The European legislation of the pollution of industrial wastewater shows a high degree of heterogeneity. This fact implies that there is a market failure with relevant consequences. Within the European Union, each Member State performs a specific transposition of the Water Framework Directive 2000/60. The member states introduce different sanitation fees to correct water pollution. In this paper, the case of the European wine industry is analyzed. It studies the sanitation fees of the five major wine producing countries: France, Italy, Spain, Germany and Portugal. Results show significant differences among the wastewater fees and the study reveals how such heterogeneity leads to relevant market distortions. The research concludes that more homogeneous environmental regulation would promote more sustainable wine production processes with more efficient water management and purification systems, as well as the introduction of cutting edge technologies.

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