WRITTEN QUESTION E-3221/02 by Alexandros Alavanos (GUE/NGL) to the Commission. Obstacles preventing small tobacco growers accessing the market in tobacco products.
Date: 2002-11-14
Institutions: European Parliament, Provisional data
Subjects: Greece, administrative procedure, business start-up, citizen-authority relations, craft business, excise duty, market access, tax harmonisation, tobacco

C 11 E/40

Official Journal of the European Union

EN

15.1.2004

At the heart of this system is a distinction between commercial operations (which, as a principle, attract
excise duties in the Member State of final consumption) and goods acquired by private individuals for their
own use and transported by themselves,
for which excise duties are due in the Member State of
acquisition. This rule on private purchases is set out in Article 8 of Council Directive 92/12 EEC (1). There
is no limit on the quantity of goods that a private individual may acquire and ‘import’ under this article
(with the exception of the time-limited derogations granted to Denmark, Finland and Sweden).

Since different tax rules apply to these two basic categories of operations, the authorities of the Member
States will, when putting the rules of the Directive into practice, be called upon to distinguish between
genuine ‘private imports’ and commercial operations fraudulently disguised as ‘private’. The harmonised
excise system, therefore, provides for a common method which the Member States must apply when
making this distinction. Moving away from the earlier system based on quantitative ‘allowances’, which
was considered incompatible with the principle of free movement of goods, Article 9 of Directive 92/12/
EEC requires Member States to base their determination on all relevant aspects of each individual case
(taking into consideration at least those aspects mentioned in sub-Article 2 of Article 9). One of the
aspects which the Member States are required to take into account is the quantity of the products. For the
application of this criterion, the Member States may lay down ‘guide levels’. However, these levels may
only serve as a form of evidence.

On the specific points raised by the Honourable Member:

(a) The Commission considers the ‘guide levels’ provided for in Article 9, subArticle 2, of Directive 92/
12/EEC to be purely indicative. The harmonised excise duty rules do not allow a Member State to
apply such guide levels as limits on the quantity of products which a private individual may acquire
and transport between Member States under the provisions of Article 8 of Directive 92/12/EEC.

(b) Under the provisions of Article 9 of Directive 92/12/EEC, it is for the authorities of the Member States
to establish whether goods held by a private individual are in fact held not for the individual’s own
use, but for ‘commercial purposes’. The individual holding a large quantity of excise goods may
reasonably be expected to provide an explanation as to how he intends to use those products, but
the goods are held for a non-commercial purpose. The
may not be required to prove that
responsibility for making this determination rests entirely on the authorities of the Member State,
which have to be satisfied, on all the evidence available, of the true purpose of the movement of the
goods.

The Commission would like to add that these aspects of British excise law are at present the subject of
infringement proceedings under Article 226 of
the announced measures
adequately address the points raised by the Commission in these proceedings can not yet be determined,
as the enquiry is still ongoing. The Commission is therefore, at this time, not in a position to comment on
those parts of the Honourable Member’s questions.

the EC Treaty. Whether

(1) Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty

and on the holding, movement and monitoring of such products, OJ L 76, 23.3.1992.

(2004/C 11 E/041)

WRITTEN QUESTION E-3221/02

by Alexandros Alavanos (GUE/NGL) to the Commission

(14 November 2002)

Subject: Obstacles preventing small tobacco growers accessing the market in tobacco products

Some tobacco growers in Greece prefer to market their produce in the form of fine-cut tobacco for rolling
cigarettes, thereby creating a cottage industry for cutting and, possibly, packing raw tobacco.

15.1.2004

EN

Official Journal of the European Union

C 11 E/41

The growers concerned, who live in particularly problematic areas, wish to grow the Mavra and Tsebelia
varieties on dry,
infertile land, without using fertilisers or pesticides. These varieties are suitable for
producing very high quality thin-cut tobacco which can be marketed as ‘natural’ tobacco at satisfactory
prices which will guarantee them a decent income without Community support.

However, the marketing of fine-cut tobacco by Greek growers on the basis of such a small area and
minimal resources has run up against provisions and requirements in national
law which make it
prohibitive in both financial and practical terms to operate such a cottage industry, i.e. in effect they are
banned from the market.

Is it possible to market such a product once it is taxed and labelled in accordance with current

1.
Community and national legislation?

2.
Can the Commission, in agreement with the Greek authorities, set out the measures and the cost
involved to the producers concerned to comply with the legislation and obtain the relevant permits
(guarantees, tax reserves, etc.)?

3. Will the Commission examine the possibility of establishing more flexible procedures to enable those
small tobacco growers who are interested and wish to do so to set up a small cottage industry in tandem
with their production?

Answer given by Mr Bolkestein on behalf of the Commission

(3 January 2003)

As far as Union legislation in the area of excise duty is concerned, the Commission would like to point out
the following, in reply to the three specific questions raised by the Honourable member:

1. Union legislation lays down minimum levels of taxation for tobacco products. These minimum levels
were last modified by Council Directive 2002/10/EC (1) amending, inter alia, Council Directive 92/80/
EEC of 19 October 1992 on the approximation of taxes on manufactured tobacco other than
cigarettes (2). According to this modification, the minimum level of excise duty on fine-cut tobacco for
the rolling of cigarettes will have to reach 36 % of the retail-selling price inclusive of all taxes, or
EUR 32 per kilogram, by 1 July 2004. The minimum level of excise duty on cigarettes is set at 57 % of
the retail selling price, inclusive of all taxes, of cigarettes of the most popular price category, with a
minimum of EUR 60 per 1 000 cigarettes (EUR 64 as from 1 July 2006).

The lower minimum rate applied on fine-cut tobacco for the rolling of cigarettes reflects the fact that
such tobacco is a semi-finished product, used by consumers who roll their own cigarettes and have to
buy additional materials for that purpose. However, Member States are free to determine their tax
levels above minimum rate levels. Greece has chosen to apply an excise duty of 59 % of the retail
selling price on fine-cut tobacco for the rolling of cigarettes. This duty level is comparable to its
overall duty level on cigarettes, amounting to 57,5 % of the retail selling price for cigarettes of the
most popular price category.

2. According to Article 11 of Directive 92/12/EEC (3) the production of products subject to excise duty
under suspension of that duty shall take place in a tax warehouse. Greek tobacco growers, wishing to
also set up a production of fine-cut tobacco, have to obtain an authorization from the Greek tax
authorities to be authorized warehousekeepers. The minimum requirements that such warehouse-
keepers have to respect are laid down in Article 13 of the Directive. Basically, they consist of the
provision of a guarantee for the excise duty, keeping appropriate accounts of stocks and product
movements, and consenting to checks from the authorities.

It is not possible for the Commission to detail the costs involved for a producer to meet the
requirements to become an authorised warehousekeeper. The cost of providing a guarantee is
normally not excessive, and should be seen in relation to the deferment of excise duty payment that it
allows. Moreover, Member States can waive this requirement, if they deem it to be appropriate. There
does not seem to be an additional cost involved in keeping accounts, this is generally part of the
normal administration of the business of course. Moreover, within the limits set by the Directive,
Member States already have flexibility in fixing and simplifying the obligations to be respected by
producers of excise products.

C 11 E/42

Official Journal of the European Union

EN

15.1.2004

3. The Commission has not received a request from the Greek authorities to introduce more flexible
procedures. The Commission is of the opinion that the fiscal obligations outlined are not a particular
impediment to tobacco growers setting up a production of fine-cut tobacco.

As regards other than fiscal requirements laid down in Community legislation, such as those concerning
the labelling of tobacco products, the Commission would point out that marketing, presentation and sale
of fine-cut tobacco is subject to the labelling requirements set out in Article 5, of Directive 2001/37/EC (4),
concerning the manufacture, presentation and sale of tobacco products, in particular paragraphs 2, 5, 6
and 7 thereof.

(1) Council Directive 2002/10/EC of 12 February 2002 amending Directives 92/79/EEC, 92/80/EEC and 95/59/EC as

regards the structure and rates of excise duty applied on manufactured tobacco, OJ L 46, 16.2.2002.

(2) OJ L 316, 31.10.1992.
(3) Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty
and on the holding, movement and monitoring of such products, OJ L 76, 23.3.1992, as last amended by Directive
2000/47/EC of 20 July 2000, OJ L 197, 29.7.2000.

(4) Directive 2001/37/EC of the Parliament and of the Council of 5 June 2001 on the approximation of the laws,
regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale
of tobacco products (cid:1) Commission statement, OJ L 194, 18.7.2001.

(2004/C 11 E/042)

WRITTEN QUESTION E-3233/02

by Caroline Lucas (Verts/ALE) to the Commission

(15 November 2002)

Subject: Coffee trade

Does the Commission consider it fair that, according to ‘The Economist’, coffee companies in Europe are
making up to 40 % profit on coffee, whilst the coffee producers on which they depend fall further into
poverty?

Does the Commission intend to raise the issue of corporate social responsibility with the four coffee giants
in Europe: Nestlé, Sara Lee, Kraft and Tchibo?

Answer given by Mr Lamy on behalf of the Commission

(17 December 2002)

The Commission is clearly not in a position to judge the profit levels of individual companies (cid:1) although
it must be said that these figures are approximately double those quoted by Oxfam in their recent report
on the coffee crisis. However, the Commission would be the first to accept that volatility in the coffee
market is indeed a major problem for producers and is well aware of the development implications of the
fall in coffee prices and the very real problems which coffee farmers are facing. With a view to help
the Commission is currently working within the International Coffee
alleviate the immediate crisis,
Organisation on how best to support their quality scheme, which should help to improve world prices. It
is also supporting a number of projects to encourage the development of markets for ‘fair trade’ to help
poor producers gain a greater share of the international market.

The question of what further measures the Commission may take on coffee in the immediate future is
being considered by an inter service working group in consultation with non-governmental organisations,
including Oxfam and large coffee roasters. Parliament will be kept informed of any progress.

Over the longer term, diversification of the economy is a key element of a coherent development strategy
aimed at the eradication of poverty and integration of developing countries into the world economy.
Diversification requires a comprehensive approach to trade and development (1). With the Everything But
Arms Initiative (cid:1) as well as its commitment to a successful trade round, the Commission is helping to
create greater market opportunities for developing countries to diversify.
is also providing the
development support to help turn opportunity into reality.

It