Opinion of the Economic and Social Committee on the "Proposal for a Council Regulation amending Regulation (EEC) No 1696/71 on the common organisation of the market in hops"

(2001/C 193/09)

On 22 December 2000, the Council decided to consult the Economic and Social Committee, under Articles 36 and 37 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 30 March 2001. The rapporteur was Mr Kienle.

At its 381st plenary session on 25 and 26 April 2001 (meeting of 25 April 2001), the Committee adopted the following opinion by 61 votes to zero with one abstention.

1. Background

1.1. It is said that hops are the soul of beer. Hops (humulus lupulus) are climbing plants; their fruiting structure (hop cone) contains the bitter substance lupulin which, in addition to malt, yeast and water, is a key ingredient in the manufacture of beer. Hops, however, make up only 0,3 % of the production costs of beer.

1.2. Hops are grown in eight of the European Union Member States; traditionally this is a crop which is strongly geared to exports and the world market. A total of approximately 22700 hectares are under hops cultivation, producing around 35000 tonnes of hop cones. Of the total world production of hops - around 94000 tonnes - the European Union produces 37 %.

1.3. Hops farming requires a considerable investment of time and money.

1.4. Hops marketing is predominantly based on contracts of up to five years so as to minimise the considerable market risks. Producer groups in all the EU producer countries play a key role in efforts to obtain regular, market-oriented quality improvements.

1.5. The trend towards concentration in the brewing industry continues. Worldwide, around 30 breweries and big brewery companies currently account for two thirds of the beer produced.

1.6. The common organisation of the market for hops was established in 1971. Community budget spending fell from EUR 13 million in 1997 to EUR 12,4 million in 2000.

2. Gist of the Commission proposal

2.1. Under Article 12(5)(a) of Regulation (EEC) No 1696/71 on the common organisation of the market in hops, production aid for the 1996 harvest up to and including the 2000 harvest was set at EUR 480/ha. The Commission is now proposing a two-year extension to these arrangements.

3. Comments

3.1. The Committee agrees with the Commission's assessment, which is also that of the producer associations in all hop-growing countries in the EU, that the five-year aid programme has had a decisive, positive impact on improvements in quality and varietal conversion and thus, as a whole, on the stabilisation of hops production in the EU.

3.2. It also appears that the special measures for set-aside and grubbing-up used by four or five countries are in this case well suited to the organisation of the market.

3.3. It can be assumed that the trend towards concentration in the brewing industry and hops trade worldwide will not stop, but that hops will continue to be produced, despite the structural changes taking place, by comparatively small units.

3.4. The Committee assumes that due to the high production and market risks associated with further varietal conversions, long-term contract production, based on advance contracts usually concluded for five year-periods, will also continue to be of prime importance.

3.5. The Committee recognises that the producer groups assisted by aid over the last five years have had a considerable impact on improvements in hops production in terms of quality, plant protection, marketing and logistics, thus giving a considerable boost to the competitiveness of European hops production on the world market. These measures should therefore continue, with a view to achieving sustainable hops cultivation and long-term contract-based production.

3.6. Producers and producer groups are facing considerable concentration in the international brewing industry and also in the global hops trade. Trade in hops has become concentrated in the hands of two major groups over the last four years, accounting for 40 % and 30 % respectively of the total trade volume on the world market.

3.7. In order to face up to the particular risks and quality requirements of hops growing and marketing, and to send out a signal to the worldwide brewing industry that EU hops production offers long-term supply security, the Committee deems it appropriate that producer aid be extended for five years.

Brussels, 25 April 2001.

The President

of the Economic and Social Committee

Göke Frerichs