On July 15, the European Commission issued its first positive opinion regarding an agreement that establishes indicative prices for sustainably produced wine. This agreement is deemed compatible with competition rules under the recent reform of the Common Agricultural Policy (CAP).

Generally, competition law prohibits agreements between companies that distort free competition, such as price-fixing. However, certain agreements can be exempted from this prohibition. The CAP reform for 2023-2027 introduced exemptions allowing agreements aimed at achieving sustainability objectives through higher standards than those mandated by EU or national law.

In accordance with Regulation No. 1308/2013, which organizes common markets for agricultural products, producers of organic wine or high environmental value (HVE) wine from Occitanie, France, requested the Commission to assess the compatibility of a proposed price agreement between producers and buyers with the new rules.

The agreement aims to encourage the involved producers to maintain sustainable production practices by providing indicative prices that cover the costs of production compliant with organic or HVE standards, along with a profit margin of up to 20% of these costs.

The Commission found that the proposed agreement met all conditions outlined in Article 210 bis of the OCM Regulation, including: engaging agricultural producers, concerning the trade of agricultural products, contributing to multiple sustainability objectives, and imposing only necessary competition restrictions to implement these standards.

Consequently, the Commission issued a positive opinion on the agreement.