CELEX: 51987PC0661
Language: en
Date: 1987-12-16
Title: Proposal for a Council Regulation extending the period of application of Regulation (EEC) No 3310/75 on agriculture in the Grand Duchy of Luxembourg (submitted by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (87) 661
Vol. 1987/0309
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 ---pagebreak---      COMMISSION OF THE EUROPEAN COMMUNITIES
                                                                COM(87 ) 661 final
                                                                Brussels , 16 December 1987
                            Proposal for a Council Regulation
                        extending the period of application of
                   Regulation ( EEC ) No 3310 / 75 on agriculture in the
                                Grand Duchy of Luxembourg
                                                          A
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                                                            . :     v?  I
                         ( submitted by the Commission )
C0MC87 ) 661 final
 ---pagebreak---                                                                         С
                                 EXPLANATORY MEMORANDUM
1 .    Under the second subparagraph of Article 1(1 ) of the Protocol on the
       Grand Duchy of Luxembourg and Council Regulation ( EEC ) No 3310/75 ( 1 ),
       as last amended by Regulation ( EEC ) No 4067 /86(2 ), non-sparkling
       natural Luxembourg wines made from fresh grapes are exempt from excise
       duties within the territory of the Benelux Eonomic Union until
       31 December 1987 by way of derogation from Article 95 of the EEC
       Treaty .
2.     Luxembourg has requetsed a further extension of those arrangements
       until 31 December 1988 , on account in particular of the failure to make
       progress towards the harmonization of excise duties on wine in the
       Community and of the significance which the exemption from excise has
       fro Income from wine-growing In Luxembourg .
3.     Nothw i thstand i ng the considerations In point 4 below , in the light of
       the criteria on which the said preference system regarding fiscal
       customs duties was based , the extension of the system is still
       justified by the " special situation " of Luxembourg agriculture .
        In this respect , the following points should be considered :
       (a)   Vitlcultural production Is still of special significance for
             Luxembourg agriculture In general and for the Moselle region In
             particular . The grape harvest accounts for a major proportion of
             the value of total agricultural production In Luxembourg ( FB 600
             to 700 million , or 9,5% of total final production ). More
             particularly as regards the Luxembourg Moselle region , wine¬
             growing with related upstream and downstream sectors Is a typical
             activity providing work for 15% of the working population in the
             region ;    It Is also a main factor In preserving the countryside In
             view of the importance of tourism In the region .
 ( 1 ) 0J No L 328 , 20.12.1975 , p. 12 .
 ( 2 ) OJ No L 371 , 22.12.1986 , p. 13 .
 ---pagebreak---                                   2
(b) In the period from 1967 to 1976 , the average yield from Luxembourg
    vineyards was 130.6 hl / ha ;  In the period from 1977 to 1986 , the
    trend in production and yields was as follows :
    Year         Total production ( hi )    Y I e I d / ha
    1977               155 000                      134
    1978                72 200                        62
    1979                62 500                        54
    1980                50 100                        43
    1981                96 800                        85
    1982               256 400                      225
    1983               184 500                      160
    1984               152 200                      131
    1985               107 000                        92
    1986               159 600                      137
    These figures reflect significant variations in harvests from year
    to year , which are due to the weather conditions applying and the
    small overall size of the Moselle valley , which means that changes
     In weather conditions affect the whole region . Though there Is no
    specific tendency in the figures , the last decade does show an
    average yield of 112,3 hl / ha , representing a fall of approximately
    15% in yields over the previous decade .
(c) There has been a deterioration In the production cost / selling
    price ratio over the last few years , in particular owing to
     increased competition from imported wines . To illustrate this , In
    the last fifteen years , wine imports have been rising constantly
    on both the Luxembourg market ( Table I ) and on that of the Benelux
    countries as a whole ( Table II ).
 ---pagebreak---                                      TABLE   I
                                        Quant 1 1 les of wine
                      YEAR                   Imported into
                                           Luxembourg ( hi )
                      1970                         60 947
                      1975                         90 386
                      1978                        106 475
                      1983                        142 808
                      1984                        158 545
                      1985                        138 177
                      1986                        139 639
                                    TABLE   I I
                                   Quantities of wine Imported
                     YEAR          Into the Benelux countries
                                           ( hi )   (*)
                     Average
                     1970 / 75                  1 912 883
                     1977 / 78                  2 315 039
                     1982 / 83                  3 014 746
                     1983 / 84                  3 154 882
                     1984 / 85                  3 311 489
                     1985 / 86                  3 443 000
(*) From the Commun ity ( EUR 10 )
Source : EUROSTAT
 ---pagebreak---                                        4
         These figures also show that the exemption of Luxembourg wine from
         excise duties has had no effect on Imports of wine from other
         Member States   Into the Benelux countries .
   (d)   The discontinuation of the exemption and an Increase In the
         consumption price by a corresponding amount would , however , have
         probably a significant adverse effect on the quantities of
         Luxembourg wine sold In the Benelux countries , as Belgium and the
         Netherlands absorb approximately 94% of Luxembourg wine exports .
         if Luxembourg wine-growers are to feel the direct effects of any
         discontinuation of the exemption , It would represent a loss of
         more than 10% of their Income , as the Commission showed when
         previous proposals for the extension of the arrangements were put
         forward ; this would endanger the profitability of many small and
         medium-sized wine-growing undertakings In the Luxembourg Moselle
         reg ion .
   (e)   The fact that Luxembourg has not been forced up until now to
         resort to either preventive or compulsory distillation Is not
         likely to offset the abovement loned difficulties . Following
         efforts by producers to Improve the quality of wine , table wine
         production has fallen steeply In Luxembourg while quality wine
         production , which is not eligible for such measures , has risen .
   For the foregoing reasons , the Commission proposes that Luxembourg 's
   request should be granted and the exemption from excise duties applying
   to Luxembourg wines on the Benelux market should be maintained until
   31 December 1988 under the conditions provided for In Regulation ( EEC )
   No 3310 / 75 .
4.  In view , however , of the transitional nature of the exemption
   arrangements provided for In the recitals of Regulation ( EEC ) No 541 / 70
   and in particular of the prospect of the large single market outlined
    In the White Paper , with which the exemption is Incompatible , provision
   must be made as of now for their gradual dismantling from 1 January
   1989 until they are completely abolished from 1 January 1993, or before
   as a result of the application of the Directive on the harmonization of
   excise duties on wine In the Community .
 ---pagebreak---                                       Proposa l
                             COUNCIL REGULATION ( EEC ) No
                                     of
          extending the period of application of Council Regulation ( EEC )
             No 3310 / 75 on agriculture In the Grand Duchy of Luxembourg
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community ,
Having regard to the Protocol on the Grand Duchy of Luxembourg annexed
thereto ,
Having regard to Council Regulation ( EEC ) No 3310 / 75 of 16 December 1975 on
agriculture in the Grand Duchy of Luxembourg ^ 1 ) , as last amended by
Regulation ( EEC ) No 4067/ 86(2 ), and In particular Article 2(2 ) thereof ,
Having regard to the proposal from the Commission ,
Whereas , under the second subparagraph of Article 1(1 ) of the Protocol on
the Grand Duchy of Luxembourg , Belgium , the Grand Duchy of Luxembourg and
the Netherlands are to apply the system provided for In the third paragraph
of Article 6 of the Convention on the Economic Union of Belgium and
Luxembourg of 25 July 1921 ;        whereas the period of application of that
system was last extended by Regulation ( EEC ) No 4067 / 86 ;     whereas the
Council has to decide to what extent those provisions should be maintained ,
amended or discontinued ;
Whereas the application of the said system In favour of Luxembourg wines
will continue to be of benefit to the agricultural         income of the Grand
Duchy of Luxembourg In the sector concerned ,
Whereas , having regard to the other reasons set out In Regulation ( EEC )
 No 3310 / 75 , the period of application of the latter Regulation should be
extended .
 ( 1 ) 0J No L 328 , 20.12.1975 , p. 12 .
 ( 2 ) O J No L 371 , 22.12.1986 , p. 13 .
 ---pagebreak---                                            2
Whereas , however , the system in question was Introduced as a transitionary
arrangement and must In any case be discontinued with the prospect of the
large single market advocated In the Single Act ;         whereas the provisions
for abolishing that system gradually In any case must be adopted as of now
HAS ADOPTED THIS REGULATION :
                                    Article 1
In the first paragraph of Article 2 of Regulation ( EEC ) No 3310/ 75 ,
'31 December 1987'    Is hereby replaced by '31 December 1988' .
                                    Article 2
Any subsequent extension of the system provided for In Regulation ( EEC )
                                           and progressive
No 3310 / 75 shall entail a substant I a I / reduct Ion In the tax exemption in
question so that it is abolished by 31 December 1992 at the latest .
                                    Article 3
This Regulation shall enter Into force on 1 January 1988 .
This Regulation shall be binding In Its entirety and directly applicable In
a I I Member States .
Done at Brussels ,
                                                      For the Counc I I