CELEX: 51974PC0916
Language: en
Date: 1974-06-14
Title: Proposal for a REGULATION (EEC) OF THE COUNCIL laying down general rules governing the distillation of table wines during the period from 1 July to 30 September 1974 (Submitted by the Commission to the Council)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (74) 916
Vol. 1974/0154
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 ---pagebreak--- COMMISSION
                                                    COM(74 ) 916 final .
                                          Bruxelles ,    june 197^
                                Proposal for a
                        REGULATION (EEC)) OF TES COUNCIL
                   laying dom general rules governing the
                   distillation of -table wines during the
                     period from 1 Jul*r to 30 September 1974
                      (Submitted by the Commission to the Council )
   COa(7 ^) 916 final
 ---pagebreak---                                                             COM(74 ) 916     final
                          EXPLAWATORY MEMORANDUM
 At its sessions on 29/ 30 April arid 4 June 1974 the Council discussed the
 situation on the wine market following the requests made by France and
 Italy for the distillation of wine as provided for in Article 7 of the
 Basic Regulation .
As a result of the record harvest in 1973 stocks reached an exceptionally
high level and at the end of the 1973/74 wine-growing year stood at their
highest level (more than 80 million hi ) since 1970 f when the common organ­
isation of the market was introduced .
In several marketing centres prices fell below the activating price .
Elsewhere , given the present inflationary situation , prices are steady as
producers are keeping their wine in expectation of intervention measures
being introduced .     Very few transactions are being carried out .
Prices in Italy , expressed in units of account , will fall by 12.5/0 when
the new exchange rate for the lira is introduced .     In addition , it must
not be forgotten that until 15 December 1974 prices in Italy will continue
to be subject to a coefficient of increase equal to the adjustment of 7»79$
not applied in this sector.      In view of this monetary aspect prices on
the Italian market are giving cause for concern .      Finally , a complete
and dramatic collapse of the market is to be feared from July onwards as a
result of the surplus amounts of wine available , producers 1 growing financial
difficulties and the need to store the wine produced from the last harvest .
Under these circumstances the Commission considers it advisable to propose
that the Council take a decision authorizing the distillation of wine as
provided for in Article 7 of the Basic Regulation .      Even if the 1974
harvest is a normal one , expensive surpluses of wine can be expected on the
market at the beginning of the next wine–growing year as the market imbalance
persists .
 ---pagebreak---                                                           COIî(74 ) 916 - E fi.
                                                                     ' "   1
In its Memorandum 011 "the adjustment of the common agricultural policy,
submitted in November 1973 f the Commission introduced the idea that
distillation might take place at the beginning of a wine-growing year
as a means of taking preventive action on the market .      It will shortly
incorporate this idea in a proposal for a regulation amending the Basic
Regulation .
With this aim in mind it proposes today that action be taken in sufficient
time for a serious market crisis to be avoided .     In addition , if it is
acknowledged that the quantities of wine produced will , in any case , make
distillation necessary sooner or later , the proposed measure will reduce
the cost of private storage aids which would otherwise be granted in the
coming months .
The details governing such distillation are practically the same as those
proposed for the previous measures taken in 1971 and 1972 .
 ---pagebreak---                                                             0011(74) 916-E final
                                 Proposal for a
                 REGULATION (EEC ) No      /74 OP THE COUNCIL
                                       of
               laying down general rules governing the distillation
                of table wines during the period from 1 July to
                              30 September 1 974
HIE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community ;
Having regard to Council Regulation (EEC) No 816/701 of 28 April 1970
laying down additional provisions for the common organization of the market
in wine , as last amended by Regulation (EEC ) No 2592/73 , and in particular
Article 70 ) thereof ;
Having regard to the proposal from the Commission ;
Whereas Article 7 of Regulation (EEC ) No 816/70 provides that measures
cay be adopted for the distillation of table wines if the granting of
aid to private storage alone is unlikely to be effective in restoring
price levels ;
Whereas aids to private storage have been granted since the end of 1973 for
wines of types E I , R II , R III , A I and A II ; whereas the prices for
some of these wines are below the activating price ;
Whereas the possibility of concluding nine-month storage contracts for
these types of wine during the period from 16 December 1973 to
15 February 1974 has not brought about any considerable restoration of
price levels ;
Whereas the abundant harvest of 1 973/74 has yielded .supplies considerably
in excess of the normal requirements of this wine marketing year ;
1 0J No L 99 , 5 May 1970 p. 1 .
  0J Ho L 269 , 26 September 1973 . p « 1
 ---pagebreak---                                      - 2 -                  0011(74 ) 9'6-E fixs.1
Whereas the conditions are fulfilled for the commencement of a distillation
operation }
Whereas it is necessary to lay down the conditions under which such operation
should take place ; whereas the price for wines to "be distilled should not
act as an encouragement to the production of wines primarily for the purpose
of distillation , "but should nevertheless "be sufficiently attractive for the
operation to he effective ;
Whereas , in order to limit the scope of the measure f its duration should he
restricted ; whereas means must also be found of "bringing distillation
operations to an end if prices for the wines referred to above should again
rise above the activating price ;
Whereas the prices for wines to be distilled will not permit the products
of such operation to be marketed on normal terms ; whereas an aid should
therefore be paid , the amount of which should be fixed , talcing account of
normal expenses , at a level which will make it possible to market the
products of distillation .
HAS ADOPTED THIS REGULATI01T :
                                   Article 1
Table wines may be distilled subject to the conditions laid down by this
Regulation.
                                   Article 2
1 . Producers who wish to have all or part of their harvest of table wine
distilled shall conclude delivery contracts , where appropriate through the
intervention agency , with distillers selected by them.
2.  Under'such contracts :
    ( a) the distiller shall purchase the quantity of table wine referred
          to in the contract ;
 ---pagebreak---                                        - 3 -                  COM(74 ) 916-E final
      (b ) the distiller shall "be obliged to distill such wine and to pay
           a price therefor wliich shall not "be less than the price referred
           to in Article 3 ,
 3.  The contracts shall specifV :
     (-0    tlic quantity , colour and actual alcoholic strength of the table
            wines to "be distilled ;
     (13)   the name and address of the producer ;
     ( c ) the place at which the wine is stored ;
     (a ) the name of the distiller or the registered business or company name
            of the distillery ;
     (e)    the address of the distillery .
                                     Article 3
1<   B-e minimum purchase price for table vanes to be distilled is hereby
fixed at 1.32 u.a . per degree and per hectolitre .
2.  The price referred to shall apply in respect of unaltered product ,
ex–producer * s premi s e s .
                                     Article 4
1.  Distillation msy not take place before 1 July 1974 or after
30 September 1974 *
However , it may be decided to bring forward the closing date for distillation ,
particularly if the average prices for all the types of table wine on all
markets should for two consecutive weeks remain at a level above the
activating price .
                                     Article 5
Products of the distillation of table wines shall have an alcoholic strength
of not less than &6yo with a tolerance of 0 .4% above or below.
                                     Article 6
1 . For each hectolitre of wine that is distilled , an aid shall be paid
by the intervention agency .
2.  The amount of the aid is heret^y fixed at 0.32 u.a . per degree and per
hectolitre .
 ---pagebreak--- 3#  The aid shall "be paid only upon production of a contract as referred
to in Article 2 and upon proof "being given that distillation took place
within the period during which such operation was authorized under
Article A.
                                  Article 7
1.  Member States shall designate an intervention agency to he responsible
for applying the provisions of this Regulation .
2.  The competent intervention agency shall be the agency of the State on whose
territory distillation takes place .
                                  Article 8
This Regulation shall enter into force on the day of its publication m the
Official Journal of the European Communities .
This Regulation shall be binding in its entirety and directly applicable in
all Member States .
Done at Brussels ,                                          For the Council ,
                                                            The Président ,
 ---pagebreak---                                                               COM(74) 916-E final
                              FIIIAUCIAL REPERCUSSIONS
 In view of the surplus situation on the market in wine this Regulation
 provides for the distillation of winej as referred to in Article 7
 Regulation (EEC ) Ho 8l6/70 f for the period from 1 July to 30 September 1974»
Aid granted from the EAGGF will be equal to 0.32 u.a. per degree/hectolitre#
 S-r.oc the amount of wine for distillation will "be "between 6 and 7 million
hectolitres T encpenditure will total 20 million u.a > t to he set off against
Article 691 , Item 6911 of the "budget of the European Communities .
            Budget            Appropriations          Appropriations usea,
             1972                                      27 226 500
             1973             2 109 000                 2 109 000
             1974                                           32 000
The amount earmarked in the 1974 budget is not sufficient to finance the
measure envisaged .      ITow , the "Information memorandum relating to the
variations in the expenditure , of the Guarantee Section resulting from the
Council Decision of 23 March 1974 and to the variations which could occur in
1974 for other reasons " of 4 April 1974 states that there will "be additional
expenditure of 40 trillion u.a . tinder Chapter 69 , Wine .     The measure
envisaged can "be financed under the overall appropriations of the Guarantee
Section .     However , this mil require a transfer of appropriations from
one Chapter to another .