Communication from the Commission to the Council on the contribution to be paid to the Promotion Fund of the International Olive Oil Council (IOOC) for the 2000/01 information campaign to increase consumption of olive oil and table olives in non-member countries
Date: 1999-12-07
Institutions: European Commission
Subjects: consumption, financial aid, olive oil, sales promotion, third country

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 07.12.1999
COM(1999) 653 final

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL

on the contribution to be paid to the Promotion Fund of the International Olive
Oil Council (IOOC) for the 2000/01 information campaign to increase
consumption of olive oil and table olives in non-member countries

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL

on the contribution to be paid to the Promotion Fund of the International Olive
Oil Council (IOOC) for the 2000/01 information campaign to increase
consumption of olive oil and table olives in non-member countries

1.

2.

3.

Article 11(1) of Council Regulation No 136/66/EEC of 22 September 1966 on the
establishment of a common organisation in the market in oils and fats1, as last
amended by Regulation (EC) No 1638/982, authorises the Community to undertake
measures directly or indirectly to provide information or to promote, in Member
States or non-member countries,
the consumption of olive oil and table olives
produced in the Community.

Article 11(2) of Regulation No 136/66/EEC calls on the Commission to send the
Council a programme of the measures it contemplates undertaking during the
following marketing year(s).

As a full signatory to the International Agreement on Olive Oil and Table Olives
signed at Geneva in 1986, extended for five years from 1 January 1994 and
prolonged for two years until 31 December 2000, the Community must contribute
each year to the IOOC Promotion Fund for increasing olive oil and table olive
consumption in non-member countries.

Chapter B1-38 (Promotion measures) of the 2000 budget makes provision for a
contribution.

For a number of years the Commission has made a compulsory and a voluntary
contribution. The amount paid has increased over the years to reach EUR 5 706 450
in 1999 for a total programme cost of EUR 5 836 400.

The programme is devoted in the main to information, education and research
activities which have gradually been launched in various non-member countries.

Promotional activity began in the United States (1983/84), Australia (1989/90) and
Japan (1991/92) and has subsequently commenced in Canada (1994/95), Argentina
(1994/95)3, Thailand (1996/97), South-East Asia (Taiwan 1998/99) and Brazil
(1998/99).

Given the very substantial
increases in olive oil consumption achieved in the
countries in which programmes have been mounted by the IOOC (see annexed table)
and the supply side outlook for olive oil
the Commission
considers it necessary to continue, in parallel with campaigns within the Community,
promotional action in certain non-member countries through the IOOC.

in the Community,

1

2

3

OJ 172, 30.9.1966, p. 3025/66.
OJ L 210, 28.7.1998, p. 32.
Promotional activities in Argentina were discontinued in 1999, because of the imposition of an import
tax on olive oil by the Argentine authorities.

2

It is therefore proposed that the Promotion Fund continues to be supported by means
of a financial contribution for the 2000/01 programme.

4.

In July 1999 the IOOC sent the Commission its programme for 2000/01 (March
2000 to February 2001) and a breakdown of the draft budget required.

The programme embraces:

–

–

–

–

promotional and public relations activities and provision of scientific,
nutritional and gastronomic information in the above-mentioned countries,

continuation of scientific research and dissemination of the results of research
already carried out,

production of information material and its distribution at international events in
various countries,

market studies and assessment studies for the programmes mounted.

The cost of the programme presented by the IOOC is EUR 6 123 650 with a possible
breakdown as follows:

-
-
-
-

-
-

non-member country activities
scientific research
dissemination of results
production of material and international
events
market/assessment studies
other (table olives, quality control, etc.)

EUR 4 546 650
EUR 400 000
EUR 135 000

EUR 407 000
EUR 128 000
EUR 507 000

EUR 6 123 650

5.

The Commission has examined the draft programme, which is a continuation of the
work of previous years. The strategy seems well adapted to the objectives in view
and the means proposed appropriate to that strategy. Further, the assessment studies
carried out in previous years confirm the effectiveness of the action mounted.

The only new measure is including China in the promotional activities, which,
according to market studies, represent an interesting and potential market.

However, given the resources in the 2000 budget for promotion outside the Union,
and the possibility that promotional activities may be launched for other products in
these countries in the year 2000, the Commission considers that, in order to maintain
balance, a slight reduction in the funds allocated to olive oil is justified.

Since significant funds have already been invested and the scope of promotional
measures widened,
the changed budgetary
situation will not jeopardise the efficiency of the promotional activities of the IOOC
in any way.

the Commission is convinced that

3

The total budget proposed by the IOOC should therefore be amended as follows:

-
-
-
-

-
-

non-member country activities
scientific research
dissemination of results
production of material and international
events
market/assessment studies
other (table olives, quality control, etc.)

EUR 4 192 270
EUR 400 000
EUR 135 000

EUR 357 000
EUR 128 000
EUR 447 000

EUR 5 659 270

It should be noted that the above figures are maximum amounts: the final amounts
will be fixed following a call for tenders launched by the IOOC. The call for tender
procedure ensures sound financial management.

6.

The above sum is covered by:

• a compulsory contribution from IOOC members equalling EUR 500 000 (the
Community contribution amounts to EUR 404 850 in accordance with the cost-
sharing formula provided for in the Agreement),

• a voluntary contribution from the Community not exceeding EUR 5 094 270,

• estimated income of EUR 65 000 from the sale of IOOC publications.

In conclusion, the total Community contribution for 2000/01 equals EUR 5 499 120,
which is 3.7% down on the total contribution to the previous programme
(EUR 5 706 450).

It should be noted that the present Agreement expires on 31 December 2000. A first
commitment is proposed to cover expenditure until that date. A further commitment
will be proposed when the Agreement is extended beyond 1 January 2001.

Development of consumption based on import figures

USA

JAP

AUS

CAN

BRE

ASIA

TOTAL

(1 000 tonnes)

Initial consumption

25

2

4

6

26

3

Consumption when
IOOC activities
commenced

Current consumption

Target consumption
(2001/02)

38
(1985)

4
(1991)

10
(1990)

11
(1994)

26
(1998)

4
(1997)

19

30

29

45

8

20

160

180

30

50

23

28

4

66

93

269

353

FINANCIAL STATEMENT

BUDGET HEADING:
B1-381

APPROPRIATIONS:
EUR 21 million (letter
of amendment - 2000)

TITLE:
Communication from the Commission to the Council on the contribution to be
paid to the Promotion Fund of the International Olive Oil Council (IOOC) for
the 2000/01 information campaign to increase consumption of olive oil and table
olives in non-member countries.

LEGAL BASIS: Council Regulation No 136/66/EEC

AIMS:

Financial contribution to the IOOC for the 2000/01 marketing year.

FINANCIAL IMPLICATIONS

CHARGED TO THE EC BUDGET

EXPENDITURE
-
(REFUNDS/INTERVENTION)
-
-

NATIONAL AUTHORITIES
OTHER

12 MONTH
PERIOD

(Mio EUR)

5,5 *

CURRENT
FINANCIAL
YEAR 2000
(Mio EUR)

5,5 *

REVENUE
-
(LEVIES/CUSTOMS DUTIES)
NATIONAL
-

OWN RESOURCES OF THE EC

-

-

FOLLOWING
FINANCIAL
YEAR 2001
(Mio EUR)

-

-

1.

2.

3.

4.

5.

5.0

5.1

5.0.1 ESTIMATED EXPENDITURE
5.1.1 ESTIMATED REVENUE

5.2 METHOD OF CALCULATION:

2000

2001

2002

2003

-
-

-
--

-
-

-
-

6.0

6.1

CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN
THE RELEVANT CHAPTER OF THE CURRENT BUDGET?

YES

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

6.2 WILL A SUPPLEMENTARY BUDGET BE NECESSARY?

YES / NO

YES / NO

6.3 WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS?

YES

OBSERVATIONS:

*

Amount already included in the letter of amendment for the PDB 2000.

5