ARCHIVES HISTORIQUES
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DOCUMENTS "COM"
COM(80)36
Vol.1980/0015

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(80)36 final
Brussels.4february 1980
"νΑ^.*<> <<Xs£>/«*?«<•T4l~.i\{& .<\.«Am •a
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Proposalfora
COUNCIL REGULATION (EEC)
layingdowngeneralrulesondistillation operations fortablewines
forwhichthedistillation contract mustbeapproved
before15April1980
(submittedtotheCouncilbytheCommission )
C0M(80)36final

EXPLANATORY MEMORANDUM
Aftertheexceptionally abundant harvestin1979theCommunity winemarket
isfacedwithaseriouscrisissuchasithasnotknownsince1974/75.
Thewiderangeofstructural andmarketmeasures ,thebasicprinciples of
whichwereadoptedby^JieCouncilatitsmeetingon10/11December 1979#
inlinewiththeactionprogramme putforward bytheCommission inJuly
1978,shouldproduceabetterbalanceinthissectorinthemedium-term .
Butforthetimebeingthemarketcrisiswhichhasbeenworsening since
September 1979inFranceandinItalycanoilybewardedoffbyarapid
Decision totaketheso-called exceptional distillation measures decided
bytheCouncilonthebasisofArtiole 15ofthebasioRegulat£on .
(Regulation 337/79).
Foritspart,theCommission hasputintooperation ,sincethestartof
thecurrentwineyearandinlinewiththeforecasts ofproduction and
supplies ,alltheintervention measuresatitsdisposal :preventive
distillation (Article 11),distillation limitedtoholdersoflong-term
contracts (Article 12),distillation ofsurpluswinesfromtheCharentes
region (Article 13),short-term storage andlong-term storage.
Itisestimated thatthedistillation operations alreadydecidedfonmight
resultinabout12millionhiofwinebeingwithdrawn fromthemarket,
the
However ,forwardestimates forthewineyear,adopted bytheCommission on
14December 1979,showaproduction figureof167millionhiwhichis
about25millionhihigher'thannormalCommunity consumption plusexports
andtaking ,intoaccountimports .Thisestimate wasdrawnuptakinginto
accountonlythosedistillation measures alreadydecided upon.Thoseare
themeasureslistedaboveaswellasthedecision toapply,inFrance,the
provision concerning supplementary winsdeliveries fordistillation
(Article HOofRegulation 337/79)atarateof3J&,whichcorresponds toan
obligatory distillation oflowpricewines(50$oftheguidepricefor
whitewine)andwillenableafurther 1.2millionhioftablewinetobe
withdrawn fromthemarketatalimitedcosttotheEAGGF.

Atthis :'tagetheCoramissionhasthereToreexhausted allthedevicesfor
managing themarket ,undernormalconditions whichtheCouncilputat.its
disposal whenthewineRegulation wasrevisedin1976.TheCommunity is
nowfacedwithexceptionally highproduction which,attheprovisional
figureof167millionhi,isonlyslightlylessthantheall-time record
of170millionhiin1973.Theforwardestimate drawnupinthe
conditions referred toabove,indicates thatstocksattheendofthewine
yearwillbe87millionhi,afigurewhichwasreachedpreviously onlyin
197MatatimewhentherewasaseriousmarketcrisisbetweenItalyand
France .
PriceshavefallentoverylowlevelsandtheCommunity representative
price .atthebeginning ofJanuary 1980wasonly85/C,81%r67$oftheguide
priceforredwineoftypesRI,RIIandwhitewineAIrespectively .
Ifthiscrisisistobeaverted ,itisurgentfortheCounciltotakea
decision whichmakesclearitsdetermination tobringthetablewine
marketintobalancefollowing the1979harvest .TheCommission is,
1therefore ,proposing totheCouncilthatitshouldpermitdistillation of
tablewinesunderArticle 15oftheRegulation (EEC)No337/79.
Asregardstherulesforcarrying outthesedistillation operations it
shouldberecalledthattheprocedure adoptedin1975ofsetting
quantitative limitsonthequantities distilled throughthelodgingof
applications whichweremet4.nproportion tothequotadecideduponand
thetotalnumberofapplications wasamostunsatisfactory one.
(Regulation 267/75).TheCommission istherefore proposing theusual
limitation intermsoftheperiodofdistillation ,together withthe
condition thatthequantities distilled maynotexceed 10%ofeach
producer's1979harvestoftablewine,although thislimitmaybe
increased to20?forsmall-scale producers .Thequantities distilled
should,therefore ,bebetween 6and8millionhi.
Finally ,tb<=>Commission proposes fchnfcfchflprio<»paidforthewinedistilled
shouldbe8'V/oofthe^ruidepriceforredwinesRIandRIIand80%ofthat
forwhitewinesAIor2.16ECUper%volandperhectolitre and1.90ECU
perfovolandperhectolitre respectively .Sincethedifficulties onthe
marketasreflected inpricelevelsaremoreseriousforwhitewineof
typeAIthanforredwine,distillation operations willgivepreference
towhitewine.Thedistillation aidisbasedonthemarketpricesfor
alcoholinItaly.

Proposal rora
-CQUNCXL REGULATIO»(E^C)
layingdowngeneralrulesondistillation operations iortabxewinsa
forwhichthedistillation contract mustbeapproved
before15April1980
; , -v
THECOUNCIL OFTHEEUROPEAN COMMUNITIES ,
HavingregardtotheTreatyestablishing theEuropean Economic Community ,
HavingregardtoCouncilRegulation (EEC)No337/79of5February 1979on
thecommonorganization ofthemarketinwine(1),aslastamended by
Regulation (EEC)No/(2),andinparticular Article 15(1)thereof,
Havingregardtotheproposal fromtheCommission ,
WhereasArticle 15ofregulation (EEC)No337/79providesthatprovisions
concerning thedistillation oftablewinesmaybeadoptedwhere
application ofthemarketsupportmeasures providedforinthatRegulation
areunlikely tobeeffective inrestoring pricelevels;
/
Whereasthisisthecaseatpresentinviewofthefactthatthisyear's
abundant harvest andthelargestocksfromprevious yearshavecreated
supplies whichconsiderably exceedthenormalrequirements forthiswine
year;whereas ,moreover ,allthesupportmeasures havealreadybeentaken
buttheyhavenotyetsucceeded inrestoring reasonable pricelevels;
(1)OJNoL51»,5.3.1979 ,p.1
(2)OJNoL

Whereas the conditions under which these distillation operations may take
place should belaid down ;whereas inparticular theprice ofthewines
going fordistillation should notbesuch astoencourage theproduction
ofwine principally fordistillation ,although they should besufficiently
attractive for theoperation tobeeffective ;
Whereas themarketing ofthealcohol produced under this Regulation should
notheallowed tohave anegative influence onthemarket fortheproduct
Whereas themaximum quantity oftable wine which may "bedistilled foreach
producer andtheduration ofthedistillation operation should "belimited
inorder tolimit the cost ofthe operation ;
V/hereas themaximum quantity oftable wine which may "bedistilled foreaoh
producer tobepaid tohim ,asageneral rule ,within time limits which
will enable him toobtain aprofit comparable tothat which hewould have
obtained from acommercial sale ;
Whereas provision should bemade forproducers who have concluded a
distillation contract toterminate itwhere the market situation would
enable them todispose ofthewine more profitably ;
Whereas provision should temade forproducers toconclude contracts with
distillers subject toapproval bytheintervention agency ,inorder to
facilitate thecontrol oftheprogress ofoperations andoftheobservance
oftheobligations ofboth parties ;whereas this system would have the
added advantage ofmaking iteasier tomonitor thequantitative effects of
distillation onthemarket ;
Whereas ,inorder toensure appropriate control ofthedistillation
operations ,distillers should besubject toasystem ofapproval ;
Whereas the price ofwine going fordistillation isnot such astoenable
the products obtained from this operation tobemarketed normally ;
whereas ,itistherefore fnecessary togrant aidandtofixtheamount of
aid ,taking into account normal costs ,atalevel enabling theproducts
obtained tobemarketed ;

-3-
Whereas,onthebasisofexperience ,acertainmarginshouldbeallowed
forthequantity ofwinespecified inthecontracts forthedistillation
ofwines;whereas ,moreover ,provision shouldbemade,intheeventqf
accident orforcemajeure ,foraidtobepaidinrespectofthequantity
ofwinewhichhasactually beendistilled ,
HASADOPTED THISREGULATION :
Article 1
1.Producers wishingtodistilpartoftheirharvestoftablewines
pursuant toArticle 15ofRegulation (EEC)No337/79shallconclude
contracts forthedelivery oftablewinewithanapproveddistiller
before 1April1980.
2.Forthepurposes ofthisRegulation thequantity oftablewines
distilled byanyoneproducer maynotbelessthan10hiandmaynot
exceedthefollowing percentages ofthequantity oftablewinestated
intheproducer'sharvestdeclaration forthe1979/80marketing year:
-20$forthefirst|50hectolitres declared ; i
-10*fortheremainder ofthedeclared production .
Article 2
Thesupplycontracts shallnotbevalidunlessapproved bythe
intervention agencybefore15April1980.
Thesecontracts shallcover:
a)thepurchase bythedistiller ofthequantityofwineenteredinthe
contract ; -
b)theobligation forthedistiller toprocessthewineintoaproduct
withastrengthof86£volormore,orintoaproductwithastrength
of85>volorlessandtopayforitatleastthepricereferredtoin
Article 3.

-a-
Article 3
1.The minimum buying-in price for table wine fordistillation shall be
fixed at :
-2.16 ECUper %voland perhectolitre forredtable wine oftype RI
and RII;and at
-1.90 ECUper %volandperhectolitre forwhite table wine of
type AI. f
2.The prices referred toshall apply tobulk merchandise exproducers'
premises .
Article 4
1.The intervention agency oftheMember State inwhich thedistillation
has taken place shall pay aid for each hectolitre ofwine distilled .
2.Theamount oftheaidshall befixed ,inrespect ofthewine referred
tointhe first indent ofArticle 3(1 )at:
1.31 ECUper %vol andperhectolitre ifthewine wasprocessed into
aproduct with astrength of86%volormore ,
1.13 ECUper %vol andperhectolitre ifthewine wasprocessed into
aproduct with astrength of85%volorless .
The amount oftheaid shall befixed ,inrespect ofthewine referred
tointhesecond indent ofArticle 3(1),at:
1.05 ECUper %volandperhectolitre ifthewine wasprocessed into
aproduct with astrength of86%volormore ,
-O.87 ECUper %volandperhectolitre ifthewine wasprocessed into
aproduct with astrength of85%volorless .

Article 5
Whenthetotalquantity ofwineinthecontract entersthedistillery ,
thedistiller shallpaytheproducer atleastthedifference between
theminimumbuying-in pricereferred toinArticle 3andtheaid
providedforinArticle 4. t
Withintwoweeksofentryintothedistillery ofthetotalquantity of
wineinthecontract ,theintervention agencyshallpaytheproducer an
amountequalto4051oftheminimumbuying-in pricereferred toin
Article 3,tobededucted fromtheaidprovided forinArticle 4.
Whenproofissupplied thatthetotalquantity ofwineinthecontract
t
hasbeendistilled ,theintervention agencyshallpaytheproducer the
difference betweentheaidprovided forinArticle 4andtheamount
referred toinparagraph 2.

-6-
4.MemberStatesmayprovidethattheamountreferred toinparagraph 2
shallbepaid:i
-bytheintervention agencytotheproducerwithintwoweeksof
approval ofthecontract ,
-bythedistiller ;inthelattercasetheintervention agencyshall
reimburse thisamounttothedistiller whentheproofreferred toin
paragraph 3issupplied .
5.Wheredistillation takesplaceinaMemberStateotherthantheMember
Statewheretheproducer islocated ,theminimumbuying-in price
referred toinArticle 3shallbepaidbythedistiller .
6.Bywayofderogation fromparagraphs 1totheminimumbuying-in
pricemaybepaidbytheintervention agencyorthedistiller inone
paymentafterdistillation ofthetotalquantity ofwineappearing in
thecontract .
(
Article 6
Distillation maynottakeplacebefore 1April1980norafter31May
1980.Itmay,however ,bedecidedtobringforwardtheclosingdatefor
thedistillation operations ,inparticular shouldtherepresentative
pricesforalltypesoftablewineexceptfortypesAII,AIIIandRIII
reachalevelhigherthantherespective activating priceduringtwo
consecutive weeks.
Article 7
Wheretherepresentative priceofthetypeAItablewineinacertain
numberofquotations exceeding 50%ofthequantities quotedexceeds 90%of
theactivating price,itmaybedecidedthatthedistillation contracts
shallbeterminated inwholeorinpartattherequestoftheproducer .
Article 8
Amarginof10%moreorlessthanthequantity ofwineindicated inthe
contracts referred toinArticle 1shallbepermitted .
Theintervention agencyshallpaytheaidprovidedforinArticle 4for
thequantity ofwinewhichhasbeenactuallydistilled withinthemargin
referred tointheprevious subparagraph .

-7-
Article 9
Where,duetoaccident orforcemajeure ,allorsomeofthewinecovered
byacontract referred toinArticle 1cannotbedistilled ,thedistiller
ortheproducer shallimmediately soinform:
-theintervention agerfcyoftheMemberStateinwhoseterritory the
distillation premises arelocated and,
-iftheproducer'swineryislocatedinanother MemberState,the
intervention agencyofthesecondMemberState.
Inthecasesreferred tointheprevious paragraph theintervention agency
shallpaytheaidreferred toinArticle Minrespectofthatquantity of
winewhichhasactually beendistilled .
Article 10
Forthepurposes ofthisRegulation anapproveddistiller meansa
distiller included onalisttobecompiled bythecompetent authorities
oftheMemberStates.
Underconditions tobelaiddownaspartoftheimplementing rules,
approval maybewithdrawn bytheseauthorities fromdistillers whodonot
fulfiltheirobligations underthisRegulation .
Article 11
1.MemberStatesshallappoint anintervention agencytoberesponsible
forimplementing thisRegulation .
2.Theintervention agencyresponsible shallineverycasebethatlocated
ontheterritory wheredistillation takesplace.
Article 12
ThisRegulation shallenterintoforceonthedayofitspublication in
theOfficial JournaloftheEuropean Communities .
ThisRegulation shallbebindinginitsentirety anddirectly applicable
inallMemberStates.
DoneatBrussels , FortheCouncil
ThePresident

FINANCIAL STATIPiiT
batsi30.1.1980
Provisional budget
CREDITS «appropriations
5„7miLlionEUA1.BUDGETLINECONCERNEDI6912Disti11aTIonofwine CREDITS «appropriations
IIImm11IITI ' 33*7million EUA
2.ACTION*.ProposalforaCouncilRegulation layingdownthegeneralruleson
operations todistiltablewineforwhichthedistillationcontract
mustbeapproved . H
Article 15ofRegulation No337/79 I3,LEGALBA3ISI
I4.OBJECTIVER »The1979wineharvestwasexceptionally abundant.' Thetraditional
marketsupportmeasuresshouldtherefore besupplemented byan
exceptional diptiLlation -providedforunderArticle15ofthe
BasicRegulation .
5.FINANCIAL CONSEQUENCE
5.0EXPENDITURE
••CHARGED TOTOEECBUDGET
(REFUNDS/lNTEHVENTIONS)
-CHARGED TONATIONAL AEÎUNISTH »
-CHARGED TOOTHERNATIONAL CR0UF3
5,1RECEIPTS
-OWNRESOURCES OFTHEEC
(LEVIES/CUSTOt-SDUTIES)
-NATIONAL
5.0.1PLURIANNUAL PATTERB OPEXPENHTUHEPERIOD OP12MOUTHS
89.0mECU
or
82»8EUA
T£AR•••»•<?*••••••••
.82-8mEUACUKBHCT Hf?«iCIAL TEAR
f)
89.0mECU
or
82-8mEUAFOLLOWING FINANCIAL YEAR
)
TEAS YE£B
5.2METHODOrCALCULATION
Assumptions :-8mhi,.60%wljitewineand40%redwine-averageaid:whitewine1.08ECU/%/hi;redwine1.22ECU//./hi-averagealcoholicstrength:redwine11°;whitewine10°
Totalcost:0.96ECU/%/hlx'10x4.8mhl=46.08mECU
1.22ECU/%/hlx11x3.2mhl=42.94mECU
89.02 mECU
––
6.0FINANCING POSSIBLE WITHCREDITS INSCRIBED INRJWMIT CHAPTER OPCURRENT EUKICT?
illlJl'JUlIJiil .lM"|TTirni 1r :
6.1FINANCING POSSIBLE BYTRANSFER SEWIIJCN CHAPTERS OFCURRENT BUDGET?
6.2NECESSITY FORASUPPfcffiEN TARIiJUXXiEY ?
6.3CREDlia^TO BEWRITTENINTOFUTUREBUDGETSmm
COIttENTS I
Thisisanemergencymeasureforwhichnoappropriations werePr°vl^d.Itseffectiveness isconnectednotonlywithrelievingthemarkethutalsowith
psychological effectonoperators.Rapid"measuresmilreducetheneedfo
storageexpenditure andshouldlimitsubsequent expenditure .
<1)TheCommission willproposetheneoessary ljudgefecoverat"thetimeitsnew
proposals forthe1980 "budget.,