Proposal for a Council Regulation amending Regulation (EC) No 1255/1999 on the common organisation of the market in milk and milk products
Date: 2007-02-15
Institutions: European Commission
Subjects: common organisation of markets, extra-EU trade, intra-EU trade, milk, milk product

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 15.2.2007 
COM(2007) 58 final 

2007/0025 (CNS) 
2007/0026 (CNS) 
2007/0027 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

amending Directive 2001/114/EC relating to certain partly or  
wholly dehydrated preserved milk for human consumption 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1255/1999 on the common organisation of the market  
in milk and milk products 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 2597/97 laying down additional rules on the common 
organisation of the market in milk and milk products for drinking milk 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

I. 

INTRODUCTION 

This package of proposals contains amendments of: 

– 

– 

– 

Council Directive 2001/114/EC relating to certain partly or wholly dehydrated 
preserved milk for human consumption, 

Council  Regulation  (EC)  No  1255/1999  on  the  common  organisation  of  the 
market in milk and milk products and 

Council  Regulation  (EC)  No  2597/97  laying  down  additional  rules  on  the 
common  organisation  of  the  market  in  milk  and  milk  products  for  drinking 
milk. 

The  proposed  amendments  will  in  particular  provide  simplification  of  a  number  of 
rules in the dairy sector to the benefit of all stakeholders.  

II. 

COUNCIL DIRECTIVE 2001/114/EC 

The  Community  dairy  industry  and  exporters  of  milk  powders  and  condensed  milk 
have  for  a  long  time  requested  a  modification  of  the  Community  rules  on  protein 
contents  in  such  products.  Currently,  the  natural  content  of  milk  protein  in  the 
collected milk should be maintained in preserved milk. The adjustment of the protein 
content to a standard level is not allowed. 

However,  since  1999  the  Codex  Alimentarius  Committee  has  allowed  such  protein 
standardisation in the international standard for dry milk set by the Committee. 

As a consequence, competitors from outside the Community, producing according to 
those  standards,  are  enjoying  an  economical  advantage  vis-à-vis  the  Community 
producers.  The  attached  proposals  aim  to  modify  that  situation  by  allowing  the 
standardisation  of  the  protein  content  in  the  Community  in  line  with  the  Codex 
standards (minimum content of 34%, expressed in fat free dry matter). 

With  a  natural  protein  content  in  milk  powder  ranging  from  31%  to  37%  a 
standardisation  to  34%  is  likely  to  lead  to  substantial  quantities  of  proteins  being 
released on the Community market. On the basis of the foreseeable market for dairy 
proteins  which  is  driven  by  a  strong  demand  it  is,  however,  not  expected  that 
increased availabilities would lead to any major additional costs for the Community, 
if  any  at  all,  in  terms  of  intervention,  export  refunds  of  disposal  aids.  The  overall 
higher commercial value of proteins together with improved competitive strength on 
the  world  market  may  even  provide  a  higher  milk  price  where  the  commercial 
benefits are passed on to the milk producers. 

The  intervention  price  for  skimmed  milk  powder  (SMP)  is  currently  based  on  a 
protein content of 35.6%. With a Community standardisation to 34% the intervention 
standard should logically be aligned to that level with the consequent adaptations of 
the intervention price (see under III(a)).  

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III. 

COUNCIL REGULATION (EC) NO 1255/1999 

a) 

Reduction of intervention price for SMP 

The  adaptation  of  the  intervention  price  for  SMP  as  referred  to  above  is  strictly 
mathematical  and  follow  the  current  rules  of  price  reduction  where  the  SMP  is 
having a protein content lower than the intervention standard of 35.6%. A reduction 
of 1.75% is applied for each percentage point lower than the standard. 

The  new  intervention  standard  of  34%  would  therefore  lead  to  a  new  intervention 
price which is 2.8% (1.6% x 1.75) lower than the current one. Furthermore, due to 
the  new  possibility  of  standardising  SMP  it  is  appropriate  only  to  allow  into 
intervention the standard SMP containing 34% of protein. Article 7 should therefore 
be amended accordingly.  

b) 

Removal of intervention trigger for butter 

The  current  rules  for  butter  intervention  provide  that  from  1  March  to  31  August 
intervention is open in a Member State where the average market price falls to or is 
below  92%  of  the  intervention  price  in  two  consecutive  weeks.  Suspension  of 
buying-in is decided for a Member State where the average butter price is equal to or 
higher than 92% for two consecutive weeks. The actual fixed buying-in price is 90% 
of  the  intervention  price.  This  system  is  administratively  cumbersome  for  Member 
States and the Commission and has lost its practical value. 

Without diluting the value of the intervention system the provisions should therefore 
be simplified by eliminating the 92% trigger mechanism. Intervention agencies may 
simply buy butter at 90% of the intervention price from 1 March and until the overall 
Community ceiling has been reached. The Commission can thereafter either suspend 
intervention  buying  or  let  it  continue  via  a  tendering  system,  as  the  rules  already 
provide. Article 6(1) should be amended accordingly.  

c)  Abolition of national quality class for butter 

Reference  to  the  "national  quality  class"  was  introduced  in  the  Community 
legislation at a time when there was no Community standards for butter.  

In 1995 common quality requirements for butter intervention were introduced. Those 
requirements  were  found  both  to  be  very  strict  and  cumbersome  to  verify  and 
consequently reference to national classes continued for butter under the various aid 
schemes.  However,  with  now  25/27  national  classes  there  is  obviously  a  risk  of 
different qualities  and  control systems  linked to the granting of aids. It  is  therefore 
proposed to replace that national class as butter quality criterion by the Community 
requirements  for  butter  exported  with  refunds.  Those  requirements  are  not  only 
'"lighter"  than  the  intervention  requirements  but  they  are  also  easy  to  control. 
Article 6(2) and (3) should be amended accordingly.  

d) 

Removal of certain aids for private storage 

As aid for private storage of cream or SMP has not in practice been used in the past 
by  operators  as  support  for  the  dairy  market  the  two  measures  can  be  considered 
obsolete and should be removed from the basic dairy Regulation. 

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e) 

Removal of disposal aid for military forces 

Equally,  the  possibility  to  grant  an  aid  for  butter  purchased  by  military  forces 
(Article 13(1)(b)) is obsolete and should be removed from the Regulation.  

f) 

Introduction of a single rate of aid for school milk 

Article 14 provides for Community aid to be granted under the school milk system. 
Although the regime undoubtedly has both a great nutritional and promotional value 
the  implementation  of  it  is  felt  by  Member  States  to  be  complicated  and 
cumbersome. With a view to simplify the system it is proposed to have only one rate 
of aid, irrespective of the sort of milk delivered to the pupils. The single rate of aid 
should be established on the basis of past up-take of the various milk qualities under 
the school milk regime. For other eligible dairy products the amounts of aid should 
be determined in the light of that simplification. 

g) 

Compulsory use of import licence to be abandoned 

Article  26  provides  for  the  obligatory  use  of  an  import  licence  for  all  imports  of 
Article  1-products.  However,  with  regard  to  import  quotas  the  Commission's 
DG TAXUD  has  for  some  time  been  monitoring  the  import  of  various  agricultural 
products  via  the  "first-come/first-served"-system.  The  system  is  built  on  a  daily 
follow up of imported quantities with the help of a reliable computer network with 
Member States.  

As  information  source  for  the  stakeholders  the  DG  TAXUD  monitoring  system 
provides  more  accurate,  updated  and  transparent  information  than  the  current 
licensing system would do. On that background it is proposed, where import quotas 
are  or  will  be  monitored  by  DG  TAXUD,  to  exempt  operators  from  presenting  an 
import licence.  

IV. 

COUNCIL REGULATION (EC) NO 2597/97 

This  Regulation  currently  provides  that  only  three  categories  of  drinking  milk  may 
be produced and marketed in the Community: 

– 

– 

– 

skimmed milk (0.5% fat or less), 

semi-skimmed milk (between 1.5% and 1.8% fat) 

whole milk (3.5% fat or more). 

However, a large number of derogations from the above have been accepted in the 
past in connection with the various accession treaties. All of those derogations expire 
in 2009, except for Estonia where the derogation expires in April 2007. Estonia has 
formally requested a prolongation of its derogation and with a view to provide equal 
treatment it is proposed in a separate proposal to meet that request by providing for a 
prolongation until 2009.  

Furthermore,  for  many  years  there  has  been  a  clear  and  steady  tendency  in  the 
Community towards consumption of dairy products with less milk fat, in particular 
with regard to drinking milk.  

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In order to respond to those changes in nutritional habits as well as to comply with 
the  general  objective  of  encouraging  the  production  of  such  agricultural  products 
which is demanded by the market it is proposed to liberate the drinking milk market 
by  allowing  production  and  marketing  in  the  Community  of  milk  with  fat  contents 
outside  the  three  abovementioned  categories,  provided  that  clear  and  readable 
information on the fat content is provided on the label.  

Such liberalisation would make some of the abovementioned derogations redundant 
while providing for increased transparency and trade among Member States.  

V. 

FINANCIAL CONSEQUENCES 

Standardisation of preserved milk together with a reduction in the intervention price 
for SMP of 2.8% is likely to lead to a minor increase of SMP production while the 
bulk of the supplementary quantity of proteins obtained through standardisation will 
be absorbed by increased production of cheese and fresh dairy products. In turn, that 
increase  would  generate  a  higher  fat  use  in  those  products  and  a  correspondingly 
lower  butter  production  and  butter  export.  Overall,  therefore,  the  standardisation 
would lead to budgetary savings. 

The proposed amendments of the basic regulation (Regulation (EC) No 1255/1999), 
with the exception of the SMP intervention price, are of technical/obsolete nature and 
will not lead to any saving or new expenditures for the budget. The implementation 
of the single rate of aid for school milk does not change the total financial envelope 
for the scheme. 

Finally, it is estimated that the liberation of the drinking milk regulation (Regulation 
(EC)  No 2597/97)  will  not  lead  to  a  change  in  the  speed  of  the  shift  towards 
consumption of lower fat drinking milk. Since the trend in the average fat content is 
not assumed to change, there will be no budgetary impact compared with the current 
legislation. 

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2007/0025 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

amending Directive 2001/114/EC relating to certain partly or  
wholly dehydrated preserved milk for human consumption 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 37 thereof, 

Having regard to the proposal from the Commission1, 

Having regard to the opinion of the European Parliament2, 

Whereas: 

(1) 

In view of the growing need for harmonisation in the international trade, a provision 
should  be  made  to  allow  the  standardisation  of  the  protein  content  of  skimmed  milk 
powder,  whole  milk  powder  and  condensed  milk  to  a  minimum  content  of  34%, 
expressed on fat free dry matter. 

(2)  While allowing standardisation, it is necessary to define raw materials as well as the 

composition of raw materials used for protein adjustment. 

(3) 

Council Directive 2001/114/EC3 should be amended accordingly, 

HAS ADOPTED THIS DIRECTIVE: 

Annexe  I  to  Directive  2001/114/EC  is  amended  in  accordance  with  the  Annex  to  this 
Directive. 

Article 1 

Article 2 

Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative 
provisions necessary to comply  with  this  Directive  by  1  January  2008  at  the  latest. 
They  shall  forthwith  communicate  to  the  Commission  the  text  of  those  provisions 
and a correlation table between those provisions and this Directive. 

OJ C …, …, p. …. 
OJ C …, …, p. …. 
OJ L 15, 17.1.2002, p. 19. Directive as amended by the 2003 Act of accession. 

1. 

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3 

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When  Member  States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication. Member States shall determine how such reference is to be made. 

2. 

Member States shall communicate to the Commission the text of the main provisions 
of national law which they adopt in the field covered by this Directive. 

This Directive shall enter into force on the third  day following  that of its publication in the 
Official Journal of the European Union. 

Article 3 

Article 4 

This Directive is addressed to the Member States. 

Done at Brussels,  

For the Council 
The President 

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Annex I to Directive 2001/114/EC is amended as follows: 

ANNEX 

(1) 

In  point  1  "Partly  dehydrated  milk",  the  first  subparagraph  is  replaced  by  the 
following: 

"This  means  the  liquid  product,  whether  or  not  sweetened,  obtained  by  the  partial 
removal of water from milk, from wholly or partly skimmed milk or from a mixture 
of these products, which may have an admixture of cream or of wholly dehydrated 
milk or both, the addition of wholly dehydrated milk not to exceed,  in  the  finished 
products, 25% of total milk solids." 

(2) 

In  point  2  "Totally  dehydrated  milk",  the  first  subparagraph  is  replaced  by  the 
following: 

"This  means  the  solid  product,  where  the  water  content  does  not  exceed  5%  by 
weight  of  the  finished  product,  obtained  by  the  removal  of  water  from  milk,  from 
wholly or partly skimmed milk, from cream or from a mixture of these products." 

(3) 

Point 3 "Treatments" is amended as follows: 

(a) 

In point (b), the introductory words are replaced by the following: 

"Without  prejudice  to  Regulation  (EC)  No 853/2004  of  the  European 
Parliament and of the Council of 29 April 2004 laying down specific hygiene 
rules for food of animal origin*, the preservation of the products referred to in 
paragraphs 1 and 2 shall be achieved: 

* 

OJ L 139, 30.4.2004, p. 55. Corrected by OJ L 226, 25.6.2004, p. 22." 

(b)  The following point (c) is added 

"The  protein  content  of  milk  may  be  adjusted  to  a  minimum  content  of  34% 
(expressed  on  fat  free  dry  matter),  only  to  comply  with  the  compositional 
requirements  of  points 1  and  2  of  this  Annex,  by  the  addition  and/or 
withdrawal of milk constituents in such a way as not to alter the whey protein 
to casein ratio of the milk being adjusted." 

(4) 

Point 4 "Authorised additions" is replaced by the following: 

"4.  Authorised additions and raw materials 

(a)  Pursuant to Article 2, the addition of vitamins is authorised in the case of 

the products referred to in this Annex, subject to Directive 90/496/EEC; 

(b)  Authorised  raw  materials  for  protein  adjustment  purposes  referred  to  in 

point 3(c) shall be as follows: 

(i)  Milk retentate 

Milk retentate is the product obtained by concentrating milk protein 
by ultra filtration of milk, partly skimmed milk, or skimmed milk; 

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(ii)  Milk permeate 

Milk  permeate  is  the  product  obtained  by  removing  milk  proteins 
and milk fat from milk, partly skimmed milk, or skimmed milk by 
ultra filtration; and 

(iii)  Lactose 

Lactose  is  a  natural  constituent  of  milk  normally  obtained  from 
whey  with  an  anhydrous  lactose  content  of  not  less  than  99.0% 
m/m on a dry basis. It may be anhydrous or contain one molecule 
of water of crystallisation or be a mixture of both forms." 

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2007/0026 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1255/1999 on the common organisation of the market  
in milk and milk products 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 37 thereof, 

Having regard to the proposal from the Commission4, 

Having regard to the opinion of the European Parliament5, 

Whereas: 

(1) 

(2) 

(3) 

Article  7(1)  of  Council  Regulation  (EC)  No  1255/19996  sets  up  the  minimum 
requirement for the protein content of skimmed-milk-powder bought into intervention 
at 35.6% of  the  non-fatty dry extract. Following the allowance in the Community of 
standardisation  to  34%  of  certain  dehydrated  preserved  milk  it  is  appropriate  for  the 
good  management  of  intervention  stocks  to  provide  that  the  intervention  quality  is 
fixed  at  that  level.  The  intervention  price  of  skimmed  milk  powder,  set  up  in 
Article 4(1)  of  that  Regulation  should  be  amended  to  take  into  account  the  new 
standard for protein content. 

Article 6(1) of Regulation (EC) No 1255/1999 provides for the buying in of butter by 
the  intervention  agencies  when  market  prices  of  butter  over  two  weeks  are  less  than 
92% of the intervention prices. The operation of such arrangement is administratively 
cumbersome.  In  the  light  of  the  most  recent  amendments  of  the  intervention  system 
and with a view to simplify that system the trigger arrangement should be abolished. 

Article 6(3) of Regulation (EC) No 1255/1999 provides that aid for private storage of 
butter  can  only  be  granted  on  butter  classified  according  to  national  quality  grades. 
The  application  of  different  qualities  in  Member  States  leads  to  different  treatment 
with  respect  to  the  aid.  In  order  to  provide  for  equal  treatment  and  simplify  the 
administration for the aid for private storage, the national criteria should be replaced 
by Community criteria used for other market support. 

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OJ C …, …, p. …. 
OJ C …, …, p. …. 
OJ  L  160,  26.6.199,  p. 48.  Regulation  as  last  amended  by  Regulation  (EC)  No 1913/2005  (OJ L 307, 
25.11.2005, p. 2). 

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(4) 

(5) 

(6) 

(7) 

(8) 

In  accordance  with  Article  6(3)  of  Regulation  (EC)  No 1255/1999  aid  for  private 
storage  of  cream  shall  be  granted  as  a  market  support  measure.  Equally,  pursuant  to 
Article 7(3) of that Regulation aid for private storage of skimmed milk powder may be 
granted. Given that the two support measures in practice have been inactive for a long 
time,  even  in  situations  with  serious  unbalance  of  the  markets  for  milk  fat  and 
proteins, the two measures may be considered obsolete and should be abolished. 

Article  13(1)(b)  of  Regulation  (EC)  No 1255/1999  provides  for  the  possibility  for 
military forces to buy butter at reduced prices. However, that provision has not been 
applied since 1989 and such support scheme is deemed not necessary. 

Article 14 of Regulation (EC) No 1255/1999 sets up the aid level for milk supplied to 
pupils in educational establishments and provides for the adaptation of the aid level for 
other  eligible  products.  With  a  view  to  simplify  the  school  milk  scheme,  while 
responding to today's health and nutritional tendencies, a flat rate aid should be set for 
all categories of milk. 

The  amounts  of  aid  fixed  under  the  school  milk  scheme  are  applicable  from  July  to 
June  every  year  while  in  some  Member  States  the  school  year  ends  in  July.  The 
application of two different rates in the same school year creates serious problems in 
the  implementation of the scheme. In order to avoid that situation the amount of aid 
should be applicable from August to July. As a consequence, the current amounts of 
aid applicable for the school year 2006/2007 should be extended until 31 July 2007. 

Article  26  of  Regulation  (EC)  No  1255/1999  provides  for  the  obligatory  use  of  an 
import  licence  for  all  imports  of  products  referred  to  in  Article  1  of  that  Regulation 
Other monitoring systems than the licensing system are now available providing more 
accurate,  updated  and  transparent  information.  Where  appropriate,  such  systems 
should  equally  be  applied  for  import  of  dairy  products.  The  request  of  an  import 
licence  should  therefore  not  be  compulsory  whilst  the  Commission  should  be 
empowered to introduce a licensing system when necessary. 

(9) 

Regulation (EC) No 1255/1999 should be amended accordingly, 

HAS ADOPTED THIS REGULATION: 

Article 1 

Regulation (EC) No 1255/1999 is amended as follows: 

(1) 

In Article 4(1), the point (b) is replaced by the following: 

"(b)  skimmed milk powder, 169,80 from 1 September 2007."; 

(2) 

Article 6 is amended as follows: 

(a) 

paragraph 1 is replaced by the following: 

"1. 

Intervention agencies shall buy-in butter as indicated in paragraph 2 at 90% of 
the intervention price during the period 1 March to 31 August of any year, on 
the basis of specification to be determined. 

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Where  the  quantities  offered  for  intervention  during  the  above  period  exceed 
30 000 tonnes in 2008 and onwards, the Commission may suspend intervention 
buying. 

In  such  cases  buying-in  by  intervention  agencies  may  be  carried  out  using  a 
standing tendering procedure on the basis of specifications to be determined."; 

(b) 

in paragraph 2, the second subparagraph is deleted; 

(c) 

paragraph 3 is amended as follows: 

(i) 

the first subparagraph is replaced by the following: 

"Aid for private storage shall be granted for: 

– 

– 

unsalted  butter  produced  from  cream  or  milk  in  an  approved 
undertaking of the Community of a minimum butterfat content, by 
weight,  of  82%,  a  maximum  milk  solids-non-fat  content,  by 
weight, of 2% and a maximum water content, by weight, of 16%, 

salted  butter  produced  from  cream  or  milk  in  an  approved 
undertaking of the Community of a minimum butterfat content, by 
weight,  of  80%,  a  maximum  milk  solids-non-fat  content,  by 
weight,  of  2%  and  a  maximum  water  content,  by  weight,  of  16% 
and a maximum salt content, by weight, of 2%."; 

(ii) 

the second subparagraph is deleted. 

(3) 

Article 7 is amended as follows 

(a) 

paragraph 1 is replaced by the following: 

"1.  The intervention agency designated by each of the Member States shall, 
under  conditions  to  be  determined,  buy  in  at  the  intervention  price  top 
quality  skimmed  milk  powder  made  by  the  spray  process  and  obtained 
from cow's milk in a approved undertaking in the Community, which is 
offered to it during the period from 1 March to 31 August and which: 

– 

– 

– 

meets a minimum protein content of 34.0% by weight of the non-
fatty dry extract, 

meets preservation requirements to be laid down, 

meets conditions to be determined as regards the minimum quantity 
and packaging. 

The intervention price shall be that in force on the day of manufacture of 
the  skimmed  milk  powder  and  shall  apply  to  skimmed  milk  powder 
delivered  to  the  store  designated  by  the  intervention  agency.  Flat-rate 
transport  costs  shall  be  borne,  under  conditions  to  be  fixed,  by  the 
intervention  agency  if  the  skimmed  milk  powder  is  delivered  to  a  store 
situated  at  a  distance  greater  than  a  distance  to  be  determined  from  the 
place where the skimmed milk powder was in store. 

The  skimmed  milk  powder  may  only  be  stored  in  stores  meeting 
conditions to be fixed."; 

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(b)  paragraph 3 is deleted. 

(4) 

In Article 10, point (a) is replaced by the following: 

"(a) 

the detailed rules for the application of this chapter;". 

(5) 

(6) 

In Article 13(1), point (b) is deleted. 

In Article 14, paragraph 3 is replaced by the following: 

"3.  The Community aid shall be: 

– 

– 

EUR  18,61/100 kg  of  whole  milk  for  the  period  from  1 July 2006  till 
31 July 2007, 

EUR 16,11/100 kg of all milk from 1 August 2007 onwards. 

The amounts of aid for other eligible milk products shall be determined taking 
into account the milk components of the product concerned." 

(7) 

Article 26 is amended as follows: 

(a) 

paragraph 1 is replaced by the following: 

"1. 

Imports into the Community and exports from the Community of one or 
more products listed in Article 1 may be subject to the presentation of an 
import or export licence." 

(b) 

in paragraph 3, point (a) is replaced by the following: 

"(a)  The list of products in respect of which export licences are required and 

the import procedures where no import licences are required;". 

Article 2 

This Regulation shall enter into force on the third day following that of its publication in the 
Official Journal of the European Union. 

It shall apply from 1 July 2007. However, paragraphs 1, 2, 3(a) and 4 of Article 1 shall apply 
from 1 September 2007. 

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

Done at Brussels,  

For the Council 
The President 

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2007/0027 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 2597/97 laying down additional rules on the common 
organisation of the market in milk and milk products for drinking milk 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 37 thereof, 

Having regard to the proposal from the Commission7, 

Having regard to the opinion of the European Parliament8, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

Article  3  of  Council  Regulation  (EC)  No  2597/979  sets  up  the  products  to  be 
considered drinking milk, in particular with regard to their fat content. 

In  order  to  facilitate  the  change  over  from  existing  pre-accession  national  rules  to 
community rules, several transitional derogations have been adopted on the occasion 
of recent accessions. 

Taking into account various consumer habits in different Member States as well as the 
expiring derogations it seems appropriate to allow the marketing, as drinking milk, of 
products with a fat content other than the existing three categories. 

In order to provide clarity for the consumers, such milk should however not be called 
whole  milk,  semi-skimmed  milk  or  skimmed  milk  but  have  their  fat  content 
percentage clearly indicated on the packaging. 

(5) 

Regulation (EC) No 2597/97 should be amended accordingly, 

7 
8 
9 

OJ C …, …, p. …. 
OJ C …, …, p. …. 
OJ  L  351,  23.12.1997,  p. 13.  Regulation  as  amended  by  Regulation  (EC)  No 1602/1999  (OJ L 189, 
22.7.1999, p. 43). 

EN 

14 

   EN 

 
                                                 
HAS ADOPTED THIS REGULATION: 

Article 1 

In Article 3(1) of Regulation (EC) No 2597/97 the following second subparagraph is added: 

"Heat-treated  milk  not  complying  with  the  fat  content requirements laid  down in points (b), 
(c)  and (d)  of  the  first  subparagraph  may  be  considered  drinking  milk  provided  that  the  fat 
content  is  clearly  indicated  and  easily  readable  on  the  packaging  in  form  of  "fat  content  of 
...%"". Such milk shall not be described as whole milk, semi-skimmed milk or skimmed milk. 
Member States may allow producers to indicate the fat content in the form of "fat content of 
…% + 0.2%." 

Article 2 

This Regulation shall enter into force on the third day following that of its publication in the 
Official Journal of the European Union. 

It shall apply from 1 July 2007. 

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

Done at Brussels, 

For the Council 
The President 

EN 

15 

   EN 

 
 
 
FINANCIAL STATEMENT 

1. 

BUDGET HEADING: 

05 02 12 

APPROPRIATIONS 
(AL 2007): 
EUR 587 000 000 

2. 

TITLE: 
–  Council  Directive  2001/114/EC  relating  to  certain partly  or  wholly  dehydrated  preserved  milk  for 

human consumption, 

–  Council Regulation (EC) N° 1255/1999 on the common organisation of the market in milk and milk 

products, 

–  Council Regulation (EC) N° 2597/97 laying down common rules for the production and marketing of 

3. 

4. 

drinking milk.  

LEGAL BASIS: 
Article 37 of the Treaty 

AIMS: 
The  proposed  amendments  will  in  particular  provide  simplification  of  a  number  of  rules  in  the  dairy 
sector. 

5. 

FINANCIAL IMPLICATIONS 

5.0 

CHARGED TO THE EC BUDGET 

EXPENDITURE 
– 
(REFUNDS / INTERVENTIONS) 
– 
– 

NATIONAL AUTHORITIES 
OTHER 

5.1  REVENUE 

OWN RESOURCES OF THE EC  

– 
(LEVIES / CUSTOMS DUTIES) 
– 

NATIONAL 

5.0.1  ESTIMATED EXPENDITURE 
5.1.1  ESTIMATED REVENUE 

5.2  METHOD OF CALCULATION: 

See annexes I and II. 

12 MONTH 
PERIOD 

(EUR million) 

CURRENT 
FINANCIAL 
YEAR 2007 
(EUR million) 

– 

– 

– 

– 

FOLLOWING 
FINANCIAL 
YEAR 2008 
(EUR million) 

–16,1 

– 

2009 

–22,4 
– 

2010 

–19,5 
– 

2011 

–21,2 
– 

2012 

–19,6 
– 

6.0  CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 

RELEVANT CHAPTER OF THE CURRENT BUDGET? 

6.1  CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF 

THE CURRENT BUDGET? 

6.2  WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 

6.3  WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS? 

YES NO 

YES NO 

YES NO 

YES NO 

OBSERVATIONS: 
The proposal has no impact on administrative expenditures. 

EN 

16 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX I: CALCULATION OF THE FINANCIAL IMPACT OF THE PROPOSAL (Mio €) 

Budget year 

2008 

2009 

2010 

2011 

2012 

2013 

A.  Simplification measures and technical adjustments with no budgetary impact: 

–  Removal of the trigger system for butter intervention (1) 
–  Abolition of the private storage aid for cream 
–  Abolition of the private storage aid for SMP 
–  Abolition of National Quality Class for butter as an eligibility criterion for granting Community aid 
–  Abolition of the possibility for the military forces to purchase butter at reduced prices 
–  The community aid for school milk to be fixed at the same level throughout the school year 
–  Compulsory use of import licences only when needed for management purposes. 

B.  Measures with possible budgetary impact: 

1. 

Standardisation of protein content at the level of 34% (see annexe II) 

The  possible  impact  on  the  dairy  markets  of  standardisation  has  been  analysed  by  the  medium  term 
forecast model used in DG AGRI (2). The model result shows that standardisation will lead to increased 
availability  of  protein  for  dairy  products.  The  largest  part  of  this  protein  goes  into  cheese  and  fresh 
dairy  products,  while  there  is  a  modest  increase  in  SMP  production.  Furthermore,  the  increased 
production  of  cheese  and  fresh  dairy  products  will  take  up  more  fat  and  hereby  reduce  butter 
production and butter export, leading to a lower expenditure related to butter export. 
The intervention price for SMP decreases from 2008 onwards by 2,8%. 

2.  Use of a flat rate for the schoolmilk calculation 

The proposed measure will stay within an unchanged total budgetary envelope. 

3. 

Simplification of the drinking milk Regulation 
It is estimated that the liberalisation of the way drinking milk may be produced and marketed, will not 
lead to a change in the speed of the shift towards drinking milk with lower fat content. 

p.m. 

p.m. 

p.m. 

p.m. 

p.m. 

p.m. 

–16,1 

–22,4 

–19,5 

–21,2 

–19,6 

–18,5 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

T O T A L 

–16,1 

–22,4 

–19,5 

–21,2 

–19,6 

–18,5 

(1)  The abolition of the trigger system should not lead to increased expenditure for butter intervention, despite that the possibility to deliver to intervention for operators in countries with average 
market prices beyond 92% will be introduced. Buying-in at 90% of the intervention price is already limited at 30 000 t and it is not expected that the total quantity offered to intervention will 
increase  after  abolition  of  the  trigger  system.  Should  operators  in  countries  with  average  market  prices  above  92%  make  offers  this  will  lead  to  the  limit  of  30.000  t  being  reached  faster. 
Furthermore, today operators in a MS where intervention is not open can introduce offers in a MS where intervention is open. 

(2)  The baseline scenario for the simulation is based on the market balance of the July 2006 "Prospects for Agriculture markets and Income in the European Union 2006–2013" (DG AGRI). 

EN 

17 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX II: CALCULATION OF THE FINANCIAL IMPACT OF PROTEIN STANDARDISATION ON THE EXPORT REFUNDS 

BUDGET 
2008 

BUDGET 
2009 

BUDGET 
2010 

BUDGET 
2011 

BUDGET 
2012 

BUDGET 
2013 

BUTTER export 
baseline quantities 
proposal quantities  
variation quantities 
baseline refund 
scenario refund 
variation refund 
impact lower quantities 
impact resulting quantities 

TOTAL 

SMP export 
baseline quantities 
proposal quantities  
variation quantities 
baseline refund 
scenario refund 
variation refund 
impact initial quantities 
impact supplementary 
quantities 

TOTAL 

1 000 t 
1 000 t 
1 000 t 
€/t 
€/t 
€/t 
Mio € 
Mio € 
Mio € 

1 000 t 
1 000 t 
1 000 t 
€/t 
€/t 
€/t 
Mio € 

a 
b 
c = b – a 
d 
e 
f = e – d 
g = c * d /1000 
h= b * f /1000 

i = g + h 

a 
b 
c = b – a 
d 
e 
f = e – d 
g = a * f /1000 

Mio € 

Mio € 

h = c * e /1000 

i = g + h 

236 
228 
–8 
1.030 
1.010 
–20 
–8,2 
–4,6 
–12,8 

110 
113 
3 
400 
360 
–40 
–4,4 

1,1 

–3,3 

260 
248 
–12 
1.020 
1.010 
–10 
–12,2 
–2,5 
–14,7 

100 
94 
–6 
340 
280 
–60 
–6,0 

–1,7 

–7,7 

257 
244 
–13 
980 
980 
0 
–12,7 
0,0 
–12,7 

91 
85 
–6 
280 
220 
–60 
–5,5 

–1,3 

–6,8 

254 
241 
–13 
970 
960 
–10 
–12,6 
–2,4 
–15,0 

85 
79 
–6 
240 
180 
–60 
–5,1 

–1,1 

–6,2 

244 
231 
–13 
910 
900 
–10 
–11,8 
–2,3 
–14,1 

80 
74 
–6 
170 
110 
–60 
–4,8 

–0,7 

–5,5 

226 
213 
–13 
870 
860 
–10 
–11,3 
–2,1 
–13,4 

77 
71 
–6 
140 
80 
–60 
–4,6 

–0,5 

–5,1 

IMPACT BUTTER + SMP 

–16,1 

–22,4 

–19,5 

–21,2 

–19,6 

–18,5 

EN 

18 

EN