Wines of Great Britain Limited (“WineGB”).

Response to the consultation launched on 27th February by the Department of the Environment, Food and Rural Affairs in relation to the paper “Health and Harmony: the future for food, farming and the environment in a Green Brexit” (Cm 9577) (the “Consultation Paper”).

1. Executive Summary

This paper is submitted by Wines of Great Britain Limited, the trade association for the wine producers of the United Kingdom.

The wine production industry is an exciting new industry (for the UK) which has considerable potential to:

- Advance the environmental and public access agenda- Deliver significant enhancements to the rural development, tourism and employment

agenda- Be closely aligned with the Government’s Industrial Strategy- Provide significant exports and import substitution and at the same time increase revenues

for government substantially

However, WineGB believes that achieving these aims will require a scheme tailored to the UK wine industry. Such a scheme would include:

- Direct support to the organic vineyard sector- Domestic and overseas marketing support for the end product (i.e. wine)- Support for research and development- A clear scheme for the appropriate protection of English and Welsh wine (akin to the EU

PDO/PGI system currently in force).- A clear message from Government that this is an industry which it wishes to see advance;

the introduction of clear, and permissive/encouraging planning guidelines - Assistance in developing educational facilities and training for the industry- A more tailored approach to the current assistance for investment in equipment and

government encouragement of banks, LEPs and other funding organisations to fund the sector

- A cellar door excise duty relief scheme to encourage investment in tourist facilities by vineyards and wineries, particularly the medium and smaller sized producers.

The structure by which this can be achieved is something for discussion but might, for example, include a statutory body funded in part by Government and in part by the industry itself.

Wine GB has no objection to this paper being published.

2. Background 2.1 WineGB: Wines of Great Britain Limited (“Wine GB”) is a trade association for producers of wine in the United Kingdom; it is the entity resulting from the merger in 2017 of English Wine Producers Limited and United Kingdom Vineyards Association. It has approximately 300 members encompassing vineyards, wine producers, and consultants serving the industry, predominantly in

England and Wales. Wine GB does not, generally speaking, represent retailers such as supermarkets or the hotel and restaurant trade.

2.2 Current levels of production: The English and Welsh wine industry produced approximately 5.9m bottles of wine in 2017, of which almost 70% was sparkling wine; annual production depends crucially on climatic conditions, and 2017 was a year in which considerable damage was incurred through frost in late April. The industry is currently experiencing rapid growth in terms of planted vines and wine sold and there has been substantial investment of capital and in professional management in the industry in recent years. Production of grapes and wine is also increasingly seen as a valuable diversification, particularly for fruit and vegetable growers and arable farmers. The Department should note that statistics on the industry in this paper are drawn from the results of the survey of our members and non-members carried out in March 2018.Our members also produce a small quantity of wine based spirits such as brandy and eau-de-vie but these are not currently particularly significant volumes.

2.3 The export trade: English and Welsh wine is now exported to some 27 countries around the word; the principal markets are currently believed to be the United States of America, Japan, and Australia, with the Nordic countries being important smaller markets. Other markets include China and Hong Kong, Canada, the Netherlands, Switzerland, Belgium, Italy, Germany, France and India. It is not clear how many producers are involved in the export trade (probably around 20-30) but it tends to be the larger producers; many of the latter see exports as a key part of their strategy. The key selling point for all producers is that the quality of the wine (particularly sparkling wine) is competitive with similar wine from other areas of the world.

2.4 Diversity: Vineyards introduce diversity into a landscape that can often be seen as a monoculture. All vineyards (whether organic or otherwise) are properly seen as naturally attractive features as the relatively low need for cultivation (when compared to other forms of agriculture) means that they tend to be wild life havens. Although pest control is essential on the vines themselves, mechanical means are usually used to control headlands and inter-vine rows and windbreaks, grass field margins and inter-row planting all help with biodiversity. Many vineyards adopt a mixture of organic and non-organic practices to deal with pest and diseases and, again, these all help with this biodiversity. Chemical use is often targeted, not broadcast, fertiliser use is generally deployed by foliar sprays (or by direct application to individual vines, rather than broadcast in the manner of arable fertilisation) and so the impact on water ways and the wider landscape is minimal. Indeed, integrated pesticide management is already effectively operated by the best managed vineyards and encouragement of such practices is desirable. We believe that the encouragement of the creation of vineyards (and organic vineyards in particular) is therefore directly in line with the overall aims of the Consultation Paper. We also believe that encouraging organic production would be welcomed by many (but in fairness, not all) in the industry but it is one area where some level of support to growers may be desirable (see below); in any case, a review of benefits for organic growers is needed – at present, for example, the current system requires growers to pay a licence fee simply to access organic benefits which rather perversely incentivises growers against becoming organic - that seems wholly illogical. There is also a rather strange requirement (which we suspect reflects European, rather than UK conditions), excluding organic growers from some subsidies available to producers of fruit not destined for alcoholic drinks.

2.5 Impact on the rural and wider economy: Vineyards and wine production are also potentially very important in the development of the rural economy and in the creation of rural employment, often in areas where the rural economy has lost diversity and become more mono-cultural (and/or commuter led) due to the changes in agriculture in past years. Ten hectares of vineyard provides employment for one person permanently employed whereas land employed in arable production

requires only one person per 400 hectares or so. Thus, if 20,000 hectares of arable land were to be converted to production of vines, the 10 farmworkers previously would be replaced by approximately 2,000 permanent staff. That does not include the seasonal labour also required nor other wine related jobs created by the industry.

As can be seen from the WineGB paper “Looking to the Future” (a copy of which is attached as Appendix 1), a comparison with the US state of Oregon, a state which has developed its wine industry fairly recently but which was about the same size as the UK about 20 years, suggests that by 2040 there may be as many as 24,000 people working in the industry.

The impact on rural employment does not stop at the vineyard or winery gate however: further downstream activities such as sales and marketing are also essential; also wine tourism is a well-known benefit for wine regions around the world; extensive research in a number of “New World” countries, such as Australia and New Zealand, shows that the average tourist spend of wine tourists has a monetary value which far exceeds the spend of the average tourist, benefitting not only the wineries and vineyards but local hotels, restaurants, petrol stations and other local businesses.

However, local planning authorities need a clear signal from Central Government that this is an important rural industry that Central Government wishes to support as it will provide a significant uplift in rural employment and income for not only wineries, but local hotels, pubs, restaurants, petrol stations and other retailers and tourist sites. Research from New Zealand indicates that less than half of the additional income from a tourist is spent in the winery, the remainder accruing to the local economy. Therefore, planning authorities must be conscious of the need for growth and to treat development plans with a supportive approach to encourage the investment needed to see this growth maintained.

Vineyards also achieve significantly higher productivity per unit of land input: 10 hectares of vineyard will produce approximately 75 tonnes of fruit with a value in excess of £160,000, whereas 10 hectares of wheat have a value of approximately £40,000. (Both figures obviously being very dependent on market and climatic conditions).

There is also considerable scope to expand the exports of the UK wine industry from its current fairly low base. As discussed in our paper “Looking to the future” we anticipate by a comparison with the Australian experience, exports by 2040 could reasonably be expected to be in the region of £350m per annum.

Finally, taxation is inevitably a key factor in this industry. Excise duty and VAT provide very significant amounts for HM Treasury from both the domestic production sector and imported wines. There is a good argument that import substitution will improve the level of revenue earned by HM Government as other taxes such as income and corporation tax, NICS and capital gains tax receipts from producers should increase substantially. Overall, the positive impact on HM Government’s Revenue base of expanded wine production will be considerable due to the combined effects of excise duty, VAT and employment related taxes. However, we also believe that there needs to be three, and possibly four, particular changes to the current regime: first, a cellar door duty relief scheme would greatly encourage investment in cellar door facilities and we have already raised this with HM Treasury; second, the current loophole whereby individuals are effectively able to import unlimited amounts of duty free alcohol from the EU, so long as they bring it across the Channel personally, needs to be closed. This “booze cruise” loophole costs HM Treasury and UK wine producers substantial revenues: almost every producer will probably be able to recount stories of sales for eg weddings not taking place because people can buy duty free across the Channel. This is not a level playing field and duty free imports from overseas should be the same whether from the

EU or elsewhere. That should become easily corrected once we leave the EU. Third, it is not possible to see the rationale for any difference between the levels of duty on still and sparkling wine and some of our members would wish to see the rates equalised. Economically it makes little sense. Fourth, the structure of duty needs to be reviewed more generally: it is not clear to us why levels of duty should effectively be different between, for example, cider, beer and wine, still less that producers should be able to take products out of bond as fortified wine and then “cut it” with cheaper liquid (either water or grape juice) thereby achieving a lower rate of duty. We accept that some of this has roots deep in history but that does not make it right.

The encouragement of vineyards and the production of wine is therefore closely aligned with the Government’s Industrial Strategy as set out in the White Paper “Building a Britain fit for the future”.

2.6 WineGB is commenting on the Consultation Paper only so far as it relates to the wine production industry; we make no comment on the Consultation Paper so far as it relates to traditional farming and the rural environment more generally for a variety of reasons, not the least of which being that in that respect our members have very diverse interests.

2.7 WineGB’s overall position is therefore as follows:

- Need for subsidies post-Brexit: Except where there is an issue which is consistent with the specific objectives of the Consultation Paper and where a cost implication can be shown, UK producers are not looking for continuing subsidies when the CAP payments cease; current area based payments have a very limited impact on the financial position of individual vineyards. That said, if comparable industries, such as soft fruit and vegetables are given some measure of support, we would wish to see similar support given to the grape growing industry so that there is no disincentive to landowners switching to grape growing.

- Pesticide and herbicide availability: If the environmental benefits are to be achieved, even in non-organic vineyards, it is essential that there is a wider set of active ingredients available for use on vineyards in pesticides and herbicides. At present, only six or seven active ingredients are permitted, with a further 30 permitted under emergency approval/EAMU, compared to over 84 in Germany. This has the effect of concentrating usage and running a serious risk of the development of resistance. A wider list of approved active ingredients will have the effect of growers being able to develop more targeted spray programmes which should not only reduce usage rates but also lessen the chance that resistance will develop. The reason this situation prevails is largely because even though the same chemical may be permitted for use on vines in other parts of Europe, each requires national UK approval: the problem is that the fees charged make it uneconomic for manufacturers to seek approval given the current small size of the UK vineyard sector. We would urge the government therefore to adopt a policy of assuming in the first instance that if a chemical is approved for use in France or Germany, it is prima facie suitable for the UK except for some more limited tests applicable to the UK alone e.g. perhaps the impact on the watercourse. It may be also that the usage windows may be different as well. In principle, we would have no objection either if approval was linked to some required form of integrated pest management as well. We would also urge government to introduce a longer authorization period for EAMU/emergency approvals – is it really necessary to have to go through the same process annually? – could not a three or even five year approval be granted?

- Research and development: Research and development is already part of the agenda for many of the larger producers and we would like to see some encouragement for this activity: discussions are already taking place between WineGB and Plumpton College and we believe these are well aligned to the Government’s strategic objectives.

- No tariff or quota protection: Wine producers have already publicly stated on a number of occasions that they see no need for tariff protection or quotas on imports, but would wish to see similar non-tariff/quota access to non-UK markets if at all possible. In view of the UK’s status as a major importer of wine, it is difficult to see why the EU, the USA, South Africa and Australia/New Zealand should not agree this. We would also wish to see reciprocal recognition of standards and matters such as labelling requirements. That said, if such countries will not agree access on such terms, we would suggest tariffs could be introduced, which may of course have a positive effect on the industry.

- Overseas marketing: Most wine regions (especially in the EU) give marketing support to their industry and the UK is (even under current rules) out of line with international comparators. Producers would welcome support in marketing the end products, particularly outside the UK; all producers (other than those which are part of large multinational groups) are small by almost every measure and the cost of representation at trade fairs and the like outside the UK is prohibitive. It is sometimes said that state aid rules prohibit the government from supporting the industry: we question whether that is really a constraint. There are clear exemptions for de minimis amounts of support. In particular, it is clear that 250,000 euros is permitted to be applied annually under EU rules and such an amount could contribute a great deal towards advancing the industry if the will to support the industry is present. In this context, it is worth noting that the Australian Government has recently announced a A$50m Export and Regional Support Package which is explicitly aimed at, among other things, encouraging improvements in the cellar door experience, boosting tourism and enhancing the marketing of Australian wine (for example by taking a significant stand at the 2018 Vinexpo in Hong Kong).

- Domestic marketing: But we also need assistance domestically in marketing products: the wine industry in the UK consists of a number of larger commercial producers and a greater number of small vineyards, often owner operated: this is a very common industry mix around the world and it is difficult to see why there will not always be smaller producers as well as large. In the domestic context, the small producers find it hard to justify marketing outside their immediate environment which means expansion is difficult for them. We would therefore encourage a scheme under which Government provided marketing support for smaller producers domestically, perhaps by supporting marketing shows regionally and supporting smaller producers’ presence at national events. Active support from local and regional authorities could play a key role in the economic development plans and priorities that would benefit the smaller, more regional, producers.

- WineGB would also welcome some measure of support (including financial support) directly to WineGB as the financial constraints it currently operates under make it difficult to achieve all that is necessary to support the industry.

- Labour availability: The lack of availability of skilled non-UK seasonal labour is potentially a major constraint: WineGB commented on the position in depth in a paper to the Select Committee on Environment, Food and Rural Affairs. A copy of that paper is attached to this paper as Appendix 2.

- Employment and Tourism: Wine production is a rapidly growing industry which will provide significant levels of rural development and rural employment if it is allowed to do so. It is also an industry with major potential for tourism, particularly in the south of England, and wine tourism is a well-established factor in many other countries. The multiplier effect of tourism on economic development is well known and WineGB is actively developing a strategy, in partnership with a number of local authorities (for example, with the South Downs National Park), to encourage wine tourism in the UK.

- Land planning: But wine production is a rural industry and a major handicap for many producers is the land planning system which causes major problems for many producers. If production is to increase and tourism to flourish, producers must be allowed to develop the

infrastructure required, such as pressing and fermentation facilities, storage facilities and tourism and cellar door facilities. Accordingly we think clear planning guidelines are needed to encourage the local authorities to support the industry. It simply will not work if producers are banished to industrial estates as visitors expect to visit them in rural locations. In fairness, many local authorities recognize and accept the need for such facilities but a national declaration that the wine production industry was a national priority would be helpful.

- Protection of the UK wine “brand”: We would urge the government to make plans as soon as possible to replace the EU PDO/PGI system currently in force with a replacement domestic system and ensure it is recognized by the UK’s trading partners. We would also be keen to see the current exception for so-called “British” wine removed where wine is sold as British which is actually made from imported grapes or grape must – we have no issue with such activity per se but we would wish to see much clearer requirements surrounding labelling such products so that they are no sold as “English”, “British” or anything similar.

- Inward Investment: Inward investment is an area where we expect to see considerable activity over the next few years and which we welcome: two major champagne houses (Taittinger and Pommery) have already established themselves here and we are aware of other players from a number of countries are looking at this. We have already initiated discussions with the relevant team at the Department for International Trade and we urge the government to adopt a welcoming stance in relation to them. We would welcome support in developing the case for inward investment.

- Encouraging organic production: An example of an exception to the proposition that vineyards do not need direct payment support might be organic wine producers who face decreased yield while providing a clear environmental benefit; although they presumably achieve higher prices for their products because of their organic nature, there may well be a good case for support for vineyards who wish to transition to organic production and for continuing support to reflect lower yields. This support should be based on a) a subsidy to those wishing to grow organically to meet the additional costs of establishing and maintaining an organic vineyard through to full production and b) an annual subsidy to encourage growers to maintain the vineyard as organic: this should be an amount which reflects the lower yields achieved by an organic vineyard but tempered each year to reflect climatic conditions in the relevant year. It is important, however, that any such support does not give rise to unfair competition between organic and non-organic vineyards nor encouragement of inappropriate growing giving rise to “wine lakes” and the like. There are other non-commercial practices which many growers adopt which should perhaps also be considered for support and encouragement eg ensuring that best practice in waste water treatment is adopted and the encouragement of the use of disease resistant varieties of vine. If grassland management is supported more widely, consideration should perhaps also be given to whether it would be appropriate for the vineyard sector as well.

- A statutory wine board? : One possible way to draw many of these threads together might be to create a Wine Production and Marketing Board, on a statutory basis and separate from the Food Standards Agency whose remit is consumer protection. That Board might be assigned the task of driving forward the industry by providing marketing support both domestically and overseas, encouraging research and development and training and education. It could be financed, as in other jurisdictions, in part by a compulsory levy from all vineyards, wineries and other producers, but with the Government providing matching funds but would need to be led by the industry as it is in other countries. This idea is one we would welcome discussing with Government.

Part 2 Consultation questions:

DEFRA Question: Please rank the following ideas for simplification of the current CAP, indicating the three options which are the most appealing to you:

a) Develop further simplified packagesb) Simplify the application formc) Expand the online offerd) Reduce evidence requirements in the rest of the scheme

WineGB response: We believe that a completely new and separate regime is required for wine producers, whether growers or makers of wine. The current regime is geared almost entirely towards cereal and livestock producers and is not really fit for purpose in relation to the wine production industry.

We would however urge the government to simplify procedures and application forms to the maximum extent possible: current schemes are viewed as extremely complex and time consuming without any certainty of result. This must act as a deterrent to applications being made. Expanding the on-line offer is also a good idea but not if it acts as a “barrier” to applications: there must be a help line empowered to assist applicants.

If area based support is to continue, we would like to see the removal of the current requirement that claimants must claim for not less than 5 hectares (the “pony paddock” rule) as vineyards are inherently significant and viable businesses at much smaller sizes – indeed, a five hectare vineyard probably puts that vineyard in the top 10% of vineyards in the UK by area.

DEFRA Question: How can we improve the delivery of the current Countryside Stewardship Scheme and increase uptake by farmers and land managers to help achieve valuable environmental outcomes?

WineGB response: We would welcome a scheme which encouraged a switch in land use from traditional agriculture to the growing of grapes. This could take the form of direct financial assistance to growers for, perhaps the first five years (which is the time vines take to reach maturity) and longer term support for organic producers. We have been told by our grower members that the current system is of very marginal benefit to them and often costs more to apply than it generates.

Financial incentives to adopt integrated pesticide management systems and assistance in their development would be a sensible use of resources, particularly for smaller growers.

Another way to encourage conversion of land to grape production might be to allow landowners to count a certain number of points when calculating their entitlements under a revised Country Stewardship Scheme.

The approval of a greatly increased number of active ingredients combined with a system of integrated pesticide management would also potentially greatly improve the environmental benefits achieved by non-organic vineyards.

Part 3 Consultation questions:

DEFRA Question: What is the best way of applying reductions to Direct Payments? Select your preferred option from the following:

a) Apply progressive reductions with higher percentage reductions applied to amounts in higher payment bands

b) Apply a cap to the largest payments*c) Other (please specify)

*please provide views on the payment bands and percentage reductions we should apply

WineGB response: This is really only relevant to larger land users so we have no comment on this question.

DEFRA Question: What conditions should be attached to Direct Payments during the “agricultural transition”? Please select your preferred options from the following:

a) Retain and simplify the current requirements by removing all of the greening rulesb) Retain and simplify the cross compliance rules and their enforcementc) Make payments to current recipients, who are allowed to leave the land, using the

payment to help them to do sod) Other (please specify)

How long should the agricultural transition period be?

WineGB response: Again, these issues do not materially affect wine producers as such. So we have no view on them.

Part 4 Consultations questions (first part): DEFRA Question: How can we improve the take-up of knowledge and advice by farmers and land managers? Please rank your top three options by order of preference: a) Encouraging benchmarking and farmer-to-farmer learning b) Working with industry to improve standards and coordination c) Better access to skills providers and resources d) Developing formal incentives to encourage training and career development e) Making Continuing Professional Development (CPD) a condition of any future grants or loans f) Other (please specify)

WineGB response: We would suggest options C), B) and A) are the key options for us. This is a very important topic in the wine production industry, at all scales of production due to the high crop value. WineGB is already working with Plumpton College to develop educational programmes and apprenticeships for the industry and we would very much like to see Government support for these initiatives. We would also like to see an apprenticeship scheme closely tailored to the industry as the current government scheme is rather inflexible for the wine production industry. The changes needed would not be costly nor reduce the value of the training. However, it may also be worth reviewing the incentives for employers to offer such training. One area where action is vital is the training of seasonal staff: there are currently almost no trained UK residents who are skilled in seasonal tasks.

The availability of accurate data for our fast growing industry is very important to both measure our achievements and to help with future planning. Currently this is not available and we are having to undertake our own data gathering exercise to fill this gap. More Government support here would be greatly appreciated.

We would not support compulsory CPD: this may easily drive many small producers out of the industry with no very obvious gain for anyone. A voluntary system of CPD would be different however, and we would be pleased to discuss with Government how this might work.

DEFRA Question: What are the main barriers to new capital investment that can boost profitability and improve animal and plant health on-farm? Please rank your top three options by order of the biggest issues: a) Insufficient access to support and advice b) Uncertainty about the future and where to target new investment c) Difficulties with securing finance from private lenders d) Investments in buildings, innovation or new equipment are prohibitively expensive e) Underlying profitability of the business f) ‘Social’ issues (such as lack of succession or security of tenure) g) Other (please specify).

WineGB response: C), D) and E). This is a very long term industry where it often takes a many years before profitability can be achieved. It takes about 6-8 years between the planting of a vine and the bottle of sparkling wine appears on the shelf for sale (less for still wine). That impacts not only the initial investment but ongoing expansion investment as well with the result that it can be a very long time before a truly profitable business (in accountancy terms) is achieved. However the investment in land, buildings and equipment is substantial – the cost of establishing a 10 hectare vineyard alone amounts to around £250,000-300,000 by year 5 (more for an organic vineyard); equipment sufficient to support vinification of grapes from such a site and take them through to bottling amount to perhaps a further £500,000 to which must be added the cost of buildings and (in the case of sparkling wine producers) the costs of riddling, disgorging and storage facilities. It is easily imaginable to say the total would exceed £2,000,000 for such a vineyard/winery. However, a less obvious (further) cost is the capital employed in the storage of semi-finished wine: for sparkling wine producers (who are the majority of the industry by production) the average time a bottle must remain in store is perhaps four years. It is currently simply not possible to borrow to fund any of these operations unless the borrower can support the borrowing using external income and security – with the result that most vineyards and producers are almost entirely equity funded. This not only restricts the ability of many to enter the industry, it also retards growth substantially due to the unavailability of loans to fund expansion at least until the business achieves accounting profitability, which, as mentioned above, is usually only after many years

Some assistance has been made available through EU/Defra grants (through the Leader and LEP programmes) and these need to be continued in one form or another but they tend to be difficult to access and time consuming with the result that many are put off applying; the conditions attaching to some of the grants also do not take into account well the needs of the industry e.g. a requirement of a set number of additional jobs notwithstanding the employment being created anyway by the industry.

It may be argued that Government also supports such investment through the provision of capital allowances: however, the nature of the industry is such that it can be many years before a business can reach a stage at which such allowances can be utilised. We would therefore encourage the creation of a scheme which allowed vineyards and wineries to choose between using capital allowances and a cash payment in lieu for not claiming the allowances on the relevant equipment in future.

DEFRA Question: What are the most effective ways to support new entrants and encourage more young people into a career in farming and land management? Does existing tenancy law present barriers to new entrants, productivity and investment?

WineGB response: Clearly adjustments to the apprenticeship regime would be helpful (see above) but generally the industry does not have difficulty attracting young people into it. It is perceived as an interesting career.

We are not aware of tenancy law having been a major barrier to development of our industry so far.

Part 4 Consultation questions (second part):

DEFRA Question: What are the priority research topics that industry and government should focus on to drive improvements in productivity and resource efficiency? Please rank your top three options by order of importance: a) Plant and animal breeding and genetics b) Crop and livestock health and animal welfare c) Data driven smart and precision agriculture d) Managing resources sustainably, including agro-chemicals e) Improving environmental performance, including soil health f) Safety and trust in the supply chain g) Other (please specify)

WineGB response: D), A) and B). The biggest issue in the vineyards is low yields by world standards, derived largely from the UK climate; some research is already being undertaken on this topic but much more could be done if funds were more readily available. As a young industry there is a lot to learn about what suits UK conditions best. The lack of approvals for the use of many chemicals used elsewhere in Europe – even some which are used on other fruits in the UK are unavailable to grape growers here. This has the impact not only of severely limiting the arsenal of available protective products but also encourages over-use of those products which are available, and thus resistance, neither of which is satisfactory. It has to be accepted that the UK is a very challenging climate in which to grow grapes and protection products are vital.

Data driven smart and precision agriculture is also important to modern vineyards. Precision application and targeting of fertiliser and disease control is becoming very important for us, but we have yet to find a suitable, economic solution to our own random sampling. We would welcome an opportunity to discuss possible models for integrated chemical management systems and how to encourage their usage with a view to reducing usage overall and preventing the development of resistance.

DEFRA Question: How can industry and government put farmers in the driving seat to ensure that agricultural R&D delivers what they need? Please rank your top three options by order of importance: a) Encouraging a stronger focus on near-market applied agricultural R&D b) Bringing groups of farms together in research syndicates to deliver practical solutions c) Accelerating the ‘proof of concept’ testing of novel approaches to agricultural constraintsd) Giving the farming industry a greater say in setting the strategic direction for research funding e) Other (please specify)

WineGB response: C), D) and A). WineGB is already discussing how to advance R+D and will continue to do so, particularly in conjunction with agricultural colleges such as Plumpton. As mentioned above, a statutory board led by the industry may also be a possible option.

DEFRA Question: What are the main barriers to adopting new technology and ideas on-farm, and how can we overcome them?

WineGB response: The wine industry is generally quite good at adopting new tecnology due to its being such a new industry in its own right in this country. The main barrier thus becomes financial and planning law considerations rather than anything else. By way of example, the most effective protection against frost (a major issue for the industry) is probably the well tried water sprinkler systems widely used in Champagne. But these are very expensive and need a lot of water and power so are beyond the ability of many growers (and the facilities to make them work, such as large ponds, would often probably require planning permission). There are other schemes currently being trialled but none are cheap, or if they are, they are not very effective.It follows that if the Government wished to overcome such barriers, a statement that wine production is a national priority for plamnning purposes would be helpful. In terms of overcoming financial barriers, there are a number of possibilities: a technology fund would be helpful on which growers and producers could draw by way of loan or grant (or perhaps by bringing forward the ability to claim capital allowances – at present these are only of value many years after the investment has been made due to the long time taken to reach profitability). Encouraging banks (and in their absence, providing such finance directly by way of loan) to provide stock finance would also help.

Part 4 Consultation questions:

DEFRA Question: What are the priority skills gaps across UK agriculture? Please rank your top three options by order of importance: a) Business / financial b) Risk management c) Leadership d) Engineering e) Manufacturing f) Research g) Other (please specify)

WineGB response: G); there are really only two skills gaps in wine production. They are vineyard managers/workers and seasonal workers

DEFRA Question: What can industry do to help make agriculture and land management a great career choice?

WineGB response: we believe it is already perceived to be such in the wine production industry. Wine has a natural attraction for many.

DEFRA Question: How can government support industry to build the resilience of the agricultural sector to meet labour demand?

WineGB Response: This is one of our most critical issues. We believe it can only be solved with time as the skills required for seasonal labour in particular are simply not available in the UK at present, at least in relation to UK nationals. We set out above that we would like to see government financial support for the education and training initiatives currently under discussion between the industry and the only college with a strong viticulture and winemaking faculty, Plumpton College. There is thus only one agricultural college providing courses that are relevant for the growing wine industry, and in our view seed funding from Central Government to extend the availability for new centres

providing much needed support for this industry is essential. The provision of additional educational centres offering wine industry related courses would make a significant difference for local workers wanting to continue to live at home during further education. The acknowledgement by Central Government that this was an important industry sector, and the appointment of a “Wine Czar” to support and promote the industry would also be very welcome.

Part 5 Consultation questions:

DEFRA Question: Which of the environmental outcomes listed below do you consider to be the most important public goods that government should support? Please rank your top three options by order of importance: a) Improved soil health b) Improved water quality c) Better air quality d) Increased biodiversity e) Climate change mitigation f) Enhanced beauty, heritage and engagement with the natural environment

WineGB response: F), D) and A), although one could argue that E) should be top of the list as the effects of climate change are so unpredictable and could have the most significant impact on vineyards operating in what is at the margins of what is climatically sustainable. Vineyards are naturally attractive features in many countries and are perceived as such here too. The relatively low need for cultivation also means they tend to be wild life havens, particularly if they are organic. Since usually only mechanical means are used to control headlands and inter-vine rows, the latter also tend to be good habitats for the more unusual plant varieties.

DEFRA Question: Of the other options listed below, which do you consider to be the most important public goods that government should support? Please rank your top three options by order of importance: a) World-class animal welfare b) High animal health standards c) Protection of crops, tree, plant and bee health d) Improved productivity and competitiveness e) Preserving rural resilience and traditional farming and landscapes in the uplands f) Public access to the countryside

WineGB response: C), D), and F): As a relatively new industry, options C and D are an important area where the UK needs to catch up as quickly as possible with its peers in this area. Protection of plants, particularly vines from pests and frost and other weather conditions will be a key factor in the second option (improving productivity) as low yields in the vineyards are a major issue for the industry. To give an example, yields per hectare in the UK are around 6-8 tonnes (in a full harvest) compared to perhaps 12-14 tonnes or more in southern France and the same in California. The problem is exacerbated because the UK suffers poor climatic conditions in perhaps 5 years out of 10 and if it were possible to reduce such losses significantly, that would be a major advance for the industry. That said, the arrival of two major Champagne houses (Taittinger and Pommery) are a useful independent validation of the commercial potential for the UK wine industry even with current yields.

Public access to vineyards and winery facilities is very attractive to the public, and generally speaking is not objectionable to owners (indeed in many cases welcomed). The caveat is that there are serious health and safety issues which need to be taken into account. Thus, vineyards generally spray their vines about every 10 days to two weeks during the summer months (which is when most people wish to visit). Given it may not be possible to spray all a vineyard in one day, it means that it is impossible to support any regime which allows unsupervised access to vineyards. Supervised access would however be entirely different and probably more interesting for visitors, as vineyards give tours which visitors not only find interesting but are also what visitors expect. Similarly in wineries, the public simply cannot be allowed access on an unsupervised basis, partly because as a working facility it is too dangerous to allow people to wander about but also because HMRC require wineries to supervise visitors for obvious reasons. However, although this is attractive to both vineyard and wineries as well as the public, providing the necessary facilities is expensive and government support in this area would be helpful. It is worth bearing in mind that tourism generates considerable other revenues for an area, which is presumably why many countries support the provision of such facilities. The possibility of a cellar door relief scheme has been raised with HM Treasury with a view to encouraging the growth of such facilities and hence tourism.

DEFRA Question: Are there any other public goods which you think the government should support?

WineGB response: The encouragement of wine tourism.

Part 6 Consultation questions:

DEFRA Question: From the list below, please select which outcomes would be best achieved by incentivising action across a number of farms or other land parcels in a future environmental land management system: a) Recreation b) Water quality c) Flood mitigation d) Habitat restoration e) Species recovery f) Soil quality g) Cultural heritage h) Carbon sequestration and greenhouse gas reduction i) Air quality j) Woodlands and forestry k) Other (please specify)

WineGB response: H), A) and G). There may be a case for support for state of the art on-site water treatment plants (wineries use significant amounts of water) and perhaps to encourage wineries to introduce carbon dioxide capture equipment – overall, wine production probably absorbs significant amounts of CO2, (the vineyards capture significant amounts of CO2 during the annual growing season but at certain times of the year (mainly harvest) wineries produce CO2 which currently is simply released). However, such equipment would seem at present not to be easily available, partly because the quantities are very small by global standards. To add insult to injury, wineries also purchase tanks of CO2 which are used in the winemaking process and then also released. If a manufacturer could be found to engineer such a system it could be a world class product. All that said, the amount of CO2 released is not significant overall by comparison with other industries including agricultural ones.

See above regarding the potential for tourism/recreational benefits of wine production.

DEFRA Question: What role should outcome based payments have in a new environmental land management system? How can an approach to a new environmental land management system be developed that balances national and local priorities for environmental outcomes? How can farmers and land managers work together or with third parties to deliver environmental outcomes?

WineGB response: This is difficult to comment on in the absence of more detail around the proposals. Vineyards will have no objection in principal to outcome based schemes although it is difficult to see exactly how they would fit into such a scheme. The biggest concern expressed about developments in the wine industry normally centres around traffic generation. However, it is difficult to see how this can be avoided if there is a desire to encourage the development of the industry, given it is by its nature rural and that is also what visitors wish to see.Aside from that, assistance in encouraging growers to become – and remain – organic might be worth consideration.

Part 7 Consultation questions:

DEFRA Question: Do you think there is a strong case for government funding pilots and other schemes which incentivise and deliver improved welfare? Should government set further standards to ensure greater consistency and understanding of welfare information at the point of purchase? Please indicate a single preference of the below options: a) Yes b) Yes, as long as it does not present an unreasonable burden to farmers c) Perhaps in some areas d) No, it should be up to retailers and consumers e) Other (please specify)

*if you answered ‘perhaps in some areas’, please elaborate. What type of action do you feel is most likely to have the biggest impact on improving animal health on farms? Please rank your top three choices from the below list, in order of importance: a) Use of regulation to ensure action is taken b) Use of financial incentives to support action c) Supporting vets to provide targeted animal health advice on farm d) Making it easier for retailers and other parts of the supply chain to recognise and reward higher standards of animal health e) An industry body with responsibility for promoting animal health f) Research and knowledge exchange g) Transparent and easily accessible data h) An understanding of animal health standards on comparable farms i) Other (please specify) j) N/A – Cannot rank as they are all equally important.

How can the government best support industry to develop an ambitious plan to tackle endemic diseases and drive up animal health standards?

WineGB response: this question does not appear to be really relevant to vineyards and wine production. Some vineyards use sheep to graze inter-row, but that is not, so far as we are aware, considered an animal welfare issue by anyone, nor is it vital to the continuance of the industry.

Part 8 Consultation questions:

DEFRA Question: How should farming, land management and rural communities continue to be supported to deliver environmental, social and cultural benefits in the uplands? There are a number of challenges facing rural communities and businesses. Please rank your top three options by order of importance: a) Broadband coverage b) Mobile phone coverage c) Access to finance d) Affordable housing e) Availability of suitable business accommodation f) Access to skilled labour g) Transport connectivity h) Other, please specify

WineGB response. Vineyards are rarely in the uplands, so the first part of this question is not really relevant to them. However, in relation to the remainder of the question, all these options are important issues and often lacking in the areas in which vineyards and wineries operate. If we were forced to rank options, we would place them in the order F), D), and A)

DEFRA Question: With reference to the way you have ranked your answer to the previous question, what should government do to address the challenges faced by rural communities and businesses post-EU Exit?

WineGB response: With regard to:A) Broadband: we would wish to see a universal service obligation providing access to a service

which provided speeds not less than 100 Mbps as soon as possible. Singapore (admittedly not noted for wine production) is already at over 500 Mbps and it is a scandal how far behind the UK is.

B) Similarly rural connectivity is scandalously poor in many areas and Government should insist on improvements from service providers

C) See above: we think there is a very real market failure here which only Government can address: it does not need to be entirely grant based.

D) Affordable housing: planning constraints should be relaxed for affordable housing, and there should be in particular a presumption in favour of permission on brown field sites.

E) Business accommodation: again, a national statement that the wine industry is a priority area, preferably linked to a relaxation of planning constraints is key to solving this issue.

F) Re labour availability, a seasonal workers’ scheme is essential, coupled with a scheme to make such work more attractive for the indigenous population, probably including enhanced availability of viticultural course at training colleges across a wider area than at present.

G) Transport connectivity: Improvement of the rural road network would be encouraged by WineGB. It is unrealistic to think any other form of transport can play a significant role for vineyards and wineries.

Part 9 Consultation questions:

DEFRA Question: How can we improve inspections for environmental, animal health and welfare standards? Please indicate any of your preferred options below. a) Greater use of risk-based targeting b) Greater use of earned recognition, for instance for membership of assurance schemes c) Increased remote sensing d) Increased options for self-reporting e) Better data sharing amongst government agencies f) Other (please specify)

WineGB response: We do not believe this has significant relevance to vineyards and wineries.

DEFRA Question: Which parts of the regulatory baseline could be improved, and how? How can we deliver a more targeted and proportionate enforcement system?

WineGB response: Better data sharing amongst government agencies. It would also be useful to see legislation requiring all vineyards to provide detailed statistics on vineyards and production and an increase in the management of this information by the Food Standards Agency and the Wine Standards Board. We believe there may be a case to be made for a statutory Wine Production Board to advance industry interests (see above).

Part 10 Consultation questions:

What factors most affect farm businesses’ decisions on whether to buy agricultural insurance? Please rank your top three options by order of importance: a) Desire to protect themselves from general risks (e.g. – revenue protection) b) Desire to protect themselves from specific risks (e.g. – flooding, pests or disease) c) Provision of government compensation for some risks d) Cost of insurance e) Complexity and administrative burden of insurance f) Availability of relevant insurance products g) Other (please specify)

WineGB response: F), D) and A/B In practice, at present insurance against the most serious risks (essentially frost at bud burst and poor weather at flowering) is currently unavailable, so far as we know at any price.

What additional skills, data and tools would help better manage volatility in agricultural production and revenues for (a) farm businesses and (b) insurance providers? How can current arrangements for managing market crises and providing crisis support be improved?

WineGB response: Data on the industry is scarce and we are not aware of any arrangements for managing market crises – this is a topic which requires discussion with you we think. Access to a central data base for the reporting of disease would be useful for a start.

Part 11 Consultation questions:

Where there are insufficient commercial drivers, how far do you agree or disagree that government should play a role in supporting: a) Industry, woodland owners and others to respond collaboratively and swiftly to outbreaks of priority pests and diseases in trees?

b) Landscape recovery following pest and disease outbreaks, and the development of more resilient trees?

c) The development of a bio-secure supply chain across the forestry, horticulture and beekeeping sectors?

Where there are insufficient commercial drivers, what role should government play in: a) Supporting industry, woodland owners and others to respond collaboratively and swiftly to outbreaks of priority pests and diseases in trees? b) Promoting landscape recovery following pest and disease outbreaks, and the development of more resilient trees?

WineGB response: This questions seems to be largely about trees but touches a topic of relevance to vineyards. The cost of obtaining approval for chemical products for use on vines is often prohibitive given the relatively small size of the market at present even though the same products are available for use in Europe and even for use on other fruit in the UK. It would thus be very helpful if those costs, which are often government fees, could be removed and government help provided in getting approval substituted. See above for further comments on the need for a wider number of available chemicals, the reasons for this and the possibility of extending emergency/EAMU approvals to three or five years.

What support, if any, can the government offer to promote the development of a bio-secure supply chain across the forestry, horticulture and beekeeping sectors?

WineGB response: With one exception, we do not believe this issue is particularly relevant to vineyards and wineries. The exception is that strict controls need to be considered on the propagation, purchase and sale of vines so as to prevent the spread of disease and certain pests.

Part 12 Consultation questions:

DEFRA Question: How can we improve transparency and relationships across the food supply chain? Please rank your top three options by order of importance: a) Promoting Producer Organisations and other formal structures? b) Introducing statutory codes of conduct? c) Improving the provision of data on volumes, stocks and prices etc.? d) Other (please specify)?

WineGB response: These are all topics we would wish to discuss with Government, particularly C) and B). We think the industry may be too small for A). We would however very much like to see

producers and retailers of British wine required to stop using England, Britain and the like terms as soon as possible. Consumers generally do not distinguish between English wine (made from grapes grown in the UK) and British wine (made from imported grapes).

DEFRA Question: What are the biggest barriers to collaboration amongst farmers? What are the most important benefits that collaboration between farmers and other parts of the supply chain can bring? How could government help to enable this?

WineGB response: This is not regarded by us as a particular problem, at least outside the marketing of the end product.

Part 13 Consultation questions:

DEFRA Question: With reference to the principles set out by JMC(EN) above, what are the agriculture and land management policy areas where a common approach across the UK is necessary?

WineGB response: We believe that the concerns raised by us in this paper are common to growers and producers in England and Wales. There are, we believe, currently no vineyards or producers in Scotland or Northern Ireland at present. DEFRA Question: What are the likely impacts on cross-border farms if each administration can tailor its own agriculture and land management policy?

WineGB response: we do not believe any cross-border vineyards exist, but there are wine producers who make wine for growers in different areas, so this will be a relevant topic for producers should different administrations adopt different schemes. It is otherwise impossible to answer this question absent knowledge of what the different administrations may want to do.

Part 14 Consultation questions:

DEFRA Question: How far do you agree or disagree with the broad priorities set out in the trade chapter?

WineGB response: We agree.

DEFRA Question: How can government and industry work together to open up new markets? How can we best protect and promote our brand, remaining global leaders in environmental protection, food safety, and in standards of production and animal welfare?

WineGB response: for us, assistance in promoting English wine (particularly overseas) is key to this priority. We would like to see Government fund industry stands at product exhibitions outside the UK (see above). We also urgently need to see a replacement for the PDO/PGI scheme currently

mandated by the EU. This scheme includes quality standards and we would want to work further with Government to enhance those standards. In our view, the varietal schemes lack quality controls and, conversely, some controls are questionable. This is a significant body of work which we wish to advance with Government irrespective of the results of the consultation. It is also of concern to us that consumer understanding of the value of these schemes is probably limited and we believe it needs to be enhanced in some way.

Part 15 Consultation questions:

DEFRA Question: How far do you agree with the proposed powers of the Agriculture Bill? What other measures might we need in the Agriculture Bill to achieve our objectives?

WineGB response: To the extent not envisaged by the powers listed, we believe the Government should take powers to:

- create a support scheme for English wine which is specific to English conditions and needs- promote English and Welsh wines - fund necessary research and development - enhance the provision of labour, apprenticeships and to permit the temporary import of

skilled labour when needed- re-calibrate the tests used when approving the use of chemical pesticides and herbicides.

Aside from this, we support the Government taking the powers stated in the Consultation Paper.

If you have questions on any of this or require further elaboration on topics raised, please contact either Simon Robinson (Chair of WineGB), Peter Gladwin (Vice-chair of WineGB) or David Parkinson (CEO of WineGB).

Simon Robinson | ChairmanWines of Great Britain Limited