Stimulus and response

STIMULUS AND RESPONSE
THE COMMON MARKET ORGANIZATION WINE REFORM
How does it affect economically, socially, and environmentally?

Eglantina Di Mase







Introduction5
1. The Worldwide Wine Market 7
2.1. World Production7
2.2. World Consumption10
2. The EU Wine Market12
3.3. WineImpact on the EU Economic12
3.4. Wine as a Source of Employment13
3.5. EU Wine Production14
3.6. EU Wine Trade: Imports/Exports17
3. The EU Wine Industry Regulations21
4.7. The Common Market Organization21
4.8. The CMO regulations inefficiency25
4.9. The EU Situation/ Problem Definition26
4. The CommonMarket Organization For Wine28
5.10. The CMO problems28
5.11. The CMO Reform 29
5.12. The CMO Options Evaluated for the Situation30
5. The Profound Wine reform: Option Chosen by the CMO34
6.13. Profound Reform of the CMO – Variant A: One-step35
6.14. Profound Reform of the CMO - Variant B: "Two-steps" 35
6.15. Common Features of Both Variation A and B36
6.16. Budget51
6. Expected Effects of the Wine Reform 56
7.17. Economic Impact56
7.18. Social-Economic Impact on the Rural Areas59
7.19. Environmental Impact61
7.20. International Effects 63
7. Recommendation66
Conclusion72
ANNEXO 174
ANNEXO 277
ANNEXO 380
ANNEXO 482
ANNEXO 584
ANNEXO 685
ANNEXO 786
FigureIndex87
Bibliographical Reference89

“Water separates the people of the world, wine unites them.” Anonymous

Introduction
Wine is the perfect blend between nature resources and human creativity. Its production requires both art and science, its consumption just passion… and like this, just with time wine becomes a culture, a career, a business, an storyteller. It is because of its delightfuleffects, that sometimes we forget that overall wine is a commodity. Its production is not only sensitive to the environment but it is mainly affected by economic and legal factor.
In the last decades, a pleasure that used to be reserved only to the well educated and owners of a refine taste, has become increasing popular among a wider spectrum of social classes and geographicallocations. People have been leaving behind the discourse of seeing wine as a rare and luxury commodity, to incorporate it in their common choices when considering what to consume, in other words, wine has taken a greater “share of the stomach”. This has set off a chain reaction that changed the landscape of the industry forever: wines exports and income activities have increase, retailers now devotegreater shelve space to wine, marketers often come up with new cutting-edge ideas to appeal to their target markets, and producers have innovated with new strategies to increase sales and gain a larger market share. This is the globalization of wines. Even though many trading barriers have been eliminated with globalization and trades agreement, many others have been created with wines laws andregulations.
Wine needs to be regulated not only as an agricultural product, but also as an alcoholic product. It has to undertake production regulation, trading regulations, environmental regulations and even social regulations. Even though these regulations are essential for the over all good of the community, most of them affect the market flow of wine, causing a greater market unbalance. Theproblem is not on regulating the wine; the actual problem is that when creating the regulations the mind is set is under the country’s economic reality, monetary availability, and social necessity, and not on the wine industry itself. Which is perfectly illustrated in the European wine industry.
The European Union (EU) is the world’s leading producer, consumer, exporter and importer...