ARCHIVES HISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(80)190
Vol.1980/0057

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COMMISSION OF THE EUROPEAN COMMUNITIES
COM(80 )190final
Brussels .30june 1980
PROPOSAL FOR A
REGULATION (EEC)OFTHE COUNCIL
amending Regulation (EEC)N°1655 /76extending thetransitional
arrangements for the import ofNew Zealand "butter into the
L United Kingdom
r\c->
the ./->. PROPOSAL FOR A
REGULATION (EEC),OFTHE COUNCIL
\c">i , -NJ Jrelating tothe exportation New Zealand "butter into the
Community onspecial termsV,- " .A -\Vo^
(submitted totheCounoil "bythe Commission )
C0M(80)1Q0final

EXPLANATORY MEMORANDUM
1.UnderCouncilRegulation (EEC)No1655/76of29June1976extending
thetransitional arrangements fortheimportofNewZealandbutter
1IntotheUnitedKingdom,theUnitedKingdom1sauthorizedtoImport
1978:!,125000tonnes '"■
1979:120000tonnes^^"'7'
1980:VI5000tonnes
ofNewZealandbutteronspecialterms.
. ■-
'• *I'5
Thesespecialarrangements,whichwereoriginallyintroducedby !jji
ProtocolNo18annexedtotheActofAccession,provideforthe ,ife
■ --- - iw
« i • ■ » tl LI*application ofacifprice,observanceofwhichmustbeguaranteed byU
... .MI
NewZealand,andaspeciallevy,fixedatalevelensuringthatthe'a
quantities importedcanbesoldatasteadyrateontheUnitedKingdom ,
marketwithoutdisturbingthebalanceoftheCommunitybuttermarket.I
.-* - .•:ii
2.InAugust1979theCommissionsubmittedtotheCouncilarep&rtonthe
milkproductssituationintheCommunity,theworldmarketandinNew'
!i Zealand1nrelationtotheimportofNewZealandbutterintothe
UnitedKingdom(Doc.8832/79of10September1979/C0MC79)444final).
InthisreporttheCommissionsetsoutitsguidelinesnotonlywith
regardtothescopeforcontinuedimportsofNewZealandbutterInto
theCommunityinthefuturebutalsowithregardtoa.modestreduction
inthequantitiesimportedevenin1980.Inaddition,the\
CommissionexpressedtheopinionthattheexistingImportarrangements
shouldbealteredassoonaspossible1nordertoimprovetheir
working.TheaimofthetwoproposalsforRegulations attached1s
toachievetheseobjectives.
NewZealandhassufferedeconomicdifficulties 1nrecentyearsand
1twillbesometfmebeforeitisabletocreateamorebroadly 1
basedeconomythroughthedevelopmentofItsenergyahdothernatural
<resources.NewZealand'scapacitytocopewiththosedifficulties
•ndtocontinuetoprovideapoleofstabilityInthepacificdependsi
Τ0JNot185,9.7.1976,p.1t,
,j
1;i

therefore Inlarge degree onthemaintenance ofsecure access tothe E.C *
forItsexports ofdairy products' .The Community /foritspart/has an
Interest inmaintaining thepresent state ofgood relations ithaswith
New Zealand /acountry which continues tolook toEurope forguidance .
New Zealand was,inparticular ,acooperative partner during the MTNs
andfuture 6ATT arrangements relating todairy products will beamatter
ofclose concern toboth partners .The pattern oftrade with New Zealand
isreciprocal ;the Community isNew Zealand 'slargest supplier /providing
27%ofNew Zealand 'simports . •!?
i i.i
3.The aim ofthe proposed amendment toRegulation (EEC)No1655/76isto :
adjust theexisting arrangements for 1980 byreplacing thecifprice 'j
) !4
and the variable special levy with alevy which would normally remain ' !
• >' 1
unchanged throughout 1980 /inorder toavoid the disadvantages j< j
W ' * îMl '■ m .i a I a .i « a * A I 1V tresulting from the fluctuations ofthe level ofthe special levy and if|i
' , ·;ιtoenable New Zealand toplan itssupplies more efficiently . .j;|
i .
I;
iM4.The Commission takes the view that inconjunction with the proposed
amendments toRegulation (EEC)No1655/76thequantities ofbutter
imported into the United Kingdom . should bereduced
by20000 tons before the end of1980 under agentlemen 'sagreement
.with the New Zealand authorities .
5.Forthepurposes ofthecalculation ofthe special levy tobeapplied /.
account istaken ofthe reduction mentioned in
Aabove ,ofthe level ofthe intervention price for Community butter ,
ofthe net New Zealand income from butter sales inthe United Kingdom
andoftheincrease incosts since thelast fixing ofthecifprice by
Council Regulation (EEC)No2157/77^. ' ,
. I ,-
V |
!IItshould bepossible toalter therate ofthe special levy in <
exceptional cases .With 1regard to1980/the levy should beadjusted j
Ifthelevel oftheaidforthedirect consumption ofbuttef granted j
inthe United Kingdom isaltered .
i
- ,i
60The second proposal for aRegulation concerns thearrangements forthe
Import ofNewZealand butter onspecial terms after 31Oeeember 1980j
0JNoL250/30.9.1977 /p.12"h
M
I;
■Η

This proposal includes thepossibility ofImporting New Zealand butter
Into the whole Community from 1January 1981 onwards ,alower annual
quantity ,subject toamodest scale ofreduction during theearly
years ,and the retention ofthe new import arrangements without cif '
prices and with aspecial levy,which will normally remain unchanged .
 
Inorder toavoid disturbances onthe Community market andtoensure
that anyunforeseeable developments inthe future situation onthe
butter market can becoped with,provision 1smade forthe adjustment
ofthequantities ofNew Zeland butter which may beimported .
Finally ,1t1sto'be noted that theadoption ofthese proposals will
strengthen theopportunities for continued collaboration between
the Community and New Zealand ,the two major partners 1nInternational
trade 1ndairy products ,with theobjective ofpromoting ,intheir
mutual Interest ,anorderly operation ofworld markets .The Community
1salso mindful ofthe need for New Zealand tocontinue its efforts
todiversify Its economy and exports ,1tbeing understood that both
parties forItspart will strive topursue acommercial policy which
does not run counter tothis purpose .The Community has played the
major role inproviding amarket for New Zealand 'sbutter ,inview of
absence ofeffective opportunities forthis product 1nthe protected
markets ofother developed countries such asthe United States and
Japan .The Community isready tocontinue this role taking account
also ofthe wider Interest ofpolitical co-operation with New Zealand
but It1sclear that areduction ofprotectionism 1nother developed
countries 1nthedairy sector would beahighly desirable development
IntheInterests both ofthe Community and New Zealand .

DraftProposal !
vfora
COUNCILREGULATION (EEC)No/79
* of
amendingRegulation (EEC)No1655/76extendingthetransitional
arrangements fortheimportofNewZealandbutterintothe
' UnitedKingdom\
,THECOUNCILOFTHEEUROPEANCOMMUNITIES,
Ï-.'I
:HavingregardtotheActofAccession andinparticularArticle5(2)of
ProtocolNo18,herlnafter'theProtocol',
* ' ' t
HavingregardtotheproposalfromtheCommission,
Whereas,furthertotheProtocolCouncilRegulation (EEC)No1655/76of29
'June1976extendingthetransitional arrangements fortheimportofNew
2
;ZealandbutterintotheUnitedKingdomauthorized theUnitedKingdom,asa
transitional measure,toImportcertainquantities ofNewZealandbutteron
specialtermsfrom1978to1980;whereas,inaccordancewiththese
. »
;arrangements,acifpriceisfixedobservanceofwhichmustbeguaranteed
jbyNewZealand;whereasaspeciallevyonimportsofNewZealandbutter
i•.
iintotheUnitedKingdomisfixedatalevelensuringthattheproposed
>■.... .... . .i
iquantities canbesoldatasteadyrateoqtheUnitedKingdommarket
jwithoutdisturbingthebalanceoftheCommunitybuttermarket;
ι
I' ! , I■ "
I· '|Whereasproblemshavearisenhamperingimplementation ofthesearrangements
{mainlybecausedevelopments onthebuttermarketintheUnitedKingdom
cannotalwaysbepredictedandbecauseadjustments tothespeciallevy
necessitated whenstoeksofNewZealandbutterhavealreadybuiltupinthe
UnitedKingdomdonothaveanimmediateeffect;
■Whereas,therefore,itappearsappropriate toamendtheexistingarrange®
!
mentsbyreplacingtheabovementipned cifpriceandthevariablespecial
levywithaspeciallevytherateofwhichwillnormallyremainunchanged
jthroughout 1980inrespectofthecorresponding quantityspecifiedIn
!i10JNoL73,2703.1972,p.5
j20JNoL185,9«7.1976,p.1
! . '

-2-
i
inArticle1(2).ofRegulation (EEC)No1655/76;whereastheseadjustments
shouldprotectCommunitybutterfromthedisadvantages whichhavesofar
resultedfromthefluctuations inthespeciallevyandenableNewZealand
toplanmoreefficientlyitssuppliesandsalesinaccordance withmarket
developments ;whereastherateofthespeciallevyfixedshouldbe
determine^onthebasisofthecriterianowsetoutinArticle3(3)of
Regulation (EEC)No1655/76/
Whereasthelevelofthespeciallevytakesaccountoftheaidof45.94ECU
per100kggrantedintheUnitedKingdomforbutterofCommunityoriginfor
CouncilRegulation (EEC)No1269/79(3),asamende^bydirectconsumption under/CounciIRegulation (EEC)No1768/79;whereasin
ordertopreventNewZealandbuttersubjectonlytothisspeciallevyfrom
beingputtoindustrial usesatalowerpricelevelthanthatwhichmustbe
paidforbutterofCommunityoriginusedforthesamepurpose,provision
shouldbemadetoensurethattheNewZealandbutterinquestioncanbe
usedonlyfordirectconsumption;whereastheamountofthespeciallevy
mustbeadjustedif,forexample,theabovementioned aidisaltered;
HASADOPTEDTHISREGULATION :
Article 1
Regulation .(EEC)No1655/76isherebyamendedasfollows:
1.ThetextofArticles 2to5shallbereplacedbythefollowing:
"Article2
1.AspeciallevyshallbeappliedtoimportsintotheUnited
KingdomofthequantitiesofbutterspecifiedinArticle1(2).
"0JNoL161,29.6.1979,p.8
^0JNoL203,11.8.1979,p.1

2. Forthat quantity ofNew Zealand butter imported into the United
Kingdom during 1980 not exceeding the quantity fixed inArticle
1(2),thespecial levy shall be5l»37 ECU per 100 kg.
Article 3
1. Inthe event ofachange in1980 inthe amount ofthe general aid
specified inArticle 2(2)ofRegulation (EEC)No1269/79,the
amount ofthe special levy specified inArticle 2(2)shall be
adjusted accordingly .
2. The amount ofthe special levy may also beadjusted bythe
Council ,acting byaqualified majority onaproposal from the
Commission ,when other Community measures substantially modify
the conditions under which butter ismarketed .
Article 4
tThespecial levy charged shall bethat obtaining onthedayof
importation into the United Kingdom .
Article 5
Only butter which has been proved tobeofNew Zealand origin may
benefit from the special arrangements set out inArticle 1."
The text ofArticle 7shall bereplaced bythe following :
Article 7
The United Kingdom shall take all measures necessary toensure that
the New Zealand butter imported subject tothe levy fixed inArticle
2(2)isnot used for processing butexclusively fordirect con­
sumption ,within the meaning ofArticle 1(a)ofRegulation (EEC)No
1269 /79,inthe United Kingdom ."

3. The text ofArticle 8shall bereplaced bythe following :
Article 8
Detailed rules for the application ofthis Regulation shall beadopted
inaccordance with the procedure laid down inArticle 30ofRegulation
(EEC )No804/68."
Article 2
This Regulation shall enter into force
publication intheOfficial Journal of
TheRegulation shall bebinding inits
all Member States .onthethird day following its
the European Communities .
entirety anddirectly applicable in
Done atBrussels , For the Council

proposalfora
COUNCILREGULATION (EEC)
relatingtotheimportation ofNewZealandbutterintothe
Community onspecialterms
THECOUNCILOFTHEEUROPEAN COMMUNITIES,
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,
HavingregardtoCouncilRegulation (EEC)No804/68of27June1968onthe
1commonorganization ofthemarketinmilkandmilkproducts,aslast
2amendedbyRegulation (EEC)No1761/78,andinparticularArticle14(6)
andArticle19(2)thereof.
HavingregardtotheOpinionoftheEuropeanParliament^,
4WhereasProtocol18annexedtotheActofAccession,andsubsequently
CouncilRegulation (EEC)No1655/76of29June1976concerning the
transitional arrangements fortheimportofNewZealandbutterintotJie
5..._... .. 6UnitedKingdomasamendedbyRegulation (EEC)No179,haveauthorized
theUnitedKingdomtoimportannuallyuntiltheendof1980certain
quantitiesofNewZealandbutteronspecialterms;
WhereasunderArticle33ofRegulation (EEC)No804/68thecommonor­
ganizationofthemarketinmilkandmilkproductsmusttakeaccountofthe
objectives setoutinArticle110oftheTreaty;whereasinorderto
contribute,inaccordancewiththecommoninterest,totheharmonious
development ofworldtrade,arrangements shouldbemadetoenableNew
ZealandbuttertobeimportedintotheCommunity onspecialterms.
'0JNoL148,28.6.1968,p..13
^OJNoL204,28.7.1978,p.6
^0JNoC
S0JNoL73,27.3.1972,p,.5
^0JNoL185,9.7.1976,p.1
0JNoL

-2-
Whereasthenewarrangements mustincludemeasurestopreventthebalance
oftheCommunitybuttermarketfrombeingdisturbed;whereas,therefore,
theimportonspecialtermsofNewZealandbutterintoalltheMember
Statesanditsfreecirculation intheCommunitymustbemadepossibleand
thequantitiesofNewZealandbutterimportedannuallyunderthese
arrangements mustbefixedonadegressive scale,subjecttotheir
adjustmentinthecaseofanysubstantial andunforeseeable change1nthe
situation ontheworldmarketandintheCommunity;
Whereasaspeciallevywhichwillnormallyremainunchangedisthemost
appropriate methodofprotecting Communitybutterfromthedisadvantages
resultingfromthefrequentfluctuations ofitslevelandofenablingNew
Zealandtoplanonareasonable basisitsexportstotheCommunityinline
withmarketdevelopments ;
Whereas,followingtheextensiontotheCommunity asawholeofthespecial
importarrangements forNewZealandbutter,theamountofthespeciallevy
cannolongertakeaccountoftheaidprovidedforinCouncilRegulation
(EEC)No1269/79^,asamendedbyRegulation(EEC)No1768/79**,becausethe
amountofthisaidvariesfromoneMemberStatetoanother;whereas,
therefore,thelimitationofCommunityfinancinginthisaidforbutterof
Communityoriginshouldbeabolishedwitheffectfrom1January1981;
HASADOPTEDTHISREGULATION :.
Article 1
UnderthetermssetoutinthisRegulation NewZealandbuttermaybe
importedintotheCommunitysubjecttoaspeciallevy.
lojNoL161,29.6.1979,p.8
°0JNoL203,11.8.1979,p.1

-3-
Article 2
Thequantity which maybethesubject ofthespecial import arrange­
ments shall be metric tonnes percalendar year .
However ,theannual quantity shall be:
1981
1982
1983
1984metric tonnes
metric tonnes
metric tonnes
metric tonnes .
2.Thequantities specified inparagraph 1maybealtered bytheCouncil ,
acting byaqualified majority onaproposal from theCommission ,in
view inparticular ofthedevelopment ofthesituation onthe
Community butter market andthedevelopment oftheworld butter
market .
3.During agiven year ,theannual quantities specified inparagraph 1
may,inaccordance with theprocedure referred toinparagraph 2,be
temporarily reduced inorder toprevent serious disturbances onthe
butter market intheCommunity ,inparticular should there bea
substantial andunexpected drop inthedirect consumption ofbutter in
theCommunity orinthose ofitsregions where NewZealand butter is
mainly marketed . -
Article 3
1.Thespecial levy applicable toNewZeland butter imported under this
Regulation shall be69,51 ECUper100kg.
2.However ,therate ofthespecial levy maybeadjusted bytheCouncil ,
acting byaqualified majority onaproposal from theCommission ,
whenever other Community measures alter toanysubstantial degree the
conditions under which butter ismarketed intheCommunity orinthose
ofitsregions where NewZealand butter ismainly marketed .
Article 4
Entry under thespecial import arrangements shall beconditional onthe
presentation ofacertificate showing that thebutter concerned is
-ofNewZealand origin
-sixweeks oldatleast ,with afatcontent byweight ofatleast 80%
,andless than 82%,andmanufactured directly from milk ormilk cream .

-4-
Article 5
ImportsofNewZealandbuttershallbesubjecttotheprovisions adopted
9underRegulation (EEC)No974/71aslastamendedbyRegulation (EEC)No
10987/79withregardtothefluctuations ofthecurrenciesof'certain
MemberStates.
Article6
\
DetaiLedrulesfortheapplication ofthisRegulationshallbeadoptedin_
accordancewiththeprocedureprovidedforinArticle30ofRegulation
(EEC)No804/68.Theyshallprovideinparticularforcontrolmeasuresto
ensureobservance ofthequantities specifiedinArticle2.
Article7
ThisRegulationshallenterintoforceonthethirddayfollowingits
publication intheOfficialJournaloftheEuropeanCommunities .Itshall
applyfrom1January1981.
ThisRegulationshallbebindinginitsentiretyanddirectlyapplicablein
\ .allMemberStates.
DoneatBrussels- FortheCouncil
'0JNoL106,12.5.1971,p.
U0JNoL123,19.5.1979,p.1
9

F8IVAA!C5ASLSTATEMENT
Date:24.6.1980
1.BUDGETHEADING :100
62APPROBIATIONS.1,719MEUA
4,976MEUA
2.TITLE:DraftCouncilReg.ontheimportof■NewZealandbutterintothe
Community onspecialterms.
U­
E3.LEGALBASISr
μArticles14and19ofRegulation 804/68
I;4.AIMSOFPROJECTIGrantingofspecialtermsasregardthelevyappliestoimports
I1 ofbutterfromNewZealand.
5.FINANCIALIMPLICATIONS IPERIODOF12MONTHSCURRENTFlfjA^jlALYEARFOLLOW1
INGfg^NCIALYEARj
5.0EXPENDITURE-CHARGEDTOTHEECBUDGET'
(REFUNDS/INTERVENTIONS ) -24MEUA +162MEUA*.'S
■
- .
5.1RECEIPTS
-OWNRESOURCES OFTHEEC
CLEVIES/CKX00K3<XOCXK3« -20MEUA +69MEUAI
-NATIONALJ1
1982j.1983 ,i
I
5.0.1ESTIMATED EXPENDITURE
5.1.1ESTIMATED RECEIPTS j.+158MEUA
+67MEUA+
+■154MEUA
■66MEUA
5.2METHODOFCALCULATION
Seefollowing page
ΓΤ0CANTHEPROJECT8EFINANCED FROMAPPRO0IATIONS ENTEREDINTHERELEVANT CHAPTEROFTHECURRENTBUDGET?
YES/NOX8
6·1Χτ*Χ)^ΧχχΧΧ*ΧΧΧΧ1*Χ^Χ~>6<Χ^ΧΚΧΧ'ΧΧ^ίΚ ΧΧΧ'ΧΧ*Μ<>«*ΧτΧχ*»**XXX
s6-2*>xx£SflfkW**x*xfcxXk^Xx?x
6.3WILLFUTUREBUOGETAPPROBATIONS BENECESSARY ?
YES^
iOBSERVATIONS

1.'Calculations are based onthe following assumptions : .x .
a)byapplying the normal levy,imports ofN.Z. butter would benil;therefore ,
revenue nil; * ■
b)byapplying aspecial levy,there would beimports ofN.Z. butter within ,
the quantity limits ;therefore ,revenue from the levy but/onthe other
-hand,itisnecessary tofind marketS Afor acorresponding quantity of
Community butter . : ,
2.Calculation ofrevenue inthe form oflevies :
.--1981 97500 tX695.1 ECU/t=67.8 MECU =69.2 MEUA
-1982 95000 tX695.1 ECU/t=66.0 MECU =67.3 MEUA ..
-1983 92500 tX695.1 ECU/t=64.3 MECU =65.6 MEUA
3)Calculation ofthe cost ofdisposing ofcorresponding quantities ofCommunity butt
-1981 97500' tX1630 ECU/t =158.9 MECU =162.1 MEUA ,
- 1982 95000 tX1630 ECU/t =154.9 MECU =158.0 MEUA
-1983 92500 tX1630 ECU/t =150.8 MECU -=153.8 MEUA ~ •
4.Asregards 1980,itisproposed ,inrelation toexisting rules ,both toreduce -
imports ofN.Z. butter by20,000 tand,also ,toreduce the special levy by
836.8 ECU/tto513.7 ECU/t' ' ' • , ;
These proposals will have the following consequences : ■
A.Lost revenue ;
115,000 t(former level )-20,000 t(proposed production )-33,000 t
(already imported this year )
=62,000 tX323,1 "ECU/t(difference between 836.8 and 513.7 ),
=-20.0 MECU =-20.3 MEUA " i
B. Reduction inexpenditure •
1)20,000 t(corresponding reduction inthe case ofexports )X1630 ECU
(export refund ) - .- .,-
=32.6 MECU =33.1 MEUA '
-2)20,000 X459.4 MECU /t(subsidy tobe.paid toCommunity butter )
=-9.2 MECU =-9.4 MEUA
Reduction inexpenditure :33.1 -9.4 =23.7 MEUA .;
(1)The amount of1630 -ECU/tcorresponds tothe average cost ofdisposing of
butter surpluses .

REPORT FROM THE COMMISSION TOTHE COUNCIL .
ONTHE IMPLEMENTATION 'OPREGULATION .(EEC)NOI655/76EXTENDING THE
TRANSITIONAL ARRANGEMENTS FOR THE II-IPORT OF2®/ZEALAND BUTTER
'INTO THE UNITED KINGDOM DURING THE YEAR 1978

I.INTRODUCTION
1.Pursuant -toArticle 7oftheCouncil Regulation No1655/76^'
this report describes theconditions under which theimport of
NewZealand "butter into theUnited Kingdom during the n-alowriay .
year 1978 has "been administered .
II.QUANTITATIVE ASPECTS
2.Inaccordance with Article 1(l)and (2)ofRegulation (EEC)
No1655/76,theUnited Kingdom wasauthorized toimport from
NewZealand ,125,000 tonnes of "butter during thecalendar year 1978 *
%
3.Thetotal quantity ofNewZealand "butter actually imported (de"bonded )
during 1978 was124,971 tonnes .
4.On1January 1978 ,thestock ofNewZealand "butter (de"bonded )inthe
United Kingdom amounted to67,528 tonnes .
Regulation (EEC)No1655/76of "theCouncil of29June 1976 extending thetransitional
arrangements fortheimport ofNewZealand "butter into theUnited Kingdom (O.J. LI85 ,
9.7.1976 ,P.1)

-2-
5«Thetotal quantity ofNewZealand cutter sold ontheUnited Kingdom
market in197^was134»686 tonnes# (1977 :115,472 tonnes )
6.On31December 1978 >"thecarryover stock ofNewZealand "butter (dehonded )
intheUnited Kingdom amounted to57»804 tonnes .(31December 1977 :67531
tonnes )
7#Butter production intheUnited Kingdom during 197® further ,increased ^
toabout 162,000 tonnes (1977 :134,000 tonnes )SeeAnnex I,._.
8.Total offtake ofbutter ontheBritish market during 1978 isestimated
at414,000tonnes (1977 :428,000 tonnes )SeeAnnex I. ...
9.Imports ofbutter from member states further declined from ■ ; ;
189,000 tonnes in1977 to.173,000 tonnes in1978 (SeeAnnexes IandII) ).
»
ι
10.Although total U.K. imports in1978 were below the 1977 level
total butter -stocks held incold stores inthe
United Kingdom increased from 127,000 tonnes atthebeginning of1978
'to129,000 tonnes atthe end ofthat year . ■ \
11.The1978 closing stocks ofNewZealand butter (57)804t)were 14«4% i
lower than theopening stock (67,528 t).This reduction waspossible j
because thesales during 1978 were 7.8% higher than thequantity 'j
imported . - 1
" ν ;
12.In1977 "and 1978 thepercentage shares of v' NewZealand butter
onthe U.K. market were 26.9 and33.3 respectively .
•m/mm

-3-
13.During1978tiiebuttershareoftheyellow.,fatsmarketdecreasedfrom
about57.1%toabout52.8%;meanwhilethemarketshareofmargarine
increasedduringthesameperiodfrom42.9%to46.4%. >
14.During~1978,theU.K.exported asignificant quantityofalmost
56,000tonnes(comparedwith11,000tduring1977)/ofwhich48^862tonnes
wenttomembercountries.Themain.reasonforthisdevelopment was
therelatively lowlevelofmarketpricesintheU.K..comparedwith
thatinothermemberstates,wherethemarketpriceismoreclosely
relatedtotheintervention priceleveI.(SeeAnnex.l)
III,ButterPricesandthefixingofthespeciallevy
.•-'', '• •'f
15.Thespecialleviesduring1978werefixedtakingintoaccountthe
followingfactors: \ '
(a)theC.I.F.pricewhichwasfixedat117.88ua/100kgfrom
1.10.77(unchangedduring1978)
(b)on-costsup thefirstpointofsale
Thesecostscomprisethefollowing : ,
~t/longton 'j
(i)landing,handlingand1weekstorage :12.63
(ii)20.25additional weeksstorage :14.84
(i.ii)Insurance ". :0.45
Total(i+ii+iii): ,27.92
(iv)Commission at0#8333%ofthe'bulk1 ■
sellingprice... <
(v)LondonProvisionexchange(L.P.E.):discount~'
at0^8333%of'bulk-'sellingprice.
During1978thesecostfiguresremainedunchanged
■■/mm

-4-
16.Thespecial Levies were established taking into account theanticipated
evolution ofmarket prices forbutter ;the levy rates andthequantise
imported ateach rate are shown below .Further details are given in
Annex III
Applicable from 1January
"1 March
" 5June
" "28July
" "4October
" " 1November
" "23NovemberLevy (v.-*a,/IQOlcg )
103.86
123.41 (1)
80-66
94»47
100.54 v(2)
81«00
106.64(2)Tonnes
6365.8
'4455Ì .7
9322 *7
3380 «8
17000.0
44350 «0
124971 .0
C1)Nobutter was debonded atthis levy rate .
(2)Debondings at'this special levy rate were limited by '
agreement to17,000 tonne-s directly related totheshort
term subsidy given toCommunity butter sold inthe U.K. under
Council Regulation 2574 /78.
During 1978 ,the levy applicable tobutter imported into i
the Community ,from sources other than New Zealand ,ranged from
.186.5 to196-55 ua/100 kg. ~ -----
. >
17.The strong variations inthe rate ofthe levy fixed during 1978
again demonstrate thedifficulty indetermining the levy rate
inthe light ofexpectations onfuture market price developments .
The New Zealand Dairy Board (NZDB )(sole importer and exporter
ofNew Zeala .ndbutter )does not always debond butter onarrival
inthe U.K. Consequently ,throughout the year,particularly
during the winter months when the N.Z.D.B *lands the major part
ofthe entitlement ,non-debonded stocks may reach significant
levels .The N.Z.D.B. decides if,when and how much butter should be
debonded inthe light ofdevelopments ,both actual and expected
•inthe rate ofthespecial levy .Debonding can beanadministrative
act asnophysical :movement ofthe butter isnecessarily involved .

-5- . - -
18.Approximately 25,000 tonnes ofthe 1973 opening stock of67,528 tonnes
ofNew Zealand butter\was debonded in1977 atalevy rate of#70.67 u.a.;
theremainder (42,500 tonnes )at79.39 ua/100 kg. '•
Asaconsequence ,the calculated selling price for NZbutter (pack.et.ed
first hand selling price >could bekept at1225 t/ltfrom the beginning
of1978 until 6March 1978 after which the price increased to1277 fc/lt
and remained atthat level until mid-June 1978 .'Only then were the
quantities imported during 1977 actually sold .(See Annex IV).
19.During November and .December 1977 about 48,000 tonnes ofbutter were
imported into the U.K. from other EEC countries inorder tobenefit .
from the last alignment ofthe intervention price level inthe U.K.
On 1January 1978 (from 205.45 uato«230.95 ua/100 kg.)
20.U.K. public cold store stocks atthe Start of1978 were estimated '
at126,000 tonnes .Itisclear that anopening stock of184,000
tonnes (including N.Z. butter stock )together with the increase in
U.K. butter production and areduction inconsumption have had a
depressive effect onthe market prices throughout the year 1978 .
Inpractice the selling price for home produced butter (Country Life )-
aswell as .for most ofthe other butters ,remained below the intervention
price level (which increased on22.5.78 to235.72 ua)for the duration
of 1978 .
21.From 5thJune,the^selling price forN.Z. butter wasincreased by
t123/Ittofc1413.44 /lt,reflecting the levy of 103.86 u.a.paid on
6366 tonnes ofbutter debonded during January and -February .
.. ■ ■' .•- V'
22.inview oftheprice proposals forthe 1978/79milk campaign andthe
possibility ofachange inthe "green rate "the special levy was
increased on 1March to123.41 u.a. /100 kg..Since this levy was ofa
provisional nature ,noN.Z. butter was debonded until 5June,when ,
the levy was re-fixed at80.66 u.a.Immediately thereafter ,aquantity of
44.552 tonnes ofN.Z. butter wasdebonded ,thecalculated selling price

-6-
for which was about 1400 b/lt (packeted ). Itisestimated that this
quantity of44,552 tonnes ofbutter was actually sold onthe U.K.
market during the period mid-July tomid-November atanaverage price
level ofb1425 /lt.
23.On28July thespecial levy wasincreased to94.47 u.a. /100 kgto
reflect once more the development ofbutter prices onthe U.K. market .
The prices ofCommunity butter onthe U.K. market were still about
100t/ltbelow the intervention level of1580 t/lt (packeted )but were
consistently tending toincrease .
24.on4October ,the levy was again increased to100.54 u.a.tobring the
N.Z. selling price closer tothe intervention price level .
25.Thereduction ofthe levy on 1November 1978 to81u.a./100 kghas
tobeseen inthe light ofthe subsidy for Community butter which was
introduced asaspecial measure (Regulation (EEC)2574 /78)toincrease
consumption .Inthe U.K. market the short-term subsidy of20u.a. /100 kg .
(fc128.88 /lt)applied toaquantity of51,025 tonnes .For N.Z. butter
the impact ofthe subsidy was limited to17000 tonnes which were sold
after the 44552 tonnes debonded at80.66 u.a. /100 kg.
 
26.since the levy change associated with thedebonding ofthe 17000tonnes
did not necessitate any change inthe actual selling price ,ittherefore
remained atfc1427 /ltupt.o'the end ofthe year .
27. On 23November ,after the 17000 tonnes were debonded ,thespecial
, levy was increased to106.64 u.a./100 kg,corresponding toaselling
price for N.Z. butter equal tothe intervention level (1580fc /ltpackets ).
28.The 1978 .closing stock ofN.Z. butter isestimated tohave comprised
the following quantities each debonded atthe levy rate asindicated :ν
Quantity (tonnes ) Levy rate (u.a. /100 kg)
9323
3381
44350
750*94.47
100.54
106..64
various
57804 (closing stock )

-7-
29.Itisevident from the foregoing account ofthe development ofthe <
1978UKbutter market that there are weaknesses inthe present
framework .While accepting that prices for N.Z. butter and Community
butter doinfluence each other ,itisnot possible toestablish the
Levy .for N.Z. butter based onthe Intervention price without having
due regard tothe actual market prices .
30.During 1978 the sellingprices were increased byabout
162 fc/lt.for British butter
202 fc/ltfor N.Z.butter .,
226 fc/ltfor Danish butter (Lurpa .k)
The subsidies paid inthe U.K. fordirect consumption ofbutter
were 33ua/100 kg fc193.79 /It (starting on16/9/77)
33ua/100 kg t196.70 /It ( _" " 1/4/78)
28ua/100 kg t180.42 /It ( ." "22/5/78)
23ua/100 kg t148.20 /It (" " 1/7/78and valid until
3171 2/78)
31.Even with thebutter subsidiesj consumer prices increased from' about
48p/lfointhe beginning of1978 to69p/lbatthe end ofthe year
whereas the prices for margarine remained more orless stable at
about 30#5p/lb.Itislikely that these factors contributed inlarge
part tothe reduction inU.K. butter consumption by3.3% during 1978 .
IV.Decisions onthe Level ofthe CIF price
32.since thefirst application ofProtocol 18the CIFprice forN.Z.
butter has been fixed asfollows :-
1Feb .1973
1Jan .1975
1Jan .1976 '
1Oct .197776.96 ua/100 kg
90.81 " (+18% )
107.16 " (+18% )
117.88 " (+10% )
./.

-8-
The CIFprice of117,88 ua/100 kgcorresponds tojust half of
the intervention price for butter inthe Community applicable
since 22May 1978 (of235,72 ua>.Onthe basis ofthe average rate
ofthe USdollar during 1978 (1U.S. dollar = 0*65216 ua)
the CIFprice corresponds toabout 1800 U.S. dollars per tonne ,
compared with anaverage price level onthe world market of
about 1100-1200 U.S. dollars per tonne fob during 1978 .
33.inaccordance with article 2ofRegulation (EEC)no1655/76the
CIFprice shall ,onthebasis ofaperiodical review ,beadjusted *
asnecessary having regard tothe supply and demand developments
inthemajor producing and consuming countries oftheworld^and also
tothe level and evolution ofprices inthe Community -including
intervention prices -and inNew Zealand ,taking into account ,
<. moreover ,cost developments inNew Zealand andtrends infreight charges .
3'4.On20June 1978 the New .Zealand authorities submitted detai ledfigures
onthe cost developments inNew Zealand during the reference period
1July 1977 to30June 1978 .The weighted average increase ofthese
costs was calculated tobe 15-61% .
! -
35.During the same reference period the Council increased the Community
price level byabout 2% which was below the increased
costs inthe different member countries .

-9-
V.Diversification oftheN.Z. Dairy product production and ofexports of
•'such products . -•'
56.Drought conditions inthe "second ,half oftheNewZealand milk season
"(ending June )1977/1978 caused anoverall decrease intheamount of
milk forprocessing in1979 *■(–8,8 focompared with theprevious
season ).This wasreflected inadecreased production of "butter ,
.cheese and "butteroil (-14$;–3$and–3%respectively ).
37.during 1978 exports ofbutter declined by7%to153,878 tonnes .The .U.K,
w
remained themost important market taking 126,501 tonnes or82.2% of
total exports . ' /
Exports of "butter toJ^paa .were negligible duetodomeetio stocks 'and
static demand *The Japanese government hasgiven nofirm indication of
when •'butter imports might again "beauthorized .Buring 1978 *.ftewZealand
exported "butter forthefirst tims toChina –2^205 -tonnes were shipped '
inJanuary and 3S000tonnes inDecember® .'• ■-, '
•• Total sales totheUSSR wore 4t000 tonnes and were shipped in
,November 1978 .*The -Middle -East markets continued totake smalt quantities
of NZbutter bot ;tnetrace tothe Caribbean was reduced because of . .
increased imports from the Community .
■wûs GGOj.ul*,wjTo -lXXX* S/JCIA; clS'U.DS it oTodllC'l -.TO.D 01 . 0C/o
\-L9/Ci - 7~i-9' l'ijÇi "buJ^C OX .0U"t"uGX*0 2.1.ûXpOV~uCid."W8n*i"COoOU'^îi
ijat.t Asia •'a.adLatin L^er-ica \-faev -aitisused inrecpabitting plants.' :
•The ITiS.trade in "butteroil iadependent onthedevelopment ofrecombinir.g'
^-./I'-c^ v c-'''-jTiX"rx ?Recenuxy ?the r*3.te of -growth appears
tohave declined . :. - - . ' -
o-j^coso o~..pc ^\sàii'OiTì cig0.^..1)3.6 (4.limoni (5 "in -1977 to5 '3 tcor,9s
* \ 9
-1"1975 /elA.ecting thecessation ofaccess tothe "UaK -.Atthe endof -
2-977 »'J«.paJV t;aSthemajor market taking 39% oftotal exports ,--.
Exports to>TaZ«'-s ' second -large at_market ?.theUnited States ; • •
increased from 15j133 •'.to18,464 tonnes .This grewthj in .part ,rcsulxed''
from are-allocation -ofimport lioenoos which 'formerly comprised part .
:ofthenon-utilised Community quota onthat marke't . '. •' •
•ami«•o

-10-
40.Skimmed milk powder exports showed areduction of22% (1977 :167,178 t;
1978 :130,717 t.). Significant quantities were exported toPhilippines
(27,882 t)Malaysia (22,237 t) Indonesia (18,549 t)Peru (13,984 t)
and Japan (11,373 t).
41.Whole milk powder exports decreased .somewhat »• (1977 :65,785 ;
1978 :62,160 tonnes ). The main exports were toMalaysia (T2,123 tonnes )
and Sri Lanka (9,014 tonnes ). Case ,inand Caseinate exports during
1978 were also less than in1977 % (1977 :73,488 t;
1978 :63,485 tonnes ). During 1978 about 9,000 tonnes ofCasein /Caseinates
were exported tothe Community .
VI CONCLUSIONS
• mmàm mm ^ ––
42.Theforegoing ?demonstrates that the management ofthetransitional
arrangement for the import ofNew Zealand butter into the United
<. - '
Kingdom in1978 was just asdifficult asitwas in1977 .This
was again *due tounforeseeable fluctuations inthe U.K. butter
market andtothesystem itself .Asaconsequence ^,theN.Z. sales
were uneven throughout theyear with ^relatively high market share
towards the end ofthe year .Nevertheless the entitlement for 1978
was fully utilized andtotal sales were above the entitlement
reducing the carryover stock atthe end of1978 s'
■43.The Commission isofthe opinion that changes on
the operation ofthe arrangement should be made assoon as
possible ;particularly inthelight ofitsconcern about theeffect
ofthe arrangement onthe development ofthe market forbutter of
Community origin .

-11-
LIST OF ANNEXES
ANNEX I Development ofbutter production ,consumption
■- andtrade inthe United Kingdom . •
ANNEX II 1978 United Kingdom butter imports ,
per month ,from other EEC Member States .
ANNEX III 1978 United Kingdom fortnightly arrivals ,
debondings andsales ofNew Zealand butter .
ANNEX IV Development ofNew Zealand butter sales
andprices during 1978 .
/

-12-
DEVELOPMENT OFBUTTER PRODUCTION ,CONSUMPTION AND TRADE ANNEX I
INTHE UNITED KINGDOM
1OOO tonnes
1973 1974 1975 19761977 _|1978
Milk Production (a). 14,241 13,836 13,815 14,302 15,098 15,831
Milk Deliveries 13,705 13,311 13,329 13,838 14,598 15,317
Deliveries as %ofproduction 96.2 96.2 96.5 96.8 96.7 96.8
Butter production (b) 97 54 48 90 134 I 162
Total imports ofwhich (c) 318 445 475 404 327 298
EEC 186 326 364 275 189 173
New Zealand 132 119 111 129 ! 138 125
Total Exports 16 3 3 16 11 56
Consumption :(d)
Household /Catering 409 445 462 441 410 396
Other (manufacturing ) 24 18 24 18 18 18
Total Disappearance 433 463 486 459 428 414
(a)Excludes beef-cows' miIkproduction
(b)Includes farmhouse production
(c)Includes butteroi Iequivalent
(d)Takes into account stock changes
Source : MAFF

-13- . '{
1978 UNITED KINGDOM BUTTER IMPORTS PER MONTH FROM ANNEX II •• .•
OTHER EEC MEMBER STATES 1' !
. . ■ • !
IMPORTS INTO U.K. JAN . FEB . MAR . APR . MAY .I
JUNE ] JULY AUG . SEPT . OCT . NOV . DEC .TOTAL 78
ofwhich EEC
--FRANCE i403 1Pô
i724 1201 841 . 57 92 642 541 108 461 706 5882
BELGIUM /LUX 741 665 .1046 562 412 136 15) 118 132 116 82 68
I4229
- NETHERLANDS 13392 2098 548 7395 9828 98 149211 j332 j
I501 3366 1096 39014
WEST GERMANY 5132 198 1971 2794 2140 321 266 228 168 52 298 713 14281
ITALY\
.IRELAND .. |7048 2314 6743 13359 1244 1035 3379 1867 2599 2829 6869 588 49874
DENMARKI53411698 6310 7645 8600 .5580 3821 3713 3212 3805 3956 5585 59296
TOTAL EEC 32057 7079 17342 32956 23065 -.7227 -7858 6779 6984 7411 15062 8756 172576
-X
SOURCE :MAFF

-14-
ANNEX III
1978 UNITED KINGDOM FORTNIGHTLY ARRIV ALS ,DEBONDINGS
AND SALES OF NEW ZEALAND BUTTER
BUTTER
ARRIV ALS 1 I
FORTNIGHT
ENDING I TOTAL'BONDEDDtBWDED
ON ARRIV ALDEBONDED
FROM STOCKSALES
14.1 15,040 I5,040 1,759 I
28.1 402 - 402 5,040 6,626
11.2 504 - 504 - 6,995
25.2 42a - 420-6,369
11.3 7,627 7,627- - 6,231
25.3 8,910 8,910- 4,595
8.4 11,111 11,111- 4,979
22.4 4,170 4,170 6,897
6.5 3,523 3,523 V 5,213
20.5 " » " 5,775
3.6 4,545 4,545- - 4,609
17.6 3,497- 3,497 39,886 3,392
1.7 571 - 571 -3,946
15.7 622 - <522 - - I■-3,026
29"7 3,412
12.8 3,394 3,394 ' - ■ I3,384
26.8 -I "- 3,988
9.9 1,935 1,935- - 4,510
" " " 168 5,124
7.1° 3,998- 3,998 5,161 6,266
21.10- - - - 6,532
4.11 9,584- 9,584 5,663
18.11 16,996 7,778 9,218- 6,363
2.12 8,031 4,873 3,158 12,651 6,307
16.12 12,180- 12,180- 6,031
31.1217,940 j17,940 3,644
125,000 I62,906 [ 62.094 62,906 134,686
ITotal =124,971 I
Duetoshort landings onarrivals ofshipments only 124*971 tonnes were effectively
debonded *
Source:MAFF
\

-15-
ANNEX IV
DEVELOPMENT OF NEW ZEALAND BUTTER SALES AND PRICES DURING 1978
Week
No; endingSales per
week
(tonnes )Levy rate
appli cable
tosales
(ua/100 kg)Calculated tell­
ingprice approp­
riate tolevy
(fc/lt,packeted )Actual list selling
price Ct/ltpacketed >
Anchor
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
337.1
14/1
21/1
28/1
4/2
11/2
18/2
25/2
4/3
11/3
18/3
25/3
1/4
8/4
15/4
22/4
29/4
6/5
13/5
20/5
27/5
3/6
10/6
17/6
21/6
1/7
8/7
15/7
22/7
29/7
2/8
12/8
19/81700
3059
3520
3106
3238
3758
3344
3025
3648
2633
2362
2234
2287
2691
3314
3583
2787
2426
2930
2845
2820
1789
1764
1627
1775
2172
1421
1605
1703
1709
1560
1824
170270.67 1225 1225
V
79.39Ψ
12771260
1305
1278
103.86
♦
80.661347.5
1392.3
1413<*
1437
1423
1425
14001459
1482
–v
./. cont.d

■16.«
DEVELOPMENT OFNEWZEALANDBUTTERSALESANDPRICESDURING1978-(cont.d)
Week Salesper
week
(tonnes) INo.[ending
3426/8 2285
»2/9 2067
369/9 24'.3
3716/9 ,:si2
:3823/9I''*
ïi 1r■
3930/9.1•?^980
407Λ1υ:Iï3286
4114,10VI;;3388
42 |21/10 ;3144
I
4328/10 I2972
444/11ν;2691
4511/11f2908
4618/11 I3455
4725/11:3203
482/12 ■•'3105
499/12 3164
5016/η 2867
5123/12 2362
5230/1? 1282
IILevyrate
applicable
tosales
(uai100kg)Calculatedselling
priceappropriate ,
tolevy(t/ltpack-:ActualListsellingprici
(fc/lt,packeted)
Anchor(NZJ(CountryLife.
80.66 1400
81.001425 1512
1552
1583
♦
1427
♦
1413Ψ
1622