WRITTEN QUESTION E-1645/97 by Marlies Mosiek-Urbahn (PPE) to the Commission (14 May 1997)

Subject: Public invitation to tender 228/96 of February 1996

1. After the contract was awarded to the Italian company Trentofrutta, why were the conditions of the invitation to tender changed (from apples to peaches), and on what legal basis?

2. Why was there not a new invitation to tender since the product group was changed, thus giving rise to an entirely new basis?

3. Before getting the go-ahead for the change did the Commission seek to establish the scale of the impact on the market?

4. Did the Commission realize that with the payment in peaches instead of apples a European invitation to tender (apples from D, F, I and E) was turned into a purely Italian invitation to tender (the biggest producer of peaches is Italy and the Trentofrutta company is Italian), and how does it justify that decision?

5. When settling, how did the Commission compensate for the much higher market price of peaches compared with apples (approximately two-and-a-half times as much)?

6. Is the Commission aware of the considerable market disruption that it caused: 65 000 tonnes account for approximately 70% of the total harvest. The remaining 30% was offered at extremely high prices on the free market.

7. Because of capacity difficulties Trentofrutta was only able to take up and use 25 000 of the EU's 65 000 tonnes. The remaining peaches were then sold at dumping prices, which again had a negative impact on the market. Why did the Commission not check the company's capacity in advance and proceed accordingly?

8. To what extent is Trentofrutta justified in bringing onto the market fruit it has not itself exploited? If so, at what price?

9. How much does the Commission still owe Trentofrutta for the coming market year, since the company was only able to use 25 000 tonnes?

Answer given by Mr Fischler on behalf of the Commission (4 July 1997)

1. and 2. The Commission did not modify the conditions of the invitation to tender opened by Regulation (EEC) No 228/96 on the supply of fruit juice and fruit jams to the people of Armenia and Azerbaijan ((OJ L 30, 8.2.1996. )) after contracts had been awarded to the two successful tenderers. It did, however, have to take specific measures, after the planned deliveries to the people of Armenia and Azerbaijan had been made, to take account of special conditions obtaining on the markets in apples and oranges, so as to ensure that the successful tenderers were paid for their services.

These measures, taken by the Commission in June and July 1996, did not modify the conditions of competition between tenderers under the call for tenders. Indeed, by the date of the adoption of the measures in question, after the sectoral management committee had been consulted, in accordance with the procedures in force, the deliveries had already been effected to their destinations in accordance with the conditions laid down. The measures in question concerned only the paying of the services rendered by the successful tenderers.

In order to arrive at a better understanding of the requirements linked to the delivery of the supplies and of the difficulties encountered, the following details should be borne in mind:

(a) the supplies of apple and orange juice as also of various fruit jams as food aid were to be delivered to their destinations by dates which could not be extended, namely 28 April and 9 May 1996;

(b) under Community rules (Council Regulation (EC) No 1975/95 on actions for the free supply of agricultural products to the peoples of Georgia, Armenia, Azerbaijan, Kyrgyzstan and Tajikistan ((OJ L 191, 12.8.1995. )), and Commission Regulation (EC) No 2009/95 ((OJ L 196, 19.8.1995. ))), payment of the successful tenderers' services was to be undertaken in the form of products withdrawn from the market by producer organisations, under intervention measures financed by the Community and defrayed by the successful tenderers;

(c) when the invitation to tender was issued, the products to be taken over could only be apples and oranges, for which the withdrawal periods, under the fruit and vegetable market organisation rules, were open until the end of May; it should also be borne in mind that these products to be withdrawn are not stored in warehouses by an intervention agency but are simply withdrawn from the market by producer organisations;

(d) while at the beginning of the regulatory period withdrawals of apples and oranges were substantial, from February until the end May there were no more withdrawals in Italy, Germany, France and Austria; the two successful bidders were not able to find or take over such products in defrayal of their expenses;

(e) hence, on 14 June 1996, the Commission decided to allow the use, in payment of the supply costs, of fruit in respect of which the withdrawal period had just started at the beginning of June, applying in so doing Article 2 (2) of Council Regulation (EC) No 1975/95 and Article 2 (2) of Commission Regulation (EC) No 2009/95 under which supply costs may be paid for by resorting to products belonging to 'the same group of products'.

3. The Commission, before taking its decisions, carefully examined the situation of the markets in the fruits concerned and evaluated the effects of the measures envisaged. In this connection, it should in the first place be pointed out that the quantity of peaches processed on average each year in the Community amounts to 500 000 tonnes. The quantity in question for the payment of the supply costs could not consequently have a significant effect on the market in peaches. Secondly, the Commission decisions cover three new products, namely peaches, nectarines and apricots. This opening to three products considerably reduces the impact of any effects on markets.

4. For a fruit of a given variety, the quantity which is the subject of withdrawals is not directly related to the volume of production. While it is a fact that Italy is the major Community producer of peaches, two-thirds of production is harvested in Greece, Spain and France. No correlation can be established between the quantities of peaches withdrawn from the market in Italy, which result from the market situation, and the fact that the successful tenderer in question is based in Italy.

5. The market prices of peaches for processing and for consumption in the fresh state were so low in the 1996 marketing year that at least 600 000 tonnes of peaches had to be withdrawn from the market, being in most cases distilled or destroyed.

With the market in this state of collapse, prices were very frequently markedly lower than the price of apples recorded at the time of the invitation to tender.

6. The Honourable Member is invited to refer to items 3 and 5. It should furthermore be pointed out that average Community production is 3 200 000 tonnes. The quantity of 65 000 tonnes, which could have represented the payment to the successful tenderer(s), accounts for only 2% of this volume of production and could not cause market disturbance.

In addition, market prices were not high, and it would have been inconceivable, had they been, to count on withdrawals as a means of defraying the successful tenderers' expenses.

7. and 8. The Commission, entrusted by the Council with the execution of these measures as well as with the monitoring of the supply operations (Council Regulation (EC) No 1975/95 Article 4 (1)), supervised the progress of the operations. It is not aware that the successful tenderers placed back on the market any products taken over, in breach of Article 3(2) of Regulation (EC) No 228/96.

The obligation not to put back on the market the products taken over is sanctioned, where appropriate, by the withholding of a substantial security. The Commission did in fact receive evidence from the national authorities that the provisions of the tendering procedure were complied with by the successful tenderers.

9. Yes.