REPORT on the proposal for a Council decision authorising Portugal to apply reduced rates of excise duty in the autonomous region of Madeira on locally produced and consumed rum and liqueurs and in the autonomous region of the Azores on locally produced and consumed liqueurs and eaux-de-vie

13.10.2009 - (COM(2009)0259 – C7‑01042009 – 2009/0075(CNS)) - *

Committee on Regional Development
Rapporteur: Danuta Maria Hübner
(Simplified procedure - Rule 46, paragraph 1, of the Rules of Procedure)

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a Council decision authorising Portugal to apply reduced rates of excise duty in the autonomous region of Madeira on locally produced and consumed rum and liqueurs and in the autonomous region of the Azores on locally produced and consumed liqueurs and eaux-de-vie

(COM(2009)0259 – C7‑0104/2009 – 2009/0075(CNS))

(Consultation procedure)

The European Parliament,

–   having regard to the Commission proposal to the Council (COM(2009)0259),

–   having regard to Article 299(2), of the EC Treaty, pursuant to which the Council consulted Parliament (C7-0104/2009),

–   having regard to Rule 55 and Rule 46, paragraph 1, of its Rules of Procedure,

–   having regard to the report of the Committee on Regional Development (A7-0000/2009),

1.  Approves the Commission proposal;

2.  Calls on the Council to notify Parliament if it intends to depart from the text approved by Parliament;

3.  Asks the Council to consult Parliament again if it intends to amend the Commission proposal substantially;

4.  Instructs its President to forward its position to the Council and Commission.

EXPLANATORY STATEMENT

Portugal has submitted two requests, dated 16 June 2008 and 20 June 2008, respectively, for an extension of the authorisation granted to it by Council Decision 2002/167/EC of 18 February 2002 to apply a reduced rate of excise duty in the autonomous region of Madeira on locally produced and consumed rum and liqueurs and in the autonomous region of the Azores on locally produced and consumed liqueurs and eaux de vie.

In its Explanatory Memorandum the Commission notes that:

'The local industry employs around 130 workers in Madeira and around 90 workers in the Azores. In Madeira, the cultivation and processing of sugar cane and fruits provides work for around 1 000 family-owned agricultural holdings.

In 2007 the market share of the products benefitting from a reduced rate of excise duty was lower than that of similar products imported or supplied from other parts of the Community (20.3 % in Madeira; 38.9 % in the Azores) from which these products therefore face strong competition. Furthermore, notwithstanding the application of a reduced rate of excise duty, the average retail selling price (including tax) in Madeira and in the Azores of locally produced rum, liqueurs or eaux-de-vie is higher than that of similar products from outside these regions.

The main handicaps faced by the producers of rum, liqueurs and/or eaux-de-vie arise from additional costs linked to the factors identified in Article 299(2) of the Treaty (i.e. remoteness, insularity, small size, difficult topography, and climate).

Raw materials of agricultural origin (according to the case, sugar cane, fruit, plants, honey, cream, milk and wine) are more expensive than under normal conditions of production. This is due to the small size and fragmented nature of the agricultural holdings and the ensuing low degree of mechanisation. In the case of Madeira, in addition, output from the processing of sugar cane is lower than in other outermost regions, owing to topography, climate, soil and artisanal production.

In the case of the Azores, the insularity is twofold, since the islands are spread over a distance of 600 km, causing further additional cost for inter-island transports.'

Ø Legal basis: Directive 92/84/EEC[1] fixes the following minimum rates:

§ ECU 0.748 per hectolitre/degree Plato or ECU 1.87 hectolitre/degree of alcohol for beer;

§ ECU 0 per hectolitre for wine;

§ ECU 45 per hectolitre for intermediate products;

§ ECU 550 per hectolitre of pure alcohol for alcohol and alcohol contained in other beverages.

For the above category, those Member States which apply a rate of duty exceeding ECU 1000 per hectolitre of pure alcohol may reduce their national rate, but not below ECU 1000.

Reduced rates may be applied in some regions of Greece, Italy and Portugal.

Every two years the rates of duty shall be re-examined and the necessary adjustments made.

Similar situations in the French Overseas Territories and the Canaries

A similar derogation applies to the production of traditional rum produced in the French Overseas Territories[2] and to the Canary Islands.

Ø Impact assessment:

The Commission notes that:

'The economic impact of the proposal concerns in essence producers of rum and liqueurs in Madeira and producers liqueurs and eaux-de-vie in the Azores and can, therefore, be considered as minimal;

If such producers were to lose the benefit of the reduced rate of excise duty, the resulting increase in retail selling price would risk jeopardising the subsistence and survival of these economic sectors, as well as employment directly and indirectly connected thereto.'

Conclusion: In your Rapporteur's opinion, whilst the proposed decision is essentially technical it is important that Parliament review it to ensure that the qualifying conditions governing the original authorization still exist and to control that no undue advantage was being given to one sector of the market.

• [1]  Council Directive 92/84/EEC of 19 October 1992 on the approximation of the rates of excise duty on alcohol and alcoholic beverages.
• [2]  By Council Decision of 30 October 1995, extended by Council Decision of 18 February 2002, which is valid until 31 December 2009.

PROCEDURE

Title	Reduced rates of excise duty in Madeira and the Azores
References	COM(2009)0259 – C7-0104/2009 – 2009/0075(CNS)
Date of consulting Parliament	23.7.2009
Committee responsible        Date announced in plenary	REGI 14.9.2009
Committee(s) asked for opinion(s)        Date announced in plenary	ECON 14.9.2009	AGRI 14.9.2009
Not delivering opinions        Date of decision	ECON 21.7.2009	AGRI 2.9.2009
Rapporteur(s)        Date appointed	Danuta Maria Hübner 6.10.2009
Previous rapporteur(s)	Elie Hoarau
Simplified procedure - date of decision	6.10.2009
Discussed in committee	6.10.2009
Date adopted	6.10.2009
Date tabled	14.10.2009