Proposal for a COUNCIL REGULATION ( EEC ) fixing for the 1991/92 marketing year, the representative market price and the threshold price for olive oil, the levels of consumption aid in Spain and Portugal and the percentages of consumption aid to be retained in accordance with Article 11 ( 5 ) and ( 6 ) of Regulation No 136/66/EEC
Date: 1991-10-07
Institutions: European Commission
Subjects: Portugal, Spain, consumption, economic support, olive oil

COMMISSION OF THE EUROPEAN  COMMUNITIES 

C0M(91) 366 final 

Brussels, 7  October  1991 

Proposal  for a 

COUNCIL  RFfllH ATIQN  (EEC) 

fixing  for the 1991/92 marketing  year,  the representative 
market  price  and the threshold  price  for olive  oil, the 
levels of consumption  aid in Spain  and Portugal  and the 
percentages  of consumption  aid to be retained  in accordance 
with  Article  11(5) and (6) of Regulation  No  136/66/EEC 

(presented  by the  Commission) 

- A -

EXPLANATORY  MEMORANDUM 

This  proposal  for  a  Regulation  concerns  the  fixing,  for  the  1991/92 
marketing  year,  of  the  representative  market  price  and  the  threshold  price 
•«"or olive  oil,  tha  level  of  consumption  aid  in Spain  and  Portugal  and  the 
percentage  of  consumption  aid  to  be  retained  with  a  view  to  financing,  on  the 
one  hand,  the  recognized  trade  organizations  and,  on  the  other  hand,  measures 
to  promote  olive  oil  consumption. 

2.  Article  7 of  Council  Regulation  No  136/66/EEC  lays  down  that  "the 
representative  market  price  shall  be  fixed  at  a  level  which  will  permit 
normal  marketing  of  olive  oi!  produced,  account  being  taken  of  prices  for 
competing  products,  and  in particular  of  the  probable  trend  of  such  prices 
during  the  marketing  year". 

3.  The  situation  in  the  seed  oil  sector  has  changed  relatively  slightly 
compared  with  the  situation  on  the  world  and  Community  markets  when  the  aid 
was  fixed  for  the  1990/91  marketing  year:  prices  are  presently  around  13% 
higher  than  during  the  period  September-October  1990  and  prospects  for  1991 
are  for  a  certain  stability  with  the  price  of  colza  drifting  down  and  the 
prices  of  soya  and  sunflower  recovering.  The  Commission  therefore  estimates 
that  the  average  price  for  seed  oils  should  be  the  same  as  or  slightly  higher 
than  during  the  1990/91  marketing  year. 

4.  In  the  olive  oil  sector  the  following  should  be  noted: 

the  present  marketing  year  has  been  marked  by  low  production  and  which 
should,  according  to  latest  estimates,  be  less  than  1 200  000  tonnes, 
and  by  very  high  prices  for  edible  oils  in Greece  and  Italy-, 

during  the  1990/91  marketing  year,  Community  production  was  disposed  of 
without  difficulty,  despite  high  prices  in  the  two  countries  referred 
to  above; 

-  2  -

as  regards  Spain  and  Portugal,  liberalization  of  the  oilseed  and  oil 
markets  following  the  end  of  the  "standstill"  period  has  not  affected 
olive  oil  consumption  in  those  two  countries.  Although  demand  was 
influenced  by  events  in  the  Gulf  at  the  beginning  of  this  year,  the 
introduction  of  consumption  aid  has  permitted  the  consumption  of  olive 
oil  in Spain  and  Portugal  to  recover. 

forecasts  of  a  satisfactory  1991/92  harvest  should  result  in  Community 
production  significantly  higher  than  this  year's  and  consequently  lower 
supply  prices  to  the  packaging  industry  in  the  Community  of  Ten. 

5.  The  above  shows  that,  for  the  Community  of  Ten,  the  present  level  of 
consumption  aid  is no  longer  correctly  adjusted  to  the  market  situation,  that 
is to  say,  a market  where  the  increase  in  the  prices  of  higher  quality  oils 
(around  two-thirds  of  production  in the  Community  of  Ten)  does  not  affect, 
within  certain  limits,  the  level  of  consumption.  This  is because,  as a 
result,  in particular,  of  efforts  to  improve  quality  and  inform  the  consumer, 
the  situation  has  changed  over  recent  years  and  the market  for  those  oils  is 
tending  to  become  a separate  market  less  closely  linked  to  that  for  other 
vegetable  oils. 

Therefore,  and  in view,  in particular,  of  the  experience  of  the  1990/91 
marketing  year,  the  Commission  considers  that  good  management  of  the  aid 
scheme  calls  for  a  suitable  adjustment  to  the  level  of  aid  avoiding  any 
negative  effects  on  consumption. 

In  this  connection,  the  increase  in prices  felt  by  the  consumer  in  1991/92 
will  be  practically  cancelled  out  by  the  fall  in the  market  price  which 
should  result  from  the  large  harvest  expected  this marketing  year. 

6.  As  regards  Spain,  as  a  result  of  the  reduction  in aid  for  the  Community 
of  Ten,  aid  will  Increase  by  a  smaller  amount  in accordance  with  the  rules  on 
alignment  laid  down  in Article  2 of  Regulation  (EEC) No  3416/90.  In  the 
light  of  experience  gained  during  this  year,  the  Commission  considers  that 
this  level  of  aid  will  enable  any  difficulties  in disposing  of  Spanish 
production  of  olive oil  to be  overcome. 

-  3  -

tilth  regard  to  Portugal,  slight  changes  should  be made  to  the  present  level 
of  aid  to  consolidate  consumption  levels  in  the  country. 

In addition,  the  recent  launch  of  the  fifth  campaign  to  promote  olive  oil 
consumption,  with  a considerably  increased  budget  in Spain  and  Portugal, 
should  help  to maintain  and  consolidate  consumption  in  those  two  countries. 

7.  As  a consequence  of  developments  on  the olive  oil  market  during  recent 
years  and  particularly  the market  for  better  quality  oils,  the  fixing  of 
consumption  aid  after  production  aid  has  been  fixed  appears  less  Justified 
than  in  the  past. 

The  simultaneous  fixing  of  the  two  aids  should  therefore  be  considered  as 
part  of  the  price  package. 

This  would  not  only  permit  the  Council  to  fix  at  the  same  time,  as  it  does 
for  the  other  sectors,  all  the  essential  components  of  the  organization  of 
the  olive  oil  market,  but  would  also  have  the  advantage  of  allowing  a 
decision  to  be made  on  rebalancing  the  two  aids. 

The  Commission  will  present  Its  final  thoughts  on  the  simultaneous  fixing  of 
the  two  aids  and  their  rebalancing  as  part  of  the  1992/93  price  package. 
However  the  producers'  total  income  is  to be  kept  unchanged. 

8.  Article  11(3) of  Regulation  No  136/66/EEC  lays  down  that  Member  States 
may  involve  one  or  more  recognized  trade  organizations  in  the management  of 
the  consumption  aid  arrangements.  In addition,  Article  11(6) of  the 
abovementioned  Regulation  lays  down  that  the  Council  is  to  fix  the  percentage 
of  the  consumption  aid  that  the  recognized  trade organizations  can  retain  to 
finance  their  work  and  the  percentage  of  aid  to be  allocated  for  measures  to 
promote  consumption. 

_ 4  -

Taking  into account  the  amount  of  aid  resulting  from  this proposal  as well  as 
the  amounts  retained  during  previous  marketing  years  and  still  available, a 
figure  of  1% for  the  next  marketing  year  will  enable  promotional  measures  to 
be  continued  and  even  intensified. 

In view  of  the  amount  of  aid  resulting  from  this  proposal  as well  as  past 
experience,  a  figure  of  1.4% should  maintain  the overall  remuneration  of 
those organizations  at  a sufficient  level  for  them  to carry  out  the  tasks 
with  which  they  have  been  entrusted  and  to  improve  the  transmission  of  data 
to  the  agencies. 

9.  In the  light  of  these  considerations,  the Commission  puts  forward  the 
fo11ow i ng  proposa I s : 

representative market  price:  ECU  197.28/100  kg  (+ ECU  7/100 k g ), 
consumption  aid  In the Community  of  Ten:  ECU  53.90/100  kg 
(-  ECU  7/100 k g ), 
consumption  aid  in Spain:  ECU  45.67/100  kg, 
consumption  aid  in Portugal:  ECU  49.42/100  kg 
retained  for  promotional  measures:  1%, 
retained  for  trade organizations:  1.4%. 

For  reference,  the  figures on  which  the  calculation  of  consumption  aid  for 
1988/89,  1989/90  and  1990/91  as well  as  those  in this  proposal  was  based  are 
given  in the  Annex. 

10.  Finally,  the  threshold  price must  be  fixed  so  that  the  selling  price  of 
the  imported  product  corresponds  to  the  representative  price.  It  is 
therefore  necessary  to  take  Into consideration  landing  and  warehousing 
charges  and  the  percentage  of  consumption  aid  to be  retained. 

In view of  the  above,  the  threshold  price  is fixed  at  ECU  194.20/100  kg. 

- 5 -

ANNEX 

1987/88 

1988/89 

1989/90 

1990/91 

1991/92 

Producer  target  price 
Production aid 
Difference 
Representative market  price 
Difference  (consumption  aid) 

322.56 
70.95 
251.61 
174.61 
77.00 

322.56 
70.95, 
251.61 
190.61 
61.00 

322.56 
70.95 
251.61 
190.61 
61.00 

322.01 
70.83 
251.18 
190.28 
60.90 

322.01 
70.83 
251.18 
197.28 
53.90 

m  Q 

m 

COUNCIL REGULATION  (EEC) No 

Of 

fixing  for  the 1991/92 marketing year, the representative 
market  price and the threshold price for olive oil, the 
levels of consumption  aid  in Spain and Portugal  and the 
percentages of consumption aid to be retained  in accordance 
with Article  11(5) and  (6) of Regulation No 136/66/EEC 

THE COUNCIL OF THE EUROPEAN  COMMUNITIES, 

Having  regard  to the Treaty establishing  the European  Economic  Community, 

Having  regard  to the Act of Accession of Spain and Portugal, and  in 

particular  Articles 89(1) and 234(2) thereof, 

Having  regard  to Council  Regulation  136/66/EEC of 22 September  1966 on the 

establishment of a common organization of the market  in oils and  fats1, as 

last amended by Regulation  (EEC) No 1720/912, and  in particular  the second 

subparagraph of Article 4(4) and Article  11(6) thereof, 

Having  regard  to the proposal  from  the Commission, 

Whereas  the representative market  price must  be fixed according  to the 

criteria  laid down  in Article 7 of Regulation No 136/66/EEC; 

Whereas  the threshold  price must  be fixed  in such a way  that  the selling 

price for the  imported  product  at  the frontier  crossing  point  determined  in 

accordance with Article 9 of Regulation No 136/66/EEC  is the same as the 

representative market  price, account  being  taken of  the effect of the 

measures  referred  to  In Article  11(6) of  the said Regulation; 

1  0J No L 172, 30.9.1966, p. 3025/66. 
2  0J No L 162, 26.6.1991, p. 27. 

-} 

Whereas Article 2 of Council  Regulation  (EEC) No 3416/90 of 

27 November  1990 on the  introduction of Community  aid  for  the consumption 
of olive oil  in Spain and Portugal3,  lays down criteria  for adjusting  this 

aid to the Community  level;  whereas the application of  those criteria 

results  In consumption aid  in Spain and Portugal  during the 1991/92 

marketing year being  fixed at the  levels given below; 

Whereas, pursuant  to Article 11(5) and  (6) of Regulation No 136/66/EEC, a 

certain percentage of the consumption aid during each olive oil marketing 

year  is to be used, on the one hand, to finance the recognized  trade 

organizations referred  to  in paragraph 3 of  the abovementioned Article and, 

on the other  hand, to finance measures to promote olive oil  consumption  in 

the Community;  whereas the said percentages for the 1991/92 marketing year 

should be f ixed, 

HAS ADOPTED THIS REGULATION: 

Article 1 

For the 1991/92 marketing year  the representative market  price and the 

threshold price for olive oil shall be as follows: 

-  representative market price:  ECU 197.28 per  100 kilograms, 

-  threshold price:  ECU 194.20 per  100 kilograms. 

Art icle 2 

For the 1991/92 marketing year consumption aid for olive oil  in Spain and 

Portugal  shall be as follows: 

-  for Spain:  ECU 45.67 per  100 kilograms, 

-  for Portugal:  ECU 49.42 per  100 kilograms. 

3  OJ L No 330, 29.11.1990, p. 6 

-3 

Article  3 

1.  For  the  1991/92 marketing  year  the percentage  of  consumption  aid 

referred  to  in Article  11(5) of  Regulation  No  136/66/EEC  shall  be  1.4%. 

2.  For  the  1991/92 marketing  year  the  percentage  of  consumption  aid  to be 

allocated  to  the measures  referred  to  in Article  11(6) of 

Regulation  No  136/66/EEC  shall  be  1%. 

Article  4 

This  Regulation  shall  enter  into  force on  1 November  1991. 

This  Regulation  shall  be  binding  in  its entirety  and  directly  applicable  in 

a 11 Member  States. 

Done  at  Brussels, 

For  the  Council 

& 

-

IHANCï AL  S TATEMENT 

DATE: 

mT  HiADING: B 1220 Consumption aid 

B 1221 Schemes related to consumption 

APPROPRIATIONS: (1992 DB) ECU 743 ml 11 ion 
ECU  30 ml I lion 

J. T'T-E: 
L: if  Council Regulation fixing, for the 1991/92 marketing year, the representative market price and the 
thre•"'•old price for olive oil and the percentages of consumption aid to be retained 

LEGAL BASIS: Articles 4 and 11 of Regulation No 136/66/EEC 

4. AIMS OF PROJECT: To fix: 

- the representative market price 
- the threshold price 
- the percentages of the oonswption aid to be retained 
for the 1991/92 marketing year for ol ive oi I. 

5.  FINANCIAL  IMPLICATIONS 

Period of 12 months 

Current Financial Year 
1991 

Following Financial Year 

1992 

5.0 EXPENDITURE 

CHARGED TO THE EC BUDGET 1220 
(REFUNDS/ INTERVENTION)  1221 
NATIONAL ADMINISTRATION 
OTHER 

5.1 REVENUE 

- OWN RESOURCES OF THE EC 
(LEVIES/CUSTOMS DUTIES) 

- NATIONAL 

ECU 713 mi 11 ion (B) 
ECU  7 mi 11 ion (B) 

nil 

ECU 535 mi 11 ion (B) 
ECU  5 mi 11 ion (B) 

ECU 720 mi 11 ion (B) 

ECU 540 mi 11 ion (B) 

1993 

1994 

1995 

1996 

5.0.1 ESTIMATED EXPENDITURE 
5.1.1 ESTIMATED REVENUE 

ECU 180 mi 11 ion 

5.2 METHOD OF CALCULATION: 
The consumption aid for 1992 under this measure  is as fol lows: 
EUR-10:  775 000 t X ECU (539-5,39)  /t x 1,135 (1) x 0,75 - ECU 352 mi 11 ion (B) 
Spain: 
415 000 t x ECU (456,7-4,57) /t x 1,180 (1) X 0,75 - ECU 166 mi 11 ion (B) 
Portugal:  40 000 t x ECU (494.2-4,94) /t x 1,155 (1) x 0,75 - ECU  17 million (B) 

TOTAL EUR-12 
For the record,the appropriations in the 1992 DB for the 1991/92 marketing year amount to ECU 570 mi 11 ion, 
i.e. the impact of the measure on 1992 is savings of ECU 35 mi 11 ion. 

ECU 535 mi 11 ion (B) 

6.0 CAN THE PROJECT BE FINANCED FRCM APPROPRIATIONS ENTERED  IN THE RELEVANT CHAPTER OF THE CURRENT BUDGET? 
YESxxx 

6.1 CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT BUDGET? 

6.2  IS A SUPrLBJENTARY BUDGET NECESSARY? 

6.3 WILL FUTURE BJ&GE7 APPROPRIATIONS BE NECESSARY? 

xxxxxx 

xxxxxx 

YESxxx 

OBSERVATIONS: 
It is proposed to retain "fôï, i.e. ECU 7 million, in 1991/92 to finance programnes to promote 
olive oil consurption and 1,4%,  i.e. ECU 10 million, to finance the activities of the professional bodies. 
(V  Couole rate coefficient. 

^° 

" 

ISSNQ254-1475 

C0M(91) 366 final 

DOCUMENTS 

EN 

03 

Catalogue number : CB-CO-91-415-EN-C 

ISBN 92-77-75933-X 

Office for Official Publications of the European Communities 
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