Proposal for a Council Regulation (EC) on measures to promote and provide information on agricultural products in third countries
Date: 1999-01-14
Institutions: European Commission
Subjects: agricultural product, public awareness campaign, sales promotion, third country

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  14.01.1999 
COM(1998) 683 final 

98/0330 (CNS) 

Proposal for a 

COUNCIL REGULATION  (EC) 

on measures to promote and provide  information 
on agricultural products in third countries 

(presented by the Commission) 

EXPLANATORY  MEMORANDUM 

1. 

INTRODUCTION 

The  Agricultural  Council  at  its  meeting  of  23  to  25  June  1997  called  on  the 
Commission  to  look  into  the  setting-up  of  a  horizontal  framework  for  the 
assistance  of  promotion  activities  for  the  export  of  agricultural  products  and  to 
make  a  proposal.  At  the  agricultural  Council  on  22-26  July  1998,  the 
Commission  announced a proposal before the end of  1998. 

The Commission  is aware of the challenges  which  European  agriculture  faces in 
the  years  to  come,  as  attested  by  its  proposals  to  reform  the  CAP.  To  take  up 
these  challenges  and  to  participate  in  the  positive  evolution  of  the  world 
marketplace,  European  agriculture  has  to  improve  its  competitiveness  in  this 
market. This will entail exporting  increasingly  without  refunds,  while at the same 
time putting emphasis on the quality  and safety of its products. 

This  approach  has been  emphasised  by the European  Council  of  Luxembourg in 
December  1997  which  recognised  the  need  to  continue  developing  the  current 
model  of  European  agriculture  while  at  the  same  time  searching  for  greater 
internal  as well as external  competitiveness. 

The European  agri-food  sector must prepare itself for  this evolution  if it does not 
want to see its position  in the world markets dwindle. The Community can assist 
in this effort  by implementing an aid scheme for promotion  activities in this  field. 

2. 

THE CURRENT  SITUATION 

To  date  the  Community  has  conducted  promotion  campaigns  in  non-member 
countries  in  a  very  small  number  of  sectors,  in  particular  olive  oil  (through  the 
International  Olive  Oil  Council)  and  fibre  flax  (directly  managed  by  the 
Commission).  The  results  obtained  are  very  satisfactory,  the  use  of  these 
products  outside  the  European  Community  is  developing.  This  should  be 
considered  as  an  indicator  to  go  on  with  similar  activities  for  other  agricultural 
products. 

3. 

T HE  SCOPE  FOR COMMUNITY  PROMOTION 

Although  it  is true  that  primary  responsibility  for  promoting  their  products  rests 
with the producers  and the trade as well  as with the Member States of origin, the 
Community  can  play  a  very  useful  role  in  this  field.  By  basing  itself  on  the 
principles  of  subsidiarity  and  complementarity,  Community  promotion  can  offer 
"added  value"  to  the  actions  carried  out  by  the  national  authorities  and  the 
interested economic actors. 

The  following  arguments  can  be  put  forward  in  favour  of  a  Community  policy 
toward export  promotion. 

a)  Firstly, Community action should have a multiplier effect,  providing a boost 
for national  initiatives  and private  activities.  Furthermore,  it  would  benefit 
all producer Member States, including those which do not have the financial 
resources, to undertake promotion. 

In fact,  an action taken at the Community  level  to provide  information  and 
to upgrade products, will  increase the effectiveness  of the work undertaken 
at the national  level  and stimulate the Member States  and the private  firms 
to  take  consequent  measures.  According  to  information  available,  in 
countries  with  little  or  no  information  about  Community  products, 
promotion measures targeted at retailing and distribution business as well as 
actions to inform consumers of Community products (e.g.  wine and cheese) 
would be much better accepted and would have greater impact than isolated 
initiatives taken by individual Member States or firms. 

What  is  required  are  Community  actions  that  boost  the  common  and 
European  values  of  the  products,  while  at  the  same  time  respecting  their 
diversities  (conditions  of  production,  methods  of  conservation  and 
utilisation). 

b)  Secondly,  in  the  new  international  environment  featuring  to  reduce  or 
abolish generally export refunds and to proceed to a greater liberalisation of 
trade,  the  competitive  position  of  EC  products  can  be  improved  by 
Community actions to promote their image on international markets. 

Therefore  the  Community  has  to  assist  its  operators  in  adapting  to  the 
situation,  resulting  from  both  the  GATT  Agreements  and  the  forthcoming 
WTO  negotiations,  by  creating  an environment  favourable  to  Community 
products, and in particular those exported without refunds. This is a specific 
task of the Community, while the Member States' promotion campaigns arc 
geared to conquering a greater market share for their own products. 

In  particular  the  Community  assistance  should  involve  in  informing 
consumers  and  those  in  the  trade  (importers  and  distributors)  in  non-
member countries about measures planned at Community level  to guarantee 
the  quality  and  the  safety  of  foodstuffs  (e.g.  labelling  and  traceability  of 
beef/veal,  absence  of  residues)  and  the  supply  of  characteristic,  clearly 
identified products linked to specific  areas (PDO/PGI arrangements). 

The  Member  States,  for  their  part,  should  supplement,  where  appropriate, 
such joint  action  by  initiatives  that  highlight  the  specific  qualities  of  their 
own products and regions of origin. 

c)  On the other hand, in addition to market studies, specific  Community action 
to  develop  new  export  markets  could  involve  high-level  official  visits,  in 
particular  to  international  fairs  to  help  open  up  certain  markets.  Such 
Community-level  visits  can  prove  highly  effective  (for  abolishing  trade 
barriers, securing  acceptance of  Community controls), compared  to similar 
initiatives  taken  by  a  sole  Member  State  who  targets  only  on  its  own 
products. 

d)  Finally,  the  need  for  an  active  promotion  policy  is  recognised  by  our 
principal  trade  partners  (ex. the  U.S.A.,  Japan  and  Australia)  which,  in  the 
light of the new international  context resulting frpm  the GATT  Agreements, 
have  equipped  themselves  with  ever  more  effective  promotion  policies  in 
order to maintain and raise their world market shares. 

Given these circumstances, the Community would weaken its position in the 
external markets if it fails to come up with an equivalent  approach. 

4. 

CHOICE  OF PRODUCTS AND MARKETS 

target  products 

for  direct 
The  Community  promotion  should 
consumption  or  for  processing  with  priority  being  given  to  high  value  added  or 
highly  differentiated  products  that,  with  suitable  promotion,  have  a  prospect  of 
being  exported  without  refunds.  However,  this  should  not  mean  that  products, 
which  happen  to  receive  export  refunds,  are  by  definition  precluded  from  the 
scheme. 

intended 

The  target  markets  are  those  where  there  is  significant  real  or  potential  demand 
and  where  the  Community  faces  strong  competition  (e.g.  Japan  and  south-east 
Asia,  the  Middle  East,  the  USA  and  Latin  America,  Canada  and  Australia,  as 
well  as  capital  regions  in  developing  countries).  In  accordance  with  criteria  set 
by the Council, the Commission  should decide every second year on the products 
with latitude for adjustments  in the intervening period. 

5. 

TYPES OF PROMOTIONAL  MEASURES 

The action to be undertaken can be grouped in three categories: 

a)  General  Activities,  comprising  market  .research  and  surveys  (dealing  with 
topics of supply and demand, consumer behaviour,  structure  of  distribution) 
and  high  level  visits  with  the  participation  of  selected  managers  as  well  as 
the participation  in international  events fairs  and exhibitions, with  European 
Community stands (cf.  stand at FOODEX in Japan in March  1997). 

b)  Sector Activities, meaning measures carried out for a specific  sector or for a 
few  specific  products  with  the  purpose  of  establishing  a  basis  for  the 
marketing  effort.  These measures  could  take the  form  of  press  conferences, 
workshops  and  seminars  for  selected  target  groups  (such  as  importers, 
distributors,  medical  doctors,  nutritionists,  and  other  opinion 
leaders) 
focusing  on  the  advantages  of  EC  products  in  terms  of  quality,  hygiene, 
food  safety, nutritional  aspects, animal welfare, labelling, etc. 

c)  Specific  Programmes,  instead,  would  consist  of  Public  Relations  activities, 

advertising and promotions aimed at consumers/end  users. 

6. 

FINANCING 

With  the  exception  of  certain  specific  measures  (information  on  Community 
quality and labelling systems, high-level  visits, studies) to be financed  100% by 
the  EC,  the  other  measures  should  be  part-financed  (e.g.  50%)  by  the  EC, the 
remainder  being  defrayed  by 
the  professional/interbranch  organisations 
proposing  them  and  by  the  Member  States  concerned.  Such  part  financing 
appears indispensable if those in the trade and the Member States are to be made 
more responsible. 

Similarly,  concerning  the  financing  of  promotional  activities  lasting  for  longer 
periods  (e.g.  more  than  two  years),  Community  share  of  financing  should  be 
regressive (i.e. with a diminishing percentage share of say from 60% to 40%). 

7. 

MANAGEMENT,  CONTROLS AND ASSESSMENT 

After  the  Community  regulation  framework  has  been  defined  (objectives, 
resources,  products,  etc.),  initiative  for  measures  to  be  taken  should  fall 
the  sectors 
essentially  on  the  professional/interbranch  organisations  of 
concerned. After the Member States concerned have given their agreement, such 
measures would be proposed for approval to the Commission, which should give 
preference  when  selecting  programmes  to  those  from  organisations  covering 
several Member States. 

Regarding the implementation  of  approved  measures  and taking  account  of  the 
extensive experiences  required, mainly  the knowledge  of several  disciplines and 
intercommunicating  markets  as  well  as  the  lack  of  specialised  staff  at  the 
Commission,  the only  viable  solution  for  implementing  the  measures  approved 
by the  Commission  would  be,  to  give  responsibility,  by  means  of  restricted or 
open  invitations  to  tender,  to  an  operational  structure  with  a  network  in  the 
markets  concerned  and  able  to  call  on  human  resources  with  the  requisite 
technical skills in the fields of communication, products and markets. 

For olive  oil,  the  system  of  management  entrusted  to  the  lOOC  (International 
Olive Oil Council) should be maintained in view of the positive results achieved 
and the lack of other sector-wide structures comparable with the lOOC. 

A  monitoring  committee  set  up  by  the  Commission  and  the  Member  States 
concerned  should be put in charge of  overseeing  the  measures.  As  for  all other 
contracts of  this type, the competent departments of  the  Member States and the 
Commission  (EAGGF,  Financial  Control,  UCLAF)  will  carry  out  financial 
control. 

Lastly,  the  implementation  of  the  measures  will  be  assessed  by  independent 
bodies selected by the Commission. 

Proposal for a 

COUNCIL REGULATION (EC) 

on measures to promote and provide information 
on agricultural products in third countries 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing  the European Community,  and in particular 
Article 43 thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

Having regard to the opinion of the Economic and Social Committee, 

Whereas,  under  current  legislation,  the  Community  can  conduct  promotional 
measures in third countries for a limited number of agricultural products; whereas the 
results so far have been very encouraging; 

Whereas,  in  view  of  the  experience  gained,  the  prospects  for  market  growth  both 
within and outside the Community and the new context of international trade, a global 
and consistent  policy  needs  to be developed  towards  information  and promotion  on 
the markets of third countries; 

Whereas  such  a  policy  can  usefully  supplement  and  strengthen  the  measures 
undertaken by the Member States, especially  by promoting the image of  Community 
products  on  international  markets  as  regards  food  quality  and  safety  in  particular; 
whereas  this  activity,  by  helping  to  open  up  new  markets,  is  also  likely  to  have a 
multiplier effect on national and private initiatives; 

Whereas  the  selection  criteria  for  the  products  and  markets  involved  must  be 
identified; 

Whereas,  as  a general  rule,  the  Commission  should  bear  only  part  of  the  requisite 
funding,  so  that  the  proposer  organisations  and  interested  Member  States  can  share 
the responsibility; whereas however, in exceptional  cases, it may be appropriate not to 
require a financial contribution  from the Member State concerned; 

Whereas provision should be made whereby the Commission, through the appropriate 
procedures, can delegate  management  and implementation  of  the measures to bodies 
with the necessary facilities and skills; 

Whereas,  in  view  of  the  experience  gained  and  the  results  achieved  by  the 
International  Olive  Oil  Council  in  its  promotional  activities,  provision  should 
however be made to continue delegating to that body the measures  falling  within  its 
sphere of responsibility; whereas it should be possible to seek the assistance of similar 
international bodies for other products; 

Whereas,  to  monitor  the  proper  conduct  of  the  programmes  and  the  impact  of  the 
measures, provision should be made for effective  monitoring by the Commission and 
the Member States, and for evaluation of the results by an independent body, 

HAS ADOPTED THIS REGULATION. 

Article 1 

1. 

2'. 

The Community may fund in whole or in part measures in third countries that 
promote or provide information on agricultural products. 

The  measures  referred  to  in  the  preceding  paragraph  shall  not  be  directed 
towards particular brand names, nor shall they favour the products of  any one 
Member State. 

The measures referred to in Article  1 shall be: 

Article 2 

(a) 

(b) 

(c) 

(d) 

public  relations, promotional  or publicity  measures,  in particular  highlighting 
the advantages of Community products especially in terms of quality, hygiene, 
food  safety,  nutrition,  labelling,  animal  welfare  considerations  or respect  for 
the environment, 

participation  at  events,  fairs  or  exhibitions  of  international  importance, 
especially through the provision of European Community exhibition stands, 

information  campaigns  on  the  Community  system  of  PDOs/PGIs  and TSGs 
and organic farming, 

information  campaigns  on the  Community  system  of  quality  wines  psr, table 
wines and spirit drinks with a geographical  indication, 

(e)  market studies with a view to expanding market outlets, 

(0 

high-level  visits by Community representatives, 

(g) 

studies to evaluate the result of the promotional and information  measures. 

Article 3 

The  following  products in particular shall  be eligible  for the measures  referred  to in 
Article 1: 

(a) 

products  intended  for  direct  consumption  or  processing  for  which  export 
opportunities  or  potential  new  market  outlets  in  third  countries  exist, 
especially where export refunds will not be required, 

(b) 

typical or quality products displaying high added value. 

Article 4 

In choosing the third countries in which the measures referred to in Article  1 will be 
carried  out,  account  shall  be  taken  of  the  markets  of  countries  where  there  is 
significant actual or potential demand. 

Article 5 

1. 

2. 

In  accordance  with  the  procedure  referred  to  in  Article  11,  the  Commission 
shall draw up every two years a list of the products and markets referred to in 
Articles 3 and 4 respectively. 

However, this list may be amended in the interim, if necessary. 

Before  the  list  referred  to in  paragraph  1 is  drawn  up, the  Commission  may 
consult the Standing Group on the Promotion  of  Agricultural  Products of the 
Advisory Committee on Agricultural Product Health and Safety. 

Article 6 

Where measures are decided for the olive  oil  and table olive  sector,  the Community 
may carry them out through the International  Olive Oil  Council.  In the case of other 
sectors,  the  Community  may  seek  the  help  of  international  organisations  offering 
similar guarantees. 

Article 7 

1. 

To carry out the measures referred to in Article 2 (a), (b) and (d) and subject to 
Article  6,  the trade or inter-trade  bodies  representing  the  sector(s)  concerned 
shall  draw  up promotion  and information  programmes  lasting no  longer than 
three years. 

Once approved  by the Member States  which, without  prejudice  to the second 
subparagraph of Article 9(3), shall undertake to contribute to their funding, the 
programmes  referred  to  in  the  preceding  subparagraph  shall  be  submitted  to 
the  Commission.  It  shall  approve  the  programmes  after  it  has  informed  the 
Management Committees for the sectors in question, and shall give preference 
to programmes from organisations that cover several Member States. 

Before  approving the programmes, the Commission  may consult  the Standing 
Group on the Promotion of  Agricultural  Products of  the Advisory  Committee 
on Agricultural Product Health and Safely. 

2. 

The Commission  shall decide on the measures 

(a) 

referred  to in Article 2(c), (e) and (f), or 

(b) 

carried out by an international organisation  as referred  to in Article 6 

after  the  Management  Committee  for  the  sectors  in  question  or,  where 
to  Regulations  (EEC) 
appropriate,  the  Regulatory  Committees  referred 
No2092/9l',  (EEC)  No  2081/922  and  (EEC)  No  2082/923  have  been 
informed. 

Before  taking a decision, the Commission  may consult  the Standing  Group on 
the Promotion of Agricultural  Products referred  to in paragraph  I. 

Article 8 

1. 

2. 

3. 

Subject  to Article 6, the Commission  shall  choose, on the  basis  of  an open  or 
restricted invitation to tender, the body or bodies to manage and implement  the 
measures, and the body to evaluate the results. The body or bodies  responsible 
for  implementation  shall  have specialist  knowledge  of  the  products  concerned 
and  the  targeted  markets,  and  the  resources  to  ensure  that  the  measures  are 
implemented  as  effectively  as  possible,  taking  account  of  the  European 
dimension of these programmes. 

A Monitoring  Committee, comprising  representatives  of  the  Commission,  the 
Member  States  concerned  and  the  proposer  organisations  shall  supervise  the 
proper conduct of the measures. 

The Member States concerned  shall  be responsible for  monitoring and  making 
payments in respect of the measures referred to in Article 2(a), (b) and (d). 

1. 

Without prejudice to paragraph 4, the Community shall  fund: 

Article 9 

(a) 

the measures referred  to in Article 2(c), (0 and (g) in their entirety, 

(b) 

the  other  promotional  and  information  measures  listed  in  Article  2 in 
part. 

However,  in  special  cases  the Community  may  fund  the  measures  referred  to 
in Article 2(b) and (e) in  full. 

OJL  198, 22.7.1991, p. 1. 

OJL  208, 24.7.1992, p.  I. 

OJL  208, 24.7.1992, p. 9. 

2. 

3. 

The  Community's  contribution  to  the  annual  measures  referred  to  in 
paragraph  1(b)  shall  not exceed  50% of  the real  cost  of  the  measures.  In the 
case  of  promotions  lasting  at  least  two  years,  the  contribution  shall  be 
degressive, falling from 60% to 40% of the real cost of the measures. 

The  Member  States  shall  contribute  to  the  measures  referred  to  in  the 
preceding  paragraph  by  covering  20%  of  their  real  costs,  the  remaining 
balance to be borne by the proposer organisations. 

However,  in  duly  justified  cases  and  on  condition  that  the  programme 
concerned is clearly of Community interest, it may be decided, in accordance 
with  the  procedure  laid  down  in  Article  11,  that  the  proposer  organisation 
should bear all that part of the funding not supported by the Community. 

4. 

Where Article 6 applies, the Community shall after approving the programme, 
grant an appropriate contribution to the international organisation in question. 

Article 10 

Community expenditure  on the measures  referred  to in  Article  I shall  he considered 
intervention  within  the  meaning  of  Article  3  of  Council  Regulation  (EEC) 
No 729/704. 

Article 11 

Detailed  rules for  applying  this  Regulation  shall  be  adopted  in  accordance  with the 
procedure laid down in: 

(a) 

(b) 

Article  38  of  Council  Regulation  No  136/66/CEE  on  the  establishment  o\'  a 
common organisation of the market in oils and fats5 or, as appropriate. 

the corresponding article in the other regulations on the common organisation 
of the agricultural markets. 

Article 12 

Every  two  years  the  Commission  shall  present  to  the  Council  and  to  Parliament  a 
report on the  application  of  this  Regulation. The first  report  shall  be presented  after 
the second year in which the measures provided for in this Regulation are applied. 

4 
* 

OJL 94, 28.4.1970, p. 13. 
OJ  172, 30.9.1966, p. 3025/66. 

10 

Article 13 

1. 

2. 

3. 

In Article  11(1) of  Regulation No 136/66/EEC, the words "or third countries" 
are deleted. 

The  words  "and elsewhere" in  the first  indent  of  Article  2(2)  of  Regulation 
(EEC) No B08/706 are deleted. 

The words "and abroad" in Article  2(1)  of  Regulation  (EC) No  2275/967 are 
deleted. 

This Regulation shall enter into force on  I May  1999. 

Article 14 

This Regulation shall  be binding  in its entirety and directly applicable  in all Member 
States. 

Done at Brussels, 

For the Council 
The President 

O IL  146,4.7.1970. p.  I. 
O JL  308, 29.11.1996, p. 7. 

11 

FINANCIAL  STATEMENT 

1. 

2. 

BUDGET HEADING: 

BI-38 

APPROPRIATIONS: ECU 95 million 

TITLE: 
Proposal  for a Council Regulation on measures to promote and provide information  on agricultural  products in third 
countries. 

3. 

LEGAL BASIS:  Article 43 of the Treaty and Council Regulation No 136/66/CEE 

AIMS: 
To develop a global and consistent policy for providing  information  on and promoting certain agricultural  products by means 
of promotional  measures in third countries. 

5. 

FINANCIAL  IMPLICATIONS 

PERIOD OF 
12 MONTHS 

(EUR  million) 

CURRENT 
FINANCIAL 
YEAR (1998) 
(EUR  million) 

FOI LOW INC. 
FINANCIAL 
YEAR (1999) 
(Ft IK million) 

5.0 

EXPENDITURE 

CHARGED TO THE EC BUDGET 
(INTERVENTION) 

15 

6 
(of which: 
lOOC: 6 
Other: p.m.) 

5.1 

5.0.1  ESTIMATED EXPENDITURE 
5.1.1 

5.2  METHOD OF CALCULATION: 

2000 
(EUR million) 

2001 
(EUR million) 

2002 
(EUR million) 

2003 
(FUR  million) 

15 

15 

15 

15 

6.0  CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE RE1 .EVANT 

CHAPTER OF THE CURRENT BUDGET? 

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

BUDGET? 

6.2  WILL A SIJPPLEMENTARY BUDGET BE NECESSARY? 

6.3  WILL FUTURE BUDGET APPROPRIA FIONS BE NECESSARY? 

OBSERVATIONS: 

»  The overall amount  includes a yearly contribution of about EUR 6 million to the International Olive Oil Council. 
S  For  1999 this expenditure is based on Article  1(5) of Council  Regulation (EC) No  1638/98 of 20 July  1998. 

YES 

YES 

12 

ISSN 0254-1475 

COM(98) 683  final 

DOCUMENTS 

EN 

03  16  11  10 

Catalogue  number  :  CB-CO-98-693-EN-C 

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