 3 0 0.0% 0.0% n.a.

CHARDONNAY 1628 1684 1663 1966 2517 0.4% 0.5% 54.6%

COLOMBARD 0 0 0 0 18 0.0% 0.0% n.a.

COLORAILLO 0 0 0 104 97 0.0% 0.0% n.a.

FORCALLAT BLANCA 0 0 0 39 0 0.0% 0.0% n.a.

FORCALLAT TINTA 247 282 233 195 173 0.1% 0.0% -30.0%

GARNACHA BLANCA, LLADONER BLANCO 28 70 27 31 0 0.0% 0.0% -100.0%

GARNACHA PELUDA 445 422 408 396 410 0.1% 0.1% -7.9%

GARNACHA ROJA, GARNACHA GRIS 0 0 0 4 0 0.0% 0.0% n.a.

GARNACHA TINTA, GIRONET, LLADONER 20385 20277 20175 20153 20743 4.7% 4.5% 1.8%

GARNACHA TINTORERA 11546 12997 14029 17120 21464 2.6% 4.7% 85.9%

GEWURZTRAMINER 0 66 70 76 74 0.0% 0.0% n.a.

GRACIANO 542 608 613 628 673 0.1% 0.1% 24.2%

JAEN TINTO 0 0 0 3 0 0.0% 0.0% n.a.

MACABEO, VIURA 10806 12170 13054 17222 20524 2.5% 4.5% 89.9%

MALBEC 0 0 0 106 113 0.0% 0.0% n.a.

MALVAR 0 0 0 125 123 0.0% 0.0% n.a. MALVASIA AROMÁTICA, MARLVARÍA DE 246 0 0 167 173 0.1% 0.0% -29.7% BANYALBUFAR, MALVASÍ A DE SITGES MAZUELA, CARIÑENA, MAZUELO, SAMSO 1273 1286 1292 1321 1352 0.3% 0.3% 6.2%

MENCIA 0 0 0 18 18 0.0% 0.0% n.a.

MERLOT 3329 3317 3302 3204 3239 0.8% 0.7% -2.7% MERSEGUERA, EXQUITSAGOS, 31 28 28 26 33 0.0% 0.0% 6.5% BLANCO, VERDOSILLA MEZCLA 789 754 188 639 620 0.2% 0.1% -21.4%

MOLLAR CANO 0 0 0 4 0 0.0% 0.0% n.a.

MONASTRELL 18211 17729 17174 16001 16040 4.2% 3.5% -11.9%

MONTUA,CHELVA 602 666 569 568 572 0.1% 0.1% -5.0%

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 61

Share Share of of the Evolution the Variety 2013 2014 2015 2016 2017 variety 2013- variety in 2017 in 2013 2017 MORAVIA AGRIA 0 0 0 212 193 0.0% 0.0% n.a.

MORAVIA DULCE, CRUJIDERA 1514 1466 1398 1272 1233 0.3% 0.3% -18.6% MOSCATEL ALEJANDRIA, MOSCATEL DE 361 362 396 551 672 0.1% 0.1% 86.1% MOSCATEL DE GRANO MENUDO, 730 751 1020 1552 2154 0.2% 0.5% 195.1% MOSCATEL MORICO PALOMINO 0 0 0 34 79 0.0% 0.0% n.a.

PALOMINO FINO, LISTAN BLANCO 0 0 0 15 0 0.0% 0.0% n.a.

PARDILLO, MARISANCHO 2152 2037 1854 1707 1680 0.5% 0.4% -21.9% PARDINA, BALADI, BALADI VERDEJO, 2032 2004 1995 2156 2088 0.5% 0.5% 2.8% CALAGRAÑO, JAEN BLANCO, ROBAL PARELLADA, MONTONEC, MOTONEGA 222 244 301 407 488 0.1% 0.1% 119.8%

PEDRO XIMENEZ 212 208 325 536 819 0.0% 0.2% 286.3%

PERRUNO 0 0 0 6 0 0.0% 0.0% n.a.

PETIT VERDOT 1607 1553 1567 1592 1616 0.4% 0.4% 0.6%

PINOT NOIR 0 0 0 12 18 0.0% 0.0% n.a.

PLANTA NOVA, TARDANA 0 0 0 16 0 0.0% 0.0% n.a.

PRIETO PICUDO 0 0 0 5 5 0.0% 0.0% n.a.

RIESLING 0 0 0 54 61 0.0% 0.0% n.a.

ROJAL TINTA 825 888 688 594 547 0.2% 0.1% -33.7%

RUFETE 0 0 0 2 0 0.0% 0.0% n.a.

SAUVIGNON BLANCO 3115 3127 3153 3252 3408 0.7% 0.7% 9.4%

SYRAH 13311 13222 13023 12378 12115 3.0% 2.6% -9.0% TEMPRANILLO, CENCIBEL,TINTO TORO, TINTA DEL PAIS, TINTA DE TORO, ULL DE 71818 71478 70889 70465 71388 16.5% 15.6% -0.6% LLEBRE TINTO PAMPANA BLANCA 3941 4284 4452 5391 6362 0.9% 1.4% 61.4%

TINTO VELASCO, FRASCO 1617 1566 1509 1428 1400 0.4% 0.3% -13.4%

TORRONTES 0 0 0 10 11 0.0% 0.0% n.a.

TORTOSI 0 141 138 97 0 0.0% 0.0% n.a.

VERDEJO 5881 5834 5767 5765 5792 1.3% 1.3% -1.5%

VERDONCHO 1717 1696 1690 1711 1701 0.4% 0.4% -0.9%

VIOGNER 0 0 0 166 239 0.0% 0.1% n.a. XARELLO, CARTOIXA, PANSAL, PANSA 35 35 33 27 0 0.0% 0.0% -100.0% BLANCA RESTO 2181 2133 2615 940 1677 0.5% 0.4% -23.1%

TOTAL NACIONAL 436513 440033 440439 445317 458911 100% 100% 5%

Total International Varieties30 28955 28828 28533 28122 28650 7% 6% -1% Source: MAPAMA, Potential of viticultural production in the European Union and Spain-Inventory of viticultural potential as of July 31, 2013, 2014, 2015, 2016 and 2017

30 International varieties : based on the OIV definitions

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 62

ANNEX VI Description of the NSP Measures

Existing in Content of the Eligible measures Implementing conditions Type of aid the 2008 measure Wine CMO Support for information or Beneficiaries shall be professional organisations, wine producer promotion measures organisations, associations of wine producer organisations, concerning Union temporary or permanent associations of two or more producers, wines either (a) in MS inter-branch organisations or bodies governed by public law. Private to inform consumers companies are only eligible for Point (b) of the measure. about the responsible Support granted shall last no longer than 3 years for a given consumption of wine beneficiary and, for Measure (b), for a given third-country market it Max. 50% of the Promotion (Art. 45) and PDO/PGI or (b) in Yes can be extended for a maximum of two years if justified by the eligible expenditure third countries to effects of the operation. improve their competitiveness (in this Information in Member States: priority shall be given to operations case, only PDO/PGI concerning several MS / several administrative or wine regions / wines or wines with an several PDO and PGI. indication of the wine Promotion in third countries: priority shall be given to new grape varieties are beneficiaries or beneficiaries targeting a new third country. eligible). Support for MS that submitted the inventory of their Compensation up to production potential. Beneficiaries are wine growers, i.e. natural or legal person who farm 100% of the loss of Restructuring and Support can cover: an area planted with vines. revenue OR conversion of varietal conversion, contribution to 50% of Yes vineyards (Art. 46) relocation and Replanting of vineyard following a mandatory grubbing-up for health the costs incurred (75% replanting of vineyards or phytosanitary reasons shall be eligible under certain conditions. in less developed and improvements to regions) vineyards management techniques. Beneficiaries are wine growers, i.e. natural or legal persons who farm an area planted with vines. Support for total Areas concerned must be kept in good vegetative conditions and no destruction or removal negative impact on the environment shall result from the application Flat rate payment / ha of grape bunches still in Green harvesting of the measure. MS can restrict the measure according to timing of (not exceeding 50% of their immature stage, Yes (Art. 47) different varieties, environmental or phytosanitary risks, etc. the costs of removal reducing the yield of and loss of revenue) the relevant area to No support shall be granted in case of complete or partial damage of zero. the crops. Green harvesting support cannot apply to the same parcel for two consecutive years. Temporary degressive Mutual funds (Art. Support for the setting- Beneficiaries are wine growers or producers of wine products. aid covering the Yes 48) up of mutual funds Support period shall not exceed three years. administrative costs of the fund Financial contribution to the insurance premium, not Support for the exceeding 80% in case subscription of harvest Beneficiaries are wine growers. Member States may grant the of insurance against insurance safeguarding support through insurance companies as intermediaries under adverse climatic events producers’ incomes Harvest insurance certain conditions, but the amount of the support must be assimilated as natural after losses caused by Yes (Art. 49) transferred in full to the producer. disasters and 50% in natural disasters, other cases (insurance adverse climatic Member States must ensure that the support does not distort against losses caused events, diseases or competition in the insurance market. by any adverse climatic pest infestations. events / by animals, plant diseases or pest infestations).

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 63

Existing in Content of the Eligible measures Implementing conditions Type of aid the 2008 measure Wine CMO Support for tangible and intangible Beneficiaries can be wine enterprises producing or marketing the investments in wine products, wine producer organisations, associations of two or Support dedicated to processing facilities more producers or interbranch organisations. small/medium-sized and winery Eligible actions are immovable property, new machinery and enterprises, with infrastructure, equipment, architect/engineer and consultation fees, feasibility maximum aid rate of marketing structures 40% of the eligible Investments (Art. studies, computer software and patents/licences/copyrights. and tools, intended to investment costs (50% Yes 50) Replacement investments are not eligible. improve the overall in less developed performance of the Support cannot be granted to operations benefiting from promotion regions, 75% in enterprise and its support. outermost regions, adaptation to market Priority must be given to operations likely to have positive effects in 65% in the smaller demands, as well as to terms of energy savings, global energy efficiency and environmentally Aegean islands) increase its sustainable processes. competitiveness. Beneficiaries can be wine enterprises producing or marketing wine Support for tangible or products, wine producer organisations and associations of two or intangible investments more producers. Research and development centres may participate Aid rate up to 40% of aimed at the and interbranch organisations may be associated with the operation. the eligible investment development of new Support is granted for tangible and intangible investments including Innovation in the costs (50% in less products, processes for knowledge-transfer for the development of new products, wine sector (Art. developed regions, No and technologies, processes and technologies, or other investments adding value at any 51) 75% in outermost intended to increase stage of the supply chain. regions, 65% in the the marketability and Priority must be given to operations likely to have positive effects in smaller Aegean islands) competitiveness of EU terms of energy savings, global energy efficiency and environmentally wine products. sustainable processes; including an element of knowledge transfer; and ensuring the participation of research and development centres. Aid paid to distillers that process by- Support for voluntary products into raw or obligatory alcohol of min. 92% by distillation of by- Beneficiaries are distillers that process the by-products delivered to volume. products of wine- distillation into alcohol with an alcoholic strength of at least 92% by By-product making. The alcohol A lump-sum amount volume, to be used exclusively for industry or energy purposes. Yes distillation (Art. 52) resulting from the covering the cost of supported distillation Support includes an amount to compensate the costs of collection, to collection of by- must be exclusively be transferred to the producer when relevant. product must be used for industrial or transferred from the energy purposes. distiller to the producer when relevant. Source: Agrosynergie based on regulations (EU) No 1308/2013, 2016/1149

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 64

ANNEX VII: Standards costs for eligible operations of Restructuration and reconversion measure31

Operation National eligible Regional Eligible Regional Eligible amount 2014- amount 2014-2016 amount 2017-2018 2018

A) RESTRUCTURING OR REPLANTING OF

VINEYARDS.

1. Grubbing up (including removal of vine Max 430€/ha stock)

1.1. External contract invoice Max. 430 €/ha

1.2. Operation carried out with own means 348 €/ha 5.7h/ha32 – 69.4€/h

2. Soil preparation: Max 1,400€/ha

2.1 Outsourcing invoice / s

- Deep work Max. 410 €/ha

- Organic and / or mineral amendment (with Max. 900 €/ha

invoice of the product contributed)

- Superficial work Max. 70 €/ha

- Roll pass Max. 20 €ha

2.2 Operation carried out by the vine grower:

- Deep work 332 €/ha 4.4h/ha – 75.5€/h

- Organic and / or mineral amendment (with 729 €/ha 2.1h/ha – 92.6€/h invoice of the product contributed) (without the invoice

of the product contributed)

- Superficial work 57 €/ha 1.4h/ha – 47.9€/ha

- Roll pass 16 €/ha 0.8h/ha – 38.5€/h

3. Disinfection: Max 2,000€/ha

3..1. External contract invoice Max. 2.000 €/ha

4. Removing stones Max 400€/ha

4.1. External contract invoice Max. 400 €/ha

5. Levelling: Max 800€/ha

5.1. External contract invoice Max. 800 €/ha Not specified

6. Plant and plantation 1.69€/plant

6.1 External contract invoice (plant not Max. 0.36 €/plant

included)

6.2. Invoice of the plants Max. 1.33 €/plant

6.3 Operation performed with own resources 0.29 €/plant 11.7h/ha – 55.1€/h (plant not included)

7. Individual protection of plants against 0.5€/Plant rabbits at the time of planting

7.1 Outsourcing invoice (protectors not Max. 0.13 €/unit

included)

7.2. Invoice of the protectors Max. 0.37 €/unit

7.3 Operation carried out with own means 0.11 €/unit 13.4h/ha – 16.4€/h (protectors not included)

31 Only operations eligible in Castilla-La-Mancha are led done in the table 32 The amount for these actions will not exceed the amount eligible for external contract. In addition, the durations and amount include workforce and machine used.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 65

Operation National eligible Regional Eligible Regional Eligible amount 2014- amount 2014-2016 amount 2017-2018 2018

8. Treillis Max. 3,400€/ha

8.1. External contract invoice (treillis not Max. 960 €/ha included)

8.2. Trellis invoice Max. 2.440 €/ha

8.3. Operation carried out with own means 778 €/ha 64h/ha – 14.6€/h

B) RECONVERSION OF VINEYARDS. Not specified

9. Overgrafted: Max. 0.9€/ha Not specified

9.1 Outsourcing invoice (only labor) Max. 0.90 €/graft Not specified

unit

9.2. Operation carried out with own means 0,73 €/graft unit Not specified

(only the work)

C) IMPROVEMENT OF VINEYARD

MANAGEMENT TECHNIQUES.

10. Change from gobelet-trained vine to 600€/ha + crop treillis management system

10.1. External contract invoice:

- Pruning and elimination of remains Max. 600 €/ha

- Placement of espalier Max. 960 €/ha

10.2. Trellis invoice Max. 2440 €/ha

10.3 Operation performed with own means:

- Pruning and elimination of remains 486 €/ha 55.9h/ha – 15€/h

- Placement of treillis 778 €/ha 64h/ha – 16.4€/ha Source: Regional order 126/2017 of the Regional department of agriculture, environment and rural development of Castilla- La-Mancha, 12th of July, regional order of the Regional department of agriculture, environment and rural development of Castilla-La-Mancha, 4th of December 2013, Royal decree 548/2013

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 66

ANNEX VIII: Standards costs for eligible operations of Investments measure

Type of expenditure Amount eligible 2014-2018 Accommodation Amount of the invoice, up to a maximum of: x 120€ / day in Spain (reverse missions) x 180€ / day in third countries Maintenance (includes Amount to lump sum (justification with invoices): meals, local x 80€ / day in Spain (reverse missions) transportation, x 90€ / day in third countries telephone, etc.) Collective meals Amount of the invoice, up to a maximum of: x 60€ / person in Spain (reverse missions) x 70€ / person in third countries Displacements Amount of the ticket, only in tourist class For travel by car, 0.25€ / km. Studies of new markets Amount of the invoice up to a maximum of 5% of the budget allocated in the program to the country from which performs the study of a new market, with a limit of 1,000€ Evaluation studies of the Amount of the invoice up to a maximum of 5% of the budget allocated in the program to results of the promotion the country from which performs the evaluation study of the results of the promotional activities activities, with a limit of 1,000€ Audits of execution of Amount of the invoice up to a maximum of 5% of the budget allocated in the program to measures and the country from which performs the audit of execution of measures and expenditure of expenditure of actions the shares, with a limit of 1,000€ Source: Regional orders of the Regional department of agriculture, environment and rural development of Castilla-La- Mancha 2014/883, 2015/1339, 2016/943, 2017/1080.

AGROSYNERGIE – Case study: Castilla la Mancha Evaluation study of the impact of the CAP measures applicable to the wine sector 67 KF

-

03

-

18

-

454

-

EN

-

N

10.2762/717506