CELEX: 51979PC0102
Language: en
Date: 1979-03-01
Title: PROPOSAL FOR A COUNCIL REGULATION (EEC) AMENDING REGULATION (EEC) No 1111/77 LAYING DOWN COMMON PROVISIONS FOR ISOGLUCOSE (Presented by the Commission to the Council)

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COM (79) 102
Vol. 1979/0052
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 ---pagebreak---          COMMISSION OF THE EUROPEAN COMMUNITIES
                                                      COM(79)102 final final
                                                      Brussels . 1 March 1979
                       PROPOSAL FOR A COUNCIL REGULATION ( EEC )
                     AMENDING REGULATION ( EEC ) No 1111 / 77 LAYING
                        DOWN COMMON PROVISIONS FOR ISOGLUCOSE
                   ( Presented by the  Commission to the Council )
                                                           \
                                                             \
                                   t
C0M(79 ) 102 final
 ---pagebreak---                                EXPLANATORY MEMORANDUM
   Conmon provisions for isoglucose were laid down in Regulation (EEC) NO 1111/77 »
   AS last amended by Regulation (EEC ) NO 1298/78 . In particular these provisions
   iraoosed a levy system , with effect from 1 July 1977 > on the whole of the
' Community 's production of isoglucose . For the periods 1977/78 and 1978/79 the
   isoglucose production levy was fixed at 5 ua per 100 kg of dry matter . This
 " corresponded to half the production levy applicable to "B" quota sugar (i.e.
   sugar produced "between basic and maximum quotas) and represented 15 $ of the
   intervention price of white sugar . The primary objective in introducing this
   system was to equalise the conditions of competition between sugar and isoglucose
   having regard to the growth in isoglucose production and to the difficulties in
   disposing of existing surplusses on the Community and world markets in sweeteners .
    .Additionally, the isoglucose levy was intended as a contribution to the financing
    of the refunds necessary to export these surplusses , refunds which , since 1977 »
    have reached levels between 20 and 25 ua per 100 kg of sugar . This contribution
    was regarded as justifiable because the price of isoglucose depends directly on
     the price of sugar , and the latter has been fixed at a level well above that
    which would have applied in the absence of the quota system , which extends only
     to sugar manufacturers .
2. On 25 October 1978 the European Court of Justice gave a judgement under Article 177
     of the E33 Treaty stating, in particular, that Council Regulation (EEC) NO Hll/77
     of 17 May 1977 was invalid to the extent to which its Articles 8 and 9 imposed a
     production levy on isoglucose of 5 ^ Per              dry mat'tert
     The Court did not uphold the motives which led the Commission and the Council
     to impose this levy. Accordingly the Court declared that the levy breached the
     general principle of non-discrimination within the meaning of Article 40 (3) of
     the EEC Treaty. It emphasised first and foremost the fact that the isoglucose
     production levy was applied to total production whilst the sugar production levy
     was imposed only on -B- quota sugar , also, it was only the sugar manufacturers who,
     by limiting their production, had the possibility of reducing the charge re­
      presented by the levy.
      Mditionally, the Court pointed out that by virtue of the organisation of the
      market in the sugar sector about 60 * of the average charge resulting from the
      production levy was borne by the beet growers; and that , by omitting to take
      this factor into consideration in the calculations , the charges borne by the
      sugar manufacturers ( the sugar production levy in 1977/78 was 9.85 ua 100 kg
      of which 5.94 was borne by the beet growers and 3-91 by the manufacturers)
 ---pagebreak---    had been appreciably over-estimated . Finally , the Court considered that within
   the limit of the wAn and "B " quotas the sugar manufacturers benefitted from
  market guarantees whilst the isoglucose producers did not enjoy similar ad­
  vantages . The Court concluded by stating that it was up to the Council to take
   all the necessary measures , compatible with Community law , to ensure that
  the market in sweeteners furictioned properly .
. In the light of the foregoing the Commission believes that such measures should
  now be taken in respect of the period July 1979 to June 1980 and that they
  should be analogous to those which are in force in the sugar sector up to
  30 June 1980 . The proposed measures are attached hereto .
  The most important of these involves the allocation of a basic quota to each
  isoglucose producer ; and in order to avoid discrimination between the two sectors
  this quota should be determined , as in the sugar sector , on the basis of effective
  production in a reference period . Given that isoglucose production in the
  Community began only in 1974/75 » and has developed successively since then , it
  would be appropriate to adopt as a reference the production realised 6ince the
  Court pronounced its judgement , such production not having been subject to the
  restraining effect of the production levy originally provided for . And because
  this period covers only four months it would be appropriate to multiply the
  production therein by a factor of three . Nevertheless , if this reference turns
  out to be less favourable than one based on production during the. most recent
  period of 12 months corresponding to the last year ( 1 July 1977 "to 30 June 1978 ) »
  the period in which isoglucose production reached its highest ever level ( l ), then
  the latter reference should be used to establish the basic quota . The Commission
  considers it necessary to provide , at the Community level , for a reserve quantity
  in order to take account of the particular situation of this or that under­
  taking, notably those not having begun , or which will only begin , their pro­
  duction after the start of the reference period of production . As regards this
  supplementary quantity it is worth recalling the provisions laid down in
  Regulation No IOO9/67/EBC on the introduction of the quota arrangements in the
  sugar sector . Starting with the 1968/69 sugar year , those provisions established
  basic quotas totalling 6.48 mio t based on a production in the reference period
  1961/65 of 5*78 mio t ,with a reserve quantity to take account of particular
  cases *
   (l ) ESC production in 1976 :        70 i 000 t dry matter
        EEC production in 1976/77 î     82 000 t dry matter
        EEC production in 1977/78 :    102 810 t dry matter
 ---pagebreak---  The "basic quota for isoglucose must "be multiplied by a coefficient to deter­
 mine the maximum quota. Such a coefficient must correspond to that fixed for
 sugar undertakings for the I979/8O sugar year .
 All isoglucose production exceeding the maximum quota of an undertaking must
be exported to third countries without a Community guarantee and may not be
disposed of on the Community 's internal market * This equates with the situation
in the sugar sector .
In order to strengthen the market guarantees for isoglucose producers it would
be appropriate to allow henceforth that exports of isoglucose in the natural
state as well as in the form of processed goods may benefit from refunds
corresponding to those applicable to sugar exported in the form of processed
goods .
In its prices proposals for the 1978/79 sugar year (l ) the Commission informed
the Council that it was initiating an enquiry of the Community undertakings
concerned as to the comparative costs of invert sugar , liquid sugar and iso-
glucose . The Commission undertook to ^irtform the Council of any conclusions
vjhich might be drawn from the enquiry in a manner which would enable them
to be taken into account .
In this connection the Commission wishes to point out that for reasons outside
the Commission 's control this enquiry , which was carried out by a private firm
accepted by the interested parties , had to be confined to a single Member State
(Belgium ) and to two enterprises (Raffineries Tirlemontoise S.A. and G.R.
Amylum N.V. ); and it goes without saying that the figures obtained from the
two enterprises ought not to be circulated .
Nevertheless , the fact that it emerged from the enquiry that the production
costs of isoglucose were below those of invert sugar , plus the existence of
si^iificant unused capacities in the starch and glucose sectors , together with
the difficulties in the disposal of surplusses ( which will require a further
reduction in "B" quotas in the 1979/80 sugar year ), strongly reinforce the
Commission 's conviction that its proposed measures are necessary .
Finally , the Comission wishes to emphasise that these measures would apply
only during the period 1 July 1979 to 30 June 1980 and would be entirely
without prejudice to the Commission 's position with regard to the future
policy concerning the market in sweeteners (sugar and isoglucose)#
( l ) See Doc COM (77 ) 525 final of 9.12.1977 voi I page 41 point 4
 ---pagebreak---                            - 4 -
The Commission is equally in favour of the elimination of impediments
to the utilisation of isoglucose which exist at present as a result ,
on the one hand , of national legislation in certain Member States and ,
on the other hand , of fiscal measures ( excise  duties and other taxen )
applied in the case of sucrose and isoglucose .
In this respect the Commission would press Member States to eliminate
these impediments as quickly as possible and to apply , where and to the
extent necessary , a fiscal treatment which does not discriminate between
surcrose and isoglucose .
 ---pagebreak---                   PROPOSAL FOR A COUNCIL REGULATION ( EEC )
         amending Regulation ( EEC ) No 1111 / 77 Laying down common
                          provisions for isoglucose
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
 having regard to the Treaty establishing the European Economic Community ,
 and in particular Article 43 thereof .
 Having regard to the proposal from the Commission ,
                                                                (1 )
 Having regard to the Opinion of the European Parliament             ,
 Having regard to the Opinion of the Economic and Social Committee ^,
 Whereas Articles 8 and 9 of Council Regulation ( EEC ) No 1111 / 77 of 17 May
 1977 laying down common provisions for isoglucose^^, as last amended by
                                (4)
 Régulation ( EEC ) No 1298/ 78     , provide    for a system of production levies
 applicable until 30 June 1980 ;
 Whereas the Court of Justice of the European Communities delivered a judge­
ment on 25 October 1978 stating that Regulation ( EEC ) No 1111 / 77 is invalid
 inasmuch as Articles 8 and 9 thereof impose a levy on the production of iso-
glucose of five units of account per 100 kilograms of dry matter for the
 period corresponding to the 1977/ 78 sugar year ;
 Whereas the Court decided that this levy system infringed the general prin­
 ciple of non-discrimination within the meaning of Article 40(3 ) of the EEC
 Treaty ;   whereas the discrimination arises from the fact that the isoglucose
 levy applies       to total production tut         the sugar levy applies only to
 production exceeding the basic quota without exceeding the maximum quota ;
 Whereas the most appropriate means for avoiding inequality of treatment is to subject
 isoglucose production to rules analogous to those at present applying to sugar pro­
duction until 30 June I98O ; whereas this is particularly neces­
 sary in view of the restricted outlets at present available on the market
 for sweeteners ; whereas this implies therefore , the introduction of a temporary
 system for isoglucose production analogous to that applied to sugar pro­
 duction by virtue of Council Regulation ( EEC ) No 3330/(5)
                                                               74 of 19 December 1974
on the common organization of the market in sugar            , as last amended by
 Regulation ( EEC ) No 1396/78^^;
 ( 1 ) 0J No C                              ( 4 ) 0J No L 160 , 17.6.1978 , p. 9
 ( 2 ) 0J No C                              ( 5 ) 0J No L 359 , 31.12.1974 , p. 1
 ( 3 ) 0J No L 134 , .28.5.1977, p. 4       ( 6) 0J No L 170 , 27.6.1978 , p.1
 ---pagebreak--- Whereas , since the manufacture of isoglucose began in the Community only
in 1974/75 1 i"t is fair to allot/each manufacturer a basic quota according
to his output during the most recent possible period , namely a quantity
equal to three times his output in the period 1 November 1978 to 28 February
1979 » or his output in the period 1 July 1977 to 30 June 1978 if that were
the more favourable reference period for the undertailcing concerned ; whereas
it is appropriate to allocate basic quotas for the period 1 July 1979 to
30 June 1980 J vrhereas , moreover , in order to take into account the particular
circumstances of this or that undertaking, particularly one which began
production only recently , it is appropriate to provide the possibility of fixing
basic quotas at a higher level within the limit of 10 -Jo of the sum of those
quotas ;
Whereas , with the same need for analogy with the system applied to sugar pro­
duction and for equality of treatment , it is necessary to fix a specific anount
of the production levy applicable to isoglucose production exceeding the basic
quota without exceeding the maximum quota and which takes account of the fact
that participation by the producer of the raw material is not possible ; whereas ,
therefore , it is appropriate to take into consideration the share of the pro­
duction levy borne by sugar manufacturers ;
Whereas , in the aforementioned judgement , the Court decided also that the iso-
glucose producers did not benefit from guarantees similar to those provided for
sugar manufacturers ; whereas , therefore , it is appropriate to provide that
restitutions corresponding to those provided for the products referred to in
Article 1 ( l ) (d ) of Regulation ( ESC ) Wo 3330/74 may apply to exports of isoglucose
the natural state as well as in the form of the goods listed in the Annex to
Regulation ( ESC ) NO llll/77 »
KA3 ADOPTED THIS REGULATION :
 ---pagebreak---                                        - 3 -
                                     Article 1
The text of Article 4(1 ) of Regulation ( EEC ) No 1111 / 77 is replaced by the
fol lowing :
                                     Article 4
1.   Provision may be made for an export refund for the products listed in
     Article 1 when unprocessed and for isoglucose falling within subheading
     17.02 D I exported in the form of the goods listed in the Annex .
     The level of the refund shall be determined per 100 kilograms of dry
     matter , taking into account the following in particular :
     ( a ) the export refund fixed by virtue of Article 19(1 ) of Regulation
           ( EEC ) No 3330/ 74 for the products referred to in Article 1 ( 1 ) (d )
           of that Regulation ;
     ( b ) the economic aspects of the proposed exportations .
     When the refund is being fixed , account may be taken of the need to
     establish a balance between the use of Community raw materials in the
     manufacture of processed goods for export to non-member countries and
     the use of the products of such countries brought in under inward
     processing arrangements .".
                                     Article 2
1.   The provisions of Title II of Regulation ( EEC ) No 1111 / 77 are hereby
     repealed with effect from 1 July 1977.
2 . i%asures consequent upon the repeal in paragraph 1 shall be
     adopted in accordance with the procedure laid down in Article 12 of
     Regulation ( EEC ) No 1111 / 77 .
                                     Article 3
The following Title is inserted after Article 7 of Regulation ( EEC )
No 1111 / 77 :
                                   " TITLE II
                                Quota arrangements
                                     Arti eie 8
1 . Article 9 shall apply for the period 1 July 1979 to 30 June 1930 .
 ---pagebreak---                                   - 4 -
2 . The arrangements applicable from 1 July 19o0 shall be adopted by the
    Council before 1 January 1980 in accordance with the procedure laid
    down in Article 43 ( 2 ) of the Treaty .
                                Article 9
1 . A basic quota shall be allotted to each isoglucose producing undertaking
    established in the Community .
2 . The basic quota of each such undertaking shall bo equal to three tines its
    production , as determined for the purposes of this Regulation , during the
    period 1 November 1978 "to 28 February 1979 » expressed as dry matter .
    Nevertheless , if the production of isoglucose resulting from the application
    of the preceding subparagraph is less than that , as determined for the pur­
    poses of thi3 Regulation , by the same undertaking , during the period 1 July
    1977 to 30 June 1973 the latter quantity shall constitute its banic quota .
    Moreover , a reserve quantity equal to 10 :jo of the sum of the basic quotas
    resulting from the application of the preceding subparagraphs may be used
    for the purpose of allocating supplements to basic quotas .
3 . For the period referred to in Article 8 ( l ) these shall also be allotted
    to each undertaking having a basic quota by virtue of paragraphs 1 and 2
    a maximum quota equal to its basic quota multiplied by a coefficient .
    This coefficient shall be that fixed by virtue of the second subparagraph
    of Article 25 ( 2 ) of Regulation ( iSSC ) Ho 3330/74 for the period 1 July 1979
    to 30 June 1980 .
4 » The quantity of isoglucose produced during the period referred to in
    Article 8 (l ) which :
    - exceeds the maximum quota of the undertaking
      or
    - wan produced by an undertaking not having a basic quota
    may not be disposed of on the Community 's internal market and must be
    exported in the natural state to third countries without the application
    of Article 4 «
 ---pagebreak--- 5 . For the quantity of isoglucose production which exceeds the basic quota
    without exceeding the maximum quota Member States shall charge a production
    levy on the isoglucose producer concerned . For the period referred to in
    Article 8 (l ) the amount of the isoglucose production levy shall be orrual
    to the share of the sugar production levy , as fixed for the 1979/80 sugar
    year by virtue of Article 28 of Regulation ( ESC ) Fo 3330/74 , borne by the
    sugar manufacturers .
6 . The Council , acting by a qualified majority on a proposal from the Comnission ,
    shall allocate as necessary the reserve quantity referred to in paragraph 2
    and shall adopt general rules for the application of this Article .
7 . Detailed rules for the application of this Article , which shall in particular
    provide for the levying of a charge on the quantity of isoglucose referred
    to in paragraph 4 which has not been exported in the natural state during
    the period referred to in Article 8 ( l ) and fix the amount of the production
    levy referred to in paragraph 5 » shall be adopted in accordance with the
    procedure laid down in Article 12 .".
                                    Article 4
This Regulation shall enter into force on the third day following its publi­
cation in the Official Journal of the European Cornmunitieg .
It shall apply from 1 July 1979-
This Regulation shall be binding in its entirety and directly applicable in
all Member States .
Done at Brussels ,                                        For the Council
 ---pagebreak---                          FINANCIAL               STAT EMENT
                                                                                          Date     2.1.79
       I. BUDGET HEADING :          Article 112 Receipts
                                                                                    Anproon at ions           : 7.2 MEUA
       2 . TITLE of the project : Proposed Regulation amending Regulation ( EEC ) No 1111 / 77
             laying down common provisions for isoglucose ( amending Articles 4 , 8 and 9
            thereof ) .
       3 . LEGAL BASIS : /\ r ticle 43 of the EEC Treaty
       4 . AIMS OF PROJECT :          jo establish a temporary production quota system for isoglucose ,
             following the European Court'.s Judgement of 25.10.78 which invalidated the
            present production levy .
             ( Repeal of said levy with effect from 1.7.77 ( 1 ))
     ! 5 . FINANCIAL IMPLICATIONS
                                                                                                   ) ·ΙΙΙΜΙ·Ι·1ΙΙΙΙΙ·–––
                                                     J PERIOD OF 1 ? MONTHS CURRENT FINANCIAL YEAR
                                                                                   < 1979 )
                                                                                                     FOLLOWING FINANUAI .
                                                                                                               ( 1980  )
                                                                                                                          VFAP      *
                                                                                                                                    î
       s.o EXPENDITURE charged to
                           TO THE EC BUDGET
                ( RE FUNDS / INTERVENTIONS )
            - NATIONAL                       budgets
     I -OTHER sectors
       5.1  RECEIPTS
            - OWN RESOURCES OF THE EC
                ( LEVIES / CUSTOMS DUTIES )
            - NATIONAL
                                                         + 1.3 MEUA            - 6.7 MEUA ( 3 )                + 0.8 MEUA           l
       5.0.1    ESTIMATED EXPENDITURE
       S.1.1    ESTIMATED RECEIPTS                      Project coni ined to the marketing ye ar 1979 / 80
       5 .2 METHOD OF CALCULATION         _ Isoglucose levy , = 40 % of sugar levy , would apply to
             isoglucose production between the basic quota and the maximum quota , i.e. " B "
             isoglucose .
         - Sugar levy 1979 / 80 = 10.05 ua / 100 kg ; isoglucose levy 1979 / 80 = 4.02 ua / 100 kg .
         - Maximum sugar quota 1979/ 80 = 120 % ( 2 );                       B   isoglucose 1979 / 80 = ca 27 000 tonn
     Β
     ?                                                         ·
       6.0 CAN THE PROJECT BE FINANCED FROM G R'0 P r -j                     ™E RELEVANT CHAPTER      THE CURRENT BUDGET ? YESW0X
        6.3 WILL FUTURE BUDGET                    BE NECESSARY ?
                                                                                                                           YEsXftôX
                                     appropri at ions
        OBSERVATIONS
     |                    " ( 1 ) The repeal of the present levy of 5 UA / 100 kg , with effect from                                |
     |       the Court 's judgement . With an actual production between 1.7.77 and 30.6.78 of
102 800 t ( the levy has been suspended since the latter date ) the financial consequence                                            j
     sj of the repeal amounts to 5 140 000 UA . •                                                                                    j
     |        ( 2 ) Assuming that the "B" sugar quota is reduced to 20 % of the basic sugar                                          I
     1                quota .
     I        ( 3 ) With respect to the 1979 Budget .
 ---pagebreak---                      FINANCIAL STATEMENT ( continued )
Following the Court 's Judgement , and in order to continue to control the
market in sweeteners and ensure equality of treatment between sugar and
isoglucose , the Commission is proposing that a quota system be introduced
in the isoglucose sector . From the financial angle this would mean that ,
outside basic production , part of the cost of managing the sweeteners market
would be borne by the industry up to a certain level of production beyond
which the industry would bear the whole cost . The production between basic
quotas and that level involved charging a production levy of 1.3 MEUA per
annum ( 0.5 MEUA in 1979 ); on the other hand , at current levels of refunds ,
that same production involved costs amounting to 7.5 MEUA .
The 1979 Budget , which was drawn up before the Court issued its Judgement ,
provided for a charge of 7.2 MEUA for this operation . The loss of own resources
in 1979 would be 6.7 MEUA .