CMO wine promotion, a myriad of appeals on the 2023/2024 tender. “We have to look forward”

The CMO Wine Promotion Notice for Third Countries 2023/2024 arrived very late, as often happens, but perhaps never this late. The National call (30 million euros out of the 100 total, and 70 in the hands of the Regions, ed.) was opened in July, with deadlines set in a critical period, August (extended then to a later date). Protests rose from the supply chain requesting a overall change, in many aspects, of the rules of presentation and evaluation of projects (starting from the controversial obligation to present “three estimates” for each activity), which according to many, were not accompanied by sufficiently clear explanations. This also caused more difficulties in submitting applications (which overall, except for Tuscany, have decreased). Rankings arrived even later (the official one for projects co-financed at the National level, a provisional one released in November, and the definitive one published only on December 29, 2023. The one for multi-Regional projects is instead dated January 17, 2024), as you can see on the website of the Ministry of Agriculture. Then, as often happens, a flurry of appeals has arrived and is still arriving, which now risk paralyzing an important, fundamental measure to support Italian wine exports. Over the last 10 years, thanks to promotions that first of all companies, and Consortiums, have projected with CMO co-financing (usually covering up to 50% of the project), Italian exports have practically doubled. Now, the same as other countries, they are in a period of slowdown. This is a brief summary of a complicated situation that became evident last summer. There were meetings, round tables and discussions among the Ministry, the supply chain and the Regions that were obviously inconclusive. And, while the projects should have already been started and become operational, the courts are being strongly contested, casting uncertainty on everyone, including those who won the various tenders and obtained the right to financing. “Made in Italy should not be in the Courts, and companies that rightly file appeals when they feel they have been wronged, need to count on prompt answers and clear operational tools rather than winning years long cases”, Silvana Ballotta, at the helm of Business Strategies, commented to WineNews. The studio works on internationalizing companies, and over the past 20 years, has followed the path of the CMO Measure, carrying out important projects for some of the most famous Italian wine companies. “I won't comment on the controversies and appeals, as they are already here, and the Courts will follow their course. I would like to say that we all need to analyze the situation as it is. We managed to open the tender in July 2023, after delays in relations between the Ministry and the Regions, and interventions from the various trade associations. We arrived terribly late, proposing improbable deadlines in the middle of August, even though they were slightly extended, and this in itself was a symptom of obvious problems. Moreover, the July announcement distorted the canons of presentation and evaluating projects”, Ballotta continued, “which have been valid for the past 12 years. I am not saying whether they are right or wrong, but they have, nevertheless, distorted a system and caused difficulties, not only because August holidays were waived, but because the new criteria were not accompanied by sufficient explanation and clarification”. One of the criteria that has been emphasized several times is the obligation to submit 3 estimates for each activity. “It's one of the things that had an enormous impact because it wasn’t clear which items needed to be indicated. Not to mention the timing, as asking suppliers on the other side of the world for different and detailed quotes in August became almost impossible. Then there is the issue of quality. For instance, I know a supplier with whom I have been working for 20 years asks higher prices than others, but I also know his work ethics, while if I find one on the estimate that costs less but I don't know anything about him, and he doesn’t do a good job, well then, instead of saving, in the end, I wasted money”, Ballotta pointed out. And, she added, “at any rate, the system reacted. Plus, it is not true, as some people have written, that we risk sending back who knows how much money to Brussels, which instead did happen in 2016/2017. when after various appeals and delays, Italy returned almost 20 million euros to Europe. There are residual funds at stake, regardless of how things go in Court and from which amounts multi-Regional projects must be deducted, and then the amounts that the State-Regions Conference has asked to assign to Regions, including Tuscany, which have more projects suitable for financing than funds available. The value of funds at risk of not being spent, realistically, from our calculations, amounts to 4 million euros, which is not that different than the several previous years. This is a symptom proving that to make full use of resources, things must be simplified and clarified, not made more complicated or unclear. Of course, the answers the Ministry has given are not sufficient; for instance, some projects were excluded because "the designers did a bad job". I have been in this sector for a long time, everyone always does their very best. Clearly, then, it is a competition, with scores that rewarded some and excluded others. Mainly, there was lack of preparation and a general explanation- including how quality assessments would be carried out - and from what I have learned, not even the Regions were well prepared. The Ministry also tried to do its best. We must remember that CMO funds are also public funds, come from taxpayers, and therefore must be used and allocated well. I have been following the CMO Measure for 20 years, I believe that our Business Strategies studio has contributed quite a lot to communicating it and making it grow. Every year we say we need to talk and come to an agreement, in the interests of the supply chain and Made in Italy, but we then end up postponing, which is difficult to understand. It is now the end of January, and we should start thinking about the 2024/2025 tender. We need to sit at a real, working table. There are a thousand meetings, but they are uncoordinated, disconnected. Even controls AGEA (agricultural payments) is carrying out are complicated due to the many unclear points in the notice and in the form, and sometimes they don’t know how to proceed”. In other words, while the appeals and the various Regional TARs (Courts) are doing their jobs, Ballotta invites us to look ahead. “The CMO Promotion is an important Measure, but we need to clarify it, and whether it should be distributed a bit to everyone, in any case, or whether the actual qualitative merit of the projects should be rewarded. Last year’s Ministry of Agriculture decree, in my opinion, very slightly touched on this subject, but there were too many flaws. One thing no one talks about, for instance, is that starting in 2020/2021 the Italian State heavily sanctions projects that are not 100% completed. So if I implement a good project that is 90% successful, in terms of expenditure of funds, on that 10% that I am unable to use I will have large sanctions - and of course there are cases in many Courts in Italy regarding these sanctions”. We need a change of pace on everyone's part. “Let us remember that wine”, Ballotta said, “is looked upon not exactly benevolently by Brussels. Let's also think about all the times that the autonomy of the Wine CMO, compared to other sectors, has been called into question, or how the promotion funds in general have been questioned several times in support of a product that some people in Europe and not only, consider harmful to one’s health. In this context, all this chaos at the National level certainly does not help, and instead fuels, even in Europe, a negative background noise towards our wine system. Our wine system works, though, and has a lot of potential to be exploited, which is also thanks to the CMO Promotion, a Measure that must continue to exist and must move forward. However, we have to manage it well. February is right around the corner, so let's think about the future. I am convinced that we will make it”.
In the meantime, the Minister of Agriculture, Francesco Lollobrigida, who we met in Rome at the conference, “Francesco's economy and the Italian wine world”, said, “the Ministry offices are working to spend all the funds, looking for the right ways within the rules, and talking to the supply chain. The funds will not be moved to other Measures. Those intended for promotion go to promotion, and in any case it would not be the first time”, the Minister reiterated, “that the entire amount of funds has not been spent. Our objective is clear, the resources that are spent, in this case for promotion, must bring concrete and tangible results”.