Historic decision: European Commission approves first sustainable price agreement in the wine sector

Price regulation to protect sustainable production

The costs of sustainable production are often not reflected in the market – this is particularly true in the wine sector, where producers of organic and HVE-certified wines have been under pressure for years. The French market is struggling with oversupply, falling consumption and increasing price sensitivity, while a large part of consumers are unaware of the additional costs of sustainable production.

The agreement now approved aims to protect wineries that produce according to sustainable principles from being squeezed out of the market. According to the draft, guide prices would be set for still wines that cover production costs and include a profit margin of up to 20%. The guide prices would be updated annually, separately for organic and HVE standards and for six grape varieties. The agreement would be in force for two years.

Positive EU feedback – also in terms of competition law

The European Commission’s investigation found that the initiative fully complies with Article 210a of the Regulation on the Common Organisation of the Markets in Agricultural Products. The body stressed that the agreement specifically concerns farmers, applies to agricultural products and applies higher sustainability requirements than those required by EU or national legislation.

In addition, the Commission also acknowledged that any competition restrictions inherent in the agreement are essential to achieving the sustainability objectives – i.e. the restriction of market competition in this case is a lawful and proportionate measure.