A Stitch in Haste

One of my favorite targets for ridicule is the European wine cartel. If their wine is so good, then why does it require multi-billion-euro subsidies and flagrantly protectionist regulations?

Well, it turns out that some eurocrats are, sorta kinda, asking the same question:

The EU plan foresees an end to restrictive and often confusing labeling rules for wines and wine-making practices to make it simpler for consumers to see what they are buying. It calls for winemakers to put on their label the grapes used in the wine, a labeling practice used by non-European producers, which has appealed to consumers.

The reform also recommends simplification of national vintner quality systems replacing them with just two EU-wide classes of wine: wine with Geographical Indication and wines without.

That's the good news; here's the better news:

[EU Agriculture Commissioner Mariann Fischer Boel] said EU governments had to realize that decades-old practices of generous subsidies -- which total some 1.2 billion euros ($1.5 billion) a year, 63 percent of which was used to prop up prices -- had made wine producers complacent and out of touch with trends and were flooding the market with too much wine that no one wants to buy.

There is a special vineyard in Hell for people who advocate agriculture subsidies of the type given to European vintners: First the government taxes people -- regardless of whether they even drink wine -- to pay the vintners not to grow grapes (which by definition decreases Europe's GDP -- Salut!). Restricted supply means higher prices, so the taxpayers get, not cheaper wine but more expensive wine (and let's not forget sales, value-added, and "sin" taxes). Cheers! And, in the end, there still winds up being a wine glut because the vintners -- stripped of the profit motive -- have no incentive to produce wine anyone actually wants to drink. Prost!

But these pernicious subsidies are going to end, right?

[Boel] ... said billions of dollars in new aid would be made available to salvage the wine sector.

Sigh. Subsidies to correct the subsidies? Isn't that like throwing good wine after bad? Bottoms up!

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For what it's worth, we're no better. See also here.