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Common Organisation of the Markets in Agricultural Products (Wine) (Amendment, etc.) Regulations 2021

Volume 811: debated on Thursday 15 April 2021

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Common Organisation of the Markets in Agricultural Products (Wine) (Amendment, etc.) Regulations 2021.

My Lords, this instrument concerns protection of geographical indications in Great Britain. GIs are a form of intellectual property protection for the names of food, drink and agricultural products with qualities attributable to the place they are produced or the traditional methods by which they are made. Wider examples include Scotch whisky, Welsh lamb and Melton Mowbray pork pies. This instrument concerns only wines such as an English regional wine, iconic products such as champagne and Rioja, and corresponding traditional terms: for example, grand cru or sparkling. It contains a necessary amendment to the retained EU regulation which provides the legal basis for the wine geographical indication scheme.

The amendment made by this short and technical instrument corrects an error in the original legislation, identified since the end of the transition period. I express my considerable apology and regret for this. Clearly, one seeks to have all legislation in the perfect form. I can report that this error was identified within the department. We immediately sought to remedy it, hence this instrument has used the “made affirmative” procedure. It ensures that the proper registration and protection of GIs and traditional terms in Great Britain continues and that the UK maintains compliance with its international agreements.

This SI does not make any wider policy changes. It corrects article 107 of retained EU regulation 1308/2013, concerning protected wine names and traditional terms. Three separate exit instruments provided for amendments in relation to this article, but in the process an inadvertent revocation was made of the text that was intended to be in place. This instrument puts the intended provision in place, ensuring that all established wine GIs and traditional terms are fully protected and legitimately appear on a public register of wines and traditional terms. “Established” means those names that were protected under the relevant EU schemes on the last day of the transition period. This in turn ensures that the UK Government fully comply with their GI commitments under the EU withdrawal agreement, and the WTO’s TRIPS obligations—the Trade-Related Aspects of Intellectual Property Rights Agreement.

As well as making a direct amendment to a retained EU regulation, the instrument includes a corresponding revocation of domestic secondary legislation. The provision revoked is Regulation 6(3) of SI 2020/1452, one of the previous exit instruments I mentioned. As the provision has been rendered ineffective, it is being removed for clarity.

Since this instrument entered into force on 10 March 2021, the relevant entries in our public GI registers have been updated to show the date of registration as 10 March, rather than 31 December 2020. This change has been made to just over 2,000 records; seven of these are UK names, the rest are predominantly from EU countries. We have engaged with the Food Standards Agency and the network of trading standards authorities, who have confirmed that they are not aware of any wine GI infringements during this period.

We have also engaged with the European Commission and have provided reassurance that we are not aware of any breaches with respect to the affected product names given our checks with the responsible bodies. Furthermore, we have confirmed with the Intellectual Property Office that there have not been any conflicts with trademark applications during the period in question. We have also engaged with the two main UK wine trade bodies, the Wine and Spirit Trade Association and WineGB, and with the Scottish and Welsh Governments. All were appreciative of the quick efforts we had taken to rectify the error and our engagement with them; they reported no knowledge of any breaches to affected product names. I reassure your Lordships that all product names under the three other GI schemes have not been affected, including spirit drinks and agri- foods, nor are wine GIs and traditional terms which are protected domestically through other international agreements.

As I have outlined, the regulations in this instrument are essential to ensure that the UK and EU wine GIs and traditional terms are appropriately protected in Great Britain, and that we comply with our important international obligations. For those reasons, I beg to move.

My Lords, viticulture is one of our great prospects in this country. In the two years leading up to lockdown there was a 35% increase in the number of people employed by the sector. More of our acreage is given over now to the commercial growing of wine than at any time certainly since the dissolution of the monasteries and possibly ever. Wine producers are making a calculated gamble on a warming of temperature in this region. Not only is a lot of Kent, Surrey, Sussex and Hampshire growing as a wine-producing area, but traditional champagne houses are buying up land because they too are able to see the way in which temperature is moving.

As my noble friend the Minister says, this SI deals in effect with an oversight that in itself is a minor issue. What is not a minor issue is the question of geographical indications and how to get them right. One of my neighbours in Hampshire produces an outstanding English sparkling wine—I say outstanding because it wins every blind tasting and is the only foreign sparkling wine served at the George V in Paris; not the only English wine, the only foreign wine—yet he has to get a name for it, a recognised brand, that will allow him to charge what it is intrinsically worth abroad.

We need to be aware of treading the line between consumer protection and accurate information for customers and, if you like, barriers to entry. These classification schemes are often set up deliberately to be a racket. They sometimes have rather amusing anomalies; for example, Stilton cheese can be produced in half a dozen places in the East Midlands, none of which is actually Stilton. It is not in the area allowed to produce that cheese and has to call it something else. Sometimes they are very obviously a racket. The most outstanding example within the wine trade is of course the 1855 Bordeaux classifications, from which you cannot move down. We need a response that is flexible, guards against producer capture and rewards innovation and start-ups.

My noble friend the Minister mentioned the trade bodies. WineGB’s chief executive, Simon Robinson, has a nice phrase, saying that our producers will be

“the New World in the Old World”,

by which he means that we will replicate the innovative, experimental approach of new world producers, who of course are much less tied to the concept of the appellation contrôlée than the European Union and continental wine producers are.

I hope that the Government will take on board what the industry is calling for, which is that, as we repatriate control, we should not simply replicate EU rules on geographical designations. We should have a UK regime, but it should be very light-touch. What is it that the prayer book says of marriage? We should approach it “reverently, discreetly, advisedly, soberly”—if “soberly” is the right word to use when talking about the wine industry.

I finish on a light note. Did noble Lords know that it can only be called “repartee” if it is said in the Repartée region of France, otherwise it is just sparkling wit?

My Lords, it has taken me a while to come to terms with the reality that my noble friend the Minister has taken responsibility for an error in his department—a very rare occasion indeed—but his outstanding speech and excellent explanation of the GIs completely carried the Committee. We fully appreciate the way he has come back to us to give us the background.

I had the privilege of serving on the European Union Committee’s sub-committee in 2007 that undertook a detailed analysis of European wine, entitled A Better Deal for All. I had the great privilege of working with Lord Plumb at the time. I stand by all the committee’s recommendations, many of which are still relevant in the context of a post-Brexit UK, but possibly more relevant to the bureaucrats in Brussels. I am also a long-standing unpaid member of the Haberdashers’ Company’s wine committee.

These are simple and straightforward regulations and, as my noble friend the Minister said, they clarify a technical error, which is welcome. However, my noble friend’s presence at the Dispatch Box on this subject provides the Grand Committee with an opportunity to hear about a key issue during the current round of trade negotiations with wine-producing countries, being ably led by the Secretary of State, Liz Truss, who is doing excellent working securing future arrangements between the UK and a number of countries producing new world wine.

The issue in this context that should concern your Lordships is the future regime for wine import certificates, first in the context of the EU and separately in the context of all wine-producing countries with which we trade. Now that we have left the EU, I can see no national interest in nor justification for the retention of wine import certificates. Freed from unnecessary bureaucracy, the retention of these forms is a cost on the Exchequer and on the industry. In fact, they are no use, so much so that my noble friend the Minister would find it difficult—I would go as far as to say impossible—to name any other bottle of potable alcohol from vodka to rum that requires them. All are well served by standard customs paperwork.

Yet the retention of wine import certificates, which is exclusively a decision for government and Parliament, is to place an onerous and costly process on those merchants and buyers—the restaurants, pubs and bars—that buy a wide selection of wines as their unique selling point and which now have to face the bureaucratic process of obtaining a physical stamp for wine imported, which has no safety benefits and above all no consumer protection advantages. After all, if there were any consumer protection gains, we would have them for imports of every other bottle of alcohol.

With safety and authenticity being guaranteed by the importer, I am a loss to understand why the Government are looking to retain these import certificates. After all, one significant advantage of Brexit consistently argued by the Government with which I was in complete agreement was to ensure a substantial reduction in unnecessary red tape, freeing Parliament to promote freer trade and erasing unnecessary bureaucracy.

I ask my noble friend the Minister just one simple question: why does he of all people—bright, questioning and perceptive as he always is—want to keep VI-1s? What is their benefit? Can it possibly be greater than the bureaucratic costs and processes that they cause? These forms require a physical customs stamp on entry into the UK, duplicating everything that is necessary in normal commercial documentation. They do not address the historical challenge of counterfeited wine since, should there be another Australian scandal, that would not be discoverable on the face of the certificate. Counterfeited wine would be stamped at the customs point, so I cannot see how possible issues of fraud are in any way covered by these certificates.

Possibly this bureaucracy is to be retained to protect English producers, but surely my noble friend the Minister and the Committee would not conceive of resorting to red tape to protect our outstanding English producers, who can succeed on merit and quality even if they currently produce less than half a percent of total wine consumption in the UK. So what do the Government see as the benefit of VI-1s?

A simplified version of the form is good for the European Union, but the answer to that challenge is to welcome the deferred date for the EU introduction, which is now the end of the year, and use that time to introduce digital forms, moving with pace from the CHIEF to the CDS system. That is the least bad outcome with Brussels and is surely acceptable to everybody in the industry. However, importing to the EU is, of course, different from the rest of the world, where surely there is no need for these forms at all. After all, most of the wine imported from Australia is in bulk. While there may be 10,000 or more suppliers in the EU supplying major retailers in the UK, only a handful export from Australia, and the majority do so in bulk.

What can it possibly be that would make the exceptionally popular and able Liz Truss so unpopular in bars and restaurants the length and breadth of the UK, not to mention the dent in popularity of my noble friend the Minister when the Bishops’ Bar reopens? The only answer I can come up with is that this is a pawn in an otherwise much larger series of trade negotiations. If so, the Minister will understandably have little to say, particularly in answer to my only question of what is the value of a VI-1 certificate. If that is the case, I totally understand and would not wish to weaken the Government’s negotiating position in the trade negotiations under way this year. If I am wrong, then I hope this House will return to the subject in due course and be united in seeking to end this unnecessary and costly bureaucracy—costly to the Government, to the wine industry in the UK and, above all, to the consumers, who will pay the price for the bureaucracy we hoped we had left behind on 31 January 2020.

My Lords, it is a pleasure to take part in this debate, and to follow my noble friend Lord Moynihan, who, with eloquence and guile, has taken many of my points: I feel none the worse for being a shadow and an echo of much of what he said. Before that though, I welcome these regulations, straightforward but important and correcting, as my noble friend the Minister said, an error as we transpose legislation as a result of the end of the transition period. I shall focus, very much as my noble friend Lord Moynihan did, on the VI-1 forms.

In no sense do I wish to pre-empt the Minister, but I believe that my noble friend Lord Moynihan very effectively answered his own question: there is no purpose or point to VI-1 forms. Has the Minister had an opportunity to look at the Reducing Friction in International Trade paper that I alerted him to in the autumn of last year? That concerns a digital solution to this problem, a proof of concept for Australia-to-UK wine imports, not just about customs documentation but about all documentation, linking the digital, the legal, the physical, the health and safety and the viniculture all together through various new technologies, not least distributed ledger technologies, IoT and several other elements. What the proof of concept demonstrated was that we can today, if we so choose, have a real-time, effective digital solution to this issue; yes, with EU-UK trade; yes, with all trade.

It may be worth noting that we are not just an importer of fine wine from continental Europe; we have a stunning importer/exporter wine industry at all levels and at all sections of the wine industry. It is a less well-known but fabulous part of the British economy. Indeed, as my noble friend Lord Hannan correctly identified, we have a growing range of fabulous wine producers, not least across the south coast of England, which is set in only one direction, and that is positive and set for growth. Does the Minister agree that we can work together and bring in a digital solution which would be far more effective than just taking into digital means the unnecessary details currently stored on VI-1 bits of paper? Until then, does he agree that not just until 31 December this year, but well beyond, to eternity, we should not have VI-1 forms in our trade with the EU or the world? They have no purpose; they merely leave UK drinkers with an acrid aftertaste in their mouth. If the forms come back, they will leave drinkers having to swallow increased prices and reduced choice. I know that my noble friend the Minister cannot want that. I very much look forward to his response.

I thank the Minister for his opening remarks and for agreeing to meet me and the noble Baroness, Lady Hayman, yesterday to discuss this SI, which as he says is a simple one that corrects a technical omission. I thank him for his gracious mea culpa at the beginning; we all make mistakes, but it is important to acknowledge them. As Peers are always busy dealing with SIs, the fewer we have of them in future, the better.

I do not think that the omission does anything to suggest that the Government are not serious in how they treat the issue of GI schemes. I believe that they understand their value, to both consumers and the trade, in delivering benefits to both. I would like the Minister to commend the staff for spotting this error. I think there was a nine-week period during which these regulations could have been exploited so, as I say, they should be commended. During that time, there was no protection for the investment made by companies that have invested in these high-quality products. As other noble Lords have said, those are mainly from Europe, with brands such as champagne and rioja but, as the noble Lord, Lord Hannan, says there is a growing number of English sparkling wines, which we should be and are proud of—not just in Hampshire, I would like to say, but in the neighbouring county of Surrey, where I live.

I have no wish to prolong the debate, but I ask the Minister one question. When we last debated this matter, a number of noble Lords outlined the concerns that they had around the problems that people were having in importing wine from European countries. Can the Minister update us on the situation vis-à-vis imports of European wine into the UK, given that half of all the wine that we import into this country comes from the European Union? Therefore, a problem with the amounts of importing from Europe would be a significant blow to those who enjoy drinking those products.

I also start by thanking the Minister for his very helpful meeting with me and the noble Baroness, Lady Parminter, and for his openness about what has happened and the situation that has arisen. Clearly, as the Minister said, this is a very short instrument because its sole purpose is to reinstate a previously implemented operability amendment to geographical indicators that was inadvertently revoked by another Defra SI. This error has meant that the version of the EU regulation on the statute book following the transition period was technically incorrect, but we thank the Minister and his staff for their explanations yesterday that the impact has been minimal.

As we have already considered this instrument in Committee, and other noble Lords have discussed the wider implications, I also intend to keep my remarks brief. I was pleased to hear in the Minister’s opening remarks that he and his department have discussed the situation with both—[Inaudible]—and the devolved Administrations. I draw attention to the fact that, during consideration of previous Defra EU exit SIs, we have raised concerns around the possibility of drafting errors and potential for mistakes if Defra continues to favour multiple and sometimes overlapping instruments over one or two larger consolidating texts.

If we turn to Paragraph 7.1 of the Explanatory Memorandum,

“What is being done and why?”

we can see that our concerns have come to fruition in this case. I understand that it is often more complicated when we have so many different pieces of legislation that need to be updated, changed or brought into UK law following our departure from the EU, but it is concerning that mistakes such as this have been able to be made due to the complexity of the many different small pieces of legislation that are being passed.

I join the noble Baroness, Lady Parminter, in giving thanks to the member of staff who spotted this error, as it was extremely fortunate that it was picked up at this early stage. But I hope that the Minister will be able to explain how such an error came to be made. Is the department aware of any similar issues that have arisen in other areas? If so, how many have happened, and are relevant corrections being made? Has the department reviewed how it checks the drafting of often very complex and detailed legislation? We all need to have confidence in government legislation and confusion and avoidable errors are simply not acceptable. I thank the Minister again for his sincere apologies that such a mistake has happened and ask for his reassurance that there will not be any such confusion and reoccurrence in the future.

My Lords, I thank all noble Lords who have contributed to what has been a very constructive debate. It is clearly essential that we have the right legislation in place for the effective operation of the UK’s wine GI scheme, with appropriate product name protections visibly in place.

I enjoyed my noble friend Lord Hannan of Kingsclere’s absolute endorsement of viticulture in this country, and if I could trade some counties with my him and the noble Baroness, Lady Parminter, in Suffolk we have some excellent wine production as well. Clearly, the champagne houses are not only buying land in Kent because of climate change but also because the soil structure is very similar to that obviously famous part of France—and that is why there is this commitment. The export of English and Welsh wines, in particular, around the world is an area of expansion and growth, and I am pleased that my noble friend mentioned innovation start-ups, which are really important.

I reiterate to both noble Baronesses my regret that the error has happened, but I would also like to remark upon their thoughtfulness in raising the matter of the official, whom I am not allowed to name, who detected this error. I am very grateful for their generosity. I am aware—as we all are, because we are all engaged in this—of the significant pressures on both policy and legal teams with regard to the SI programme. This was particularly the case in the run-up to the end of the transition. That is why, to pick up the important point raised by the noble Baroness, Lady Hayman, we will continue to review and improve our processes in respect of legal and policy checks and clearances of legislation. This will include a consideration as to whether there is enough resource in place. I regret every error; the perfect form is something we strive for, but sometimes these things happen. I will always be up front when they do, but we obviously need to do everything we can to stop these issues manifesting themselves.

My noble friends raised the issue of VI-1s, which already exist for wine imports from other origins, such as Australia, the United States and Chile. These wines remain extremely competitive in our, and, indeed, the EU’s, marketplace. We believe the new self-certification requirement to be appropriate and affordable.

I also say to my noble friends, particularly my noble friends Lord Moynihan and Lord Holmes of Richmond, that leaving the EU of course gives us the opportunity to consider and review changes in policy to suit the needs of British people and our businesses. We will continue to monitor all areas of retained EU law, including those concerning wine certification, to ensure that they are fit for purpose. I remember my noble friend Lord Holmes of Richmond raising the electronic transmission of wine certification strongly in debate on the Agriculture Bill. It is possible to transmit by those means and we will consider all aspects of VI-1 processes and their transmission. Our immediate attention has been focused on whether VI-1s serve a practical and useful purpose in today’s global wine trade. However, I remember the document and officials are considering this area.

A number of points were also made about the whole scenario of the wine world, including by the noble Baroness, Lady Parminter. The first thing to say is that the United Kingdom is one of the most important global wine-trading nations. The UK is second only to the United States of America in the value of imports. She also raised the point that there were issues, which we have all identified, post the end of the transition with imports and arrival. My understanding is that these matters are improving all the time, as paperwork becomes better understood. A lot of attention has been paid to this and it is improving. It was interesting that imports from France and Italy were down by 10% in 2020, compared to 2019, but imports from Spain were up by 10%. Those are the three countries which have a significant supply issue.

I certainly want to take up the opportunities that my noble friends have raised for exports of our excellent English and Welsh wines. I should also say that we have recently extended the easement where any wines arriving from the EU will not need to have associated wine certification to 1 January 2022. This will provide time for the sector to adjust to the new trading arrangements, including those set out under the UK-EU Trade and Cooperation Agreement.

I agree that there have been these initial problems with exports to certain EU member states. We have a considerable interest in wine exports to the EU, of course, which total about £400 million per annum. This is largely made up of re-exports of imported wine from countries such as Australia, Chile and the United States, and fine wines from all around the world. Those problems are very important not only for our own domestic wine but obviously for this significant re-exporting, which is a key feature and part of the employment aspects of this sector.

We have been working hard with the companies concerned in this area and with their agents, our diplomatic network and member states to resolve the immediate issues, and what can be done to ensure these problems do not reoccur for future shipments. I cannot promise that we are in the perfect form on these matters as yet. What I know is that, across the piece, as exports have been building up since 1 January, these issues have been resolved and trade is starting to re-energise itself—not only because of coronavirus but because of the work we are doing in this sector.

With those comments and, if I may say so, a general endorsement of the opportunities for domestic wine consumption and exports, I recommend that the Committee agrees to these regulations so that we can rectify an error which, thank goodness, was identified by an excellent official. There was no issue with any goods and, from the work we have done, we are clear that there was no issue of any difficulty during those nine weeks. We would of course not have wanted that to arise. I will look at Hansard in case there are some points that I may not have covered, but with those remarks I commend the instrument to the Committee.

Motion agreed.

Sitting suspended.