The European Commission on Wednesday adopted proposals for a bold, market-oriented reform of its wine sector, slashing all unnecessary subsidies.

Under the proposals, all the inefficient market support measures -- various aids for distillation, private storage aid, export refunds -- would be abolished.

The addition of sugar to enrich wine, or chaptalization, would be banned, and aid for must for enrichment, introduced to compensate for the higher cost compared to chaptalization, would also be abolished.

Crisis distillation, a practice to get rid of surplus wines, would be replaced by crisis management measures, paid for from "national financial envelopes."

The EU spends 500 million euros a year to subsidize crisis distillation, more than one third of its 1.3-billion-euro budget on the wine sector.

"Planting rights" would be kept in place until 2013 and uncompetitive producers would have the option to voluntarily leave the sector in return for attractive financial support.

As from Jan. 1, 2014, restrictions on planting would be lifted to allow competitive producers to expand their production if they so choose.

The European Commission, the executive body of the European Union (EU), also proposed more funds for EU wine promotion, particularly on third country markets.

The commission has dropped its idea of lifting the ban on imports of must for vinification in the EU and on the blending of imported wines with European wines. The ban will stay to ensure quality of European wines.

Mariann Fischer Boel, EU commissioner for agriculture and rural development, said the aims of the reform was to increase the competitiveness of EU's wine sector, strengthen the reputation of EU quality wine and recover old markets and win new ones.

"We currently waste too much money -- over one third of our budget -- getting rid of surplus wine instead of improving our competitiveness and promoting our wines," she said.

"I am convinced my proposal will reinvigorate the European wine sector and allow us to take our rightful place as the world's biggest and best. So let's leave behind the rhetoric and do what's best for our wine growers and consumers."

She said wine sector reform is necessary although the trade balance last year improved a little.

Under current policies, in the years ahead the EU would run an annual wine surplus of almost 13 million hectoliters, she told the Agriculture Committee of the European Parliament on Wednesday.

The commission initiated wine sector reform a year ago. The proposals were adopted after discussions with all stakeholders.

The EU has more than 2.4 million holdings producing wine, covering 3.6 million hectares, or 2 percent of EU agricultural area. Wine production in 2006 represented 5 percent of the value of EU agricultural output.

EU wine consumption is falling steadily, although sales of quality wines are increasing. Over the last 10 years, imports have grown by 10 percent per year, while exports are only increasing slowly.