COMMISSION STAFF WORKING PAPER SUMMARY OF THE IMPACT ASSESSMENT
Date: 2011-07-13
Institutions: European Commission
Subjects: aquaculture, common organisation of markets, fishery product

EUROPEAN COMMISSION 

Brussels, 13.7.2011 
SEC(2011) 884 final 

COMMISSION STAFF WORKING PAPER 

SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the common organisation of the markets in fishery and aquaculture products 

{COM(2011) 416 final} 
{SEC(2011) 883 final} 

 
 
 
 
  
 
 
EXECUTIVE SUMMARY  

The  EU  is  the  first  market  in  the  world  for  fisheries  and  aquaculture  products  -  a  market 
worth €55 billion euro (or 12 million tons). On  average, EU citizens eat 22 kg of fisheries 
and  aquaculture  products  per  year,  which  accounts  for  15%  of  their  protein  intake. 
Consumption patterns vary greatly between Member States, ranging from barely 10 kg in 
some countries (mainly Eastern ones) to over 30 kg in others. All EU countries, however, 
are  registering  an  increase  in  consumption.  Because  EU  production  has  declined  over  the 
last decade, the EU ratio of self-sufficiency has also decreased sharply: from 57% to 35%.  

A Common Market Organisation (CMO) for fisheries and aquaculture products has been in 
place since 1970. It is one of the pillars of the Common Fisheries Policy (CFP). Its current 
legal basis is Regulation 104/2000, adopted in 1999. The reform of the Common Fisheries 
Policy,  now  ongoing,  provides  an  excellent  opportunity  to  review  and  possibly  revise 
objectives and instruments of the Market Policy for fisheries and aquaculture products. 

The problems  

Since 2008 the Commission has been carrying out extensive evaluations and consultations, 
with  the  dual  intent  of  assessing  the  performance  of  the  current  legal  framework  and  the 
unfolding of EU market trends in the last decade on one hand, and of hearing the views of 
the parties concerned on the other. This report presents and analyses the five main problem 
areas found, which may be summarized as follows.  

the market position of EU production has worsened;  

•  our market policy did not sufficiently contribute to sustainable production;  
• 
•  we have been unable to predict or manage market fluctuations;  
•  our market potential is largely untapped 
• 

implementation of the market policy is being held down by a cumbersome, overly 
complex framework.  

To  this  day,  several  EU  fisheries  are  not  exploited  in  a  sustainable  way.  The  market 
premiums for sustainable practices are negligible, while there are no market sanctions for 
unsustainable  or  potentially  unsustainable  practices.  Our  market  policy  has  failed  to  get 
more value from stagnating or decreasing production volumes, nor has it encouraged good 
practices.  

EU supply is both diverse and fragmented. In the face of dwindling production and of an 
increasingly  globalised  market,  it  lacks  competitiveness  and  proved  unable  to  predict  and 
manage market fluctuations or to adapt to demand in terms of predictability of volumes or 
quality and presentation of goods. 

Lying  underneath  the  five  main  problems  mentioned,  there  is  also  a  sub-set  of  other 
problems. 

Fisheries  and  aquaculture  Producer  Organisations  (POs),  which  could  play  a  vital  role  in 
day-to-day implementation of the CFP (as long as their mission, resources and rights and 
duties are properly tuned) generally lack the resources and the incentives that are necessary 
to  organise  production  efficiently  and  manage  fishing  activities,  place  production  on  the 
market  etc.  Moreover,  if  most  of  the  fishing  industry  is  fragmented,  processors  and 
distributors  tend  to  be  concentrated,  particularly  at  the  retail  end.  By  developing  or 

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encouraging  concentration  on  the  supply  end,  the  economic  standing  of  EU  fishermen  is 
likely to be improved. Better organisation of production appears to be a prerequisite for a 
well functioning coordination of all elements along the marketing chain. 

Information about market demand, customer preferences, trends, and price formation is not 
widely  available  to  all  actors.  Yet,  by  better  understanding  the  market  dimension  of  their 
activity, EU producers would be better able to direct fishermen toward production that have 
a  stronger  chance  of  selling  at  a  reasonable  price  (the  golden  rule  being  here  that  fish 
unlikely to be sold should remain in the water). This means better planning of supplies and 
sales – in other words actively deciding which kind of product to sell and when and where 
to sell it.  

Policy  makers  also  need  background  information  –  as  well  as  early  warning  of  possible 
market crises - for policy design. 

In the current situation of overexploited stocks, spending public money to destroy fish is no 
longer justifiable; the so-called "withdrawing" of fishery products from the market should 
be abolished. The effect of intervention mechanisms on the stability of the market has been 
weak anyway, and only limited to a few ports and some small pelagic species.  

This  is  due  to  the  fact  that  market  interventions  may  help  the  symptoms  of  sudden  price 
drops,  but  never  attack  the  cause  of  the  problem.  Undeniably,  though,  fishing  remains  an 
uncertain and risky economic activity; adjusting the timing and quantity of catches to the 
specific  market  needs  of  any  given  moment  will  always  be  challenging.  Any  sensible 
market policy must account for this intrinsic problem and at least contain the inherent risks 
for fishermen.  

EU  marketing  standards,  which  establish  standardised  commercial  features,  are  important 
for the smooth functioning of the EU internal market for fish. Both the evaluation carried 
out and this report analyse to what extent the current common marketing standards should 
be revised. 

Consumer information is a key component of the market organisation, firstly because of the 
wide  range  of  fish  and  seafood  now  on  the  shelves  and  secondly  because  people  are 
becoming  more  and  more  aware  of  environmental  issues  and  demand  to  make  informed 
purchasing  choices.  Is  this  fish  fresh  or  defrosted?  Where  exactly  was  it  caught?  Was  it 
fished  or  produced  sustainably  or  traded  fairly?  Consumers  have  the  right  to  get  reliable 
information about what they buy from the label on the product.  

Finally, increasing consumption throughout the EU offers tangible economic opportunities 
for both EU and third-countries producers.  

The right for the EU to act  

According  to  Article  3  (1d)  of  the  Treaty  of  the  Functioning  of  the  European  Union 
(TFEU),  the  European  Union  has  exclusive  competence  for  the  conservation  of  marine 
biological resources under the CFP. Article 4 (2d) TFEU stipulates that the EU has shared 
competences for the other components of the CFP. These provisions determine the scope of 
action as regards what needs to be addressed at the level of the EU and what room remains 
for  MS  to  act.  They  also  affect  the  form  of  EU  action  in  terms  of  choice  of  instrument. 
Market  measures  under  the  CMO  fall  within  the  scope  of  Article  4(2d)  TFEU,  and 
justifying the measures with regard to the subsidiarity principle is therefore necessary. 

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The establishment of a Market Policy at EU level is essential to achieve an internal market 
in fisheries and aquaculture products and to ensure fair competition. Under the subsidiarity 
principle,  MS  and  economic  operators  should  enjoy  a  high  degree  of  autonomy  in  the 
application of different mechanisms pertaining to Market Policy. 

Interaction with the reform of the CFP 

The  main  objective  of  the  reform  of  the  Common  Fishery  Policy  is  promoting  the 
sustainable management of fishery resources through an economically viable sector, which 
in turn is to be increasingly empowered with its own management. To achieve this goal, we 
must start by helping the sector organise itself more efficiently.  

The CFP impact assessment concluded that, considering the new objectives and instruments 
of  the  CFP,  a  far-reaching  reform  of  the  market  policy  was  necessary:  market-oriented 
instruments should contribute, directly or indirectly, to meeting the main CFP objectives. 

To  address  overfishing  and  unsustainable  practices  and  move  away  from  production 
strategies based solely on volume, the new market policy will support:  

• 

the  empowerment  of  producers  organisations  and  their  co-management  of  access 
rights as well as production and marketing activities; 

•  market  measures  that  increase  the  bargaining power of producers  (in fisheries  and 
aquaculture)  improve  prediction,  prevention and  management  of  market  crisis  and 
foster market transparency and efficiency; 

•  market  incentives  and  premiums  for  sustainable  practices;  partnerships  for 
sustainable  production,  sourcing  and  consumption;  certification  (ecolabels), 
promotion, information to consumers; 

•  additional market measures on discards. 

Objectives 

For  each  of  the  five  main  problems  areas  listed  above,  the  impact  assessment  defines 
specific objectives of new market policy for fisheries and aquaculture products: 

•  Upgrading market incentives to support sustainable production practices   

• 

• 

Improving the market position of EU production  

Improving the connection between EU production and EU market  

•  Enhancing the market potential of EU products 

•  Supporting better governance and simplification of the legal framework 

Options 

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On the basis of evaluations conducted, stakeholders views, specific objectives defined and 
policy tools identified, four options have been analysed: 

•  Option  1:  continuing  the  current  Common  Market  Organisation  for  fisheries  and 

aquaculture products  

•  Option  2:  revising  the  current  Common  Market  Organisation  for  fisheries  and 

aquaculture products  

•  Option 3: enhancing the Market Policy for fisheries and aquaculture products  

•  Option 4: deregulating the  current Common Market Organisation for fisheries and 

aquaculture products 

Option  1  means  that  the  current  CMO  remains  the  same,  focusing  mainly  on  market 
interventions  to  support  price  stability  (withdrawal,  carry  over,  private  storage,  tuna 
compensatory  allowance),  autonomous  tariff  arrangement  (suspensions  and  quotas), 
marketing  standards  (freshness  and  size)  and  mandatory  information  to  consumers 
(commercial designation; production method: caught at sea, caught in freshwater or farmed; 
origin (catch area or country of origin for freshwater or farmed products). 

Option  2  reduces  intervention  mechanisms  to  a  single  storage  aid  for  fishery  products 
destined  for  human consumption. It deals with inconsistencies between minimum landing 
and  marketing  sizes.  It  makes  revision  of  tariff  quotas  and  autonomous  suspension  more 
flexible (every 3 years). 

Option  3  is  the  same  as  option  2,  but  empowering  POs  and  Inter-Branch  Organisations 
(IBOs)  with  additional  tasks  and  granting  them  financial  support  to  draw  and  implement 
sustainable  production  and  marketing  plans.  This  option  also  simplifies  and  adapts  the 
scope of marketing standards; it inserts the respect of international conventions for fisheries 
governance  in  preferential  autonomous  tariff  arrangement;  it  sets  up  a  European  Market 
Observatory;  it  extends  mandatory  consumer  information  and  its  scope  to  all  products 
(fresh, frozen, canned, processed). It provides a framework to ensure accuracy and control 
of voluntary labelling. 

Option 4: no CMO. This option suppresses all financial support (intervention and support to 
collective actions) and any specific legal instrument for fisheries and aquaculture products. 
No pre-condition for imported fisheries and aquaculture products. 

Assessing the options 

Environmental sustainability 

Option 1 remains focused on managing intervention mechanisms; it neither empowers POs 
to manage their fishing activities in a sustainable way nor does  it ensure that  aquaculture 
activities are carried out in a sustainable manner. 

Suppressing  aid  for  withdrawal  in  Option  2  will  have  a  rather  limited  direct  impact, 
considering  the  small  volumes  concerned  by  withdrawals  in  recent  years.  It  still  however 
sends a strong political message that greater anticipation of market demand and outlets is 
necessary.  

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Option  3:  empowering  POs  with  collective  management,  monitoring  and  control  of  the 
fishing opportunities allocated by the Member States (including the individual fishing rights 
and fishing efforts of their own members) would significantly improve the sustainability of 
the EU fishing sector. Access for consumers to more  precise information  on all products, 
whatever  their  presentation  will  considerably  extend  knowledge  on  fisheries  and 
aquaculture  products.  This  will  help  consumers  to  make  better,  informed  choices  and 
ultimately support responsible consumption.  

Lack  of  support  for  POs  in  Option  4  would  negatively  affect  their  coordination  in 
implementing  sustainable  fishing  practices.  It  would  also  limit  the  management  efforts 
currently undertaken by POs. Although private initiatives toward sustainable sourcing and 
consumption are increasing in the EU, this new market development still needs to grow and 
to build up its credibility and confidence. 

Economic sustainability 

Under  Option  1,  the  added  value  of  POs  is  bound  to  remain  limited  to  the  possibility  of 
benefiting from intervention mechanisms. POs are unlikely to provide additional services to 
their members, especially to better connect their production to market requirements and add 
value to their products. 

In  terms  of  impact  of  Option  2  on  first-sale  prices,  producers  are  likely  to  remain  price 
takers until they learn to group their supply efficiently and better promote their produce. 

Regarding  Option  3,  benchmarking  with  the  fruit  and  vegetable  sector  shows  a  clear 
correlation  between  level  of  production  structuring,  price  stability  and  added  value. 
Planning  and  concentration  of  supply  should  therefore  lead  to  greater  first-sale  price 
stability. Adequate market expertise should reinforce market position and ability to predict 
market trends or crises. The increased bargaining power of producers should lead to more 
balanced  added-value  distribution.  More  accurate  consumer  information  on  origin  (for 
instance on stock, FAO sub-area, defined maritime spaces such as Bay of Biscay, English 
Channel etc) will support local purchase and focus on sustainable consumption. Small-scale 
fleets would be able to market their production better; and consumer confidence would be 
restored  or  upheld.  Extending  the  information  requirements  to  processed  products  would 
also satisfy consumer expectations and help prevent fraud. 

The  elimination  of  Market  Policy  instruments  as  per  Option  4  would  take  away  any 
incentive to structure the sector. It would weaken the negotiating power of producers and 
limit their ability to adapt supply to demand (atomised supply, lack of coordination between 
producers).  Information  to  consumers  on  a  voluntary  basis  is  a  workable  option, 
considering  operators'  commitments  to  sustainable  production.  It  will  not,  however,  meet 
the objective of informing EU consumers better and enhance their knowledge on fisheries 
and aquaculture products. Cases were observed in which false allegations of environmental 
friendliness  have  misled  or  confused  consumers,  and  this  undermines  any  attempts  at 
restoring the image of the sector.  

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Social sustainability 

In Option 1 and 2, the effects on income will remain very limited, on one hand because they 
only concern cases where price drops need to be prevented, and on the other because the aid 
intensity is very low (0.2% of EU production value).  

In Option 3, the improved structuring of the production side is expected to improve crisis 
anticipation  and  increase  added  value  by  diversifying  marketing  strategies.  This  should 
uphold employment and income levels. 

In  Option  4,  the  removal  of  market  instruments  is  likely  to  impact  some  sectors  (small 
pelagic  canneries)  that  could  relocate  outside  the  EU.  In  these  cases,  impact  on  jobs  and 
income could be substantial on a local scale. 

Comparing the options 

Based on the impacts assessed and the risks identified, options are compared vis-à-vis the 
baseline  scenario  (status  quo)  in  terms  of  effectiveness  and  efficiency  in  relation  to  the 
objectives  and  in  terms  of  coherence  with  overarching  EU  objectives  (namely  the  CFP 
objectives but also other cross-cutting issues). This can be summarised as follows: 

Option 1, or the status quo, was evaluated in detail and  was  judged partly  inefficient and 
too  complex  to  fulfil  its  current  objectives.  So  far  the  main  focus  of  the  CMO  has  been 
price  stability  through  market  intervention.  This  proved  to  have  small  impact  and  low 
performance; it tackled the symptoms rather than the real causes, sent the wrong political 
signals and left operators with little or no responsibility. Today, 12 years after its adoption, 
the current CMO appears unfit for the challenges of the EU market. It will result even more 
ineffective in the reformed CFP, and possibly inconsistent with its underlying objectives. 

Option  2  aims  at  correcting  the  main  shortcomings  of  the  existing  CMO  by  proposing 
adjustments  and  simplifications  that  would  improve  its  functioning.  The  relevance  to  the 
main objectives of the CFP reform would however remain questionable.  

Option  4  would  remove  the  EU  Market  Policy  altogether.  It  is  true  that  market-driven 
developments  and  incentives  toward  sustainability  have  increased;  the  commitments  by 
processors and retailers, combined with the increased pressure from NGOs and civil society 
to obtain sustainable products, should bring us closer to our environmental objectives. Still, 
the  main  problems  identified,  namely  the  complex  and  fragmented  EU  supply  sector  and 
the  risks  of  misleading  or  confused  consumer  information,  would  only  be  partially 
addressed. In fact, the industry will be given more responsibility to manage their activities, 
but the lack of support to structure their production and of accompanying market measures 
would contradict the reform's goal to support market-based instruments (rather than costly 
structural  measures)  and  help  producer  organisations  improve  the  marketing  of  their 
products.  

Option  3  proposes  to  enhance  the  Market  Policy  so  as  to  accompany  the  fisheries  and 
aquaculture  sector  while  it  shifts  toward  sustainable  production  practices.  Much  can  be 
done in terms of organisation and marketing to increase predictability of supply and reduce 
transactions  costs. This option emphasises the  role  of  each  main  stakeholder  in  favouring 
sustainable practices. 

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Under  this  option,  the  structure  and  objective  of  the  new  Market  Policy  would  be  much 
broader and bolder: 

•  Several  tools,  particularly  market  interventions  mechanisms,  are  abandoned.  This 

implies a strong political message and tremendous simplification.  

•  Some elements, such as marketing standards and autonomous tariff policy, remain 
but  with  more  flexibility;  additional  objectives  are  introduced  (to  support  the 
development of distant selling or e-commerce, a level playing field etc). 

•  Other elements are emphasised: the sector is reorganised with stronger focus on the 
producers' ability to manage their production and market their products; a simplified 
single storage aid is foreseen (produce to be stored, processed and reintroduced onto 
the  market),  information  to  consumers  is  considerably  extended  in  scope  and 
content.  

•  One new element is the EU market observatory. 

The impact assessment of the reform of the CFP concluded that a far-reaching reform of the 
Market Policy is necessary, one that should reinforce the role of producer and inter-branch 
organisations  and  marketing  measures  in  general.  This  will  contribute  to  the  reform's 
objectives of economic sustainability while also helping environmental sustainability. The 
Market Policy should orient production activities to areas where market conditions are good 
and where there is a market for the fisheries and aquaculture products.  

The  Market  Policy  should  help  increase  the  added  value  of  fisheries  and  aquaculture 
products  in  a  context  where  financial  support  is  moved  away  from  the  fleet  (especially 
scrapping  and  temporary  cessation),  in  favour  of  smart,  green,  innovative  and  market-
oriented solutions for the fisheries and aquaculture sector. More specifically, some aspects 
of the market reform should accompany and support the implementation of the new CFP: 

•  Empower POs to ensure management, enforcement and control of fishing activities 

of their members. 

•  Market-based transferable fishing shares (TFSs) allow the fishing industry to adjust 
fleet capacity to the available marine resources without need for public intervention; 
POs could be responsible of collectively managing TFSs.  

•  Market  measures  accompanying  an  active  policy  for  mandatory  landing  of  all 
catches for stocks subject to catch limits should be carefully defined and could be 
implemented by POs. 

•  Give value to more selective and sustainable production activities and move away 
from  strategy  based  on  volume  with improved  production  and  marketing  planning 
by  POs  and  with  EU  consumers  playing  a  more  active  role  when  they  are  in  a 
position to make informed choice. 

Variations in distributional impacts between areas or regions are very limited due to a fully 
uniform access of POs to financial instruments and the all rules.  

A  broad  range  of  stakeholders  will  largely  benefit  from  Option  3.  POs'  increased 
responsibilities  and  resources  will  provide  new  business  opportunities  to  producers  of 
fishery and aquaculture products, who will find membership more attractive. The new tariff 
policy  will  improve  the  predictability  of  supply  of  raw  materials  and  this  will  enable 
processors to better predict their activities. The whole sector will be better coordinated and 

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encouraged  to  launch  initiatives  of  common  interest  in  particular  to  promote  sustainable 
fishing.  Consumers  will  be  able  to  make  better  informed  choices  through  improved  and 
more accurate labelling of fishery and aquaculture products. Finally, the simplification and 
reduction in administrative burden will have a positive impact on the Commission, Member 
States' Administrations and economic operators. 

In view of the impact analysis DG MARE supports Option 3 to set up an enhanced Market 
Policy for fisheries and aquaculture products. 

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