The EU vine planting scheme in Italy: do market forces prevail over regulatory design?

Quotas have been extensively used in the past to stabilise and control the EU agricultural production systems. Over the decades, markets have, however, been liberalised, and quota schemes have remained in force for only a few sectors. The wine sector is one of them, with a quota regime shaping the distribution of vineyards across territories and the competitiveness of the sector. By examining the Italian case, the paper provides a preliminary analysis of the dynamics of the vineyards’ inter-regional allocation after the new scheme’s establishment in 2016. The analysis is conducted at the regional level over the 2008-2022 period and exploits dynamic two-way FE with bias correction (LSDVC) models. Findings show that there was vineyard reallocation from less to more remunerative regions, which are also the regions that produce the highest-quality wines, according to the Geographical Indication scheme, and those wines that are more in demand by consumers. By linking policy design with broader economic and structural changes, the paper contributes to the debate on how governance instruments can support wine sector competitiveness, while reflecting on new lines of interventions in the light of the 2028 planned revision of the EU scheme.