CELEX: 51988PC0498
Language: en
Date: 1988-09-28
Title: Proposal for a COUNCIL REGULATION (EEC) fixing for the 1988-1989 marketing year the representative market price and the threshold price for olive oil and the percentages of the consumption aid to be retained in accordance with Article 11(5) and (6) of Regulation No 136/66/EEC (presented by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (88) 498
Vol. 1988/0179
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 ---pagebreak---    COMMISSION OF THE EUROPEAN COMMUNITIES
                                               /
                                             COM(88 ) 498 final
                                             Brussels , 28 September 1988
Tl
                                   Proposal for a
                              COUNCIL REGULATION ( EEC )
      fixing for the 1988-1989 marketing year the representative market price
                   and the threshold price for olive oil and the
                 percentages of the consumption aid to be retained
                    in accordance with Article 11(5 ) and ( 6 ) of
                              Regulation No 136 / 66 / EEC
                             ( presented by the Commission )
                                             wi        o 1 u:      m
 ---pagebreak---                                                                             yf/-
                                 EXPLANATORY MEMORANDUM
      The attached Regulation sets the representative market price and the
      threshold price for olive oil for the 1988 /89 marketing year and the
      percentages of the consumption aid to be retained during that marketing
      year in order to finance ( a ) the running of the recognized trade
      organizations and ( b ) certain measures to promote the consumption of olive
      oil .
2.    Article 7 of Council Regulation No 136 / 66 / EEC stipulates that the
      representative market price for olive oil is to be fixed at a level that
      will permit normal marketing of production , account being taken of prices
      for competing products and of the probable trend of these prices during
      the marketing year .
3.    The situation on the world and Community seed oil markets is totally
      different from that pertaining when the aid for the 1987 / 88 marketing year
      was set . Poor weather in the United States and speculation caused ECU
      prices in seed oils almost to double between September and July . For a
      number of weeks now the markets have been very volatile because of
      uncertainty about production volumes but prices ought eventually to
      stabilize at a markedly higher level than that of 1987 . These wholesale
      price variations have as yet only slightly affected retail prices but will
      undoubtedly do so in the coming months .
4 . • Olive oil prices during the 1987 /88 marketing year were affected by
      abundance of supply and restriction of intervention to the last four
      months of the marketing year . The first production forecasts for 1988 /89
      are on the other hand below average . This should help producer prices
      though private and intervention stocks may depress the market .
5.    The upshot is that
      - the substantial rise in seed oil prices , once it reaches the retail
        stage , will bring about an increase in the price that the public is
        prepared to pay to maintain its level of consumption ,
      - 1988 / 89 will see some reduction in the olive oil supply .
 ---pagebreak---                                            - 2 -
     The first of these remarks does not contradict the conclusion that the
     Commission drew last September from a study of the Italian olive oil
     market that where seed oil price variations are restricted to some 20%
     either way the most important factor influencing consumption of olive oil
     is its price to the final purchaser .
6.   In the present Community olive oil supply position the Commission remains
     of the opinion that disposal of production within the Community is more
     advantageous in financial terms than exportation . It wishes to stabilize
     and even slightly reduce the volume of exports and considers maintenance
     of the existing level of consumption in the Community desirable . Given the
     present situation this could be achieved even with some increase in the
     price of olive oil at consumer level . The Commission intends moreover to
     intensify the campaign to promote olive oil consumption .
7.   These considerations lead the Commission to propose as :
     - representative market price : 1 96,61 ECU/ 100 kg (+ 22 ECU/ 100 kg )
     - consumption aid :                  55     ECU/ 100 kg (- 22 ECU/ 100 kg )
     - déduction for promotional measures : 5 % .
     Annexed for reference are the factors determining the consumption aid for
     1986 / 87 and 1987 / 88 and those behind the present proposal .
8.   The proposed drop in the consumption aid will result in a reduction of
     Community expenditure of some 140          million ECU on the sum anticipated
     for 1989 .
9.   The outcome of the proposals is a drop in the net aid from which the
     consumer benefits , hence a rise in the retail selling price of olive oil .
     There should be no downturn in consumption . As in the past the Commission
     will have the option of reconsidering the level of the representative
     market price and of the consumption aid during the marketing year , as
     provided for in Article k of Regulation No 136 / 66 / EEC .
10 . Article 11(3 ) of Regulation No 136 / 66 / EEC allows Member States to appoint
     one or more recognized trade organizations to assist them in
     administration of the consumption aid . Further Article 11(5 ) of the
     Regulation provides for the Council to fix the percentage of the
     consumption aid that these organizations may retain to finance the work
     that they do .
 ---pagebreak---                                        - 3 -
     Given the amount at which the present proposal sets the consumption aid a
     percentage of 1.6 would from past experience enable the overall v
     remuneration of these organizations to be maintained at an adequate level
     to guarantee discharge of the functions assigned them .
11 . Finally the threshold price must be fixed at a level such that the selling
     price of imported oil is at the level of the representative price . Account
     must be taken of the cost of landing and warehousing the imported product
     and of the percentage of the consumption aid to be retained .
     Consideration of these factors gives a price of1 95 , 74 ECU/ 100 kg .
 ---pagebreak---  27 . ΊΟ . 87                           Official Journal of the European Communities                               No L 304/3
                                      COUNCIL REGULATION ( EEC) No
                                                      of .
                  fixing for the 198‘£'1989 marketing year the representative market price and the
                  threshold price for olive oil and the percentages of the consumption aid to be
                    retained in accordance with Article 11 (5) and (6) of Regulation No 136/66/EEC
 THE COUNCIL OF THE EUROPEAN COMMUNITIES,                         for financing the recognized trade organizations referred
                                                                  to in paragraph 3 of the said Article and, secondly, for
 Having regard to the Treaty establishing the European            financing measures to promote the consumption of olive
 Economic Community,                                              oil in the Community ; whereas the said percentage
 Having regard to Council Regulation No 136/66/EEC of
                                                                  should be fixed for the 1 98^/ 1 9f$ marketing year,
 22 September 1966 on the establishment of a common
 organization of the market in oils and fats ('), as last         HAS ADOPTED THIS REGULATION :
 amended by Regulation (EEC) No^2lo|3'? (2), and in
 particular the second subparagraph of Article 4 (4) and                                    Article 1
 Article 1 1 (6) thereof,
                                                                  For the 198^/ 198 ^ marketing year, the representative
 Having regard to the proposal from the Commission,               market price and the threshold price for olive oil shall be
                                                                  fixed as follows :
 Whereas the representative market price should be fixed
 in accordance with the criteria laid down in Article 7 of        – représentative market price                   ECU per 100
 Regulation No 136/66/ EEC ;                                           kilograms,
                                                                  – threshold price -. 4%^ ECU per 100 kilograms.
Whereas the threshold price should be fixed in such a
way that the selling price for the imported product at the                                  Article 2
 frontier crossing point fixed pursuant to Article 9 of
 Regulation No 136/66/EEC is the same as the representa¬           1 . For the 1982/89 marketing year, the percentage of
 tive market price, account being taken of the effect of the      the consumption aid, referred to in Article 11 (5) of Regu¬
 measures referred to in Article 1 1 (6) of the above Regula-     lation No 136/66/EEC, is hereby fixed at 1,6
 nY ;i
                                                                  2. For the 1987/ 8^ marketing year, the pci^einag^ cl
Whereas it follows from the application of these criteria,        the consumption aid to be allocated for the campaigns
that the representative market price and the threshold            and projects, referred to in Article 1 1 (6) of Regulation No
 price should be fixed at the levels given in Article l of         136/66/EEC, is hereby fixed at 5".
 this Regulation ;
                                                                                            Article 3
Whereas, under Article 1 1 (5) and (6) of Regulation No
 1 36/66/ EEC, a certain percentage of the consumption aid        This Regulation shall enter into force on 1 November
should be used during each olive marketing year firstly            1985!
                  This Regulation shall be binding in its entirety and directly applicable in all Member
                  States.
                  Done at
                                                                              For the Council
                                                                               The President
( ' ) OJ No 172. 30. 9. 1966. o. 3025/66.
(:) OJ No Lm.iH /qtt.p.-j
 ---pagebreak---                                                                                    ( PGRA-2336 )
            FINANCIAL            STATEMENT
                                                                Date : 12 September 1988
 1 . Budget heading : B 1220                       Appropriations : PB 89 450 million ECU
                          B 1221                                              20 million ECU
 2 . Title : Draft Council Regulation setting for the 1987/88 marketing year the
      representative market and threshold prices for olive oil and the percentages of
      the consumption aid to be retained
 3 . Legal basis : Articles 4 and 11 of Regulation 136 /66 /EEC
4    Aims of project : Determination of the following for olive oil for the          198J/8J
     marketing year : - representative market price
                         - threshold price
                         - percentages of consumption aid to be retained
                                                 period of          current        following
                                                 12 months     financial year    financial year
5.       Financial implications                                      ( 1988 )         ( 1989 )
5.0      Expenditure
         - charged to the EC budget
                    ( intervention )  1220      332m ECU(B )                      332 m ECU ( B )
                                      1221       17m ECU(B )                       17 m ECU ( B )
                                                349m ECU(B )                      349 m ECU ( B )
                                                               –                –
5.0.1 Estimated expenditure
5.1.1 Estimated receipts
5.2 Method of calculation : The gross total amount for the consumption aid for 1989
       ( set by this Regulation ) is determined as follows :
       600 000 t x 550 ECU/ t x 1,058 ( 1 ) = 349 m ECU ( B ) ( 2 )
       Gross amount estimated when 1989 preliminary draft budget was drawn up :
       600 000 t x 770 ECU / t x 1,058 ( 1 ) = 489 m ECU ( B )
      Différence : ( 349-489 )m ECU B « - 140 m ECU ( B )
6.0   Can the project be financed from appropriations entered in the relevant chapter
      of the current budget ?                                                          yes
6.3 Will future budget appropriations be necessary ?                                   yes
Observations :
( 1 ) Double rate coefficient
( 2 ) Of this amount it is proposed to retain 5% , i.e. 17 m ECU to finance the
      programmes to promote olive oil consumption and l.£% i.e. 6 m ECU , to finance
       the activities of the trade organizations .