CELEX: 51973PC1278
Language: en
Date: 1973-07-26
Title: PROPOSAL FOR A REGULATION (EEC) OF THE COUNCIL amending Regulation (EEC) No 170/71 as regards the activities of producers' organizations and the definition of the term "producer" (submitted to the Council by the Commission)

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COM (73) 1278
Vol. 1973/0241
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                            COM(73)1278 final.
                                                            Brussels . 26 July 1973
                                  PROPOSAL FOR A
                        REGULATION ( EEC ) OP THE COUNCIL
               amending Regulation (EEC) No 170/ 71 as regards the
                 activities of producers' organizations and the
                       definition of the term "producer"
                  ( submitted to the Council "by the Commission)
  COM(73 ) 1278 final
 ---pagebreak---                                   EXPLANATORY MEMORANDUM
            Proposal for a Council Regulation amending Regulation (EEC ) No 170/71
            as regards the activities of producers' . organizations and the defi­
            nition of the term "producer"
The purpose of this proposal for a Regulation is to define two notions which,
as experience has shown , can lead to differing interpretations .
These are :
              l ) the so-called "recognized activities",
              2 ) the term "producer". ,
l ) "Recognized activities"
                                                                       1 '
    The purpose of forming producers' organizations is to help produoers im­
    prove their position on the market . The principal means of achieving this
                                                                    *
    aim - which contributes to the attainment of the objectives of Article 39
    of the ,Treaty - is to encourage producers , rather than themselves pro­
    cessing, preparing and putting up for sale and selling their goods , to
    place them at the disposal of a producers', organization , which will carry­
    out these activities on their hehalf - the effect being to extend the range
    of and to concentrate supply . Such activities are essential to the func­
    tioning of producers' organizations and are thus to be regarded as talcing
    precedence ever the principle of the avoidance of distortions of competi­
    tion . It is therefore justified to exoanpt them from the" general applica­
    tion ©f -the provisions on competition lc.id down in the - Treaty. This is done ,
    in pursuance of the basic Regulation 0 :1 the organization of the market in
    fishery products , by means of a provision for recognition of produoers' or­
    ganizations which carry out the above mentioned actiyities aad satisfy the
    other requirements already laid down in Community provisions .
                        r. ' v .i
    However , it may happen -ftid; producers' organizations also carry out acti­
    vities which , although economically justified , do not directly contribute
    to the attainment of the objectives of Article 39 of the Treaty . Such
    activities do not merit* exemption from the applicability of the Treaty
    rules on competition . It is therefore desirable to specify what constitute
    " recognized activities" in detail . This is to be done on the basis of the
    existing provisions; these-, while specifying as a conditisn for recogni­
    tion of a producers' organization that inter alia it sh«uld carry on the
    activities referred to earlier , also refer to other activities and this re­
    ference has given rise to misunderstandings , particularly in the following
    two oases :
 ---pagebreak---                                         - 2 -
a) Article 1(2 ) of Regulation (EEC ) No 170/71 provides Inter alia that producers'
   organizations shall he recognized if their activities cover one or more of
           i
   the products falling within headings Nos 03.01 to O3.O3 of the Common Customs
   Tariff ( excluding products smoked elsewhere than on fishing vessels). Those
   heading numbers include "both fish , crustaceans and molluscs in the fresh or
   chilled state and the like products after they have undergone certain pro­
   cessing operations (filleting, salting, smoking, drying, freezing). The
   question could therefore arise as to whether it is only the marketing of such
   products , whether processed or unprocessed , which is to be regarded as a
   "recognized activity" of a producers' organization , or whether the processing
   of produots supplied to it in the unprocessed state is also to be so re­
   garded . The second alternative is to be preferred , on the following grounds :
             r»        v                                               •       .
   For some years now, and increasingly so as regards freezing, fishermen and
   fishing vessel operators have been carrying out the aforesaid types of pro­
   cessing themselves . The purpose of suoh processing is to improve the keeping
   quantities of perishable "fishery products , thus making them less susceptible
   to falls in price and , as regards filleting, to meet the growing demand by
   consumers for foodstuffs requiring the minimum of preparation .
   However , such processing "requires costly installations , which the smaller'
   fishing businesses either cannot afford or dannot operate economically . In
   order to give those producers' organizations whose members oonsist of small-
   scale businesses' the same opportunities and position on the market as pro­
   ducers' organizations whose members prooess their own products and then supply
   them to the organization for sale , it is essential that the processing by
   producers' organizations of products supplied by their members be designated
   "a recognized activity". However , the smoking of products elsewhere than on
   fishing vessels should remain excluded, for this process has always been
   carried , out largely by industrial establishments and its inclusion in. the
   list of "recognized activities" would distort competition .
                                                                 • • •/« • •
 ---pagebreak---                                           - 3 -
   b ) The first indent of Article 2(2) of Regulation No I7O/7I provides that
        sale through producers' organizations is to "be confined to the first marke­
       ting stage . In practice , this provision has led to differing interpreta­
       tions. In order to avoid distortions of competition in marketing and hence
       in trade , it should therefore be expressly provided that only sale to the
       initial purchaser at the wholesale stage is to he regarded as a "recognized
       activity".
2) Produc er
   The existing provisions relating to producers' organizations contain no de­
   finition of the term "producer". This could give rise to difficulties , in that ,
   as already explained , tariff heading-No s 03.01 to O3.O3 caver certain types
   of processing which are also carried out "by businesses which do not themselves
   engage in fishing, but devote themselves exiusively to the processing of
   fishery products .
   However, the intention was that the formation of producers' organizations
   should be facilitated only for businesses which actually engage in fishing.
   In some Member States it is oustomary to regard as a producer not only the
   owner of a fishing business but also all persons working on board fishing
   vessels , for the crew not only participate in decisions concerning the
   conduct of fishing operations and the sale of the catch, but also share the
   financial risk. Thus their remuneration depends solely on the net proceeds
   •f sale after deduction of all costs in respect of fishing and sale (nets,
   ice , fuel , fees, etc .). In erder to enable crew members to take an active
   part in decisions of producers' organizations, it is provided that they, as
   well as the owner of the business , are to be regarded as producers and hence
   as members of the producers' organizations concerned .
   Thxs Regulación has no financial ocnsequences *
 ---pagebreak---                                Proposal for a
                  REGULATION ( EEC ) OF TTTC /COUITCIL
                   amending Regulation ( EEC ) No 170/71
        as regards the activities of producers' organizations and the
                 definition of the term " producer"
 THE COUNCIL OP THE EUROPEAN COMMUNITIES ,
 Having regard to the Treaty establishing the European Economic Community ;
 Having regard to Counoil Regulation (EEC ) No 2142/70 ^ of 20 October 1970
 on the common organization of the market in fishery products , as last amended
"by Regulation (EEC ) No 220/73 S
Having regard to the proposal from the Commission ^
Whereas the ©bjective in setting up producers' organizations is to improve .
production and marketing conditions f»r their members !
Whereas Council Regulation (EEC ) No I70/7I ^ of . 26 January 1971       the re­
cognition of producers' organizations in the fishing industry provides that ,
in order for a producers' organization to be recognized and thereby to enjoy
the financial advantages provided for , it must satisfy certain minimum re­
quirements and carry on on behalf ®f its members certain activities essential
to the attainment of the above-mentioned objective ^ whereas these include
in particular the sale of the products supplied to the organization by its
members , and the drawing up and implementation of rules concerning production
and marketing? whereas , however , producers' organizations may also carry on
other activities which , although economically justifiable , do not justify
exemption from the rules on competiti®nj whereas it is therefore desirable
that it should be expressly stated which activities qualify for recognition *
                                                            • • • /• • •
*0J No L 236 , 27 October 1970, p. 5 .
^OJ No L 27 , 1 February 1973, p . 1 .
J0J No L 23 , 29 January 1971 , p . 11 .
 ---pagebreak--- Whereas the existing provisions concerning producers' organizations do not
define the term "producer"! whereas this eould -give rise to difficulties , in
that tariff heading Nos . 03.01 , 03.02 and O3.O3 cover oertain types of pro­
cessing which are also oarried out by businesses which do not themselves en­
gage in fishing, hut devote themselves exclusively to the processing of fishery
products ? whereas , however , the intention was to that the formation of pro­
ducers' organizations should he facilitated only "businesses
actually engaging in fishing, irrespective of whether they also engaged in
processingi
Whereas in some Member States it is customary to regard as a producer not only
the owner of a fishery business but also all 'persons working on board
fishing vessels , for the crew not only participate in decisions concerning
the eonduct *f fishery operations and „the sale of the catch, but also share
the financial risk; whereas , in order to enable such crew members to take an
active part in decisions of producers' organizations , it is provided that
they , as well as the ®wner of the business , are to be regarded as producers
and hence as members of the producers' organization concerned!
HAS ADOPTED THIS REGULATION i
 ---pagebreak--- Article 1(2 ) of Regulation (S3C ) Ko 170/71 i3 replaced by the following ;
   "2 . Meniber States g>=n recognize producers' organizations applying
    for recognition if they satisfy the conditions set out in Article 2 .n
                                    Article 2
The following Article la is inserted in Regulation (S3C ) Ho I7O/7I s
    For the purposes of recognition only the following activities shall "be
    taken into consideration s
    –  application of their concon rules for production ,
    -  filleting, freezing, salting and drying of products supplied "by members ,
    –   ihe concentration of supply,
    –  preparation for sale,
    –   sale through the intermediary of the organization to the wholesale
        trade ,
    – the application of their c 0-330n marketing rules to any sales by
       Hesters direct to the wholesale trade ."
The following provision is adied to Article 2(l ) of Regulation (S3G ) Ho I7O/7I
   "( e ) they may accept as ceabers cnly those persons specified in Article
    2a ."
                                    Article à.
The following Article 2a is inserted in Regulation (Z3C ) No I7O/7I S
   "Artiçl e_2a
    In this Eegulaxion "producer" means î
    a) the operator of a business situated within the territory of the
         Cocounity which engages in the fishing or breeding of one or more of
         the species of fish, crutaceans or molluscs listed under tariff
          heading Lo 03.01 or O3.O3 and supplies to the producers * organiza­
         tion products falling within heading Ko . 03.01 , 03.02 or 03.03 of the
         Cctrscn Casrtcns Tariff ; or
    b ) the following persons taken together :
         aa) those
              – who work on board the fishing vessels belonging to a business
                aa defined in (a), and
 ---pagebreak---             - participate in decisions concerning the conduct of fishery-
              operations and the sale of the oatch and shares the relevant
              financial risksj
      "b"b ) and the operator of a business as defined in ( a ).
                                    Article 5
This Regulation shall enter into force on .*..                   . . . (a three-
month delay should be provided for to enable recognized organizations to make
the necessary adjustment ).
This Regulation shall be binding in its entirety and directly applicable in
all Member States .                                                  1
Done at Brussels f
                                            For the Council
                                              The President