Opinion of the European Economic and Social Committee on the ‘Proposal for a regulation (EU) No xxxx/2010 of the European Parliament and of the Council of … amending Council Regulation (EC) No 1234/2007 (Single CMO Regulation) as regards the aid granted in the framework of the German Alcohol Monopoly’ — COM(2010) 336 final — 2010/0183 (COD)
Date: 2010-09-15
Institutions: European Economic and Social Committee
Subjects: Germany, State aid, State monopoly, beverage industry, common organisation of markets, control of restrictive practices, ethanol, suspension of aid








C_2011048EN.01016301.xml










15.2.2011   


EN


Official Journal of the European Union


C 48/163





Opinion of the European Economic and Social Committee on the ‘Proposal for a regulation (EU) No xxxx/2010 of the European Parliament and of the Council of … amending Council Regulation (EC) No 1234/2007 (Single CMO Regulation) as regards the aid granted in the framework of the German Alcohol Monopoly’
COM(2010) 336 final — 2010/0183 (COD)
2011/C 48/29
Rapporteur: Mr KIENLE

On 7 July 2010 the European Parliament, and on 8 July 2010 the Council, decided to consult the European Economic and Social Committee, under Article 43(2) of the Treaty on the Functioning of the European Union, on the:

‘Proposal for a regulation (EU) No xxxx/2010 of the European Parliament and of the Council of …amending Council Regulation (EC) No 1234/2007 (Single CMO Regulation) as regards the aid granted in the framework of the German Alcohol Monopoly’

COM(2010) 336 final - 2010/0183 (COD).
The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 31 August 2010.
At its 465th plenary session of 15 and 16 September 2010 (meeting of 15 September) the European Economic and Social Committee adopted the following opinion by 114 votes to two with six abstentions:
1.   Conclusions and recommendations







1.1


The EESC welcomes the proposed measures for a temporary extension of the aid arrangements provided for in connection with the German Alcohol Monopoly, with a final expiry date being set at the end of 2017 at the latest, particularly as there is no evidence of market disturbances and as the proposal will have no impact on the Community budget.










1.2


The EESC recommends that the transitional period be used to enable families involved in traditional agricultural distilling to re-orientate their businesses in a socially acceptable way, and particularly to preserve environmentally valuable orchards.




2.   Introduction







2.1


The European Commission is proposing that the German Alcohol Monopoly for ethyl alcohol of agricultural origin, which has existed since 1918, be abolished as of 1 January 2018. The national authority has hitherto issued distillation permits and set a price which covers the distilleries' costs.










2.2


The production/sales of the Monopoly will be gradually reduced:






—


the agricultural bonded distilleries, which process mainly cereals and potatoes, must leave the monopoly by the end of 2013 and reduce their production by a third each year for three years (from a total of 540 000 hl in 2011 to 180 000 hl in 2013);










—


the flat-rate distilleries, distillery users and fruit cooperative distilleries, which are locally oriented and produce very small quantities of alcohol, may produce in total up to 60 000 hl annually until the end of 2017.














2.3


The proposal has no impact on the Community budget.




3.   Comments







3.1


The EESC welcomes the proposed phasing-out of the German Alcohol Monopoly, with a temporary derogation clause and differentiated rates of reduction of the allowed volume of agricultural ethyl alcohol production.










3.2


In 2008 around 40.5 million hl of agricultural ethyl alcohol were produced in the 27 EU Member States, particularly from cereals, sugar beet/molasses, wine, potatoes, fruit and other products. The EU's main producers of agricultural alcohol are France (15.4 million hl), Germany (5.9 million hl), Spain (5.4 million hl) and Poland (1.9 million hl). In the same year the EU Member States imported around 13 million hl of ethyl alcohol from non-EU countries. Agricultural ethyl alcohol is used for human consumption (in drinks and as vinegar), in the biofuels sector and in other industrial applications. The most recent boost to demand came from its use as fuel.










3.3


And yet only around 10 % of the agricultural alcohol distilled in Germany is produced in the framework of the German Alcohol Monopoly and with national aid. According to the most recent figures, 674 agricultural distilleries were producing alcohol for the Monopoly with an average production volume of 800 hl. The roughly 28 000 small-scale flat-rate distilleries – of which around 20 000 are operating each year – are allowed to produce a maximum of only 300 l of alcohol per annum under the Monopoly.










3.4


The Monopoly has hitherto allowed this kind of traditional and highly decentralised production to continue in small and very small agricultural distilleries. This does have considerable significance at regional level, however, for example on the fringes of the peri-Alpine region and the Black Forest. The environmentally sound recycling practised by agricultural distilleries and the contribution of small fruit distilleries to income stabilisation, care of the landscape and the maintenance of biodiversity enjoy a high level of political and social recognition.










3.5


The EESC assumes that, following expiry of the Alcohol Monopoly and the liberalisation of the agricultural alcohol market, industrial alcohol production will not offer an alternative for (small) traditional agricultural distilleries. During the transitional period opportunities should therefore be sought to enable farming families to adapt to new activities offering future prospects in a socially acceptable way, and to preserve environmentally highly valuable meadow and conventional orchards.





Brussels, 15 September 2010.


The President of the European Economic and Social Committee

Mario SEPI