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Wine (Revocation and Consequential Provision) Regulations 2023

Volume 834: debated on Monday 27 November 2023

Motion to Approve

Moved by

That the draft Regulations laid before the House on 25 October be approved.

Relevant document: 2nd Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)

My Lords, leaving the EU gives us a unique opportunity to review our retained EU wine law to ensure that it better suits our domestic needs. The UK wine market was worth more than £10 billion in 2022 in off-trade and on-trade sales and the UK’s developing domestic production sector has attracted significant global investment. It is therefore vital to reform retained EU laws to give us the opportunity to boost growth and development in our domestic industry and to give it the capacity to tackle future environmental and economic challenges. To do this, the reforms that I am setting out to the House today will address a number of issues faced by our wine businesses. They will remove barriers, support innovation and simplify regulations to help to support growth in our wine trade and production industry, giving them the freedom to meet new and evolving demands while maintaining the high standards that consumers have come to expect.

First, the regulations will amend current importer labelling requirements. The instrument will remove a stipulation that imported wine must show the prefix “Importer” or “Imported by” before the address of the business responsible for importing that wine to England. It will mean that the general food law provisions relating to the identification of the responsible food business operator will apply to wine in the same way as they apply to other food products, without any additional importer labelling requirements in wine law on top of that. Changing importer labelling provisions means that businesses do not have to face unnecessary costs and bureaucratic administrative burdens. With approximately 1.3 billion litres of wine being imported into the UK in the 12 months leading up to December 2022, these burdens from inherited EU labelling rules must be removed. This Government will always stand with businesses to create growth opportunities.

Secondly, we will allow wines with a protected designation of origin to be produced from any permitted grape variety or hybrid variety rather than just the species Vitis vinifera. Permitting the use of non-Vitis vinifera species and hybrid varieties in PDO wines can bring significant benefits to both the industry and to the environment. Hybrid varieties often exhibit higher disease resistance compared to traditional Vitis vinifera varieties. The use of hybrid grape varieties can contribute to greater crop consistency and thus supply chain resilience. These hybrid grapes are often bred to withstand various climatic conditions and soil types, leading to more predictable yields. That predictability can mitigate the impacts of climate-related fluctuations and contribute to a stable supply of grapes, supporting both producers and consumers.

Thirdly, the instrument will remove the ban on the production of piquette, a wine-based beverage produced by adding water to grape pomace. Ending this ban will allow wine producers to create a new product offering using a by-product of the wine production process. This is an exciting and interesting opportunity that the Government want to provide to our wine producers.

The Government will also continue to support the thriving wine industry by enabling the blending of imported wine in England. This reform is permissive in nature, so take-up from the sector is voluntary. Our aim of allowing the blending of any wine in England will enable the wine industry to blend different varieties of wine from the same or various origins to achieve greater consistency in their products and to create entirely new products that suit consumer tastes. The Government are delighted that this measure also offers the opportunity for more British jobs in English wineries and bottling plants.

The Government are also keen to make the recycling of wine bottles easier in line with collection and packaging reforms. The instrument therefore intends to remove the mandatory requirements for foil caps and mushroom-shaped stoppers to be used in the marketing of sparkling wine. In addition to reducing waste, our aim is to make the production of sparkling wine more competitive.

The instrument will remove the wine certification scheme. The Government have listened to our wine industry and acted to remove unnecessary bureaucracy. The Government opposed the wine certification scheme policy as an EU member; now that we have left, we can seize the opportunity to determine our own laws. The instrument therefore intends to remove the wine certification arrangements. The current cost of the application process is £15 plus VAT per varietal wine. By removing the scheme, the relevant wine producers are avoiding that unnecessary cost.

I recognise that a majority of these first-phase reforms will apply only in England. However, the Welsh Government and Defra have agreed to pursue future reforms together, allowing these benefits to flow to the wine industry across both nations. As we have done from the outset, we continue to encourage Scotland to make similar reforms.

Together, the changes I have set out will liberalise the growing domestic wine industry and address several issues that our wine businesses face. They will remove barriers, support innovation and simplify regulations to help support growth in our wine trade and production industries. These proposed reforms give them the freedom to meet new and evolving demands while also maintaining the high standards that consumers have come to expect.

Our wine industry and producers support the changes set out in this instrument and welcome the flexibility it provides. The Government intend to bring further changes to allow the wine industry the benefits of leaving the European Union. This instrument is part of a broader package of reforms giving our thriving wine and alcoholic drinks sector greater flexibilities that will support it in the future. I beg to move.

My Lords, I thank my noble friend the Minister for presenting the regulations before us this afternoon; overall, they are a very positive contribution to the wines and spirits industry. I declare my interest: I chair the Proof of Age Standards Scheme board, of which the wines and spirits trust is a member. I was very grateful for its briefing as part of my preparations for this afternoon.

I have just a couple of questions for my noble friend. While it is welcome that the regulations will benefit both consumers and indeed the wine industry, my noble friend mentioned that there are one, if not two, further statutory instruments to come before the House in the next six months. Would it not have been better to do all three statutory instruments together? I understand that the Secondary Legislation Scrutiny Committee, which prepared a report in advance of the regulations being laid before us this this afternoon, expressed concern about the lack of a uniform approach and level playing field across Great Britain, and the way the department has introduced and promoted the instrument.

I welcome my noble friend’s having reached an agreement between the department and the Welsh Government. Can he tell us the status of the agreement between his department and the Scottish Government in that regard? Also, it is particularly welcome that, as my noble friend said, only one label will be required, so we are in fact restoring the situation that existed before Brexit. It looked at one time as though two labels would be required on one bottle, one for consumption in the EU and one for consumption in the UK, and it is very good news indeed that these labelling changes have gone ahead in such a sensible way.

With those few remarks, can my noble friend explain the thinking behind having one statutory instrument before the House now, with two to follow in short order? Also, can he explain the precise situation with the Scottish Government regarding the instrument before us this afternoon? However, I welcome these regulations.

My Lords, we have spoken previously about similar reforms. There was an SI in 2021, for example, and during that debate we on these Benches said that it was important that the Government work with, rather than against, the industry as they continued to make the reforms. So, these regulations are welcome, and it is good that the Minister in his opening remarks confirmed that the department has been working constructively with the industry. We note that the industry has been very supportive of the regulations before us today. Clearly, that support is good and welcome, and there are many positives in what the regulations lay out.

However, the Secondary Legislation Scrutiny Committee laid out pretty lengthy concerns, which need addressing. They were largely about the operation of the internal market and, as the noble Baroness, Lady McIntosh of Pickering, mentioned, in particular the Welsh and Scottish Governments, who signalled opposition to the changes. I note that the Minister talked about moving forward with the Welsh Government, but the noble Baroness made important points about the situation regarding Scotland, so I would be interested to hear his response to those concerns.

The committee’s report also referred to the potential negative impact on consumer confidence, and in particular labelling. The report says that

“it will be important that all products are labelled clearly so that consumers can make an informed choice of what they are buying”.

Can the Minister clarify exactly what the labelling requirements will be, to ensure consumer confidence? The report also expressed concerns about the timing of the reforms, given that the Government are undertaking a broader review of wine regulations with a view to consolidating them in early 2025. Again, the noble Baroness mentioned further SIs coming forward, so it would be helpful to have a better understanding of the timing.

I also draw attention to the consultation section of the Explanatory Memorandum. Interestingly, it does not cite specific details but is quite broad and vague. For example, it says that of the 96 responses to the consultation,

“many … were supportive of the changes”.

It also contains a number of very vague statements, including:

“Changes to importer-labelling requirements received strong support”,

when 36 respondents said it would have a positive impact, but 24 said it would have a negative one.

Paragraph 10.3 is on allowing wines

“to be registered as Protected Designation of Origin … where those wines are produced from hybrid-grape varieties”.

That apparently “received solid support”, but the consultation document notes that some responses indicated there would be a risk of lower-quality wine damaging the reputation of domestic wines. That is also in the report from the Secondary Legislation Scrutiny Committee.

Paragraph 10.4 states:

“The production and sale of piquette received positive responses from respondents representing single businesses in the industry who intend to make use of the change. Other respondents noted that it would have no impact or that they would not intend to make use of the change”.

In fact, of the 85 organisations that responded, 32 anticipated a negative impact and only 18 a positive one.

Paragraph 10.5 states:

“The proposal to allow for the blending of imported wine received a broad range of responses. Many respondents indicated that they felt positively about the change and intend to make use of it”.

However, it is all a bit vague and can be a little misleading.

I wonder what the Government are doing to address the concerns that emerged from the consultation. Although it was positive overall, there were sufficient negative responses and issues raised for the Government to need to give a more detailed response. I will be interested to hear what the Minister has to say about that.

I am grateful to my noble friend and the noble Baroness for their views on this instrument. I believe we all recognise the importance of the wine industry. These changes support this aim and will ensure greater flexibility. I recognise that a majority of these first-phase reforms will apply only in England. As I said earlier, the Welsh Government and Defra have agreed to pursue reforms together, allowing these benefits to flow to the wine industry in both nations.

We are working with Scotland. Of the wine we drink in this country, I think only 1% is produced here. Most of that is produced in the south-east of England but a wine industry is now emerging across the United Kingdom. We want to encourage this. It shows farmers and land managers adapting to a changing climate and opportunities for a home-grown industry that we want to see flourish. The changes to importer labelling are required to ensure that the industry avoids unnecessary costs. Revoking importer labelling provisions in wine law will result in the application of the general food law provisions relating to food business operator labelling. This is a change I assure noble Lords that both this Government and the wine industry wish to see.

I hope that it will get the support of the House. Our desire is to improve the sustainability and innovation of the wine sector through enabling PDOs to be applied for in relation to wines made from hybrid grape varieties. This brings long-term benefits to both industry and the environment as well as increasing consumer choice. Blending wine also offers this opportunity, in addition to improving consistency and reducing waste. A serious point made by the Wine and Spirits Trade Association is that the blending of wine is something that the industry wants to do. It is in the consumers’ interest, it reduces waste and it improves quality. It allows for the same flexibility that vineyards have to supply wine that the consumer wants.

The Government also wish to free our wine industry from inherited EU bureaucracy by removing the certification arrangements for non-GI wine marketed with a variety and/or vintage indication. Again, these reforms aim to remove additional costs and administrative burdens on producers. The improvements this Government have made on wine will provide consumer confidence and sustainable growth, encourage frictionless trade, improve our environmental impact and, most importantly, remove unnecessary burdens.

My noble friend Lady McIntosh asked why we are doing this now and then tabling a further two statutory instruments later. The answer is that it is important to get this one agreed before the end of the year, when otherwise the transitional labelling rules will end. We want all food business-operated rules to be in place by 1 January. The other two statutory instruments are slightly more technical in nature and require a bit more work. We are working at pace to bring those forward in the new year.

The noble Baroness, Lady Hayman, also referred to labelling. We want to make sure that labelling is simple and straightforward. We have sought to reduce the burden on producers but still offer the correct labelling. This requirement will allow, for example, the words “a blend of wines from Australia” or “a blend of wines from Chile and Argentina” to be on the bottle. That gives enough information to the consumer, but also secures what we believe is a proportionate requirement on the industry.

I think I have addressed all the points raised. I hope the House will approve this instrument.

Motion agreed.