Dried Grapes: A Case Study in EC Market Disruption

As a result of a badly conceived farm policy the bulk of the EC′s dried grape crop of 1981/82 was sold into intervention. Minimum import prices (MIPs)were introduced, throwing the import trade into confusion, and distorting the market for dried grapes. MIPs meant that the competitive advantage of low cost suppliers was lost, and the importer′s traditional skills of buying cheap were thwarted. Failure to distinguish between types of product,quality and presentation, led to further difficulties. Even marginal failure to respect the MIP led to the application of substantial countervailing charges. In February 1988 a ruling of the European Court gave some relief to the beleaguered trade.