The viticulture sector in Italy is subject to a complex system of authorisations pertaining to the planting and replanting of vineyards, which are in alignment with the European Union’s Common Agricultural Policy (CAP). In recent years, and particularly with the implementation of Regulation (EU) No. 1308/2013, which regulates the common organisation of agricultural product markets (commonly referred to as the “Single CMO”), the legislation in this area has undergone significant evolution. The European regulations concerning vineyards are based on controlling the production structure and, in particular, the vineyard area with the aim of containing production, balancing the market, and improving the quality of European wine. The objective of this paper is to analyse the current regulatory framework in light of the 2023-2027 Common Agricultural Policy (CAP), as well as the legal issues and disputes related to the management of authorisations and investments by producers. The main judicial rulings on this matter will be examined, with a focus on the phenomenon of sham leases and the policies surrounding vineyard uprooting.
table of contents:
1. Regulation (EU) No. 1308/2013: From the Rights System to Authorisations
The introduction of Regulation (EU) No. 1308/20131 marked a significant shift in the system for managing vineyard surfaces. Previously, planting rights2 could be transferred without the sale of the land on which they were exercised3. However, with the advent of this regulation, a new mechanism based on non-transferable administrative authorisations came into effect. These authorisations are subject to a pre-established expiration date and, unlike planting rights, cannot be transferred without the sale of the land in question.
Before the regulation came into force, planting and replanting rights constituted a mechanism through which producers could transfer their rights to third parties4. However, this system was susceptible to speculative practices, exemplified by the phenomenon of sham leases, which enabled producers to circumvent the prohibition on the transfer of rights for consideration.
The changes introduced by EU legislation have resulted in the implementation of a more public-centric regulatory framework, centred on authorisations granted by Member States. This has ensured more direct control over vineyard surfaces and prevented speculation in the transfer of rights. The regulatory framework5 is based on a system that sets production limits and establishes rules for planting new vineyards or uprooting old ones, followed by the replanting of new vines. The objective is to ensure orderly vineyard growth that can respond to the anticipated increase in global market demand6.
As of 1 January 2016, the legislation pertaining to planting and replanting rights was revoked, along with the associated regulatory framework governing their recognition and transfer7. In lieu of the aforementioned provisions, a system was introduced based on the issuance of authorisations by member states or regions8. The legislation distinguishes between new vineyard plantings (Articles 63-65 of Regulation No. 1308/2013) and replanting following uprooting or anticipated uprooting (Article 66). In the case of the latter, an authorisation must be issued by the relevant Member State upon the request of the interested producer, free of charge (Article 62).
The granting of authorisations9 is permitted for the establishment of new vineyard areas or for replanting, with a maximum limit of 1% of the total national vineyard surface10. This figure is subject to annual revision based on market conditions. Periodic reviews of this figure are conducted, with the possibility of further extensions or modifications depending on market conditions11.
Furthermore, the system of authorisations is augmented by the Commission Delegated Regulation (EU) No. 273/2018 and the Implementing Regulation (EU) No. 274/2018.
2. European Regulations on Authorisations Following Regulation (EU) No. 2117/2021
As previously stated, Regulation (EU) No. 2117/202112, which updates the 2013 Regulation, introduces significant alterations to the Authorisation management system in accordance with the objectives of the 2023-2027 Common Agricultural Policy (CAP)13. Notwithstanding certain variations and additions, the regulatory model has remained largely unchanged and has even been extended in temporal application.
The recently implemented authorisation system, which provides authorisations free of charge to producers and has a three-year validity period if unused, has been designed with the objective of mitigating market turbulence caused by the pandemic and other global economic factors. Furthermore, the legislation stipulates that producers who fail to plant within the specified period are subject to sanctions established by European14 and national regulations15.
It is important to note, however, that authorisations expiring in 2024 and 2025 can be extended on a regional basis to avoid the forced uprooting of crops in cases of economic hardship for producers. Additionally, the validity of authorisations has been extended to six years in cases of replanting on the same plot or on equivalent plots to those from which uprooting took place.
Article 63 establishes a safeguard mechanism, whereby Member States may issue new authorisations on an annual basis, up to a maximum of 1% of the total vineyard surface within their respective territories, as calculated on 31 July of the preceding year16. It should be noted that vineyard areas intended for wine grape production and those that cannot be converted into vineyards under applicable national regulations are excluded from the eligibility assessment.
Furthermore, Regulation (EU) No. 2117/2021 requires that Member States, using the vineyard register17, submit an updated inventory of their productive potential to the European Commission by 1 March of each year if their national plans include measures for restructuring and converting vineyards18.
Additionally, producers who commit to uprooting an equivalent surface by the conclusion of the fourth year may be granted automatic authorisation.
With regard to replanting, Article 66 of the Single CMO Regulation stipulates that an authorisation shall be issued automatically upon request for an area equivalent to that previously uprooted. The authorisation must be used on the same farm where the uprooting occurred.
Authorisation may also be granted automatically to producers who commit to uprooting an equivalent surface by the end of the fourth year from the date of planting the new vines19.
3. The Role of the Regions in the Administration of Authorisations for New Plantations and Replanting
The regions also play a pivotal role in determining the available areas for new plantations and in communicating this information to the European Commission.
In Italy, the responsibility for the management of authorisations is devolved to the Regions. These bodies receive and evaluate applications for new plantations and replanting20. On an annual basis, producers who wish to plant new vineyards are required to submit a request to the relevant regional authorities. These authorities oversee the process in accordance with national and European directives. Additionally, the Regions are tasked with determining the available surfaces for new plantations, which they must subsequently communicate to the European Commission.
In particular, the “Unified Text on Wine”21 establishes that authorisations may be sought for both new plantations22 and replanting23, and it also prescribes the mandatory registration of vineyards in the vineyard register. Applications for new plantation authorisations are deemed admissible if the applicant’s updated and validated farm file demonstrates that the applicant’s agricultural area under management (exclusive of areas subject to restrictions) is equal to or greater than the area for which authorisation is sought24.
The process is divided into two distinct phases: the regional phase and the national phase. Subsequent to their electronic submission to the relevant regional authority, applications are subject to a discretionary assessment by the Ministry of Agriculture (Masaf) in regard to the allocation of authorisations and the potential application of priority criteria in instances where the volume of requests exceeds the available annual surface area. Subsequently, the issuing of the authorisation is conducted by the relevant regional authorities25.
Furthermore, in order to guarantee the quality of the product, the regions may, at the recommendation of the protection consortia and following consultation with the most representative professional and trade organisations, regulate the registration of vineyards in the vineyard register for the purpose of claiming the related Denominations of Origin (DO) or Geographical Indications (GI). This is done with the aim of ensuring market balance26. Consequently, the regions are empowered to regulate vineyard registration in the aforementioned register, with the objective of promoting grape varieties that are destined for the production of DOP or IGP wines, as well as those that fall within the Italian DOCG, DOC, or IGT categories.
The granting of authorisations is free of charge and non-transferable between producers, irrespective of whether they possess the land in question. Nevertheless, there are exceptions to this rule, including cases of inheritance and early succession, company mergers or divisions, marriage or civil union, divorce, or the dissolution of civil unions. In such instances, the Ministry will evaluate each case individually27.
In particular, in the event of the transfer of authorisation as a consequence of the death of the original recipient, the heir may utilise it for the remainder of its validity period28.
This exception does not apply in cases of long-term professional incapacity, given that the authorisation does not necessitate the planting to be carried out by the producer in person.
A further case concerns mergers or divisions, whereby the company in possession of the requisite authorisation is no longer able to maintain its legal personality. The newly constituted entity or the companies resulting from the division shall assume all rights and obligations, including those previously granted authorisations.
The transfer of authorisation is contingent upon the sale of the business, which should be accompanied by the transfer of the authorisation to the purchaser. However, this limitation on the circulation of authorisation can be overcome in the case of an agricultural company, whereby the company shares may be transferred to another party after obtaining the authorisation, thereby transferring the entire business structure, including the authorisation.
4. Modification of the Expiration of an Authorisation and Sanctions for Non-use
It is incumbent upon the vineyard producer to notify the relevant regional authority of the total or partial use of the authorisation within 60 days of planting, irrespective of the type of authorisation in question.
It is noteworthy that the Supreme Court has recently ruled that failure to notify the regional authority of the use of the authorisation for a new planting constitutes a serious violation, rather than merely an administrative irregularity. Such an omission renders the acquisition of the requisite rights to plant the vineyard unlawful29.
It is a requirement that authorisations are used within the period of validity, otherwise administrative sanctions will be applied in accordance with. Article 69 of the Unified Wine Law.
It is not permitted to modify the duration of authorisations in the event of force majeure, except in the case of replanting on the same uprooted areas30.
A producer who fails to utilise an authorisation for new plantings within the specified validity period is liable to face the following administrative sanctions31:
- In the event of non-compliance, the producer shall be excluded from the support measures provided by the Common Organization of the Wine Market (OCM) for a period of three years, in addition to being subject to a fine of 1,500 euros per hectare, if the planted area is less than or equal to 20% of the total area granted with the aforementioned authorisation.
- In the event that the planted area exceeds 20% but does not exceed 60% of the total area granted with the authorisation, the producer shall be excluded from the support measures provided by the OCM for a period of two years, and shall also be subject to a fine of 1,000 euros per hectare.
- Furthermore, exclusion from the support measures provided by the OCM and a fine of 500 euros per hectare will be imposed if the planted area is greater than 60% but less than the total area granted with the aforementioned authorisation.
In the event of failure to utilise the authorisation for an area of less than one hectare, no proportional reduction of the applicable sanction is foreseen. Nevertheless, in the event that the unplanted area is less than 5% of the total area granted with the aforementioned authorisation, and in any case does not exceed 0.5 hectares, no sanction shall be applied32. In the case of authorised areas of less than 0.3 hectares, the aforementioned percentage is increased to 10%.
In the event of a producer relinquishing a granted authorisation subsequent to receiving an area that is less than 100% but greater than 50% of the initially requested area, in accordance with the stipulations set forth in Commission Implementing Regulation (EU) 2018/274 of 11 December 2017, an administrative fine of 500 euros per hectare or fraction thereof of the authorised area will be imposed, in addition to exclusion from the OCM support measures for a period of two years33.
The authority to impose sanctions is vested in the regions. The recognition of force majeure or exceptional circumstances, as provided by the current EU and national regulations, entails exemption from the application of sanctions. Furthermore, no sanctions will be applied in instances where errors in the completion of the authorisation request are the result of factors beyond the control of the applicant, such as system errors or errors on the part of the processing authority.
5. Issuance of Authorisations for Replanting Following Uprooting
A replanting permit may be granted by the relevant region to a vineyard operator who has removed a portion of their vineyard and submitted a formal request for such authorisation. The aforementioned authorisations are valid for a period of three years from the date of issuance.
The replanting authorisation request must be submitted by the end of the second growing season following the uprooting; otherwise, the authorisation will not be issued. In the event that replanting is to occur on the same area where the uprooting took place, the producer may avail themselves of a simplified procedure, provided that replanting occurs within 3 years of the uprooting.
Nevertheless, should the producer elect to replant on a different area or within the three-year period subsequent to the issuance of the authorisation, the standard procedure must be adhered to. In such instances, the producer is obliged to submit a notice of completed uprooting no later than the conclusion of the growing season in which the uprooting occurred34 . This notice will be recorded in the Uprooted Areas Registry for regions operating through the National Agricultural Information System (SIAN), or in the respective information system of other regions, and will serve as a prerequisite for the replanting authorisation request.
The replanting authorisation request must be submitted by the end of the second growing season following the uprooting; otherwise, the authorisation will not be granted.
Following the issuance of replanting authorisations subsequent to uprooting, those granted in accordance with the provisions of EU Regulation 2021/2117 may be utilised for a period of up to six years from the date of issuance, provided that the replanting is conducted on the same vineyard area where the uprooting was carried out. In the event that the replanting is undertaken on a different area, the aforementioned authorisation must be utilised within three years from the date of issuance.
The additional clarification provided by case law is that vineyard replanting, which is defined as an agricultural land movement, does not require the acquisition of building or landscape permits. This ruling35 has reduced the bureaucratic burdens faced by producers, facilitating the replanting process without the need for additional permits.
6. Modification of the Location of the Area for Which the Authorisation is Granted
The high number of applications submitted annually by producers has progressively reduced the available areas for the establishment of new vineyards, thereby highlighting critical issues within the authorisation circulation system. This phenomenon has given rise to concerns related to the limitation of vineyard areas and the management of authorisations36.
6.1 Intra-company Replanting
In order to expand the cultivated area of a vineyard, intra-company replanting authorisations have frequently been employed.
In the event that a planting authorisation is granted for the same area that has been uprooted, the modification of the area is not permitted from the third year onwards, given that the authorisation has a duration of six years.
In the event that the business is also conducted on land leased from others under a rental agreement, the transfer of the replanting authorisation may extend to these additional lands, even if they are different from the uprooted areas, on the grounds that they form part of the same agricultural business. Nevertheless, it is essential that the rental agreement be drawn up in accordance with Article 45 of Law No. 203 of 1982 provides for the return of leased land without the vineyard, thus allowing for a change in the designated use of the plots that were uprooted.
Moreover, the vineyard planted subsequent to the issuance of the authorisation must be maintained for a minimum of five years, except in cases of force majeure or phytosanitary reasons. Consequently, the uprooting of vineyards planted with new planting authorisations prior to the expiration of five years from the planting date does not result in the issuance of replanting authorisations37.
Furthermore, case law has elucidated that the sole prerequisite for the issuance of a vineyard replanting authorization is that the land in question remains accessible to the applicant subsequent to the authorized uprooting. Additional business justifications cannot be invoked to justify the denial of the authorization. This reaffirms the significance of a transparent and impartial application of the regulations, thereby limiting the discretionary powers of the competent authorities38.
6.2 Inter-company Replanting
A distinct scenario arises when, at the applicant’s request, a vineyard is planted in an area distinct from the one for which the authorisation was initially granted. This practice is permitted only if the new area meets the same conditions for which the authorisation was originally issued, including any priority criteria39.
7. Modification of the Reference Region
In the event that a change to the reference region is required for authorisations related to uprooting, the relevant request must be submitted to the region where the new planting is to take place. In order to proceed with this request, it is necessary to obtain the consent of both the region where the planting is intended and the region from which the authorisation originates.
In the event that the region where the planting is intended raises no objections, the aforementioned region must contact the administration that granted the aforementioned authorisation. This administration must then verify whether the aforementioned authorisation is still valid and whether it was granted based on territorial eligibility criteria or other restrictions that would prevent a change of reference region.
Nevertheless, the reference region may not be altered for authorisations pertaining to early replanting. Furthermore, the uprooting of vineyards conducted prior to the expiration of six years from the date of registration of the temporary management transfer does not result in the issuance of new replanting authorisations in a region other than the one where the uprooting took place.
This provision also applies in instances where requests are made to transfer a replanting authorisation for leased land in a region different from the one of origin, where the lease has been in effect for a period of less than six years40.
8. Fake leases: a significant challenge within the context of authorisation systems. A Contentious Issue
One of the most significant challenges that has arisen within the authorisation system is the phenomenon of fake leases41. This practice has, in fact, resulted in a distortion of the original purpose of replanting authorisations, which are not intended to increase vineyard areas but to renew them.
Fake leases are agreements whereby authorisations are transferred from one region to another, frequently a considerable distance away, with the sole intention of exploiting vineyard areas for replanting in a different location.
In response to this growing phenomenon, the European Commission has clarified that leasing of vineyard areas with the exclusive intent to immediately uproot and replant elsewhere, based on short-term contracts, cannot be considered a legitimate agricultural activity. In particular, if the area in question has not been managed by the lessee for an appropriate period, it is evident that the intention is to circumvent the principles of non-transferability and free-of-charge authorisations. Such actions erode the integrity of the authorisation system, which was devised to guarantee transparency and the proper administration of vineyard areas42.
Notwithstanding the formal prohibition of such practices, fake leases have continued to proliferate due to a lack of effective oversight, resulting in distortions and abuses within the system. In accordance with Regulation (EU) No. 1308/2013, the transfer of authorisations is subject to strict limitations, with the stipulation that planting rights cannot be transferred without meeting specific requirements.
In consequence of this intervention, the legislature was obliged to amend the pertinent regulations, thereby requiring that vineyards planted under authorisation must be maintained for a minimum period of five years. Consequently, the uprooting of vineyards prior to the expiration of six years from the date of registration of the lease contract does not entitle the lessee to a new replanting authorisation in a region different from that in which the uprooting occurred43.
8.1 Practical Issues and Disputes Related to Fake Leases
The existence of fake leases in the wine sector gives rise to a number of legal issues that may emerge during the course of the lease agreement or at its conclusion. The following section enumerates some of the most common issues.
- Landlord’s refusal to sign consent for uprooting
In the event that, subsequent to the signing of the lease agreement, the landlord declines to sign the consent for uprooting, which is a prerequisite for the transfer of replanting rights from one plot to another, this constitutes a breach of contract. In such cases, the lessee may pursue the forced performance of the contract or, alternatively, terminate the contract and seek damages. If the contract specifically provides for uprooting and the transfer of rights, the landlord’s refusal could be considered a serious breach, justifying a claim for damages. - Compensation for expenses incurred by the lessee
In the event that the lessee has planted new vineyards or renovated existing ones during the term of the lease, the question of compensation may arise at the conclusion of the lease. The Unified Law on Agricultural Leases (Law No. 203/1982) stipulates that the lessee is entitled to compensation for improvements made, as set forth in Article 17. In the event that such improvements have increased the value of the land. - Non-renewal of the lease or failure to sell the land
In the event that the landlord does not intend to renew the lease with the lessee who has planted new vineyards, or does not intend to sell the land to the lessee, the situation becomes more complex, particularly in regard to the lessee’s investment. In such cases, it is of the utmost importance that the contract contains a clause that stipulates the fate of the improvements made to the land at the conclusion of the lease. In the absence of such a stipulation, the lessee may be liable to forfeit the investment made. - Fake leases and excessive rent
Another common issue with fake lease agreements is the imposition of an excessively high rent in comparison to similar leases. In instances where leases are drawn up with the intention of circumventing regulations that prohibit the charging of fees for the transfer of replanting rights, the contract term is frequently limited to a period of three years, and the rent is set at an excessive rate. In such cases, the contract may be deemed null or voidable due to an illegal cause, as it violates current regulations. Furthermore, the courts may interpret the disproportionate rent as evidence of a sham transaction, potentially declaring the contract null and restoring the original situation.
9. Conclusions: The Need for a Balanced Approach
The authorisation system for vineyard plantings represents a pivotal instrument for the governance and oversight of the wine sector in Italy and the European Union. Nevertheless, considerable challenges remain, particularly with regard to the issue of fictitious leases and uprooting policies. These require ongoing regulatory updates and careful oversight.
The role of jurisprudence in clarifying various aspects of this system has been pivotal. In the future, it will be crucial to maintain a balance between the necessity to regulate the market and the importance of protecting producers’ rights. This will ensure that uprooting policies or evasive practices, such as fake leases, do not undermine the credibility and sustainability of the wine sector.
The CAP 2023-2027 offers significant opportunities for the promotion of sustainable and high-quality wine production. Nevertheless, it is of the utmost importance that national and regional authorities rigorously enforce the new regulations, while ensuring that producers receive the necessary support to adapt to changes. It is only through a balanced approach, combining regulation and flexibility, that the long-term success and sustainable growth of the wine sector can be ensured.
The full text of the article is published in Open Wine Law Journal, 1/2025.
DOI: https://doi.org/10.20870/owl.2025.8375
Author: Francesco Tedioli
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