Wine output growth in Italy, a major producer, will slow down this year after farmers dug up vines because of incentives under the European Union wine sector reform.

Italy’s wine output is expected to rise 5 percent from 4.6 billion liters (1.012 billion Imp gallons) produced in 2008, when it jumped 8 percent, farmers’ research center ISMEA and wine industry body Unione Italiana Vini (UIV) said in a statement after conducting joint research.

With growers actively digging up vines, this year’s output is likely to be below a 4.8 billion liter average of the past five years, but much depends on a weather ahead of harvesting.

The EU reform, which started in August 2008, offers cash to less competitive winemakers to dig up vines to cut back output aiming to drain Europe’s “wine lakes.” Under a three-year scheme, the cash premium is the highest in the first year.

Italian winemakers applied for cash to subsidize the removal of 11,600 hectares of vines in the 2008/09 year, the research said. The figure compares to a total of 788,393 ha under vines in Italy in 2008, according to Italy’s statistics agency ISTAT.

The EU reform aims to remove 175,000 ha of land under vines out of the EU’s existing 3.6 million ha.

Italian growers’ increasing efforts to prune grapes to improve quality would also rein in quantity, the research said.

Source: Reuters