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COM(80)696
Vol.1980/0220

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(80)696final
\–-Λ"· ./
K-r':Brussels,5thNovember1980
REPORTFROMTHECOMMISSION TOTHECOUNCIL
ONTHEIMPLEMENTATION OFREGULATION (EEC)No.1655/76
EXTENDING THETRANSITIONAL ARRANGEMENTS FORTHEIMPORTOF
NEWZEALANDBUTTERINTOTHEUNITEDKINGDOMDURING .THEYEAR1979
C0M(80)696final

INTRODUCTION
1.Pursuant to-Article 7oftheCouncil Regulation No.1655/76
this report describes the conditions under which the import of
New Zealand butter into theUnited Kingdom during thecalendar
year 1979 hasbeen administered .

-2-
II.CJJ/ilITITATIVi3AoPECTci
2.Inaccordance withArticle 1(l)and(2)ofRegulation (iiEG)
No.1655/76,theUnitedKingdomwasauthorized toimportfrom
NewZealand ,120000tonnesofbutterduringthecalendar year
1979. \
3.ThetotalquantityofNewZealandbutteractuallyimported (debondcd
during1979)was119949'tonnes.
4.On1January .1979»"the.stockofNewZealandbutter(debonded )in
theUnitedKingdomamountedto57804tonnes.
5.Thetotalquantity ,ofNewZealandbuttersoldoiltheUnitedKingdom
nirketin1979was106638tonnes.(1978:134686tonnes)
6.On31December 1979,'thecarryover stockofNewZealandbutter
(debondedintheUnitedKingdom)amountedto67524tonnes.
(31December 1978:57804)*
7.Butterproduction in"theUnitedKingdom .during1979decreased slightly'
toaboutI6l000tonnes(1978:162 000tonnes)beeAnnexI.
8.TotalofftakeofbutterontheBritishmarketduring1979isestimated
.at407000tonnes(1978:414000tonnes).SeeAnnexI
9.ImportsofbutterfromMemberStatesfurtherdeclined from172576
tonnesin1978to124996tonnesin1979(SeeAnnexes ,IandII)
10.AlthoughtotalU.K.importsin1979werebelowthe1978level
totalbutterstocksheldincoldstoresintheUnitedKingdomdecreased
from129000tonnesatthebeginning of1979 "to66000tonnesat
tneendofthatyear. .
(l)Regulation (iSEC)n.1655/76oftheCouncilof29June1976extending the
transitional arrangements fortheimportofNewZealandbutterintothe
UnitedKingdom (O.J.LI65.9.7.1976 ,p.l)

-3-
11.The1979closing stocks ofNewZealand /butter(67524 t),were 16.8/
higher than theopening stock (57804 t).This increase waspossible
"because thesales during 1978 were 11%lower than thequantity imported .
12.In1978 and1979 "thepercentage shares .of1NewZealand butter onthe
U.K. consumption "butter market were 32 aaid3I$ respectively .
13.During 1979 the "butter share oftheyellow fats market decreased from
about 52.8 /'otoabout 50•24/^jmeanwhile themarket share ofmargarine'
increased marginally during thesame period from 46.4$ "to48.49 /'-
14.During 1979 ,theU.K. exported 62,000 tonnes ofbutter (56,000 tin
1978 ),ofwhich 51»l6l twent toMember Countries . (SeeAnnex I).
III . BUTTER PRICES AND THE FIXING OFTHE SPECIAL LEVY
15. lJuring 1979 "thespecial levy hasbeen based on :
(a)Theagreed CIFprice of(117*88 ua)142.51ecu/lOOkgs ,which is
wchanged since 1.10.1977 •
(b)Oncosts uptothefirst point ofsale :
(i)landing ,handling ,1week storage !5.30ECU/lOOkgs
(ii)20weeks additional Btorage 18.15 •»
(iii)insurance 0.45 »>
33.90 ,,
(iv)commission at0.8333 ?«ofthe "bulk "selling .price
(v) London Provision Exchange (L.P.E. )discount at0.83333 ^
of"bulk "selling price .
a
(c)U.K. consumer subsidy of45,94 ecupertonne (from 11July 1979 )•
(d)Packing costs of£92.62 perlong ton (£91.16 tonne ).
These costs have been applied since 11.7«1979 «Before that date the
figures indicated intheprevious report of£27»92 /long tonwere applied

-4-
16.During1979fourseparateratesofspeciallevywereapplied ,which
werecalculated onthe"basisoftheanticipated evolution ofmarket
pricesforbutter.
Thelevyratesandthequantities imported ateachratewereasfollows :
Levy(ECU/100kgs)Quantittv(tonnes'
Applicable from1January (l06.64ua =) 128.92 NIL.
"11July 59-40 64.400
" "16October ~ 70.30 35-060
" "1December 83.68 20.487
During1979 "thelevyapplicable tothirdcountrybutterimported intothe
Community fromsourcesotherthanNewZealandrangedbetween195*62uaper i
100kgs(236.50ECU)inbeginning ofJanuaryand240.48ECU/lOOkgsatthe !
endofDecember .
17.Thesignificant reduction ofthespeciallevyon11Julywasduetoa
numberoffactors :principally ,thefactthatasubsidyof45*94ECU
wasappliedtobutteronlyof.Community originsoldontheUKmarket
anditwasagreedthatacorresponding reduction shouldapplytoNewZealand
salesbymeansofareduction inthespeciallevytore-establish
competitiveness between' NewZealand andCommunity butter.
Anotherimportant factorwasthefactthatsalesinthefirstsixmonths
toJuneaveraged only1,481tonnesweekly,which,ifmaintained atthat
levelwouldresultintotalsalesfortheyearofonly77JOOOtonnes
(quotawas120,000tonnes).InfactbetweenJanuaryandJuly1979no
NewZealandbutterwasdebonded ,though43,000arrivedintheUKandwere
heldasnon-debonded stock. .
Itwasconsidered tobeintheCommunity'sinterestthatsalesof '
NewZealandbutterduring1979shouldnot-betoofaroutoflinewith !
theimportentitlement .
xheprincipalreasonforthesluggishrateofsaleswasthatbyJuly'
NewZealandbutterhadbecomeuncompetitive ontheUKmarket.
NewZealandbutterhasmaintaineditsplaceontheUKmarketbecauseof [
itspriceattractiveness ratherthanforqualityconsiderations andso !
itwasacceptedthatatleasta£40pertonnemargininfavourof
NewZealandbutterwasessentialinordertomaintainitsmarket i
position .. t
./•'f

-5-»
Inaddition "totheseconsiderations therehadbeen2devaluations in
thesterlinggreenrate,eachof5$(9Apriland1July)which
increased theCIFpriceandtheactualrateofthelevyexpressed in
Sterling ,theeffectofwhichwerealsotakenintoaccount.
nOnthebasisoftheforegoing elements thespeciallevywasreduced
to59.40ECU/lOOkgs.Toavoidthedisturbance of'theUpmarket which
wouldresultifthetotalquantity ofundebonded stockwasdebonded
atthereducedlevytheNewZealandauthorities agreedtolimitdebondings
toabout4»600tonnesperweek,whichcorresponded totheremaining
quantity tobeimported withinthelimitoftheyearlyquotaof
120,000tonnes.Inadditionthisenabledaclosermonitoring ofthe
marketdevelopment bothquantative-andprice-wise andpermitted the
Commission toadaptthespeciallevyinamoreeffective way.
18.OnOthOctoberthelistpriceforthemainbrandsofCommunitybutter
alteraseriesofpriceincreases ,wasquotedasranging ■from£1,735–
tl'v10.50pertonnewhileNewZealand ••Anchor"wasquotedat&1,337
(corresponding to£1,^7,takingsubsidyintoaccount).This
significant pricemargit/butterjustified anincreaseof10.90ECUinthe
speciallevyto70.30ECU.Theeffectwasartincreaseinthesellingprice
ofHewZealandbutterby£"80.
¥
19«;InNovemberafurtherincreaseinthequotedpricesforCommunitybutter
ofoughtthepricerangeto£1,806–£1,836whileNewZealand"Anchor"
wasthenquotedat£1,637(excludingsubsidy).itwasdecidedtoincrease
thespeciallevytonarrowthismargin. bringingitto
33*60ECU/100kgson1December *

-6-
.20.Inuring 1979 "theselling prices were increased ,"byabout :
174£/t^orBritish Butter
181£A^or^ewZealand .Butter
255£-A^orDanish Butter (Lurpak )
122£/tforIrish Butter (Kerrygold )
The Subsidy paid inthe UKforthe direct consumption ofbutter was :
1January 1979 "to2July 18ecu/lOOkgs .
2July 1979to31December 1979 45"94 ecu/lOOkgs .(Qnbutter of
Community origin ;with a
corresponding reduction inN.Z. Levy .
21.Despite the significant butter subsidy consumer prices increased over
theyear asawhole from 6O.5 pence perlbinJanuary to65-3 pence per lb
inDecember ,while the consumer price formargarine increased byonly
1.5pence to32.2 pence per lb.ThiB factor certainly contributed to
the2.56/0decrease inthemarket share held bybutter intheyellow fats
market .
22.TheGIFprice of117.88 ua/lOOkgs (142 .51ecu)remained unchanged
during 1979 * 'Onthebasis oftheaverage rate ofthe USDollar during
1979 (lUSDollar =0.73416 ecu)theCIFprice corresponds toabout
1940 USDollars pertonne compared with anaverage price level onthe
world market ofbetween $USII85 in.January and^US1430 inDecember
pertonne (FOB).

-7-
IV.Diversi fication ofNewZealand dairy products production andofexports
ofsuch products
23.During 1979 /80theamount ofmilk fatavailable inNewZealand for
processing increased by4%over the1978 /79figure which contrasts
with theprevious 12month period when ,duetodrought conditions ,a
decrease of9.2% wasexperienced .Theincreased milk production was
reflected inanincrease (17%)incheese production ,avery significant
increase inproduction ofbutteroil (137% increase ),butbutter
production decreased by8%^inthis period .
24.Export ofbutter ,however ,increased by.18%to175,000 tonnes with 72%
ofthis quantity being exported totheUnited Kingdom . •
,25.During 1979 NewZealand exported almost 29,000 tonnes ofcheese to
Japan (anincrease of26%over last year ).Exports ofcheese tothe
USdecreased by17%to15,300 while totoal (exports ofcheese increased
by14%over theprevious year (67,000 tonnes ).
26.Export ofskimmed milk powder increased by13% to147,000 tonnes and
wholemilk powder exports increased by6%,with themajor destinations
asfollows :Philippines 37,000 tonnes ;Malaysia 18,000 ;Indonesia
25,000 tonnes ;Peru 16,000 tonnes andjapan 15,000 tonnes .
27.Total wholemilk powder exports increased by6%to64,000 butexports
toNewZealand 'smajor buyers .East Asia andLatin America ,were down
considerably (IOXand19% )ontheprevious year .
28.After areduction in1978 theexport position ofcasein and caseinates
increased by15% in1979 ofwhich theUS,receiving 44,000 tonnes and
■ 'Japan ,receiving 14,000 tonnes ,were themajor buyers .
29.Though theopportunity toexport butter totheUnited Kingdom was
decreased by5,000 tonnes ,in1979 ,NewZealandhas succeeded in
increasing itsexports ofalldairy products asawhole during that
calendar year .Export earnings intheyear ending 31May 1980
resulted inanincreased netgain which wasdueprincipally tothe
improved price level andincreased demand ontheworld market .Asa
result agricultural (dairy farmers )income increased by15%toan
average of16,000 New Zealdn Dollars (net).

-8-
30..Conclusions
Thesystemoffixingaspeciallevybythepresentmethoddemonstrated
evenmoreconclusively thaninanypreviousyearth^difficulty of
predicting marketdevelopments intheUK- Consequently ,
thedifferences ofthelistpricesbetweenpackaged NewZealandbutter
andhomeproducedbutterfluctuated fromfc116pertonneinthe
beginningoftheyeartofc53inJuly,tofc123inSeptember andto
t170inNovember andDecemberinfavourofNewZealandbutter.Also
themarketshareofNewZealandbutterfluctuatedstrongly:from
32.5%inJanuaryto16.3%inMarch,to20%inJuneto12.5%inAugust,
toincreaseduringthelastfourmonthsuptoalevelof46.2%atthe
endoftheyear.StillthetotalquantityofNewZealandbuttersold
ontheUKmarketremained 11%belowthequantityimportedandasa
consequence theNewZealand(endyear)carry-over stockincreased by
9,720tonnesoverbeg.yearstock*Themainreasonfortheselow
saleshasbeenthesubstantial discountsgivenforCommunitybutter
whichinreality reducedthepricedifference betweenNewZealand
andEECbutter.
Becausepfthe7,000tonnereductioninconsumption,the5,000tonne
reductioninimportsfromNewZealand^the stableUKbutterproduction ^
andthereductionoftotalcarry-overstockby63,000tonnes,thetotal
importsfromotherMembercountries weredownby48,000tonnes.
TheCommission remainsoftheopinionthat,basedona7year
experienceinmanagingNewZealandimportsofbutterintotheUK
market,arevisedsystemforthedetermination ofthe
speciallevyforNewZealandbutterimportsisimperative .

-9-
List ofAnnexes
Annex I Development of "butter production ,consumption andtrade inthe
United Kingdom .
Annex II 1979 United Kingdom "butter imports from other E.E.C. Member
' States ,onamonthly "basis .
Anr.c"III 1979 United Kingdom weekly arrivals ,andde"bondings of '
New Zealand "butter .
Annex IV Development ofNew Zealand "butter sales andprices during 1979 *Annex II
Anne "III
Annex IV

IK/aLOft-s^lT OPBLTr^a -PROUUOTIOtl ,OftJ^jru-TIOri Ai!1)TR.u)^
LlT!1-^UIlIi'LJ Kli.'^DOMa:;;î^XI
*000tonnes
i 1973 1974 1973 1976 1977 1978 i1979~
|(dllcProduction(a) 14,241 U,83o U.Û15 14,302 15,096 15,6-il 15,627
IMilkDeliveries 13,705 13,311 13,329 13,838 14,59" 15,317 15,322
IUeliverits aa^ofproduction 9o.2 96.2 96.5 96.« 96.7 96.8 .96.8
jiiutberproduction(b) 97 54 48 90 134 162 161
ITotalimporta(c) Jl8 445 475 404 327 298 246
Iofwhioh:■
jtihit» lb6 326 364 275 .189 173 120
INewZealand 132 119 111 129 138 125 120
ITotalExports 16 3 3 16 11 56 62"
IConsumption :(d)
IHousehold/Catering 409 445 462 441 410 396369
IOther(manufacturing ) 24 18 24 18 18 1818
ITotalDisappearance433 463 486 459 423 414 407 IG
(a)includes beef-cov /s1milkproduction
fb)Includes farmhouse production
(c)Includesbutteroil équivalent
(d)Takesintoaccountstockchanges
(e)Breakdown notavailable
Source :llAFtr

li
1979UNITEDKINGDOM BLTi'KRIMPORTSP^RMOUTHFROM
OTHKRhLOJK-tBh'RoTATiij
tonnes
IIMPOfTfJL(TOU.K.(122X3)JAN.PEB.IMAR.•APR.ΜΛΪ JUi.'ii JULY AUG.LiEPr.– –'1
OGT.jNOV.ufcic.;TOTAL'79
FRANCE'261I87262 166 719377.128 62 166176
1250 1919
BfcLOIUti/LUX 171 150 393 36272653 136117 102 272154 2456
ili/fH-iRLiUlfti 558564046104068 4SI2J48 1845 380480 2373 24071485 26673
rfi&j'f'GERiiunr ~55612062782 317 130141263 266443I08I 718719 9222
ITALY ' |I
-|*
IRELAND 5718115 5155 5174 43235994079 11532664 443538801633 40890
lihilMARK 3&J2 3195 4525 4239 5H53847J160 376Û3072 3392 27252842 43604 .
TuTAL£EG 599918343 17484 14377 62951
10300 |10097 582368j812149101787083 124996
Source MAFF

λζ
AÎÏÏTEXIII
WeeklyArrivals ,and.Debondm^s ofNew-ZealandButterintheUnited .
Kingdom
Arrivals
Debonded
from StockDate Total Bonded Debonded
onArrival
i/1 ■-
.1-6/1- -■ -
2,-13/1" - "
3.20/1 - - - -
4.27/1 1919 1919 - ■ -
5-3/2 672 672
6.10/2 2352 2352 -
1'17/2 3569 3569 - -
8.24/2 1714 1714 - -
9-3/3 3662 3662
10.10/3 2999I2999
11.17/3 3598 3598
12.24/3 67 67
13.31/3 ! -
14.7/4 --
15.14/4 1000 1000 ' - •-
Ιό.21/4 672 672 - -
17-28/4 6052 6052 - -
.
18.5/5 1428 1428 -
19.12/5 235 235 - - :
.20.19/5 924 924 - •-
21.26/5 - - - -
22.2/6-
23.9/6 -
24.16/6-
25.23/6 3310 3310 - -
26.30/6 403 403 -
27.7/74048 '4048 -
'23.14/7 - - - 4565
29.21/7- - 4632
30.28/7- - - 4602
31.4/8- - - 4601
32.11/8 - - 4600
33.13/8 2520 2520 4600

-<3• I
■-Arrivals
Date [■Total I•Bonded1DoTaonded HDe"bonded
■JonArrivai |fromStockj
34.25/0 3148 ■3148 4600
!
•35-1/9 504 504 - ■4600
•!
36.3/9 3965 3965\- 4600■-1
. ■i
37.15/9 2972 2972- 4600
33.22/9• 5250 5257 201 4600
■3',.29/9 - - 4601i :
1
40.6/10 168ο 1680|4600 1
ΑΙ.13/10 6249 1663 -4586 |4600' !
42.26/10 4765 .4765 4601 !
43.27/10 - - 5100, i
44.3/11 ;- '3858 ,
45.10/111-• f1- -■■
46.17/11 0770 8770 8770
47.24/11 3223M < 3223 3223 -
43.1/12'' 9509 ;95P9 9509
.49-'8/12 I1646 -;■I1646 .1646 .
50.15/12 806 - 306 806
51.22/12 18506 471 18035 18035
.
52.31/12 2587,2537
»1
48,456
■119,949
'1.
annexIII,page.2.

N.2.BUTTER-1979Anne*IV
W/EWeekly
*I
saLesrrjStocks:weeklydevelopments I:LevyjCalcul­
ated
price
equiv.
to
igyyiActual
tist
price
N.Z.
butterActual
|List
iprice
U.K.
butterIntei–
vention
price
;level
8QZ3Fwnwi~
ative
Sales;Debon-'
;ded
;stockNon-deb-
onded
stockweekly
debond
ing-approp-
riat&
to
weekly
sal«<;
tonnesItonneJj(tonnes)|(tonnes)Ctonnes)ua/100kg
Jfc/t fc/tt/tE7t|
packs !tulkL_jopen:l
î6/1In 57c04Ii i
1812'31255992[' 94,47 1467149116071557145
213/11435324754558.I" "I»I"
320/1694394153863i
r■.i - - -»
427/1743468453^21[1919• -"" '*»
53/26345318 .524872591.-"■ -"" "
610/215956912508925943- "" "
■717/224659377484278512 -"1570" ""
824/2156910946;4685810226 -100,54 1516." "
93/3;152712474;453I313"788 -"- "" ""
1010/3î1197|136714412516837 -106,64 1555" "
1117/31237114908 ,4288820434 -" ""?,,"
1224/3r1257161654163020502 -" "" ""
1331/3988171534064221502 -," " ""
147/4.12731842139364|t24790 -"I"":"16541153
1514/41549199803781525990 - ["" ""
1621/4133121311.!3648527163 -" " " ""
1723/41747230583473833124 -" " ""
185/5210-9251673263334633 [•"
»." " -"
1912/5183627053;3074534875.'-""i" ""
2019/51834283572894135799 --I"""
2126/5'183430691271θΤ35799 ..-'i■"" "
222/61713324042539436115 -..I"1584"
239/61669340732372536888-■~" " ""
2416/6;144635519 ,2227939137 -" " ""
?523/61189367082109042447 -"– ""
2630/6445371522064642850 -U'"i"••1713161
277/7942i380941970446898 -""1647■
2814/7103639130 12323342333 4565'49,13 1587" -"
2921/793440064 i2693137701 4632 !"I15871594"n
3028/710484111230485f33099 4602 i"" ""
314/8144142553i3364528498 4601 I" »»
3211/81595441483665023Ô98 4600" "1687"
3318/81722 :4'58703952821813 4600" " " M'
*3425/8242748297■I4170120366 4600"...... "rt;
351/9208950386 !4421216270 4600"1727""
368/92429528154638315635 .4600!V-,!""[■"
3715/92471552874851114007 4600"
I"
3822/92600578865051114666 4*>0O 1717"
3929/9"346961.355 51643 110063 4601« tt ..rt
406/10332761682529167144t*fcoo»I" 1734)163
4113/10334063022541768793 4600 1667["i"" #1
4220/10390471926548718959[460/•-"I!H
I" •f
4327/10I44197634655552i3859l5100V•» I» "
443/11\34667981155943 1i3858•»|/wf16371807""ir
4510/1128353219653553.1-58,15 i»II
["ri
46*17/1131298532559200 -ï8771i"I [»I» " M
4724/1130128833759411 - 3223-
,!'""u
481/1231329146965788 -i9509!"I:1747!"!*• "fl
498/1237639523260090*-!1646"'«I"II» » H
5015/1246029983456294 -î806»r■--\**Ir.. VI
5122/125204105038 69125471 i18035l»Ii„»IIt »II
5231/12160110663S 67521*
______J3058« -I»I»»IW
_^9days)il:l!IJI':'I;IiI l
3582tonnesdestroyedbyfire.