Council Regulation (EC) No 1260/2007 of 9 October 2007 amending Regulation (EC) No 318/2006 on the common organisation of the markets in the sugar sector
Date: 2007-10-09
Institutions: Council of the European Union
Subjects: aid for restructuring, common organisation of markets, production quota, sugar, sugar industry, withdrawal from the market

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(Acts adopted under the EC Treaty/Euratom Treaty whose publication is obligatory)

I

REGULATIONS

COUNCIL REGULATION (EC) No 1260/2007

of 9 October 2007

amending Regulation (EC) No 318/2006 on the common organisation of the markets in the sugar
sector

THE COUNCIL OF THE EUROPEAN UNION,

percentage for each undertaking according to its indi-
vidual restructuring effort.

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

establishing the European

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Whereas:

(1)

(2)

In order to maintain the structural balance of the market,
the Commission may decide to withdraw sugar from the
In the case where a preventive withdrawal
market.
is
decided,
it is necessary to limit the scope of the obli-
gation provided for in Article 6(5) of Council Regulation
(EC) No 318/2006 (1), so as to avoid imposing on sugar
undertakings an obligation to pay the minimum price for
quantities of beet corresponding to their entire quota,
including those quantities which may be produced
beyond the withdrawal threshold.

In accordance with Article 10(2) of Regulation (EC) No
318/2006, the Commission is to decide by the end of
February 2010 on carrying out a linear reduction of
national and regional quotas, with a view to adjusting
these quotas to a sustainable level after the expiry of the
restructuring scheme established by Council Regulation
(EC) No 320/2006 of 20 February 2006 establishing a
temporary scheme for the restructuring of
the sugar
industry in the Community (2).

it

In order to encourage an increased participation in that
restructuring scheme,
is considered appropriate to
reduce the percentage referred to in Article 10(2) of
Regulation (EC) No 318/2006, taking into account the
total renunciation of quota per Member State under the
this
restructuring scheme, as well as

to modulate

(1) OJ L 58, 28.2.2006, p. 1. Regulation as

last amended by
Commission Reglation (EC) No 247/2007 (OJ L 69, 9.3.2007. p. 3).
(2) OJ L 58, 28.2.2006, p. 42. Regulation as amended by Regulation

(EC) No 1261/2007 (See page 8 of this Oficial Journal).

(3)

(4)

(5)

(6)

The outermost regions referred to in Article 299(2) of
the Treaty do not fall under the scope of Regulation (EC)
No 320/2006. Consequently those regions should be
excluded from the final cut by which the Commission
is entitled to adjust quotas after the expiry of the restruc-
turing scheme.

Article 4a of Regulation (EC) No 320/2006 provides the
possibility for growers of beet and cane intended for
quota production to submit a direct application for
restructuring aid provided that
they cease to deliver
sugar to the undertakings to which they were bound
by delivery contracts in the previous marketing year.
the acceptance of such applications,
As a result of
Member States are to reduce the quota of the under-
takings concerned within the limit of the 10 % referred
to in the second indent of Article 11(1) of Regulation
It is in this context necessary to
(EC) No 318/2006.
amend that Article, so as to allow for the definitive
reduction of quotas allocated to the undertakings.

A sound management of sugar in public intervention
means that sugar should be resold on the market as
soon as market trends allow for it in order to avoid a
long storage period with risks of deterioration of quality.
It is considered appropriate to allow the possibility of
resale as industrial sugar.

Article 19 of Regulation (EC) No 318/2006 provides the
possibility to withdraw sugar from the market where it is
necessary in order to maintain the structural level of the
markets at a price level close to the reference price. The
application of
this measure is currently based on a
percentage, common to all Member States and applicable
to all production under quota. Recent experience has
shown that such a linear application may be counter-
productive, since producers are encouraged to produce
above their contractual needs as a precaution against a
possible compulsory storage of the quantities withdrawn.

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(7)

(8)

(9)

It is therefore considered appropriate to adapt the with-
drawal instrument by replacing the linear percentage by a
threshold, to be determined by applying a coefficient to
the quota allocated to each undertaking, above which the
quantities produced under quota should be withdrawn. In
this way, undertakings should be able to avoid the conse-
quences of a withdrawal by adjusting their production so
that it does not exceed the level of the threshold.

It is considered that the objective of withdrawal will be
the withdrawal coefficient can be
better achieved if
preventively fixed by mid March of
the previous
marketing year, since this will enable beet growers to
adapt their sowings to the forecast balance sheet. Regu-
lation (EC) No 320/2006 opens
the possibility of
renouncing quotas against payment of restructuring aid
in two steps. The amounts that may be renounced in the
second step cannot be taken into account for the fixing
of the coefficient for the preventive withdrawal in respect
of the marketing year 2008/2009 because the respective
figures will only be known after 16 March 2008 which is
the deadline for the fixing of the coefficient. It should
therefore be clarified that that coefficient needs to be
applied to the quotas still available at that moment.

In order to take into account updated market data on
production, provision should be made for the preventive
withdrawal coefficient fixed in March to be adjusted if
necessary for the marketing year concerned.

Article 19(3) of Regulation (EC) No 318/2006 provides
that withdrawn quantities which are not marketed as
industrial sugar or isoglucose are to be treated as the
first quantities produced under quota for the following
marketing year. This rule could mean that undertakings
wishing to participate in the restructuring scheme in the
are
2008/2009 and 2009/2010 marketing
prevented from benefiting fully from that scheme.
In
order to avoid hampering the restructuring of the sugar
sector,
is considered necessary to provide for an
exemption, at the request of the undertaking, from the
withdrawal in the 2007/2008 marketing year or from a
possible withdrawal
in the 2008/2009 marketing year
for those undertakings which in the marketing year of
withdrawal
successfully applied for
restructuring aid under Regulation (EC) No 320/2006
and which as a result are going to renounce their total
quota in the following marketing year.

concerned have

years

it

(10)

In order to encourage an increased participation in the
restructuring scheme,
is considered appropriate to
provide for an increase of the coefficient in relation to
the total renunciation of quota per Member State under
the restructuring scheme.

it

(11)

Import licences under certain preferential arrangements
are to be issued only to full-time refiners within the limit

of the traditional supply need provided for in Article 29
of Regulation (EC) No 318/2006. This prerogative should
not be reduced in relation to the application of a with-
drawal, considering that refiners do not have the same
possibility as sugar producers to adapt their production
to the withdrawal thresholds.

applicable

agreements.

(12) Article 6 of Regulation (EC) No 318/2006 lays down
In
to interprofessional
rules
accordance with paragraph 6 of that Article, agreements
within the trade may derogate from some of these rules.
The possibility of derogating from the obligation for
sugar undertakings which have not signed pre-sowing
contracts for a quantity equivalent to their quota sugar
to pay the minimum price for all beet processed into
sugar should be provided for, as was the case until the
application of Regulation (EC) No 318/2006.

the

(13) Article 10(1) of Regulation (EC) No 318/2006 provides
for a yearly adjustment of
the national and regional
quotas set out in Annex III to that Regulation, as a
application of different mechanisms
result of
through which the quotas allocated to individual under-
takings are either increased or reduced. Article 10(1) of
Regulation (EC) No 318/2006 also refers to Articles 14
and 19 of that Regulation, which concern respectively
the carry forward of surplus sugar and the withdrawal
of sugar from the market. However, the application of
those Articles does not result in either an increase or a
reduction of quota. The reference in question should
therefore be deleted.

(14)

Regulation (EC) No 318/2006 should therefore be
amended accordingly.

(15) Account should be taken in this Regulation of the fact
that the total quota for production of inulin syrup was
renounced in the 2006/2007 marketing year under the
restructuring scheme established by Regulation (EC) No
320/2006,

HAS ADOPTED THIS REGULATION:

Regulation (EC) No 318/2006 is hereby amended as follows:

Article 1

1.

in Article 6, paragraphs 5 and 6 shall be replaced by the
following:

Sugar undertakings which have not

‘5.
signed pre-
sowing delivery contracts at the minimum price for quota
beet for a quantity of beet equivalent to the sugar for which
they hold a quota, adjusted, as the case may be, by the
coefficient for a preventive withdrawal fixed in accordance
with the first subparagraph of Article 19(2), shall be
required to pay at
the minimum price for quota
beet for all the sugar beet they process into sugar.

least

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Subject

to the

the Member State
approval of
6.
concerned, agreements within the trade may derogate
from paragraphs 3, 4 and 5.’;

2. Article 10 shall be replaced by the following:

‘Article 10

Quota management

1.
In accordance with the procedure referred to in
Article 39(2), the quotas set out in Annex III of this Regu-
lation shall be adjusted by 30 April 2008 for
the
2008/2009 marketing year and by the end of February
2009 and 2010 respectively for
the 2009/2010 and
2010/2011 marketing years. The adjustments shall result
from the application of Articles 8 and 9 of this Regulation,
of paragraph 2 of this Article, and of Articles 3 and 4a(4)
of Regulation (EC) No 320/2006.

2.
Taking into account the results of the restructuring
scheme provided for in Regulation (EC) No 320/2006, the
Commission shall decide by the end of February 2010 at
the latest, in accordance with the procedure referred to in
Article 39(2) of this Regulation, the common percentage
needed to reduce the existing quotas
sugar and
isoglucose per Member State or region with a view to
avoiding market
imbalances in the marketing years as
from the 2010/2011 marketing year. The Member States
shall adjust the quota of each undertaking accordingly.

for

By way of derogation from the first subparagraph of this
paragraph, for Member States for which the national quota
has been reduced as a result of renunciations of quota in
accordance with Articles 3 and 4a(4) of Regulation (EC) No
320/2006, the percentage shall be fixed, in accordance with
the procedure referred to in Article 39(2) of this Regu-
lation, by way of application of Annex VIII to this Regu-
lation. Such Member States shall adjust, for each under-
taking in their territory holding a quota, the percentage
in accordance with Annex IX of this Regulation.

(b) paragraph 1 shall be replaced by the following:

‘1.
A Member State may reduce the sugar or
isoglucose quota allocated to an undertaking established
on its territory by up to 10 % for the marketing year
the
2008/2009 and following, whilst
freedom of
in the
by Regulation (EC) No
mechanisms
320/2006. In doing so, the Member States shall apply
objective and non discriminatory criteria.’;

undertakings
established

participate

respecting

to

(c)

the following paragraph shall be added:

‘4.
By way of derogation from paragraph 3 of this
Article, where Article 4a of Regulation (EC) No
320/2006 is applied, Member States shall adjust the
sugar quota allocated to the undertaking concerned
by applying the reduction defined under paragraph 4
of that Article, within the limit of the percentage fixed
in paragraph 1 of this Article.’;

4.

in Article 15(1), point
following:

(c)

shall be replaced by the

‘(c) sugar and isoglucose withdrawn from the market in
accordance with Articles 19 and 19a and for which
the obligations provided for in Article 19(3) are not
met.’;

5.

in point a of Article 18(3), the following indent shall be
added:

‘or

— for industrial use referred to in Article 13.’;

The first and second subparagraphs of this paragraph shall
not apply to the outermost regions referred to in Article
299(2) of the Treaty.’;

6. Article 19 shall be replaced by the following:

3. Article 11 shall be amended as follows:

(a)

the title shall be replaced by the following:

‘Article 11

National quota
quotas’;

reallocation and reduction of

‘Article 19

Withdrawal of sugar

the

taking into account

1.
the
In order to preserve the structural balance of
market at a price level which is close to the reference
price,
the
concluded in
resulting from agreements
Community
accordance with Article 300 of the Treaty, the Commission
may decide to withdraw from the market,
for a given
those quantities of sugar or isoglucose
marketing year,
produced under quotas which exceed the
threshold
calculated in accordance with paragraph 2 of this Article.

commitments of

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The withdrawal threshold referred to in paragraph 1
2.
of this Article shall be calculated,
for each undertaking
holding a quota, by multiplying its quota by a coefficient,
which shall be fixed in accordance with the procedure
referred to in Article 39(2) by 16 March at the latest of
the previous marketing year, on the basis of expected
market trends. For the marketing year 2008/2009, that
coefficient shall be applied to the quota after renunciations
in accordance with Regulation (EC) No 320/2006 granted
on 15 March 2008 at the latest.

In the case where withdrawn sugar is treated as the
5.
first sugar production of the following marketing year, the
minimum price of that marketing year shall be paid to beet
growers.

In the case where withdrawn sugar becomes industrial
sugar or is exported according to points (a) and (b) of
paragraph 3 of this Article, the requirements of Article 5
on the minimum price shall not apply.

On the basis of updated market trends, the Commission, in
accordance with the procedure referred to in Article 39(2),
may decide by 31 October of the marketing year concerned
either to adjust or, in the case where no such decision has
been taken in accordance with the first subparagraph of
this paragraph, to fix a coefficient.

In the case where withdrawn sugar
sold on the
Community market before the end of the period of with-
drawal according to paragraph 4, the minimum price of the
on going marketing year shall be paid to beet growers.’;

is

the beginning of

Each undertaking provided with a quota shall store at
3.
its own expense until
the following
marketing year the sugar produced under quota beyond
the threshold calculated in accordance with paragraph 2.
The sugar or isoglucose quantities withdrawn during a
marketing year shall be treated as the first quantities
produced under quota for the following marketing year.

By way of derogation from the first subparagraph of this
paragraph, taking into account the expected sugar market
trends, it may be decided, in accordance with the procedure
referred to in Article 39(2), to consider, for the current
and/or the following marketing year, all or part of the
withdrawn sugar or isoglucose as:

(a) surplus sugar or surplus isoglucose available to become

industrial sugar or industrial isoglucose; or

(b) temporary quota production of which a part may be
reserved for export respecting the commitments of the
Community resulting from agreements concluded in
accordance with Article 300 of the Treaty.

7. the following Article shall be inserted:

‘Article 19a

Withdrawal of sugar in the 2007/2008, 2008/2009 and
2009/2010 marketing years

By way of derogation from Article 19(2)of this Regu-
1.
lation,
for Member States for which the national sugar
quota has been reduced as a result of renunciations of
quota in accordance with Articles 3 and 4a(4) of Regulation
in
the coefficient
(EC) No 320/2006,
accordance with the procedure referred to in Article
39(2) of this Regulation, for the 2007/2008, 2008/2009
and 2009/2010 marketing years by way of application of
Annex X to this Regulation.

shall be fixed,

2.
An undertaking which, in accordance with points (a)
or (b) of Article 3(1) of Regulation (EC) No 320/2006,
renounces, with effect from the following marketing year,
the total quota assigned to it shall, at its request, not be
submitted to the application of the coefficients referred to
in Article 19(2) of this Regulation. That request shall be
submitted before the end of the marketing year to which
the withdrawal applies.’;

8.

in Article 29(1), the first subparagraph shall be replaced by
the following:

If sugar supply in the Community is inadequate,

4.
it
may be decided, in accordance with the procedure referred
to in Article 39(2) that a certain quantity of withdrawn
sugar may be sold on the Community market before the
end of the period of withdrawal.

A traditional supply need of sugar for refining is
the Community at 2 324 735 tonnes per

‘1.
fixed for
marketing year, expressed in white sugar.’;

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9. In Annex V point VI, the reference to Article 10(3) shall be replaced by a reference to Article 10(2);

10. The text set out in the Annex to this Regulation shall be added as Annexes VIII, IX and X.

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

Article 2

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

Done at Luxembourg, 9 October 2007.

For the Council
The President

F. TEIXEIRA DOS SANTOS

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ANNEX

‘ANNEX VIII

CALCULATION OF THE PERCENTAGE TO BE ESTABLISHED IN ACCORDANCE WITH THE SECOND
SUBPARAGRAPH OF ARTICLE 10(2)

1. For the purpose of the calculation set out in point 2, the following definitions shall apply:

(a) “percentage at Member State level” means the percentage to be established in accordance with point 2 for the

purpose of determining the total quantity to be reduced at the level of the Member State concerned;

(b) “common percentage” means the common percentage established by the Commission in accordance with the first

subparagraph of Article 10(2);

(c) “reduction” means the figure obtained by dividing the total renunciation of quotas in the Member State by the
national quotas as fixed in Annex III to this Regulation in the version applicable on 1 July 2006. For those
Member States which were not members of the Community on 1 July 2006, the reference to Annex III concerns
the version applicable on the date of their accession to the Community.

2. The percentage at Member State level is equal to the common percentage multiplied by 1 – [(1/0,6) × the reduction].

When the result is below zero, the applicable percentage is equal to zero.

ANNEX IX

CALCULATION OF THE PERCENTAGE APPLICABLE TO UNDERTAKINGS IN ACCORDANCE WITH THE
THIRD SUBPARAGRAPH OF ARTICLE 10(2)

1. For the purpose of the calculation set out in point 2, the following definitions shall apply:

(a) “applicable percentage” means the percentage to be established in accordance with point 2 and applicable to the

quota allocated to the undertaking concerned;

(b) “common percentage at Member State level” means the percentage calculated for the Member State concerned as:

Qty / Σ [(1 – R/K) × Q]

with

Qty = the quantity to be reduced at the level of the Member State referred to in Annex VIII point 1(a),

R

= renunciation referred under (c) for a given undertaking,

Q

= the quota of the same given undertaking available at the end of February 2010,

K

= the figure calculated under (d),

Σ refers to the sum of the product of (1 – R/K) × Q calculated for each undertaking holding a quota in the
territory of the Member State; when the product is below zero, it shall be equal to zero;

(c) “renunciation” means the figure obtained by dividing the quantity of quotas renounced by the undertaking

concerned by its quota as allocated in accordance with Article 7 and paragraphs 1 to 3 of Article 11;

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(d) “K” is calculated in each Member State by dividing the total reduction of quota in that Member State (voluntary
renunciations plus the quantity to be reduced at the level of Member State referred to in Annex VIII point 1(a)) by
its initial quota as fixed in Annex III to this Regulation in the version applicable on 1 July 2006. For those Member
States which were not members of the Community on 1 July 2006, the reference to Annex III concerns the
version applicable on the date of their accession to the Community.

2. The applicable percentage is equal to the common percentage at Member State level multiplied by 1 – [(1/K) × the

renunciation].

When the result is below zero, the applicable percentage is equal to zero.

ANNEX X

CALCULATION OF THE COEFFICIENT TO BE ESTABLISHED IN ACCORDANCE WITH ARTICLE 19a (1)

1. For the purpose of the calculations set out in points 2 and 3, the following definitions shall apply:

(a) “coefficient at Member State level” means the coefficient to be established in accordance with point 2;

(b) “reduction” means the figure obtained by dividing the total renunciation of sugar quotas in the Member State,
including renunciations in the marketing year to which the withdrawal applies, by the national sugar quotas as
fixed in Annex III to this Regulation in the version applicable on 1 July 2006; for those Member States which were
not members of the Community on 1 July 2006, the calculation should take account of the version of Annex III
applicable on the date of their accession to the Community;

(c) “coefficient” means the coefficient established by the Commission in accordance with Article 19(2).

2. For the 2007/2008 marketing year, the coefficient at Member State level shall be equal to the coefficient increased by

[(1/0,5) × the reduction] × (1 – the coefficient).

When the result is above 1, the applicable coefficient is equal to 1.

3. For the 2008/2009 and 2009/2010 marketing years, the coefficient at Member State level shall be equal to the

coefficient increased by [(1/0,6) × the reduction] × (1 – the coefficient).

When the result is above 1, the applicable coefficient is equal to 1.’