2. 4. 80 Official  Journal  of the European  Communities No C 83/35 
Opinion  on the document  amending  the amended  proposal  for a Council  Regulation  on 
the common  organization  of the market  in ethyl  alcohol  of agricultural  origin  and  laying 
down  additional  provisions  for certain  products  containing  ethyl  alcohol 
The text  referred  to the Committee  has  been  published  in O fficial  Journal  of the Euro-
pean  Communities  No  C 193  of 31 July  1979,  page  5 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 22 June  1979  the Council  referred  the abovementioned  proposal  to the Economic 
and Social  Committee  in accordance  with  Articles  43 and  198  of the Treaty  establish-
ing the European  Economic  Community. 
B OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the  above  matter  at its 
174th  plenary  session  held  in Brussels  on 12 and  13 December  1979. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the  Treaty  establishing  the  Euro-
pean  Economic  Community,  and  in particular  Arti-
cles 43 and  198  thereof, 
Having  regard  to the  request  made  by the  Council 
of the  European  Communities  on 22 June  1979  for 
an opinion, 
Having  regard  to the  decision  taken  by  Bureau 
entrusting  the  Section  for  Agriculture  with  the  task 
of preparing  work  on the matter, 
Having  regard  to its previous  work  and  in particular 
the opinion  of 30 March  1978  on the  amended  pro-
posal  for  a Council  Regulation  on  the  common 
organization  of the  market  in ethyl  alcohol  of agri-
cultural  origin  and  laying  down  additional  provi-
sions  for  certain  products  containing  ethyl  alcohol 
C), 
Having  regard  to the  opinion  by the  Section  for 
Agriculture  on 29 November  1979, 
Having  regard  to the  report  of the  rapporteur,  Mr 
Paggi, 
(')OJ  NoC  181,31.  7. 1978. Having  regard  to the  discussions  at its meeting  on 
13 December  1979  (174th  plenary  session  of 12 and 
13 December  1979), 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
by 45 votes  to seven,  with  seven  abstentions: 
1. Preliminary  remarks 
1.1. The  Committee  notes  that  the  latest  amend-
ments  incorporate  some  of the  basic  recommenda-
tions  contained  in its opinion  of 30 March  1978  on 
the Commission  proposals  of 6 March  1972,  as 
amended  on 7 December  1976. 
While  this  gives  some  cause  for  satisfaction,  the 
Committee  regrets  that  many  important  suggestions 
made  in the  opinion  have  been  ignored.  These  will 
be dealt  with  later  on. 
1.2. The  Committee  wonders  whether  the  subse-
quent  energy  crisis  has  precipitated  a radical  change 
in the  general  conditions  prevailing  when  the  ori-
ginal  alcohol  proposals  were  drawn  up. 
No C 83/36 Official  Journal  of the European  Communities 2. 4. 80 
1.3. It feels  that  in the  future  large  quantities  of 
agricultural  alcohol  may  have  to be devoted  to 
energy  production.  Moreover,  the competitive  edge 
which  synthetic  alcohol  has  over  molasses  alcohol 
may be gradually  eroded  by increases  in the cost  of 
its current  basic  ingredients,  not  to mention  the 
necessity  of conserving  petroleum  derivatives. 
1.4. The  figures  available  should  be treated  with 
caution  in the absence  of clear-cut  criteria  for deter-
mining  the  price  of synthetic  alcohol.  But  they  do 
show  that  synthetic  alcohol  is still  competitive  with 
molasses  alcohol,  partly  because  the  latter's  basic 
ingredients  have  recently  risen  considerably  in price. It particularly  stresses  the need  to adopt  in parallel 
to the  alcohol  Regulation  appropriate  solutions  for 
the specific  case  of rum  from  the  French  overseas 
departments  (DOM). 
2.4. The  new  proposals  do nothing  to solve  the 
problems  of alcohols  distilled  from  vine  products  or 
table  grapes,  nor  those  of grape  brandies  and  spirits. 
These  should  be guaranteed  security  of access,  as it 
is almost  always  compulsory  distillation  which  is 
involved. 
1.5. The  Committee  therefore  concludes  that  while 
the oil crisis  may  eventually  have  some  effect  on the 
market  in agricultural  alcohol  there  is at present  no 
reason  to suppose  that  the  basic  terms  of the prob-
lem have  changes  substantially. 
2. The  Commission's  proposed  amendment  concern-
ing the  products  to be covered  by the  proposed 
Regulation 
2.1. As  now  amended,  Article  1(1)  and  Article 
1 (2) of the draft  Regulation  states  that  all products 
under  Common  Customs  Tariff  heading  No  22.06 
— and  not  just  those  whose  actual  alcoholic 
strength  exceeds  22°,  as was  previously  the  case  — 
are to be subject  to a trade  regime  and  possibly  a 
price  and  intervention  system  under  the  proposed 
Regulation. 
The Committee  endorses  this  amendment,  which 
takes  up the  suggestion  made  in point  2.4.1.1  of its 
opinion  of 30 March  1978. 
2.2. But  the  Committee  would  emphasize  here, 
and also  in connection  with  the amendment  to Arti-
cle 24 of the  draft  Regulation,  that  processed  pro-
ducts  incorporating  alcohol,  and  possibly  other  agri-
cultural  products  subject  to an organized  market, 
should  be covered  more  often  by the trade  arrange-
ments  applying  to the regulated  product  which  they 
contain. 
2.3. The  Committee  therefore  feels  that  the 
requests  made  in its previous  opinion  (points  2.2.2, 
2.3.5,  2.3.6,  2.3.7,  2.3.8,  and  2.3.9)  should  finally  be 
taken  into  consideration. 3. Target  prices  and  marketing  guarantees  : molas-
ses alcohol 
3.1. In  Articles  3, 4 and  6 the  Commission  pro-
poses  including  molasses  alcohol  in the  general 
scheme  for agricultural  alcohol;  more  specifically  it 
proposes  that: 
— the target  price  for  molasses  alcohol  should  be 
determined  on the  basis  of the  criteria  used  for 
other  types  of alcohol,  instead  of the  price  of 
synthetic  alcohol; 
— there  should  be a marketing  guarantee,  based  on 
quantities  marketed  in preceding  years  in the 
reserved  sectors. 
These  arrangements  still  provide  less  favourable 
treatment  than  that  given  to other  types  of agricul-
tural  alcohol,  for which  the storage  guarantee  covers 
the entire  quantity  produced  previously. 
In effect,  the scheme  corresponds  to that  proposed 
by the Committee  in point  2.3.2  of its previous  opin-
ion. The  Committee  opposed  incorporating  the 
molasses-alcohol  sector  lock,  stock  and  barrel  into 
the target  prices  and  marketing  guarantees  scheme 
but favoured  its being  granted  an appropriate  'guar-
anteed  quantity'  quota. 
Despite  the  changes  which  have  taken  place  in the 
meantime,  the  Committee  still  stands  by this  com-
promise  position,  while  pointing  out that  the EEC  is 
a net importer  of molasses. 
However,  as the Council  has  amended  the wine  Reg-
ulations  in order  to limit  new  plantings  drastically, 
the Committee  would  propose  that  the  new  Article 
4 (4) stop  after  'at the  end  of the  marketing  year', 
and that  the  phrase  'within  the  limits  of the  target 
quantity'  be deleted. 
2. 4. 80 Official  Journal  of the European  Communities No C 83/37 
3.2. In  view  of the  comments  in point  1 of this 
opinion,  the Committee  feels  that  in-depth  research 
should  be instigated  by the Commission  to ascertain 
whether  low-cost  alcohol  of agricultural  origin  can 
help  solve  energy  problems. 
The findings  of this  research  and  any  repercussions 
on the  market  in agricultural  alcohol  can  naturally 
be taken  into  consideration  in due  course.  The 
Commission  has  done  well  to provide  for this  possi-
bility  in the new  Article  41 (a). 
3.3. This  Article  41 (a) should  also  reconsider  the 
problems  of small  distilleries,  which  are  discussed 
more  specifically  in paragraph  9.4 below. 
3.4. The  Commission's  proposed  amendments  to 
Articles  3, 4 and  6 contain  two  other  new  elements: 
(a) a guaranteed  quantity  is provided  for  all types 
of alcohol; 
(b) it is specified  that  target  prices  shall  be so fixed 
as not  to lead  to increased  production  'as long 
as the  production  cost  of such  alcohol  is not 
competitive  with  the  market  price  for synthetic 
alcohol'. 
The Committee  approves  the first  proposal  but  con-
siders  that  it would  be advisable  to abolish  the sec-
ond and  leave  target  prices  to be fixed  by the Coun-
cil of Ministers  in the light  of the market  situation; 
this is the practice  for all agricultural  products. 
4. Transitional  measures  for molasses  alcohol 
4.1. The  views  expressed  above  in points  3.1 to 3.4 
imply  consent  to the proposed  deletion  of the eighth 
recital  and  Article  7. 
4.2. These  deletions  are  fully  justified  in view  of 
the marketing  guarantee  for  molasses  alcohol  and 
the provision  in Article  41 (a) for  a report  in the 
short  term  on  the  application  of the  proposed 
Regulation,  with  the possibility  of amendments. 
5. Selling  price  for the pharmaceutical,  perfumery 
and cosmetics  industries 
5.1. The  Committee  is in favour  of a scheme 
whereby  the  selling  price  of agricultural  ethyl alcohol  in the case  of the pharmaceutical,  perfumery 
and cosmetics  sectors  shall  be fixed  taking  into  con-
sideration  the  market  price  of synthetic  alcohol. 
This  would  be consistent  with  point  2.3.4  of the pre-
vious  opinion  and  with  the need  to facilitate  sales  of 
agricultural  alcohol  following  the grant  of quantita-
tive marketing  guarantees  for molasses  alcohol. 
6. Intervention  contribution 
6.1. The  deletion  of Article  17 and  amendment  of 
Article  31  to secure  EAGGF  financing  of  the 
charges  arising  out  of the  administration  of the 
Regulation  on the  alcohol  market  were  specifically 
called  for in points  2.3.10.1  to 2.3.10.4  of the Com-
mittee's  previous  opinion. 
The Committee  cannot  therefore  but  approve  this 
deletion  and  that  of the 24th  recital. 
7 Calculation  of levies 
7.1. The  Committee  approves  the  amendment  to 
Article  24; this  merely  enables  the proposed  Regul-
ation  to cover  products  falling  under  Common  Cus-
toms  Tariff  heading  No 22.06  and  having  an actual 
alcoholic  strength  of less  than  22°  (Article  1 (1) (e). 
7.2. The  Committee  would  point  out,  in line  with 
what  was  said  in point  2.2 above,  that  the references 
in Article  24 should  in any  case  ensure  that  the lev-
ies are applied  to alcohol  and  spirits  added  to other 
products,  as well  as to alcohol  and  spirits  in their 
own right;  these  products  would  also  be subject  to 
any levies  provided  for in other  Regulations  on agri-
cultural  raw  materials  (e.g.  wine  and  sugar). 
8. Extension  clause  and  possible  revision 
8.1. Given  the  complexity  of the  situation  which 
the draft  Regulation  has  to regulate  and  the impon-
derables  which  are inevitably  involved,  especially  in 
a sector  notorious  for conflicts  of interest  and  differ-
ences  in national  conditions,  the Committee  agrees 
with  Article  41 (a), bering  in mind  its comments  in 
point  3.2 above: 
No C 83/38 Official  Journal  of the European  Communities 2. 4. 80 
9. Confirmation  of statements  and  recommenda-
tions  in the previous  opinion 
9.1 Having  expressed  its views  on the  proposed 
new amendments  the  Committee  would  like  to 
stress  in the  strongest  possible  terms  that  several 
requests  for changes  made  in the previous  opinion 
have  not been  taken  up, even  when  they  had  a consi-
derable  bearing  on the consistency  and  acceptability 
of the whole  proposal. 
9.2. The  Committee  reiterates  what  it said  in point 
2.3 above  with  particular  emphasis  on the need  for: 
— a rapid  harmonization  of the taxes  on alcoholic 
drinks  (point  4.4.  of the previous  opinion);  and 
— the rapid  enactment  of definitions  and  rules  on 
the description  and  presentation  of all products 
directly  or indirectly  covered  by the  proposed 
Regulation  and  on the  protection  of registered 
designations  of origin  (point  2.3.12  of the  pre-
vious  opinion). 
9.3. The  Committee  would  also  emphasize  once 
again  that  producers  of whiskies  quite  justifiably 
expect  to see early  implementation  of undertakings 
to provide  restitution  payments  for Community-pro-
duced  cereals  used  to make  products  for  export 
(point  2.4.3  of the previous  opinion). 
9.4. The  Committee  considers  that  before  tackling 
the question  of small  distilleries,  it would  be better 
to wait  for the report  on the  structure  of the distill-
ing industry  in the  EEC,  which  the  Commission  is 
required  to submit  under  Aricle  41 (a). It will  then 
be possible  to take  considered  decisions  on this  deli-
cate matter,  which  has  obvious  social  ramifications 
(point  3.3.3  of the previous  opinion). ing systems  in individual  Member  States  are  being 
dismantled  following  decisions  by the Court  of Jus-
tice without  any  Community  scheme  taking  their 
place,  leaving  a disturbing  vacuum  (point  4.1 of the 
previous  opinion). 
10.2.  Spain  and  Portugal  are both  important  grow-
ers of alcohol-producing  agricultural  commodities. 
Before  they  become  Member  States  it is essential  to 
lay down  a detailed  framework  for  Community 
management  of the alcohol  market  in order,  as the 
Committee  has  already  said  in point  4.2 of the pre-
vious  opinion,  to enable  these  countries  to assesss 
the situation  in the Community  and  discuss  it at the 
preliminary  negotiations  on accession. 
10.3.  Now  that  a year  and  a half  has  passed  since 
the previous  opinion  the  Committee  has  to point 
out that  in many  of the circles  concerned: 
— there  is still  dissent  and  concern  about  the  pro-
posed  Regulation; 
— there  is a conviction  that  the  proposed  Regul-
ation  will  ultimately  tackle  purely  industrial 
problems  in addition  to basic  agricultural  prob-
lems  arising  from  the need  to provide  outlets  for 
distillates  of alcohol  products  affecting  major 
sensitive  agricultural  markets.  This  may,  among 
other  things,  seriously  distort  competition 
between  some  of the sectors  involved; 
— there  are  doubts  as to whether  the  coverage  of 
agricultural  interests  is complete  because  only 
about  one-third  of the distillates  of alcohol-prod-
ucing  agricultural  raw  materials  are directly  sub-
ject to the  draft  Regulation;  this  creates  a dis-
turbing  imponderable,  namely,  the  possible 
impact  of large-scale  switches  from  spirit  to 
alcohol  distillation  (or vice  versa)  in the  utiliza-
tion of alcohol-producing  materials  affecting 
major  sensitive  agricultural  markets. 
10. Final  comments 
10.1.  The  Committee  would  emphasize  that  it is 
extremely  urgent  that  the Council  take  the decisions 
necessary  for  setting  up an organized  market  for 
ethyl  alcohol  of agricultural  origin. 
This  is particularly  necessary  because  although  20 
years  have  passed  since  the common  market  came 
into being,  there  are still  barriers  to the  circulation 
of alcohol,  spirits  and  liqueurs.  Moreover,  market-10.4 If,  despite  the  Commission's  latest  amend-
ments  and  the reduced  competitiveness  of synthetic 
alcohol,  the  Council  should  not  approve  the  pro-
posed  Regulation  in time,  then  the comments  made 
in point  5 of the  Committee's  previous  opinion 
would  still  apply. 
There  would  then  be a case  for (i) a simplified  CAP 
distillation  scheme  based  on intervention  in respect 
of sensitive  agricultural  raw  materials  and  (ii)  the 
maintenance  of a market  divided  into  two  sectors, 
one of which  being  reserved  for agricultural  alcohol. 
2. 4. 80 Official  Journal  of the European  Communities No C 83/39 
The lion's  share  of the  market  — in which  prices  conditions  created  by intervention  in respect  of raw 
would  be  determined  by  free  competition  under  materials  — would  then  be left  to the operators. 
Done  at Brussels,  13 December  1979. 
The Chairman 
of the Economic  and  Social  Committee 
Raffaele  VANNI 
ANNEX 
to the opinion  of the Economic  and Social  Committee 
Rejected  amendment 
The following  amendment  was  rejected  during  the discussions: 
Point  3.1. 
Add the following  paragraph  at the end of the third  paragraph: 
'However,  without  prejudice  for such  criteria,  the Committee  would  ask that  the target  quant-
ity for molasses  alcohol,  like  those  for other  alcohol  of agricultural  origin,  be based  on the 
quantity  produced  in the five  previous  marketing  years  so as to ensure  that  each  distillery  has 
a quota  in keeping  with  its normal  level  of activity.' 
Reason 
The amendment  is intended  to prevent  different  criteria  being  used  for calculating  the target 
quantity,  and consequently  the guaranteed  quantity. 
Using  different  criteria  not only  introduces  discrimination  but is also  unjustified  in view  of the 
objective  which  it is wished  to achieve. 
Voting 
For: 22; against:  26; abstentions  7. 
The following  passage  in the Section  for Agriculture's  opinion  was  replaced  by an amendment 
adopted  during  the discussions: 
Chapter  5, point  5.1, first  sentence 
The Section  is in favour  of a scheme  whereby  the sale  price  of agricultural  alcohol  bought  by 
the pharmaceutical,  perfumery  and  cosmetics  sectors  would  be the same  as that  of synthetic 
alcohol.' 
No C 83/40 Official  Journal  of the European  Communities 2. 4. 80 
Voting 
For:  43; against:  0, abstentions:  14. 
The following  passage  in the  Section's  opinion  were  deleted  following  the  adoption  of other 
amendments: 
Point  5.2 
'However,  bearing  in mind  what  was  said  in point  2.3.4.3.1  of the previous  opinion,  the Sec-
tion would  stand  by the ESC  recommendation  that  there  be one  selling  price  for agricultural 
alcohol  in the  reserved  sectors  and  in the  pharmaceutical,  perfumery  and  cosmetics  indus-
tries;  such  a scheme  would  be easier  to administer  and  monitor,  a fact  of crucial  importance. 
The requirements  of the pharmaceutical,  perfumery  and  cosmetics  sectors  could  be satisfied 
by granting  a rebate  which  ensures  that  agricultural  alcohol  is really  competitive  with  syn-
thetic  alcohol  in these  sectors.' 
Voting 
For:  43; against:  0; abstentions:  6. 
Point  5a. 
'5a. Reserved  sectors 
5a. 1.  As  the  perfumery  and  cosmetics  sector  gets  70%  of its supplies  from  agricultural 
alcohol,  the Section  feels  it should  reconsider  the view  expressed  in the last  sentence  of 
point  2.3.4.1  in its previous  opinion. 
The Section  feels  that  while  what  was  said  above  about  the price  of agricultural  alcohol 
for this  sector  should  stand,  the  draft  Regulation  should  modified  so as to allow  the 
Council,  after  the end  of the five-year  period  referred  to in the third  indent  of Article  9 
of the  proposal,  to decide  in the  light  of experience  whether  or not  the  perfumery  and 
cosmetics  sector  should  be included  definitively  among  those  reserved  for  agricultural 
alcohol.' 
Voting 
For:  22; against:  18; abstentions:  16. 
Opinion  on the proposal  for a Council  Directive  prolonging,  in respect  of swine  fever, 
certain  derogations  granted  to Denmark,  Ireland  and  the United  Kingdom 
The text  referred  to the Committee  has  been  published  in Official  Journal  of the Euro-
pean  Communities  No  C 295  of 24 November  1979,  page  2. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 20 November  1979  the Council  referred  the abovementioned  proposal  to the Eco-
nomic  and  Social  Committee  in accordance  with  Article  100  of the Treaty  establishing 
the European  Economic  Community.