Allegrini 2018

Wine designations, a cultural heritage of the country

“Douja d’Or”: towards the reform of #EU regulations, critical issues and opportunities in the focus signed Accademia Italiana della Vite e del Vino
The map of Italian wine designations (ph: Federdoc)

Too many (330 DOCs, 77 DOCGs and 118 IGTs) and too small, with many and perhaps too many constraints. Consortia between problems of representativeness and supply governance, fail to affect market prices, which often have exaggerated scissors. If this is the picture of our designations of origin, in view of the EU reform of Geographical Indications (GIs) we must not shy away from a comparison with systems, experiences and markets that have only recently come to link their wines to the territory, such as the United States. An opportunity for in-depth study and discussion was offered by the expert focus in Asti signed by the Italian Academy of Vine and Wine (Aivv) (“The reform of designations of origin: opportunities and critical issues”) for the “Douja d’Or”.
“The success of designations of origin in the European agri-food system, particularly for wine production, provides an opportunity for a debate on its urgent, topical and intellectually stimulating reform”, began Rosario Di Lorenzo, Aivv president and professor of viticulture at the University of Palermo. “The Academy could not escape this appointment that brought together the main players in the supply chain, in the spirit that animates it: to make a contribution to the sector in terms of research. The DOs are a cultural heritage, as well as an economic one, that cannot be delocalized, and the proposal of the new Regulations is an opportunity to address its issues”.
Outlining the contents of the proposal, presented in March 2022, Oreste Gerini of the Ministry of Agriculture’s General Directorate for Agri-food Quality, who stressed that the intent of the reform is to increase the protection of consumers and producers, in general and online, on the Web, including with extended protection for domains, and the notoriety of geographical indication products with communication. “Alongside these three objectives are the introduction of environmental sustainability, the strengthening of consortia, and the preservation of production methods. After the consideration of 279 amendments, the trialogues between Parliament, Commission and Council began in June, and the next one will be in October. There are some issues still open. The role of consortia, which we would like without direct influence on the management of markets; the regulation of Doc and Igp products used as ingredients for which we are in favor of a system similar to what we have in Italy, so with prior authorizations by the consortia. On wine, then, the Ministry’s position is to include it in the package of the new Single Regulation along with the other products. For the powers of Euipo (editor’s note, the Intellectual Property Office in charge of managing trademarks, designs and models of the European Union) we are opposed to an outsourcing of tasks regarding the preliminary investigation of recognitions and modifications of product specifications, we prefer that they remain with the Commission's Directorate General for Agriculture”.
Bringing a view “alien” from the Italian context, speaking “an exquisitely economic language that is foreign to most”, however, was Julian Alston, of the University of California at Davis and an adviser to the Mondavi Foundation. “While they were fine at their creation, today the proposal fails to address some of the most critical issues for DOs such as information asymmetry. That is, it does not take into account what we call “lemons”: the buyer is not aware of the fakes and so the bad wine takes the good wine out of the market. It is on the guarantee on production that the Igs were born, imposing restrictions that have resulted in an improvement in quality by sanctioning its quality superiority, whether it is effective or not. Their number has thus grown, or rather proliferated, proposing wines differentiated horizontally (different Do) or vertically with the articulation of quality pyramids, with the consequent problem of increased asymmetry of information”. “In the U.S. and other EU competitor countries, Ig systems for wine work successfully without restricting producers’ varietal choices or imposing yield restrictions to limit supply”- Alston pointed out. The Ava (American Viticultural Areas), the U.S. system that ensures that at least 85%of grapes come from a specific area, sanctioned in 1983 taking its cue from the European appellation system, places no restrictions. “The goal of producers”,explained the American academic, “is to optimize volumes to achieve maximum values. This objective is prevented in the European Union by the restrictions placed by the specifications. A less heavy-handed approach than the current one would allow more room for the market mechanism to match supply and demand by shifting prices. However, there are no DOs in Italy, apart from Prosecco, that are of adequate size for this purpose. Reducing yields leads to an increase in costs that is not justified unless offset by an increase in price. Looking at “Wine Spectator” scores for the U.S. shows that the highest are given to wines that come from vineyards with low yields and have very high prices. Proving that producers by freely managing quantities achieve good economic results and contribute to the reputation of the territory and the collective brand”.
“Brussels was quick, but as usual it slaloms through problems and appeals to subsidiarity, leaving the solution of problems to individual states”, commented Davide Gaeta, Aivv advisor and professor of economics at the University of Verona, on the reform proposal. “But will the wine package along with “cheese and ham” be effective? Do we have too many designations? Will the European Union force us to merge them? Will the restrictions imposed by the Do produce commensurate benefits? Do the consortia that manage the DoPs operate economically, fairly and effectively? How is voting rights managed? The impending reform of the PDOs to give more authority to Consortia to manage supply and demand balance adds new urgency to these questions. Many PDOs are really small, probably uneconomic, to justify the overhead costs of setting up and running a Consortium. Moreover, most are not large enough to allow significant market power, having highly elastic demand. Economically, therefore, it makes no sense for most Consortia to limit area or yield with the goal of profitably increasing prices. And the hypothesis of amalgamating more Dos to provide a solution to the problem is belied by the success of small, but valuable realities”. And, speaking of volumes and values, from the elaboration of Ismea data, Italy's production of denomination wine is 80% concentrated in 50 DOs (30% in 5; 45% in 10; 90% in 100), which means, as Gaeta stigmatized, “that 50 work and the other 450 do not”. “Going to the comparison of average incomes per hectare between DOs and ordinary wines”, continued the professor of economics at the University of Verona, Davide Gaeta, “there are in some cases no sidereal distances, and so that of quantitative restrictions imposed by specifications is indeed a topic of discussion. There have been, however, opposite cases, such as that of Supertuscans. Average values per hectoliter are far below those in California, where average prices per bottle touch $50. There is much to ponder about how much it is worth the contribution of Do on the bottle price, which again is very differentiated”. Referents from important DOs participated in the panel discussion, which was followed by the introductory reports - enlivened with pointed and differentiated questions to cover all the critical issues of the reform - by Giusi Mainardi, Aivv board member and vine and wine historian. Antonio Rallo, president of Consorzio Sicilia Doc, stressed that “the IG reform must be seen as a great opportunity for the appellation wine system”, while Marco Alessandro Bani, director of Consorzio Chianti Docg, emphasized that “the regulations of a doc must be in step with the times, and the wine must be able to respond to the market and consumer tastes quickly. Rapid responses are needed to requests for changes in the specifications, which need to be congenial enough to be elastic”. Claudio Biondi, president of the Lambrusco Consortium, pointed out the importance in particular of two elements contained in the proposal at present: online protection and the strengthening of “DOP tourism” through the Consortia. “The reform proposal”, added Stefano Zanette, president Consorzio Prosecco Doc, “takes into account the danger that traditional mentions can pose to the protection of designations, as the Prošek case has shown”.
Closing the proceedings was a specific focus dedicated to Piedmont, moderated with an insightful contribution by Vincenzo Gerbi, Aivv vice president and professor of enology at the University of Turin. At the table united in the defense of the European “mold” regulation were all the consortia of Do wines in the region and Piedmont Land of Wine, the sole voice of Do wines in the region. Matteo Ascheri, president of the Barolo, Barbaresco, Alba, Langhe and Dogliani Consortium, pointed out that “the real problem is not the designations of origin and their restrictions as much as the bureaucracy and all the existing superstructures”. This aspect was also taken up by Lorenzo Barbero, president of the Asti Docg Consortium, who spoke of “biblical times to modify a specification that do not allow to keep up with the market”. Filippo Mobrici, vice-president of the Barbera d’Asti e Vini del Monferrato Consortium, also strenuously defended the regulated planting of Dos because “it is not obligatory to produce under the hat of an appellation. It is a free choice that often also coincides with caring for the land and maintaining certain varieties. We make culture, not just viticulture”. “The reform”, concluded Francesco Monchiero, president of the Roero Consortium and Piedmont Land of Wine, “is an opportunity to modernize Piedmont’s Do system, which already works today, by setting up a table to identify levers and tools that can ensure a virtuous, correct and sustainable development of the entire sector in respect of the Do, building a path that sees Piedmont as a protagonist as it was with Senator Desana in the years of their establishment”. Piedmont, which has always focused on the appellations, which cover its entire territory, and “has been fully justified in doing so, succeeding in raising the quality of its productions and the reputation of its brands”, as Mario Protocapa, Piedmont Region’s Agriculture Councillor, pointed out.

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