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Tuesday, May 22nd, 2018

Unique opportunity for investors: European grants in the wine-making sector is renewed

The reformulation of the subsidies that Europe grants to wine-growers within the Support Programme for the period 2019-2023, encourages the purchase of winery assets

Vineyards in Spain

It’s good news for investors interested in wineries in Spain.  The assistance that the European Union provides for the wine-making sector, and whose budget amounts to over 1,000 million euros, receives a very beneficial reformulation as a consequence of the enforcement of the third Spanish Support Programme to the Winemaking Sector for the period of 2019 to 2023.  In particular, the acceptable measures will be the promotion of wine in third world countries, the restructuring and conversion of vineyards, the distillation of by-products, and investments.

This means that the restoration and transformation of the winery is added to the restoration and transformation of the vineyard, which encourages the purchase of assets. In the written draft by the European organisations, and approved by Spain through a Royal Decree, it is established that financial support will be granted to the tangible or intangible investments in facilities of transformation and wine infrastructure, but also in commercialisation structures and tools, even with the aim of improving energy savings and sustainable processes. It corresponds to each Autonomous Community to summarise the implementation through its official newsletters, as has happened in Andalucía, Castile and León and the Valencian Community.

The premise is that the investments will refer to the production or to the commercialisation of the winegrowing products.  It will not only help in the renovation of the vineyards, but also of the wineries themselves, where the processes of development and then the sale of the wine take place. The subsidy will affect a much broader business cycle, and will encourage its development, as well as the mobility and the buying and selling in the different regions.

Barrels in Fariña

The EU regulation establishes that the member States of the European Union, including Spain, must present a five-year Support Programme which contains at least some of the accessible measures provided therein.  Even though the National Support Programme for the period of 2014-2018 ends on 15th October 2018, Spain has already presented its programme in 2017 for the next season, which is the reason why now it has been able to announce the grants for the next four years, supplied with more than 1,000 million euros.  The application submission deadline for those interested is the 31st January of each year, except for the first announcement, which ended this past April 16th.

To give more detail, the yearly budget of 210 million euros will be distributed like so: 72.5 million euros for reorganisation and conversion of vineyards, 56 million euros for investment, 50 million for promotion in markets in third world countries, and 31.8 million euros for distillation of by-products.  It should be remembered that Spain is the country with the largest surface area of vineyard in the world, with over 950,000 hectares.  Furthermore, measures such as the promotion of the wine in third world countries will enable the marketer capacity to increase in a sector which exports a value of 2,700 million euros each year.

 

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