Many winemakers, especially in the Tacoronte-Acentejo region in the north of Tenerife, have faced seven months of uncertainty, but now they see a smoother path ahead. The Tenerife Island Council is set to approve a lease contract on July 31 between the public administration and the public limited company Bodegas Insulares de Tenerife (BITSA).
The lease will cover the industrial facilities owned by the Cabildo in Tacoronte, known as Bodega Insular de Tenerife (without the distillery). These facilities have been used by Bodegas Insulares de Tenerife, a joint venture with 54.4% private capital control and 45.6% owned by the Cabildo.
Critics of this administrative move, aimed at keeping BITSA in the facilities and complying with competition rules, have come from the PSOE’s Agriculture spokesman in the Tenerife Island Council, Javier Parrilla. The PSOE would have preferred a property exchange between BITSA and the Island Council. They question the delay in reaching this solution and believe it reflects poorly on management in this area.
The approval of the lease contract will finally resolve the issue that caused concern for the Tenerife Island Council, winegrowers, and BITSA managers. Following a complaint to the EU, the annual rate paid by BITSA had to be adjusted to comply with competition laws, increasing the amount significantly.
The Tenerife Island Council’s decision to authorise the lease agreement aims to provide stability to BITSA, which manages wine brands with designations of origin (DOP) such as Tacoronte-Acentejo and Islas Canarias. This agreement will benefit around 300 winegrowers who work under DOP and rely on BITSA for their production.
This resolution comes just in time, as the harvest is already underway, and the decision brings relief to winegrowers facing uncertainties due to early changes in weather conditions affecting the grape harvest.
What the agreement necessitates and some strategies to avoid further irritating Brussels
Upon closer examination, particularly in terms of structure and post-acceptance of the legal obligations outlined by the Directorate General for Competition of the European Commission, the contract currently under approval, following the relevant public tender process where the public company BITSA emerged as the top scorer, closely aligns with the EU requirements, with minimal deviations. However, certain tactics are noticeable.
The approach taken involves ensuring that the fee to be paid does not match the previous amount of 156,000 Euros per year. By excluding the distillery from the list of physical assets and equipment available for rent at Bodega Insular de Tenerife (with an estimated value of 2.6 million Euros), despite it not being utilized for production purposes, there is a significant reduction in the annual fee from 156,000 to 94,000 Euros. This represents a notable discount of 62,000 Euros. The contract is set for a one-year term, with the option to extend up to five years upon mutual agreement.
This arrangement, marking the end of the confusion, also includes an added bonus, likely instrumental in prompting its prompt signing. The proposed agreement is scheduled to be ratified tomorrow in the Government Commission, with the backing of CC and PP, the parties supporting the island administration led by the nationalist Rosa Dávila.
