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Published:  23 July, 2008

By Nicholas Belfrage & Franco Ziliani

Giving one of the clearest indications so far that the wine sector is suffering badly in the present economic climate, there has been a call for a drastic reduction of VAT (IVA) on wine from one of the most powerful Italian producers. Gianni Zonin, head of the giant producer of that name, has written to prime minister Silvio Berlusconi inviting the government to reduce the fiscal burden ... on a product which for 2,500 years has been considered a staple of the Italian diet along with bread, oil, fruit, milk and vegetables, which are taxed at just 4%'. Wine in Italy is currently subject to VAT at 20%, and a reduction to half that figure would help the average Italian family to continue putting wine on their table', rather than regarding it, as Zonin believes they are coming to do, as a luxury product, classed with other top-end products reserved for a few wealthy gourmets'. It might not be easy to persuade the Italian - or any other - government to accept a loss of e5 billion, equivalent to one-tenth of total wine turnover in Italy, estimated at e50 billion. However, Zonin points out, the actual loss would be only about half that since many wine producers are already effectively being subsidised in terms of VAT. And in any case, says Zonin, it would be an act of simple justice towards Italian growers such as might save an entire industry from crisis', earning the government the gratitude of producers and distributors alike. Not everyone on the production side agrees with Zonin, however. Angelo Gaja, whose wines sell for astronomical prices, has refuted Zonin's view that wine is a mere alimentary staple. Perhaps that is true of wine made for supermarkets,' he says, but it is no longer true for the "hedonistic beverage" that Renato Ratti dubbed it already 20 years ago. Whether we like it or not wine today is what the Americans call a "premium product", a name justified by the added value conferred by "terroir", or "controlled denomination", or "rarity", or "prestige". It is on these wines, and not on the ordinary table wines, that the future of Italian wine depends.' Gaja therefore disputes the need for a lowering of taxation on wine, saying that the real effort has to consist of an improvement of quality, as the principal producers of today, none of whom [Gaja maintains] back Zonin's proposal, have striven to do. Not to mention, he adds, the problems arising from increased alcohol consumption resulting from lower taxation.