POLITICAL AND LEGAL ENVIRONMENT

Joining the European Union in 2004 meant for Czech farmers substantial benefits. In particular, it is increase of incomes and living standards, higher purchase prices and expanding export opportunities. The entry also brought a better environment, higher standards of quality

and food safety for the entire company. An important contribution was the creation of new jobs in manufacturing. (Dvorek.eu, [cit. 2012-04-23])

The year 2010 has been a year of consolidation in the field of standards and regulations.

The new EU regulation on organic production has been implemented. (WILLER, KILCHER, 2011)

6.2.1.1 LEGISLATION

Act No. 256/2011 Coll. amending Act No. 321/2004 Coll. viticulture and winemaking and amending some related Acts. (eAgri.cz, [cit. 2012-04-23])

On August 30, 2011 was published in the Official statue book Act No. 256/2011 Coll.

amending Act No. 321/2004 Coll. on viticulture and winemaking. This amendment changes the system of payment to the Wine Fund. Act is the implementation of the new Commission Regulation and Council Regulation (EC) on viticulture and winemaking, and makes adjustments in the protection of designations of origin and geographical indications.

The draft amendment to Act No. 321/2004 Coll. based on the options that allow the Czech Republic, EU rules on the requirements of consultation and supervisory bodies and professional viticulture and wine to the public to amend the law.

The aim of the Act No. 452/2001 Coll. is a national legal environment that allows login to the Community protection of designations of origin or geographical indications, and procedure that is prescribed by EU regulations. In addition to protecting the legitimate interests of entities that have their headquarters or domicile in the Czech Republic.

Act No. 834/2007 on organic farming

The Czech law on organic farming in 2000 and EC Council Regulation on organic agriculture (834/2007) in its present form does not provide rules for the production of beverages from grapes and do not allow the Czech organic wines use the name "organic wine" and the term organic, eco or organic. If the vineyard is managed according to the principles of organic farming, wine labels can only carry the name "wine made from organically grown grapes."

The labeling of organic wine

Currently, the EU organic label, organic label of the Czech Republic (the so-called bio-zebra) and expression of organic, eco or bio can be used only on organic products and organic food produced in accordance with the rules of Council Regulation 834/2007 and Commission Regulation 889/2008, and in accordance with Act 242/2000 Coll. on organic farming. Wine cellar technology is not contained in these regulations, and therefore the wine cannot be marked in this way. At this time it is possible to specify on the label expression “wine made from organically grown grapes” and only if the vineyard, from which grapes came, is already certified under organic farming, which wine producers demonstrate by a valid certificate of inspection organizations for organic farming. Ministry of Agriculture will try as soon as possible to amend Act No. 242 / 2000 Coll. among other things in it to ensure the possibility of using bio-zebra on these labels. (Bioinstitut, [cit. 2012-04-23])

But from harvest year 2012 are planned changes organic wine growers will be allowed to use the term “organic wine” on their labels. The labels must also show the EU-organic-logo and the code number of their certifier, and must respect other wine labelling rules.

The new rules create a list of procedures and materials for the production of organic wine in the existing Regulation (EC) 606/2009. For example, the ban on the use of sorbic acid and removal of sulfur by selected physical methods. The content of sulphites must not exceed 100 mg / l for red wines and 150 mg / l in rosé and white wines with residual sugar value less than 2 g / l, for all other wines the maximum carbon dioxide must be reduced by 30 mg / l.

In addition to these new rules still apply the general procedures laid down in Regulation (EC) 606/2009, and the obligation to produce organic wines only from organically grown grapes in accordance with Regulation (EC) 834/2007. (EUROPA.EU, [cit. 2012-04-23])

6.2.1.2 CUSTOM POLICY

The customs union was one of the first successes in the history of the European Union.

Thanks to the Customs Union the tariffs on the borders between EU Member States were abolished and it established a uniform system of import taxes. For imports from countries that are not a part of the EC, the Common Customs Tariff holds. Because of the absence of border controls and customs procedures between EU member states there was an obligation to register tax and statistics data anchored. Failure to do so is penalized. INTRASTAT deals with statistics of internal trade system.

The opening of the wine market and numerous legislative measures has caused the cheap export of wine from abroad and high pressure on the domestic wine. Wine grapes are imported at low purchase prices.

Since May 1, 2008 the Asian market has also opened for the Czech wine exporters by duty abolishing, which had amounted to 40% on imports into Hong Kong. This opened the possibility of Czech producers to export in mature consumer market. (Ministerstvo průmyslu a obchodu, [cit. 2012-04-23])

6.2.1.3 GRANT POLICY

Support flowing to viticulture and winemaking sector can draw on

 Funds of the Czech Republic, where the Grant Policy Principles set, laying down the conditions for providing grants under Act No. 252/1997 Coll. on agriculture.

 Wine Fund resources in the sense of marketing. Wine Fund promotes the sales, protection of products and labeling wines by geographical origin, informs the public about viticulture and winemaking, and other important facts related to viticulture and viniculture, promotes conservation and development of viticulture and winemaking as an important part of European cultural heritage.

 EU funds

State support in the organic farming sector

In 2010, a total number of 67 applications submitted for payment of subsidies (support rate was set at 22 315.97 CZK / ha). The amount of aid paid for 2010 for all 67 applications amounted to CZK 14,473,022 to the actual acreage 649 ha. (Mze, 2011)

There are several reasons of organically grown grapes development. Besides the generally favorable conditions, such as higher subsidies for area, there is also and point benefit for organic growers in competition for the drawdown of the modernization of the cellar technology.

6.2.1.4 TAX POLICY

Subject to tax on wine and intermediate products for the purposes of the Excise Tax Act, are wines, fermented beverages and intermediate products containing more than 1.2%

alcohol by volume but not exceeding 22% vol.

The basis of the excise duty on wine and intermediate products is the amount of wine and intermediate products, expressed in hectoliters. In terms of determining the rate of excise duty on wine and intermediate products should be special attention paid to the correct

determination of the tax in accordance with the provisions of § 93 paragraph 2, 3 and 4 of the Excise Tax Act, which distinguishes:

a) sparkling wine (excise duty 2340, - CZK / hl), b) still wines (excise duty 0, - CZK / hl) and

c) intermediate (rate of excise duty 2340, - CZK / hl).

Transportation of still wine is an exemption in the tax territory of the Czech Republic and the responsibilities of small wine producers.

Still wine is the only alcoholic beverage, from which is the excise duty not paid in the Czech Republic. However, in January 2012 the Minister of finance Miroslav Kalousek said in the media that for the years 2013 and 2014, he will suggest the mix of tax measures, among which will be the wine tax that could be set at 10 crowns per liter. According to Kalousek should be balanced the inequality in the tax system - the excise duty is paid on sparkling wines, but on the so-called silent wine not. This measure, however, could jeopardize the whole wine sector in the Czech Republic. In no country in the European Union is excise tax on silent wine. Exemption from taxation of wine is one of the ways to support domestic production and viticulture. Czech winemakers, who face the competition from foreign wine makers, would be disadvantaged.

(Thermogroup, [cit. 2012-04-23])