WRITTEN QUESTION E-1750/98

by Herbert Bösch (PSE) to the Commission

(5 June 1998)

Subject: Organization of the market in sugar in the EU - the carbonated drink industry

Sugar is the most expensive ingredient in carbonated drinks. It is however subject to organization of the market and costs about 10 Austrian Schillings per kilo. This means that EU carbonated drink manufacturers have to pay a high price for sugar while Swiss manufacturers can buy sugar at world prices or EU sugar at subsidised prices. This gives Swiss carbonated drink manufacturers a decisive competitive advantage over EU manufacturers; they are putting their cheaper products on the EU market and driving "EU pop" off the market.

1. How is the Commission protecting EU carbonated drink manufacturers against cheap, EU subsidised carbonated drinks from Switzerland?

2. Does it have any estimate of the number of jobs lost in the Union as a result of this policy?

3. Is any reform of the organization of the market in sugar in preparation and if not, what scope is there for compensation for the injury inflicted by the EU on its own industry?

Answer given by Mr Bangemann on behalf of the Commission

(23 July 1998)

The commercial terms applying to carbonated drinks in the trade between the Community and Switzerland are laid down in Protocol 2 to the Agreement on free trade with Switzerland of 1972. Those terms introduced total liberalisation of imports of such products from Switzerland with effect from 1 July 1977.

Changes in the trade in such products between the implementation of the Agreement and 1995 seem not to have caused any major difficulties in the Member States.

Moreover, when the Community was enlarged to include Austria, Finland and Sweden the Commission, in agreement with the Council, negotiated an agreement with Switzerland that was intended to take account of the traditional trade between that country and the new Member States, and in particular Austria. Thus, since 1995 Switzerland has released an annual quota of 32 million litres for the duty-free import of carbonated drinks from the Community.

In addition, according to the statistical information available to the Commission, enlargement has actually caused an increase in imports of carbonated and other non-alcoholic beverages (apart from water) into the Community from Switzerland (up from ECU 13,8 million in 1994 to ECU 18,1 million in 1997). However, there has also been a similar increase in Community exports of such products to Switzerland (from ECU 13,8 million in 1994 to ECU 20,4 million in 1997).

Specific proposals may not be attached to the common organisation of the sugar market in the present proposal for the reform of the common agricultural policy. The discussions on reform that have already taken place within the Agriculture Council have not called upon the Commission to make proposals concerning that organisation of the sugar market.

While awaiting a Council remit enabling the Commission to begin formal negotiations with Switzerland on the adjustment of Protocol 2 to the Free-Trade Agreement the Commission has already made technical contact with the Swiss authorities in order to examine matters relating to the trade in carbonated drinks.