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DOCUMENTS "COM"
COM(81)192
Vol.1981/0074

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(81)192 final
Brussels,14thApril1981
PROPOSAL FORACOUNCILREGULATION (EEC)
layingdowngeneralrulesonthedistillation oftable
winesasprovidedforinArticle15ofRegulation (EEC)
No337/79
(presented bythe'Commission totheCouncil)
Ë''-^-
S**^^«
COM(81)192final

C<5AQL
Explanatory memorandum
After arecord harvest in1979 ,the1980 /81wine year began with
exceptionally large carry-over stocks despite theimplementation ofall
theintervention measures provided forintherules .The1980 harvest ,
which exceeded foreseeable normal demand ,made thedisparity between
supplies andmarket outlets even worse ".This situation prompted the
Commission tomake use ofall the intervention instruments atits
disposal .These included preventive distillation (Article 11of •.-
Regulation (EEC)No337/79),measures applicable toholders oflong-term
storage contracts (Article 12)andcompulsory distillation ofwine
produced from table grapes andadditional deliveries ofwine and
by-products . -;V'
Furthermore theCommission decided topermit theconclusion oflong-term
storage contracts formusts andwines ;authorisation oftheconclusion of
short-term storage contracts hasbeen maintained permanently inview of
thelevel ofrepresentative prices .
Itmaybeestimated that theoptional distillation operations could
result inthewithdrawal of >14.5-15 million hifrom themarket ,while
compulsory operations should account forabout 2million hi.Among the
optional distillation operations ,those described as"performance
guarantee "measures ,which could theoreticaly have accounted for
21.3 million hi,will infact concern 14.2-14.8 million hi.
Thedrop inthevolume oftheFrench harvest ontheprevious year isdue
inparticular toadrop inquality wines psrandwhite wines ofall
categories ;theproduction ofredtable wine ,especially inthemain
wine-producing departments ,hasremained virtually unchanged .

-2-
Given thedisparity between supply anddemand ,which theintervention
measures have failed toremedy ,prices forthemain types oftable wine
dropped toalevel very much below theguide price and ,inthelast few
weeks ,down asfaras67%oftheguide price forthemost important red
wines and65% forwhite wines .This level isquite inadequate ;the
present market situation warrants ,intheCommission 'sopinion ,recourse
totheexceptional distillation measures provided forinArticle 15of
Regulation (EEC )No337/79.
Asregards thedetailed rules fortheapplication ofthese measures ,past
experience hasshown that ,ofthevarious formulas ofquantitative
limitation already used ,theformula adopted last year (Regulation (EEC )
No564/80)might meet thepresent requirements best .IntheCommission 's
view ,itisnotexpedient this year tolimit theperiod ofdistillation
because themany commitments ofdistilleries under existing measures make
itquite impossible toevaluate correctly thedistillation capacities
ever agiven period .TheCommission therefore proposes that the
distilled quantities should notexceed ,perproducer ,15%ofthe1980
harvest oftable wine .
Inthese circumstances ,taking account oftheproposed price level ,the
quantities distilled should enable equilibrium toberestored onthe
market .TheCommission proposes that theprices tobepaid fordistilled
wine should beequal to80%oftheguide prices ,i,e .2.14 ECU/%/hlfor
redwines oftypes RIandRIIand2.01 ECU/%/hlforwhite wines of
»
typeAI .
Aid todistillation ,based onthemarket price foralcohol inItaly ,is
lower than thelevel fixed fordistillation measures applicable to
holders oflong-term storage contracts (Regulation 2325/80).

PROPOSAL FOR
COUNCIL REGULATION (EEC )
laying down general rules onthedistillation oftable wines as
provided forinArticle 15ofRegulation (EEC )No337/79
THECOUNCIL OFTHEEUROPEAN COMMUNITIES ,
Having regard totheTreaty establishing theEuropean Economic Community ,
Having regard toCouncil Regulation (EEC)No337/79of5February 1979 on
thecommon organisation ofthemarket inwine (1),aslast amended by
Regulation (EEC)No3456/80 (2),andinparticular Article 15(1 )thereof ,
Having regard totheproposal from theCommission ,
Whereas Article 15ofRegulation (EEC )No337/79provides that provisions
concerning thedistillation oftable wines maybeadopted where
application ofthemarket support measures provided forinthat
Regulation areunlikely tobeeffective inrestoring price levels ;
i-
Whereas this isthecase atpresent inview ofthefactpat this year's
abundant harvest andtheverylarge stocks from .theprevious yearhave
created supplies which considerably exceed thenormal requirements for
thepresent year ;whereas ,moreover ,allthesupport measures have
■
already been taken ,butthey have notyetsucceeded inrestoring
reasonable price levels ;
Whereas theconditions under which these distillation operations maytake
place should belaid down ;whereas ,inparticular ,ttpeprice ofthewines
going fordistillation should notbesuch astoencourage theproduction
ofwine principally fordistillation ,although itshould besufficiently
attractive fortheoperation tobeeffective ; /.
(1)03NoL54,5.3.1979 ,p.1
(2)OJNoL360 ,31.12.1980 ,p.18

Whereas Article 67oftheActofAccession ofGreece provides that in
fixing thelevel ofthevarious amounts laid down within thecommon
agricultural policy ,account shall betaken ,forGreece ,oftheaccession
compensatory amount ,totheextent necessary fortheproper functioning
ofthecommon agricultural policy ;whereas thepresent situation onthe
market forredtable wines issuch that aminimum buying-in price ,less .
'theaccession compensatory amount ,'should notbefixed fordistillation
operations carried out in ,Greece ;whereas anyrisk ofdeflection oftrade
seems ruled outbythefact that thedistillation capacity inGreece is
limited andthat nowine issent tothat country fordistillation ;
Whereas themarketing ofthealcohol produced -under this Regulation
should notbeallowed tohave anegative influence onthemarket forthe
product ;
Whereas themaximum quantity oftable wine which maybedistilled for
each producer should belimited inorder tolimit theoverall cost ofthe
operation ;
Whereas ,inorder toensure appropriate supervision ofthedistillation
operations ,distillers should besubject toasystem ofapproval ;
Whereas provision should bemade forproducers toconclude delivery
contracts with distillers subject toapproval bytheintervention agency ,
inorder tofacilitate monitoring oftheprogress ofoperations andof
theobservance oftheobligations ofboth parties ;whereas this system
would have theadded advantage ofmaking iteasier tomonitor the
quantitative effects ofdistillation onthemarket and ,where necessary ,
tolimit thevolume ofwines which maybedistilled ;(
Whereas ,however ,thecontracts system must beadapted inorder totake
into account thefact that there areproducers whointend tohave their
wine distilled ontheir behalf andproducers whothemselves make useof
distillation plants ;whereas ,inthepase ofthelatter producers ,the
absence ofacontractual obligation necessitates anofficial analysis of
certain characteristics ofthewine tobedistilled ;

-3-
Whereas theprice ofwine going fordistillation isnotsuch astoenable
.theproducts obtained from this operation tobemarketed normally ;
whereas ,itistherefore necessary togrant aidandtofixtheamount of
aid ,taking into account normal costs ,atalevel enabling theproducts
obtained tobemarketed ; .
Whereas provision should bemade fortheminimum price guaranteed tothe
producer tobepaid tohim ,asageneral rule ,within time limits which
will enable himtoobtain aprofit comparable tothat which hewould have
'obtained from acommercial sale ; .
Whereas provision should bemade forproducers whohave concluded a -
delivery contract toterminate itwhere themarket situation would enable
them todispose ofthewine more profitably ;
Whereas ,onthebasis ofexperience gained ,acertain margin should be
.allowed forthequantity ofwine specified inthedelivery contracts ;
whereas ,moreover ,provision should bemade ,intheevent ofchance
circumstances orforce majeure ,foraidtobepaid inrespect ofthe
quantity ofwine which has'actually been distilled ;
Whereas the manufacture ofwine fortified for distillation must take
place inthevicinity oftheplace where thetable wine isheld inorder
tolimit transport costs todistilleries along distance away;' whereas
authorisation ofthe manufacture ofwine fortified for distillation ina
Member State other than that inwhich theproducer 'swinery islocated is
notjustified economically andrisks creating serious monitoring
problems ;whereas itseems appropriate ,therefore ,tostipulate that the
manufacture ofwine fortified fordistillation maytake place only inthe
country where thetable wine hasbeen produced ; . „
Whereas ,ineach Member State concerned ,abody should bemade responsibe
forimplementing theprovisions inquestion ;
Whereas theaddition ofanindicator tothewine tobedistilled isan
efficient monitoring method ;whereas itshould bestated that the
presence ofsuch anindicator must notprevent themovement ofthese
wines oroftheproducts obtained therefrom ,
,HASADOPTED THIS REGULATION :

-A-
Article 1
1.Producers wishing todistil table wines produced bythem pursuant to
Article 15ofRegulation (EEC )No337/79shall conclude contracts for
thedelivery oftable wines with anapproved distiller andshall
submit them totheintervention agency before 31May1981 .
However adecision maybetaken toamend thedate laid down inthe
first subparagraph should therepresentative prices foralltypes of
table wine ,except types AII,AIIIandRIII ,behigher than the­
.corresponding activating price fortwoconsecutive weeks .
2.Forthepurposes ofthis Regulation ,each producer maydistil a
quantity oftable wines notless than 10hectolitres andnotmore than
15%ofthetotal quantity oftable wine produced byhimduring the
1980 /81wine year . - ,
Article 2
Thedelivery contracts shall notbevalid under this Regulation unless
approved ,before 15June 1981 ,bytheintervention agency oftheMember
State inwhich thewine happens tobewhen thecontract isconcluded .
These contracts shall cover :
(a)theobligation forthedistillers ,topurchase thequantity oftable
wine entered inthecontract and topaynotless than theamount
specified inArticle 6(1 )forthat quantity ;
(b)theobligation forthedistiller toprocess thewine into aproduct
i
with analcoholic strength byvolume of86%ofmore ,orinto a
product with analcoholic strength byvolume of85%orless .
2.Where distillation takes place inaMember State other than that in
which thecontract isapproved ,theintervention agency which approved
thecontract shall forward acopy ofittotheintervention agency in
the first Member State .

-5-
Article 3
■ '
1.Producers :
-whothemselves make useofdistillation plants andwho intend to
carry outthedistillation referred toinArticle 1,or **
-who intend tohave their wine distilled ontheir behalf inan
approved distiller 'splant ,
shall soinform theintervention agency oftheMember State inwhose
territory their winery islocated bymeans ofadeclaration of
delivery fordistillation ,hereinafter called 'declaration' ,and ,if
thedistilling plant islocated inanother Member State ,thelatter' s
intervention agency aswell ,bymeans ofacopy ofthedeclaration .
2.For thepurposes ofthis Regulation ,thecontract referred toin
Article 1(1)sh^ll bereplaced :
-inthecase specified inthefirst indent ofparagraph 1,bythe '
declaration , ' V
-inthecase specified inthesecond indent ofparagraph 1,bythe
declaration accompanied byacontract fordelivery fordistillation
ontheproducer 'sbehalf concluded between theproducer andthe
distiller . . _
3.Thedeclaration referred toinparagraph 2shall notbevalid under .
this Regulation unless approved before 15June 1981 bythe
intervention agency oftheMember State onwhose territory the 1
producer 'swinery islocated .
This declaration shall involve thedistiller inanobligation to
process thewine into aproduct with analcoholic ,strength byvolume
of86%ormore ,orinto aproduct with analcoholic strength byvolume
of85% orless .
4.Inthecase referred tointhefirst indent ofparagraph 1,asample
ofthewine tobedistilled shall betaken byarepresentative ofan
*
official body oftheMember State onwhose territory theproducer 's
winery issituated foranalysis byanofficial laboratory ofits
actual alcoholic strength byvolume ,total acidity ,volatile acidity
andsulphur dioxide content .

-6-
Theproducer shall forward theresults ofthis analysis ,certified by
anofficial body ,totheintervention agency .
5.Arepresentative ofanofficial body shall check thequantity ofwine
distilled and the date ofdistillation . . '
6.Producers whohave lodged adeclaration shall beobliged todistil or
toarrange forthedistillation ofthewine covered bythat
declaration .
Article 4
.1.Theminimum buying-in price fortable wines fordistillation shall be
V
„fixed at:
-2.14 ECUperhectolitre per%volforallredandrose table wines ,
-2.01 ECUperhectolitre per%vol forallwhite table wines .
These wines must have anactual alcoholic strength byvolume ofmore
than 9.5% vol .
■>
2.Theprices referred toinparagraph 1shall apply tobulk merchandise
exproducer 'spremises .
Article 5
1..Theintervention agency oftheMember State inwhich thedistillation
hastaken place shall payaidforthewine distilled .
2.Theamount oftheaidshall befixed ,inrespect ofthewines referred
tointhefirst indent ofArticle 4(1)at:
-1.52 ECUperhectolitre per%volifthewine wasprocessed into a
product with analcoholic strength byvolume of86%volormore ,.
-1.47 ECUperhectolitre per%vol'ifthewine wasprocessed into a
product with analcoholic strength byvolume of85%ofless .
Theamount oftheaidshall befixed ,inrespect ofthewine referred
tointhesecond indent ofArticle 4(1),at:

-7-\
-1.39 ECUperhectolitre per%volifthewine wasprocessed into a
product with an -alcoholic strength byvolume of86%volormore ,
,-1.34 ECUperhectolitre per 56volifthewine wasprocessed into a
product with analcoholic strength byvolume of85%volorless .
Article 6 ■
1.When thetotal quantity ofwine inthecontract enters thedistillery ,
thedistiller shall paytheproducer atleast thedifference between
theminimum buying-in price referred toinArticle 4andtheaid
provided forinArticle 5.
"2.When proof issupplied that thetotal quantity ofwine inthecontract
hasbeen distilled ,theintervention agency shall paytheproducer the
amount referred toinArticle 5(2).
3.Theproducer mayaskfortheamount ofaidreferred toinArticle 5(2)
tobepaid tohim inadvance oncondition that hehaslodged a
security equal to110% oftheamount inthename oftheintervention
agency .This security shall begiven intheform ofaguarantee byan
establishment meeting thecriteria laid down bytheMember State to
'which theintervention agency isresponsible .
Theadvance payment maynotbemade until after thedate ofthe
approval provided forinArticle 2(1)orArticle 3(3).
Subject totheprovisions ofArticle 11,thesecurity provided forin
thefirst subparagraph shall notbereleased unless ,within a
specified period ,evidence isprovided that thetotal quantity ofwine
appearing inthecontract hasbeen distilled . -\
When thesecurity isreleased ,theintervention agency shall make the
adjustments required totake account ofthemargins provided forin
Article 10. '
Article 7
Bywayofderogation from Article 6(1),ifdistillation takes place ina
Member State other than that towhich theintervention agency which
approved thecontract isresponsible ,thedistiller shall paytothe
producer theminimum buying-in price specified inArticle 4once the
total quantity ofwine appearing inthecontract hasentered the
distillery .

-8-\
Inthis case theaidshall bepaid tothedistiller inaccordance with
therules provided forinArticle 6(2 )or(3).
Article 8
Distillation operations maynottake place before 15May1981 orafter
31August 1981 . . '
Article 9
Should theaverage prices fornotless than 50%ofthequantities quoted
ofatype oftable wine exceed 90%oftheactivating price forthat type
ofwine ,itmaybedecided that delivery contracts forwines ofthis type
shall beterminated wholly orinpart attherequest oftheproducer .
f
*Termination ofthecontract shall bepermitted only incases where the
amounts paid bytheintervention agency arerefunded .
Article 10
Amargin of10%more orless than thequantity ofwine indicated inthe
contracts referred toinArticle 1,subject to .themaximum andminimum
amounts provided forinArticle 1(2 )shall bepermitted forthequantity
ofwine actually delivered 'tothedistillery .
Theintervention agency shall paytheaidprovided forinArticle 5for
-thequantity ofwine which hasactually been distilled ,within themargin
referred tointhefirst paragraph .
Article 11
Where ,owing tochance circumstaces orforce majeure ,allorsome ofteh
wine covered byacontract referred toinArticle 1cannot bedistilled ,
thedistiller ortheproducer shall immediately soinform :
-theintervention agency oftheMember State inwhose territory the
distillation plant islocated ,and
-iftheproducer 'swinery islocated inanother Member State ,the ,
intervention agency ofthesecond Member State .
/ '
Inthecases referred tointhefirst paragraph ,theintervention agency
shall paytheaidreferred toinArticle 5inrespect ofthat quantity of
wine which hasactually been distilled .

-9-
Article 12
Thewine intended fordistillation asprovided forinArticle 1(1)maybe
processed into wine fortified fordistillation bythedistiller orbyan
approved manufacturer other than theproducer .
Iftheoperation iscarried outbyamanufacturer ,theprovisions of
Articles 1,2,4,5,9,10and 11shall apply subject totheprovisions
ofthefollowing Articles .
Article 13
1.Thecontracts provided forinArticle 1shall beconcluded between a
producer andamanufacturer . .
2.These contracts shall involve themanufacturer intheobligation :
(a)topurchase thequantity ofwin^&ppearing therein andtoprocess
all of'itinto wine fortified fordistillation , r
(b)todeliver thewine fortified fordistillation toanapproved '
distiller ,
(c)topaytotheproducer notless than theprice specified in
Article 4.
Article 14 •
1.Wine fortified fordistillation maybeproduced only intheterritory
oftheMember State where theproducer 'swinery islocated andwithin
aspecified period oftime . '
2.Themanufacture ofwine fortified fordistillation shall besubject to
official supervision .Forthis purpose :
-thedocument(s )andtheregister(s)' provided forinArticle 53of
Regulation (EEC)No337/79shall state theincrease inactual
alcoholic strength byvolume ,expressed as%vol ,giving the .
strength before andafter theaddition ofthedistillate tothe
wine ; ,
-before thewine isprocessed into wine fortified fordistillation ,
asample shall betaken byarepresentative ofanofficial body for
analysis byanofficial laboratory ,orbyalaboratory operating
under official supervision ,oftheactual alcoholic strength by
volume .Twocopies oftheresults ofthis analysis shall besent
tothemanufacturer ofthewine fortified fordistillation ,who
shall forward onecopy totheintervention agency oftheMember
State where thewine fortified fordistillation wasproduced .

-10-
Article 15
Theprice specified inArticle Ashall bepaid bythemanufacturer when
thetotal quantity ofwine appearing inthecontract hasentered his
installations .
Article 16
Wine fortified fordistillation shall bedistilled before aspecified
date .Theproduct obtained from thedistillation ofwine fortified for
that purpose shall have analcoholic strength byvolume of85%orless .
Article 17
1.When evidence hasbeen provided that all thewine fortified for
distillation ,produced from thewine appearing inthecontract
provided forinArticle 13(1 ),hasbeen distilled ,theintervention
agency oftheMember State where thewine fortified fordistillation
hasbeen produced shall paytothemanufacturer theaidprovided for ,
asapplicable ,inthesecond indent ofthefirst subparagraph of
Article 5(2 )orinthesecond indent ofthesecond subparagraph of
Article 5(2).
2.Theaidshall becalculated byhectolitre andby%voloftheactual
alcoholic strength ofthewine before itisfortified fordistillation .
3.Themargin provided forinArticle 10shall apply tothequantities of
table wine delivered tothe manufacturer 'sinstallations .
Theaidshall bepaid forthequantity oftable wine which ,after
being fortified fordistillation ,hasactually been distilled .
Article 18
For thepurposes ofthis Regulation ,"anapproved distiller "shall mean a
distiller included onalist tobecompiled bythecqmpetent authorities
ofthe Member State .
Aperson onwhose behalf distillation iscarried outshall betreated in
thesame wayasadistiller within themeaning ofthefirst paragraph .
Such distillation must becarried outbyanapproved distiller .
For thepurposes ofthis Regulation "anapproved manufacturer "shall mean
amanufacturer included onalist tobecompiled bytheMember States .

-11-
Article 19
1.Theintervention *agencies responsible forimplementing this Regulation
shall bethose appointed bytheMember States inaccordance with
%
Article 8ofRegulation (EEC)No343/79.
2.Without prejudice toArticle 2(1),Article 3(3)andArticle 17(1 ),the
competent intervention agency shall bethat located intheterritory ,
where distllation takes place . •
Article 20 '
Member States shall take themeasures necessary toensure that this
Regulation and ,inparticular ,checks toprevent thedeflection oftable
wine from itsend-use ofdistillation ,areimplemented .Tothis end -
Member States maystipulate that anindicator maybeused . \
Member States maynotprevent themovement within their territory ofa
table wine intended fordistillation orofdistilled products obtained -
from such wine ,because ofthepresence ofanindicator .
Article 21
This Regulation shall enter into force onthe .dayofitspublication in
theOfficial Journal oftheEuropean Communities ..
This Regulation shall bebinding initsentirety anddirectly applicable
inallMember States . : ,
Done atBrussels , For the Council
The President

1 · '
FIMAN CSAL STATEiWENT
o*t*s6.4.81
1.budget heading ié912 wine distillation , Appropriation ^-« .eor .1*►(ΠECU
2.title sProposal foraCouncil Regulation laying down general rules onthe -,
■distillation of;table wines ,asprovided for inArticle 15of
Regulation (EEC )No337/79 '
5.legm .BASIS :Art >15ofReg>337/79
4.Alis orproject jTopeïïiec jyaserious disturbance onthewine market bythe
.implementation ofexceptional disti Ilation measures
•
ι " 1, ' , ' *
-5. limplications
'S.-O Ε>Ρ£·.ΪΣΤυβΕ
-C»*sGí3 TOTHE ECBUDGET
»XX.X.2SC /INTERVENTIONS )
-{«fxsioiuaiWtfakSiaAfXW
'-
S.I WKSÍKXS
-80<<X«©í»XiX3®<KfXX>*€X5C
XÜCX XD5XOUS røUX »XWX50
-x«rx3f*xperiod or12months CURRENT FINANCIAL YEAR
f yFOLLOWING FINANCIAL TEAR
( )
55mECU . 55mECU
• ■token entry
5.0 .τest:*"ated e<pen5i ture
SS.1.1ESTIMATED RECEIPTS·*· «·
Relates to one .year' only
\
s.2«et*m ofcalculation AidtQdistillation :1..A3ECU/%vol=15.0 ECU/hl '
Estimated volume : 6mhi..Gross cost 6x15 -90mECU
Asthe quantities actually covered byother distillation operations ,including
'performance guarantee' operations ,are lower than initially estimated ,V
entailing 35mECU less expenditure ,theproposed exceptional operations will
also cover these quantities .Consequently net expenditure is .90-35 =»55mECU .
6.0 CAN THEPROJECT BEFINANCED FROM APPROBIAT IONS ENTEREO INTHERELEVANT CHAPTER OFTHECURRENT BUDGET ?,
e.i CAN THE PROJECT SEFINANCED BYTRANSFER BEUEEN CHAPTERS OFTHE CURRENT BUDGET 7
1 YES*»
6.2 ISASUPPLEMENTARY BUDGET 8ENECESSARY3
a.J■III fw'wRc BwrDGcT APPOSITIONS BENECESSARY ?
XVtü /N0
oôsmvatxcks :v
Asumof55mECUwould therefore ha,ve tobetransferred ;this
canbecovered from EA6GF Guarantee appropriations asaresult ofshort-term
.savings . . ' •