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17.9.

2001 EN Official Journal of the European Communities C 260/33

Opinion of the Economic and Social Committee on the ‘Proposal for a Council regulation on the
common organisation of the market in ethyl alcohol of agricultural origin’

(2001/C 260/05)

On 12 March 2001 the Council decided to consult the Economic and Social Committee, under Articles 36
and 37 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Agriculture, Rural Development and the Environment, which was responsible for
preparing the Committee’s work on the subject, adopted its opinion on 21 June 2001. The rapporteur
was Mr Wilkinson.

At its 383rd plenary session (meeting of 11 July 2001) the Economic and Social Committee adopted the
following opinion by 106 votes in favour and two abstentions.

1. Introduction 1.2. The Commission proposal

1.2.1. The proposed regulation would establish a frame-


1.1. General situation of the EU market in agricultural alcohol work of common rules for ethyl alcohol of agricultural origin.
The decision to propose such a regulation followed a request
from the Agriculture Council in mid 2000 to consider the
advisability of such action.
1.1.1. The EU produces about 20 million hectolitres (hl) of
alcohol annually, of which some 13 million hl are of agricul-
tural origin. The remainder is of non-agricultural origin and is
often referred to as ‘synthetic alcohol’. The main processing 1.2.2. The main objectives of the proposed regulation are
industries using ethyl alcohol are spirit drinks, chemicals, to improve market information on agricultural alcohol and to
pharmaceuticals and cosmetics. Fuel from alcohol is a growing establish a forum for policy proposals on it. The Commission
sector. consider that the proposals would establish a ‘light’ CMO. This
is because there are negligible financial implications. The
proposals do not include intervention measures.
1.1.2. The spirit drinks industry may only use alcohol of
agricultural origin; other industries may use either type. The
spirit drinks industry now accounts for about 30 % of EU
usage and the quality of their products is guaranteed by the 1.2.3. Since early 1998 the Commission has monitored
relevant EU regulation (1). The other 70 % may use either some alcohol imports, but they consider that the system is not
agricultural or synthetic alcohol. Total EU demand is currently an adequate implement to deal with the current and expected
met by about 50 % of each type. problems that are identified. They therefore now propose (2) a
CMO regulation.

1.1.3. Agricultural alcohol is an important outlet for some


EU primary commodities, notably cereals, sugar beet, molasses,
fruit and wine.
2. General comments on the Commission proposal

1.1.4. The Commission states that the EU market for


alcohol is in surplus by about 3 million hl per year. This
surplus is gradually rising. Total EU demand is declining 2.1. The Committee produced an Information Report on
slightly. Imports are at about 12 % of total usage including the alcohol sector in 1996 as well as commenting on earlier
blends, which are not fully covered by the Commission’s draft CMOs in 1978 (3) and 1980 (4). The Information Report
proposal. On current trends imports are rising gradually. A gives much useful background to this very complex sector
high proportion of imports is duty free, or imported at very and, although much has changed since the report, it is worth
low tariffs as denatured alcohol. Up to 80 % of imports are noting that the comments on the need to rationalise the
estimated by some to be subsidised in some way; others industry so that it can remain competitive were qualified,
consider this a high estimate.

(2) (COM(2001) 101, dated 21.2.2001).


(1) Council Regulation (EEC) No 1576/89, OJ L 160, 12.6.1989, (3) OJ C 181, 31.7.1978.
pp. 1-17. (4) OJ C 83, 2.4.1980.
C 260/34 EN Official Journal of the European Communities 17.9.2001

where it noted that in some EU regions the many very small 2.6. A major difficulty with the proposal is that it does not
distilleries performed a valuable socio-economic function in cover that part of the market that can use either synthetic or
their communities. This remains the case. Only Germany now agricultural alcohol. Since synthetic alcohol is not an agricul-
retains a national organisation for alcohol. tural product it is understood that it cannot be included in the
CMO. Yet it accounts for about 50 % of current usage in the
EU. Any CMO will be fatally flawed if it does not ensure
adequate arrangements, and particularly statistical data, to
cover this type of alcohol. The risk of unfair competition
would be high if one type was to be controlled under a CMO
2.2. A CMO was first proposed some 40 years ago, when and the other was not.
the primary market for agricultural alcohol was the food
industry (including spirit drinks). Since then the market has
become increasingly complex and technology has, and is,
affecting the uses of the alcohol produced. 2.7. Moreover, the expected growth in the use of fuel
alcohol in the EU, from about 1 % of fuel now to about 20 %
by 2020, can be expected to change the balance, with a far
larger percentage of the market that can be met by either type
of alcohol. In practice, agricultural alcohol is expected to meet
the bulk of this increase because of tax advantages given to
2.3. The Commission’s proposal does not cover all the renewables and synthetic alcohol by definition cannot be
factors affecting the market. It concentrates on the growth in renewable.
imports, that account for about 12 % of the market, and
includes as a challenge competition from accession countries.
Accession countries should not be exempt from Article 10
(concerning national aid in the proposal).
3. Specific comments

2.4. The Committee fully supports the value of better 3.1. If the decision is to set up a CMO, the Committee
market information and of a forum to analyse this market believes that, in addition to including adequate means of
information, to discuss problems in the sector and to rec- covering synthetic alcohol, the following changes must be
ommend what action is necessary. A clear problem is the lack made to the proposals.
of national statistics in the necessary form. Also Eurostat-data
is arriving too late to be of real value. There might be other
ways in which these aims could be met. For example, market
information is available from national authorities (notably 3.2. Management Committee. The proposal to include
fiscal authorities), Eurostat or commercial sources; and the agricultural alcohol within the remit of the Wine Management
forum used in the past for alcohol matters, the Spirit Drinks Committee is wrong. The alcohol sector is extremely complex
Implementation Committee, could be developed to provide a and this complexity is growing. It is clear that national ‘alcohol
proper forum. Trade ‘abuses’ should be tackled as such; to do market experts’ would be needed for the tasks foreseen for the
this successfully requires good information. What the proposal CMO. The meetings would therefore not be a normal part of
does not make clear is what the added value of a CMO would Wine Management Committee business, but would involve
be for producers, users and consumers. The Commission separate meetings. The Commission has confirmed that this is
should explain what this added value would be. what is foreseen.

3.3. In these circumstances no additional cost would arise


from having a separate ‘Alcohol Management Committee’ and
2.5. The various measures proposed (import and export the system would be clearer to those concerned. The proposal
licensing, tariff quotas, inward processing and safeguard should recognise this.
clauses) cause concern, since such proposals could lead to
protectionist and/or interventionist measures. The Committee
recognises that the Commission is not proposing to implement
these measures, but it is including provisions for them. In 3.4. Definitions. At present the only EU definitions of
particular, Article 34 of the Treaty includes the possibility of ‘agricultural alcohol’ are in Regulation (EEC) No 1576/89 (for
regulation of prices as part of any CMO. Users want access to spirit drinks) and Regulation (EEC) No 822/87 (for neutral
alcohol of appropriate characteristics and quality at a freely alcohol of vinous origin). These differ in a number of ways
determined price. This position is also of benefit to consumers from the definitions in the Common Nomenclature (CN),
helping to ensure the quality and safety of the products. which is used for Customs and trade purposes, and which is
Further, the measures included could cause excessive and the definition used in the proposal, Article 1. Article 1 should
costly administrative burdens. harmonise these definitions to avoid any confusion.
17.9.2001 EN Official Journal of the European Communities C 260/35

3.5. Given the numerous and evolving techniques for — supports the need for a legal framework to provide these;
producing alcohol from agricultural products, and from prod-
ucts that are themselves produced from agricultural products, — suggests that the requirements could be provided in a
it will be difficult to establish satisfactory definitions for the number of ways;
various types and even more difficult to police them, especially
for products from third countries. — has yet to be convinced of the added value of a CMO
regime for alcohol of agricultural origin;
— insists that any CMO that does not include arrangements
4. Conclusions to cover the complete alcohol market will be fatally
flawed;
4.1. The Committee: — considers that if a CMO is established it will need a
dedicated Management Committee;
— supports the value of better market information and of
an established forum to discuss problems in the sector; — points to the need to harmonise definitions.

Brussels, 11 July 2001.

The President
of the Economic and Social Committee
Göke FRERICHS

Opinion of the Economic and Social Committee on the ‘Green Paper on Integrated Product
Policy’

(2001/C 260/06)

On 13 February 2001 the Council decided to consult the Economic and Social Committee, under
Article 262 of the Treaty establishing the European Community, on the ‘Green Paper on Integrated
Product Policy’.

The Section for Agriculture, Rural Development and the Environment, which was responsible for
preparing the Committee’s work on the subject, adopted its opinion on 21 June 2001. The rapporteur
was Mr Pezzini.

At its 383rd plenary session (meeting of 11 July), the Economic and Social Committee adopted the
following opinion by 108 votes to one, with three abstentions.

1. Introduction as an auxiliary instrument for the ‘sustainable development’


strategy, also from the economic and social angle (2). It would
1.1. The Committee is examining the Green Paper in refer to the comments made in its opinions on related subjects,
connection with the Environmental Action Programme’s (1) pointing out that this instrument can only be implemented
new approach which highlights, in tandem with implemen- satisfactorily in this broader context.
tation of the existing legislative instruments, the main-
streaming of environmental considerations in EU policies,
involvement of the various stakeholders and the voluntary
dimension. Further, the Committee regards this Green Paper
(2) Committee opinion on the Preparation of a European Union
( 1) COM(2001) 31 final; Committee opinion OJ C 221, 7.8.2001. Strategy for Sustainable Development—OJ C 221, 7.8.2001.