Brussels, 10/11/2010 (Agence Europe) - EU member states' experts confirmed on Monday 8 November that there was a qualified majority in favour of Germany being allowed to continue to grant state aid to the ethyl alcohol of agricultural origin sector until 2018. At the Special Committee on Agriculture (SCA) meeting, only Poland indicated its intention to abstain from voting. Poland takes the view that other countries should also be allowed to grant this type of aid to some producers.
Satisfied with this agreement, which is likely to be approved at the Agriculture Council on 13 December, the German delegation even offered the other members of the SCA a glass of Mirabelle from a small producer who benefits from the German monopoly. The European Parliament is also expected to give the text its approval on 23 November.
Under Article 182(4) of the regulation on the single common market organisation (CMO) and as an exception to state aid rules, Germany can grant such aid under the German alcohol monopoly. The total state aid is limited to €110 million per year and is mainly for farmers who supply the raw materials and the distilleries which use them. The sum allocated, however, is much less and has been steadily falling since 2003 (from €110 million to €80 million). In addition a large number of distilleries are preparing for the free market by setting up cooperatives, investing in more energy efficient equipment and increasingly marketing their alcohol directly. The exemption was due to expire on 31 December of this year. The Commission decided that some more years were needed to completely phase out the monopoly and the related aid. The Commission proposal is accompanied by a timetable for reducing the quantities of alcohol produced within the monopoly until their final disappearance by 1 January 2018. It is also proposed that the total amount used should be capped, that compensation should be paid to distilleries which leave the monopoly and that the annual report to the Commission on the phasing out of the monopoly should become compulsory.
The proposal states: - the amount of aid paid between 1 January 2011 and 31 December 2013 should not exceed €269.9 million and the total amount of aid paid between 1 January 2014 and 31 December 2017 should not exceed €268 million; - agricultural bonded distilleries, of which there are currently 670, processing mainly cereals and potatoes, may remain in the monopoly until the end of 2013 (their production will, however, gradually be reduced from 540,000 hectolitres (hl) in 2011, to 360,000hl in 2012 and 180,000hl in 2013; and when they leave the monopoly, these distilleries may receive compensatory aid of €257.50 per hectolitre of nominal distilling rights); - small-scale flat-rate distilleries, distillery users and fruit cooperative distilleries which are locally-oriented and produce very small quantities of alcohol (up to 300 litres per year), may produce in total up to 60,000hl per year until the end of 2017. (L.C./transl.rt)