The traditional Italian system of vineyards’ planting rights has been the subject of significant regulatory action, both at EU and national level, that redraw the rules for planting vineyards.
The system so far in force, which is based on the concept of "right to plant or replant", effectively, will cease on the date of 31st December 2015. At year end, the system for acquiring rights for planting vineyards, which was applied up to now, will be replaced by the new system of permits required by Community legislation, and in particular by Regulation (EU) No. 1308/2013.
The Ministry of Agriculture and Forestry Policies, with the recent Decree n. 1213 of 19th February 2015 (the "Decree 1213") introduced the national implementation and integration rules of the EU Regulation No. 1308/2013, providing and integrating the discipline of transition and conversion into permissions of the vineyards’ replanting rights.
This measure provides for some changes to national legislation relating replanting rights and some rules on entry into force of the new permission system to new areas under vines. The main changes are as follows.
The instrument containing the expansion of areas under vines, represented until now by the rights system of vineyards’ planting, from 1st January 2016 will end and will be replaced by another instrument, that of the permissions to vineyards’ planting. The system of replanting permissions and the new planting will effectively be in force from 1st January 2016 and will be valid until 31st December 2030.
Secondly, the Decree 1213 abolished the rule that allowed the regions to limit the transfer of planting rights only within the Region and which was adopted substantially by all the Regions, prohibiting the transfer of the planting rights of vineyards outside the respective Regions. Consequently, it is now allowed to sell planting rights between vine growers of different Regions of the national territory, up to 31st December 2015. After that date and once the new permission system has entered into force, still valid planting rights can no longer be transferred, as they will lose their nature of "rights" and will become permissions, for which the purchase, as it will be explained below, is not permitted.
Starting from 2016, individuals who want to plant new vineyards will not have to buy the "rights" from another producer who has uprooted a vineyard, but will have to apply for a free of charge permission and participate annually in a notice of assignment of new permissions made available by each EU member state, based on the availability of individual states. The surface made available for each notice of assignment may not exceed 1% of the national wine–growing potential. The future increase of the planted area is expected to be within the aforementioned annual ceiling of 1% for each state, which is calculated on the basis of the total that actually exists (for Italy the currently available increase would be about 6,000 hectares per year).
Since 1st January 2016 to plant a vineyard, therefore, you need to be in possession of the planting permission: it can be obtained (a) by assigning with criteria and rankings that will be established at the national level, or (b) by conversion in the terms provided of the planting rights.
The Decree 1213 has governed also the passage of the planting rights granted before and still to be used on 31st December 2015 to new planting permissions. In particular, the owners will have to request the conversion of their planting rights before the expiry of validity of the certificate and no later than the deadline of 31st December 2020. From that date the three years of validity laid down for the permission elapse, for which the limit to make the authorized planting of vines is 31st December 2023.
Although both systems – that of planting rights and that of planting permissions – have the same objective to regulate and limit the amount of area under vines at Community level, the differences between the two regimes are considerable.
First, the planting right is transferable freely, because it is independent from the ground, and therefore can be sold to third parties without transferring also the soil. In the current system applicable hitherto in Italy, then, the right has its own market value, directly proportional to the demand and supply of planting rights for vineyards.
On the other hand, permission is granted by the competent authority (State or Region) and can not be sold, even free of charge. Permission is based on the model currently in force in the French system, where all planting rights are always linked to a parcel of vineyard.
The main difference between the two aforementioned systems (vineyards’ planting rights and planting permissions) is therefore represented by the transferability and the opportunity of autonomous marketing. The planting right allows the owner to have more options: (a) planting the vineyard; (b) selling the right (which has an independent estate value) separately from its soil.
In case of the removal of a vineyard, nowadays a replanting right is matured, transferable also to third parties. With the new permission system, to any vine grower who explants the option to request a permission for the replanting of the same hectare is automatically granted, but it can be used only by the owner and must be bound to the company that owns it. If the authorization is not exercised in his/her company, it is lost.
Moreover, the maintenance of the permission requires that the vineyard management is effectively run by the owner.
Furthermore, it should be highlighted that the replanting rights acquired before 31st December 2015 must be converted into an authorization and be used within the two subsequent campaigns.
Another significant difference is the different and greater duration of the right plant (5:00 to 8:00 p.m., depending on their own Region), compared to the permission, whose duration will be three years from the date of grant.
Finally, there are different consequences in case of failure to use, as currently the unused planting rights are included in the heritage of the different regional reserves and may be made available again. By contrast, unused permissions decay and the corresponding hectares of vines are lost.
Following the new Community and national legislation, from 1st January 2016, then, in Europe there will be no more rights, but only permissions. In Italy, there are currently about 50,000 hectares of planting rights, 90% of which are held by producers, while the remainder is in regional reserves.
So this is an important historical moment, to be managed appropriately and with aware choices in order to protect the national wine heritage and the single positions of the vine growers and other parties in the chain. Among other aspects, each company will have to assess, according to their own situation and their own development projects, the opportunity to purchase the right to plant throughout the country by 31st December 2015.
There are important outstanding issues, also related to implementing measures of EU and national legislation that still have not been adopted, including the identification of the criteria to be adopted for the selection of the applications for new planting permissions and the choice of a competent person to grant such permission.
Therefore, it is necessary for the operators of the wine sector to monitor regulatory and authorization developments, in order to make better choices for the development of the business.
This document has the sole purpose of diffusing and informing and does not represent in any way, nor does it constitute, legal advice on the matters discussed in it.
Contact Lawyer Luca Moro
