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REPORT     
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21 April 1998
PE 226.162/fin. A4-0137/98
on the fish product canning industry and aquaculture in the European Union
Committee on Fisheries
Rapporteur: Mr Daniel Varela Suanzes-Carpegna
Following a request by the Conference of Committee Chairmen, during the sitting of 19 December 1997 the President of Parliament announced that the Conference of Presidents had authorized the Committee on Fisheries to table a report on the fish product canning industry and aquaculture in the European Union.
 A MOTION FOR A RESOLUTION
 B EXPLANATORY STATEMENT

 Following a request by the Conference of Committee Chairmen, during the sitting of 19 December 1997 the President of Parliament announced that the Conference of Presidents had authorized the Committee on Fisheries to table a report on the fish product canning industry and aquaculture in the European Union.

The committee had appointed Mr Varela Suanzes-Carpegna rapporteur at its meeting of 2 December 1997.

It considered the draft report at its meetings of 21 January, 26 February, 18 March and 15 April 1998.

At the last meeting it adopted the motion for a resolution by 10 votes to 1, with 1 abstention.

The following took part in the vote: Fraga Estévez, chairman; Kindermann, vice-chairman, Varela Suanzes-Carpegna, rapporteur; Adam, Chichester (for Provan), Cunha, Gallagher, Girão Pereira (for d'Aboville), Kofoed, Langenhagen, Le Rachinel (for Musumeci) and Teverson.

The report was tabled on 21 April 1998.

The deadline for tabling amendments will be indicated in the draft agenda for the relevant partsession.


 A MOTION FOR A RESOLUTION

Resolution on the fish product canning industry and aquaculture in the European Union

The European Parliament,

- having regard to Rule 148 of its Rules of Procedure,

- having regard to Parliament"s resolution of 29 November 1988 on the fish processing industry(1),

- having regard to the opinion of the Committee on Fisheries of 21 May 1996 on the European Union"s association agreement with Morocco (A4-0173/96)(2),

- having regard to the working programme and results of the visit of the delegation of the Committee on Fisheries to Galicia from 4 to 6 September 1997,

- having heard the representatives of the industry at the meeting of the Committee on Fisheries on 21 January 1998,

- having regard to the report of its Committee on Fisheries (A4-0137/98),

A. whereas the fish product processing industry and aquaculture are an essential pillar of the common fisheries policy, complementing the work of the Community fishing fleet, which contributes to the supply of food products that are in deficit on the Union market and for which there is growing demand,

B. whereas employment is at present one of the Union"s top priorities and, as was made plain at the Luxembourg Council meeting of 20 November 1997, there is a need to promote industries which have a dynamic impact on economic activity, contribute to maintaining occupations that create stable jobs and help to preserve the economic and social fabric of the Union"s regions,

C. whereas the fish product canning industry and aquaculture in the European Union are a labour-intensive sector, made up largely of processes that are necessarily manual to safeguard the quality of product that the market requires, which affects some 50 000 direct jobs and some 25 000 additional ancillary jobs on Union territory,

D. whereas the Community canning industry is facing huge difficulties, as a result of recent international trade agreements concluded by the European Union with third countries, such as those with Morocco and Turkey, which involve opening up the Community market to large quotas of preserves from those countries that compete with the Community industry"s traditional products,

E. whereas the cost of these trade agreements places an enormous additional burden on the canning industry, which is already undergoing radical restructuring, and this burden must be offset by the other economic sectors that are major beneficiaries of the agreements,

F. whereas the absence of an adequate framework of support measures for the present canning industries seriously threatens their survival, since they cannot compete with products from third countries with end-product costs that are much lower than the Union"s, owing to the failure to require the technical and health conditions that are required in the Community and to the labour costs in these third-country industries, where workers" social security schemes either do not exist or are much more limited,

G. whereas unless a special action plan is adopted for the industry as a matter of urgency, defining preserves as a sensitive product and containing political, economic and financial support measures for the Community industry, the trend towards relocating such industries in third countries will continue to grow, causing widespread job losses and problems of economic, social and regional cohesion in Europe, especially in the Union"s less-favoured regions where it is proving difficult to find alternative economic activities,

H. whereas canned products preserve a food"s nutritional properties: proteins, carbohydrates, fats and vitamins and, to a large extent, their special characteristics, making them suitable for providing food aid during shortages or in emergencies,

I. whereas the consumption of fish product preserves and aquaculture in the Union doubled between 1989 and 1993, whereas there are good prospects of further growth and opportunities for developing the industry, which shows every sign of financial viability, provided that a proper supply of raw materials is guaranteed from the Community fleet"s fishing activities or from imports on the international market,

J. whereas the present good growth forecasts will enable the sector to be developed and modernized, increasing its production capacity, generating a number of jobs and reducing the present dependence on imports,

K. whereas the extensive, complex and dispersed nature of Community law affecting the canning industry, which responds to the aims of various Community policies that are not always intercoordinated, potentially giving rise to contradictory situations, is prejudicial to the proper application of a consistent body of law for the industry,

L. whereas the Community canning industry is in the process of costly modernization to adjust to the technical, environmental and health requirements of Community law, to provide the consumer and citizen with a high level of protection,

M. whereas the structural policy forms a pillar of the CFP, and whereas it must continue to be a vital support for the restructuring of a strong, economically healthy and competitive industry,

N. whereas a feature of the present situation is the absence of an effective monitoring system for imports of preserves originating in third countries, with regard to production conditions, the quality of raw materials and compliance with technical and health standards for processing,

O. whereas the absence of effective arrangements to identify accurately the origin of imports of raw materials and fish product preserves means, as has been found on many occasions, that there is a high degree of unfair competition facing the Community industry,

P. whereas the tariff arrangements in force affecting imports of products competing with Community produce are unjustified in some cases or have lost their original justification, since they grant tariff advantages to countries that enjoy considerable levels of economic development,

Q. whereas the GSP drugs mechanism, which grants advantages in access to the Community market for fish products, especially tuna, originating in some countries on the American continent, has not fulfilled its original purpose of encouraging conversion from activities associated with the drugs economy,

R. whereas there is an urgent need to carry out a reform of the common organization of the market to adapt it to the industry"s new realities, in an increasingly globalized context, by adjusting the present mechanisms: reference prices, safeguard clauses, compensatory allowance, and carry-over premiums etc.,

S. whereas the Community needs to tighten up its product quality policy, stimulate the industry"s efforts by means of quality premiums, registers and labels and conduct promotional campaigns to advertise the quality of the European product,

T. whereas differences are frequently apparent in the content of the preserve: the species, competing factors in its processing and the techniques used, and the information given on the labelling, which would normally mean that the consumer was being defrauded,

U. whereas the quality and technical and health conditions need to be scientifically monitored by specialized laboratories, imposing the same checks on imported products as on European ones,

V. whereas the Community sardine industry is in extremely unfavourable circumstances, having been greatly damaged in the last few years by competition from preserves originating in third countries, resulting in a fall by more than 40% in Community exports over the past ten years and the closure of many industries based on Union territory,

W. whereas the tariff policy applied by the Community to imports of canned sardines is generous; and preserves originating in Morocco will be entering the Community market from 1999 under a regime of total liberalization, as a result of the terms of the Association Agreement,

X. whereas the market in tuna preserves is substantial, accounting for almost 60% of the total production of fish preserves, and its consumption is expected to continue to increase,

1. Calls on the Commission to draw up a study on the situation in the fish product canning industry and aquaculture in the European Union: companies, trends in the industry in the last few years in the various Community countries, data on production, origin of raw material, volume of exports and imports, employment, technical and health standards, tariff arrangements and, in general, on the law applicable to the industry and codification of that law;

2. Calls on the Commission to put forward proposals to the Council and Parliament to include a special plan of action and an overall support framework for the fish products canning industry, taking account of the present structural policy and the new regional policy guidelines for the period 2000-2006, the principles of which are being debated at the moment, and that will aim to provide the necessary financial support to secure a Community canning sector that is competitive in a global economy;

3. Urges the Council and Commission to carry out a detailed analysis of Community tariff law affecting fish product preserves and aquaculture, with the aim of abolishing any advantages in access to the Community market that are no longer justified;

4. Declares that in the event that the general interest of the Union"s external trade relations or the development cooperation policy require maintaining certain imports that involve market access on terms that mean unfair competition for Community preserves, the latter should be declared sensitive products and compensatory aid should be allocated to the industry;

5. Demands that inspections of products from third countries are stepped up, in accordance with Directive 91/493/EEC laying down the health conditions for the production and placing on the market of fishery products, so that products from such countries are not subject to less stringent health requirements than Community produce;

6. Takes the view that the Union should develop a supply policy that meets the real needs of the Community processing industry as a whole, supporting the Community fleet and guaranteeing access to the raw material needed at any time in the best conditions that the world market can supply;

7. Urges the Commission to encourage promotion campaigns for Community fish product preserves, advertising their origin, quality, production safeguards and high nutritional value, to enable consumers to appreciate the excellence of Community products;

8. Urges the Commission to propose the initiatives needed to set up a Community-level reference laboratory to safeguard the quality of Community products and products originating from third countries freely marketed on Union territory, and their compliance with technical and health standards;

9. Urges the Commission and those responsible in the Member States to tighten up standards and improve the machinery for controlling fish products marketed on Union territory, verifying in a reliable manner that fresh and processed fishery products comply with the law on rules of origin;

10. Supports the promotion of quality products, including raw materials that can be added to the various canning preparations, such as canning liquids, and in particular olive oil, for which it calls for measures to ensure that the price of olive oil is in line with the international price, in order to maintain the competitiveness of this kind of preparation, a symbol of the quality of the Community"s canning industry;

11. Urges the Commission to promote and provide financial support for innovative methods and research into new production systems, new products, processing of species which at present have no commercial value and new forms of preparation and presentation;

12. Underlines the importance of coordination between the production sector, the Community fleet and the processing sector, stressing the need to conclude long-term contracts between producers and their organizations and the processing companies that are favourable to both sides, ensuring their supplies at reasonable prices and on reasonable terms;

13. Considers that there is a need to set up within the EU Anti-Fraud Unit a department specializing in fisheries, capable of stepping in to investigate the correct application of the rules on product origin and Community standards to the marketing and transport of fish products;

14. Declares that the sardine industry represents an economic activity of major importance for many Community regions and points out that the sector is in a state of crisis, which requires the adoption of emergency protection measures, such as:

(a) provision of the necessary funds for the period 2000-2006 to assist restructuring of the industry, in addition to the headings included in the present Structural Funds;

(b) establishment of a compensatory allowance for sardines, for the Community canning industry and the maintenance of balanced storage aid, to prevent price fluctuations in the market as a result of seasonal flows in product supply for the canning industry. Such aid will need to be paid direct to canners as soon as they can justify payment of the minimum production price;

(c) launching a Community-level campaign, backed up by the necessary funds, to promote the consumption of sardines and products such as sardine preserves and sardine "pâtés", bearing in mind the high nutritional value of this product;

15. Declares that the tuna canning industry is the most important Community canning sector in terms of employment and the volume of trade, and that to encourage the huge growth prospects in this sector there is a need:

(a) to ensure there is a proper supply of the necessary raw material (fresh, frozen and ribs of tuna), giving priority to the Community fleet and opening new quotas for imports only when these are strictly needed for the Community industry;

(b) to ensure that compensation is granted to third countries for the purposes laid down in Community provisions, sustainable development (ACP), the fight against drugs (GSP-drugs, Andean Pact), and that countries which enjoy privileged access to the Community market do not operate in social dumping conditions;

(c) to carry out rigorous control of the origin of products and the quality and technical and hygienic conditions of imported products, to prevent consumer fraud and unfair competition for the Community industry;

16. Calls on the Commission and the Council, in view of the fact that canning preserves a food's nutritional properties and facilitates its storage and transport under optimum conditions, to promote the inclusion of Community canned goods in its policy of humanitarian food aid to needy countries;

17. Instructs its President to forward this resolution to the Commission and Council, and the governments and parliaments of the Member States.

(1)() OJ C 47, 27.2.1989, p. 176.
(2)() OJ C 181, 24.6.1996, p. 15.


 B EXPLANATORY STATEMENT

I. INTRODUCTION

Since the most remote times, human beings have sought means of keeping the surplus products of hunting or fishing for times of scarcity, exercising their ingenuity to prevent the deterioration of foodstuffs which are by nature perishable and devising methods to preserve them. In this way, drying, smoking and salting appeared. At the beginning of the nineteenth century, these were the only known methods of conserving foodstuffs. At that time, the French government, concerned with the problems of supplying and transporting food for its armies in the Napoleonic wars, decided to offer a prize for the invention of a method of long-term preservation.

The prize was won, in 1809, by the French cook Nicolas Appert, who, after numerous attempts, devised a method by which the foodstuffs were hermetically sealed in a glass jar and kept at the temperature of boiling water. In this way, the foodstuffs were sterilized and were preserved for a long period, although the scientific causes of this preservation through heat remained unknown. At first, it was thought to be due to the elimination of oxygen by sterilization (Gay-Lussac), but it was Louis Pasteur who, in 1860, explained through his discoveries on microbes that high temperatures killed micro-organisms, thus allowing foodstuffs to be preserved.

Appert had invested his 12 000-franc prize in the commercial exploitation of his invention, setting up a factory ('La Maison Appert', in Massy) in 1812, with fifty employees; it continued operations until 1933. The modern food-processing industry was born: its full flowering was to come with the invention of a metal container, in the form of the familiar tin or can. The glass container was replaced by the tin, thus giving rise to a new industry - canning - which was given its mature form by Joseph Colind (England, 1823), who laid the foundations of the activity as we know it today.

Processing of fish was at that time confined to sardines, which abounded off the coasts of Brittany and the Vendée. The special 'Nantes-style' sardines-in-oil preparation was first mentioned on 8 June 1822, when the 'Journal de Nantes' published an appreciative notice by a certain Captain Freycinet, who declared after a voyage round the world that the local preserved sardines had remained perfectly edible after thirty months at sea.

The industry, centred on sardines, spread across Europe, above all to the south: numerous factories were set up in Portugal and north-eastern Spain. In Galicia, the first canning establishment appeared in Noia in 1856.

By 1880, there were 160 factories in France. In northern Europe, the traditions of drying and salting remained strong, and the canning industries which were set up were based on the native herring or salmon fisheries.

Canning is, then, a European invention. It may be stressed - especially in a time marked by concern over diet and health - that it preserves the nutritional value of food (proteins, carbohydrates, fats and vitamins), and, to a very high degree, its characteristics (physical appearance, colour, odour and taste). The versatility of canning allows it to produce not only refined, highest-quality delicatessentype products, but also products which, thanks to their food value and ease of transport, are ideally suited to being sent to less-favoured countries as food aid (although, as things stand, the EU is not taking sufficient advantage of this aspect).

1. An overview of the canning industry in the EU today

The canning industry represents an important chance of social and economic development for the coastal regions in which it exists. It creates employment both directly and indirectly (the related and supplier sectors include tinplate and card production, printing. labelling, oil, ingredients for sauces, machinery and, of course, the fishing fleet which supplies the raw material).

The evolution of the sector is characterized by specialization in the processing of local fisheries products: in northern Europe, herring and mackerel; in southern Europe, sardines, but also tuna and mackerel. In particular regions such as Brittany (France), the Oporto area (Portugal) and Galicia (Spain), the sector plays a major role in stimulating economic development. New products are being tried too - in Galicia, molluscs (mussels, clams, cockles and scallops) and cephalopods (octopus and squid).

Spanish and Portuguese membership of the EC had a considerable impact on the canning industry in both countries, obliging it to face an open market with other products in direct competition.

The 1980s were marked by a 'race for survival' in the sector, leading to the situation we know today. In northern Europe, the number of factories and the overall level of production fell; the new emphasis was on the processing of external mass-consumption products such as tuna. Substantial competition from third countries (tuna from south-east Asia or sardines from Morocco) also led to a fall in the number of factories in France, Italy and Portugal. There was a similar trend in Spain, where, nonetheless, a comparatively high number of canning factories remain in production, thanks essentially to the large variety of products (as seen above).

In general, the situation is characterized by an increase in the market share of non-Community products arising from the opening-up of the EU market to those products. The ease of access to raw materials and low labour costs of these third-country industries are comparative advantages which result in highly competitive prices.

At the same time, the Community is having increasing difficulty in ensuring self-sufficiency in raw materials, owing to the depletion of resources and the increasing difficulties of access to fishinggrounds. Between 1989 and 1993, the consumption of processed products doubled, while Community production remained static. This large gap between production and consumption arises largely from the increase in imported products. Given that the EU's industry is operating under its production capacity, and even allowing for the fact that a proportion of imports are of supplies to the industry itself, it appears necessary to agree on measures to reduce the present reliance on imports, encourage the consumption of products processed in the EU and stimulate exports to third countries. Concrete action is needed to push the EU industry to modernize and become more competitive, to meet the challenge of the future.

Your rapporteur has not found it easy to obtain reliable comparative data and figures on the present situation of the canning industry in the Community. In its reply to his written question E-3987/96, the Commission admitted quite candidly that it did not possess the data which would enable it to ascertain the number of establishments preparing preserved or semi-preserved products; the total number of establishments in the Community was approximately 14 000. Apart from data on import and export figures under the customs headings corresponding to canned fisheries products, the Commission has not supplied any concrete or specific data on the canning sector within the general figures relating to the fisheries products processing industry, despite such information having been requested in writing in questions 276/96 and 3504/96. The Commission refers the matter to the overview of industry in the Community for 1995/1996 published by its DG III (Industry and the European Statistical Office), which, once more, only provides general data concerning all the various types of processing (frozen, dried, smoked, ready-prepared, pre-cooked and tinned fish and shellfish)

- data, be it added, relating to 1993.

Your rapporteur has had to use data supplied by the industry itself. According to his sources, total production of canned fisheries and aquaculture products in the Union stood in 1996 at approximately

600 000 tonnes. The main producers are (figures in tonnes): 1) Spain - 229 380; 2) France - 114 110;

3) Italy - 111 600; 4) Portugal - 50 641; 5) Germany - 50 000. The main product is tuna (58%), followed by sardines, mackerel and mussels.

The industry appears to provide some 50 000 direct jobs in the EU, the approximate number of indirect jobs being 75 000. In Spain alone, some 135 undertakings directly employ 20 000 people, of whom 13 000 live in Galicia and about 70% are women. The major importance of the industry in regional terms is evidenced by the fact that Galicia accounts for over 70% of the value and 75% of the volume of all the canned fish and shellfish produced in Spain. Most of the undertakings in the sector are small businesses, which usually have stronger roots in their areas than the big companies or groups whose relative lack of local identification makes it easier for them to transfer production elsewhere.

As far as external trade is concerned, the Union's cover rate was 23% in 1993. In 1988, extraCommunity imports stood at (figures in tonnes) 247 866, and exports at 68 644; the corresponding figures for 1993 were 367 755 and 134 272 respectively.

2. Objectives of this report

The fisheries and aquaculture products processing industry continues to be an economic and social alternative to job cuts in fisheries-dependent coastal areas. The industry is regulated by a copious (and scattered) body of law, and is affected by the different, and at times contradictory, objectives of the various Community policies (the common fisheries policy, industrial policy, trade policy, competition policy, social policy, consumer policy, environmental policy, regional policy, etc). Even within the CFP, one has to speak of the direct or indirect effect of the various policies which impact on it (structural policy, external resources policy, markets policy), these being subject to contradictions - thanks to which, the thorny problem of the balance between fleet needs and industrial needs will have to be looked at very closely in the upcoming review of the CFP.

In 1988, the EP examined the processing industry in general in the report (A2-0270/88) drawn up by Mr Provan for what was then the Subcommittee on Fisheries. In view of the time-lapse since then and the general nature of the approach taken, it is now necessary to re-examine the question. The first priority should go to looking at the specific problems of the canning sector (the opinion of the Committee on Fisheries of 21 May 1996, drawn up by Mr Cunha, considers sardine canning only, in the context of the EU-Morocco agreement).

The fisheries canning industry is the branch of the European processing sector which has the oldest traditions and the deepest roots, and it is a major creator of direct and indirect employment. Its market share has fallen over recent years, to the benefit of the (more modern and go-ahead) frozen and pre-prepared fisheries products industry, and it has also had to face the fall-out from Community policies and agreements with third countries which have run counter to its interests and, indeed, seriously jeopardized its survival.

The main objectives of this report are therefore: to disentangle the complex set of problems with which the industry is currently struggling; to stimulate a collective debate on its situation and its potential; and to suggest possible solutions for its restructuring and modernization to help it acquire greater competitiveness in the face of the challenges confronting it at Community and world level.

I shall consider, in the first place, the two major markets of the canning industry today, namely sardines and, above all, tuna, examining their situation and problems and looking at possible measures. I shall then go on to deal with various general or horizontal aspects of the industry in relation to restructuring and modernization, innovation, development and quality policies, as well as the policies which need to be adopted at Community level to tackle the matter, from structural policy to market policy, within the context of the reform of the common organization of the market in fisheries and aquaculture products.

II. THE SPECIFIC PROBLEMS OF THE SARDINE AND TUNA MARKETS

1. The sardine market

The market in preserved sardines, which is based mainly in Portugal, Spain, France and Italy, has been in deep crisis for some years now. Most of the undertakings are labour-intensive SMUs located in small coastal communities. The crisis of the sector began in the 1980s, and is intimately bound up with the accession of Spain and Portugal to the Community in 1986, which ushered in a fundamental transformation of the Community's sardine industry. The Community's total sardine catch rose from 100 000 to 330 000 tonnes (not including the Canary Islands), and the share of the Community's total fisheries production accounted for by the Atlantic sardine fishery leapt from some 15% to over two-thirds.

At that time, the EEC took careful measures to protect the existing Member States, which had severe consequences for the new members. Export quotas were set, and it was agreed that the customs tariffs (25% for Spain and 10% for Portugal) would be reduced in the long term. In the case of Morocco, there already existed two tariff quotas (14 000 tonnes - tariff 0; 6000 tonnes - tariff: 10%). Exports from Morocco, Portugal and Spain to the EEC stood in 1986 at, respectively (in tonnes), 15 545, 12 173 and 464.

A regulation was adopted in 1985 on the conversation of the preserves industries of the EEC-10. In addition, the Act of Accession itself, in its Articles 171 and 388, provided for a system of compensatory indemnities to producers from the ten existing Member States. These indemnities - as in the case of those for tuna paid to the Community's canning industry - ceased to be payable as from 31 December 1995. Meanwhile, further tariff concessions were made to Morocco in the 1988 and 1992 agreements , and, finally, in the 1995 association agreement, the following conditions were agreed for imports into the Community market of preserved sardines originating in Morocco: 1996 - 19 500 tonnes tariff-free, the rest with a 6% tariff; 1997 - 21 000 tonnes tariff-free, the rest with a 5% tariff; 1998 - 22 500 tonnes tariff-free, the rest with a 4% tariff; 1999 and subsequently - total liberalization.

It is surely no exaggeration to claim that the Community's preserved sardine industry has been sacrificed on the altar of other interests. Special compensation measures must be adopted to forestall the physical transfers of production and the unemployment that raise their heads in the wake of concessions to third countries and social dumping, remembering that those countries' labour force is much cheaper and receives virtually no welfare benefits.

The Fisheries Council of October 1995 took the view that complementary measures must be adopted to ensure the viability of the sector, including increased storage aid, a promotion campaign and the restructuring of the existing Structural Fund payments.

These measures must be further developed and complemented by others if we are to reverse the present decline. If not, sardine canning in the Community could simply disappear, with a massive exodus of factories to ACP countries from which preserves can be imported into the Community market tariff-free. This process has already occurred in some Member States, such as France.

Of the 52 sardine canning enterprises which existed in Portugal in 1986, 26 have closed in a decade. Over the same period (1986-1996), canned sardine exports from mainland Spain (i.e. almost entirely from Galicia) fell by almost 40%, and total exports by the sardine canning factories of the Canary Islands - the main exporter region of the product within Spain - nose-dived from 7500 to 134 tonnes.

Should this industry disappear without trace, the resultant unemployment would have major regional repercussions, in already-depressed Objective 1 areas which lack alternative sources of employment. Of the 24 449 tonnes of preserved sardines produced in Spain in 1995, 21 249 came from one region, Galicia. In Portugal, almost the entire seine fleet - some 150 vessels - operates in the sardine sector (some 40% of the catch goes for processing), accounting for some 3000 direct and 12 000 indirect jobs, concentrated in a dozen localities which could end up as ghost towns.

Economic and social cohesion and the fight against unemployment are priority objectives for the whole range of Union policies, as spelt out in the Treaty of Amsterdam and recently confirmed at the employment summit held in Luxembourg on 20 November 1997.

We cannot accept this state of affairs fatalistically. We cannot look on unmoved at the annihilation of a major European industry which generates employment and produces a first-quality product in less-favoured regions.

It is therefore essential to propose the following (non-exclusive) list of measures:

- a specific programme for the sardine canning industry, to enable it to restructure itself and to permit the diversification of the economies of the regions affected. This will require new payments from the Structural Funds in addition to those already existing, which will themselves have to be reinforced for the coming period 2000-2006.

- a compensatory indemnity for sardines, for the canning industry in the Community, along with the continuation of a balanced form of storage aid in order to prevent market price fluctuations in the wake of seasonal variations in the supply of product for the canning industry. This aid should be directly payable to the canning enterprises themselves.

- improved health and hygiene inspections and checks for third-country products, under Directive 493/91/EEC, to ensure that those products are not subject to less rigorous checks than Community products and that the consumer is properly protected; a Community reference laboratory should be set up for the purposes of guaranteeing and approving the checks concerned.

- a large-scale publicity and promotion campaign at Community level, concentrating entirely on canned fisheries products and, in particular, sardines, stressing the quality of these products of Community workers and enterprises, and emphasizing their high nutritional value.

- support for the raw materials used in the various methods of canning sardines, including host liquids and, in particular, olive oil, the price of which should be maintained at the level of the world price, with a view to preserving the competitiveness of this form of preparing canned sardines as practised in the Community, given its role as a genuine symbol of quality (see later).

2. The tuna market

Tuna accounts for the largest share of the canned fisheries products industry, both in the Community and worldwide. The high level of demand for tuna, the large number of countries involved in the tuna fishery and tuna processing, the impact of demand on catch levels, the increasing utilization of frozen tuna steaks (facilitating the transport of the 'usable' product for canning purposes), the diversity of species, the variations in quality and price, the internationalization and liberalization of the market (combined with the persistence of preferential trade agreements): all these and other factors combine to create an intricate set of circumstances which make today's market in tuna an unusually complex phenomenon.

In the EU, about 60% of all fisheries canning is of tuna. Spain, France and the island regions of Portugal both produce and process; Italy is a major processor. Tuna accounts for 90% of the canning industry in Italy, 60% in France, 58% in Spain and approximately 20% in Portugal.

The species canned in the Community are essentially tropical: yellowfin (Thunnus albacares), skipjack (Katsuwonus pelamis), bigeye (Thunnus obesus), and, to a much lesser extent, long-fin tunny (Thunnus alalunga).

Allowing for the Portuguese bigeye fishery and the French, Spanish and Italian catches of bluefin tuna (Thunnus thynnus), the bulk of the Community's fishing of tropical tuna for processing purposes is carried out in the Indian Ocean, the central and eastern Atlantic and the Pacific.

Raw material supplies

The supply of raw material for the canning industry is the largest problem for the competitiveness and survival of the Community's canning industry.

In 1993, the total tuna catch worldwide (all species included) was 3.2 m tonnes. The figure has certainly increased since then, and on present trends the catch in the year 2000 will be 4.1 m tonnes, or a 27% increase on 1993.

Total world production of canned tuna rose from 780 000 tonnes in 1984 to 1.6 m tonnes (or 138 m cans) in 1993. Prices on the Community market have been driven down - the alternatives being loss of competitiveness and market share - by cut-throat competition from the cheap production of various third countries.

The ACP countries have traditionally enjoyed preferences amounting to almost total tariff-free access. More recently, a number of preferential agreements with other third countries have been signed - for instance, with the Central American Common Market (CACM) and the Andean Pact (as a support measure in relation to their anti-drugs struggle). In the latest development, the opening-up of customs quotas has led to an invasion of the market by south-east Asian countries, bringing about a major convulsion which calls for close attention and monitoring. The main exporters of the raw material are Taiwan and Korea. Thailand, which has a dynamic canning sector, has become the world's biggest importer (to the amount of 407 000 tonnes in 1993) of raw material for its own industry. Next follow Japan (for fresh tuna and sushi) and the US (for its canning industry). Thailand is the world's largest exporter of canned tuna (approximately 250 000 tonnes per annum).

In the EU, the main importers of raw material are Spain and Italy (essentially of steaks). France, taking advantage of its agreements with ACP countries, is the Union's main exporter of raw material, and is followed by Spain; both export within the Union and to the US.

These movements on the Community and world markets for raw material supplies to the industry require close examination.

The EU fleet is made up almost entirely by Spain (60%) and France (40%), which between them catch over 450 000 tonnes of tuna. France, as mentioned above, has agreements with ACP countries.

The Spanish catch is, in broad terms, 60% in international waters and 40% on the basis of agreements with third countries. In Spain, and also in Portugal (both on the mainland and in the island regions), there are now 'tuna steak units' which undertake the initial processing of the tuna into steaks for the Community industry.

Is the sum of what is caught by the Community fleet, plus the catches obtained via agreements with ACP countries, plus those obtained via the preferential agreements with the CACM and the Andean Pact likely to suffice to meet the Community's demand for raw material for its industry? Is it necessary to carry on with the process of opening up the Community market to products from other third countries, such as our south-east Asian rivals?

The matter must be examined, because it seems as if the current Community catch levels are sufficient to cover the needs of our processing industry and more besides. To open up new quotas would not only be inconsistent, but would present a double risk. Firstly, EU firms might move to south-east Asia, which would offer them both raw material and a market - in fine, a ready-made, entire economic circuit; secondly, the opening of the EU market to our competitors' raw material could easily mark the first step towards opening it up to the processed end-product too.

If we are to protect the Community's canning industry, we must also make quite certain that the Community's concessions to third countries correspond to the established objectives - namely, sustainable development (for the ACP countries), effective action against drugs (for the CACM and the Andean Pact), the outlawing of social practices which are disastrous for the Community's citizens (social dumping), quality, technical and health controls on imported products, and action against fraud over product origin.

The problem of product origin

The expansion of the list of countries benefiting from tariff preferences has made the regulation and control of product origin a more difficult task. Regulation 802/68 defined the country of origin of a product as that in which the last stage of its processing took place, while Regulation 69⅜8 extended the notion of products originating in a country to cover products resulting from the processing of products originating elsewhere. However, in the case of preserved products the law states that only preserved products made with fish or shellfish originating in a country may be considered products originating in that country.

In the case of GSP beneficiary states, the Andean Pact and the CACM, Regulations 375⅛3 and 3352/83 state that products will be considered as originating in a country if, following export from that country, they undergo no further processing, or, should processing occur, it is incomplete in nature or uses only products originating from the above-mentioned country.

Certificates of origin are issued by the authorities of the countries concerned. The system is, however, far from being transparent, and it is difficult to monitor, despite the consequences of the way things stand for the competitiveness of the EU canning industry. The system must be more closely supervised, and its actual contribution to the proposed ends should be assessed.

The case of the origin of canned tuna from Turkey

This means that canned tuna originating in Turkey can now be imported into the EU tariff-free. The problem here is that, according to the legislation mentioned above, canned tuna produced and originating in Turkey cannot be considered as a product originating in Turkey, for the good reason that that country does not fish tuna and the raw material in question, therefore, cannot originate there.

However, Decision 1/75 of the Association Council (amending Decision 4/72, defining the concept of 'products of Turkish origin'), permits the use of Community products in the preparation of processed products in Turkey, which may thus acquire Turkish origin. This is a case of 'bilateral accumulation' at work: a product originating in the EU does not actually lose its original status, but it acquires the additional status of originating in the country where it was processed (even if the processing was incomplete in nature), if and when it returns to EU territory.

It is surely not fair that the EU's canning industry - which is the real loser in this game and receives no type of compensation or reciprocal advantage - should not only have raw material (i.e. Community tuna) diverted from it to a third country, but should also have to see its natural market undercut by canned tuna processed in that same third country which has been prepared with that same Community raw material and is then sold at a price far below that of Community-processed tuna. The Community industry wishes to see at least some minimal compensation: this could take the form of an olive oil quota, as Turkey is a major producer of this product, tariff-free and at world prices.

The whole question of compensatory measures (or 'quid pro quo') may be grasped in all of its importance if one considers the Commission's reply (7 January 1998) to the present author's question E-1374/97 (21 April 1997), which explains the tariff concessions on preserved foodstuffs which the Commission is negotiating with the countries of central and eastern Europe, the application of the concept of pan-European accumulation to those countries (including the Baltic states and Slovenia) and to the EFTA countries, and its contacts with Mercosur, Chile, Mexico and South Africa with a view to liberalizing trade - especially, the Commission says, in the area of preserved fisheries products.

III. AN OVERVIEW OF THE PROBLEMS OF THE CANNING INDUSTRY IN THE EU

Quality policy

The European consumer has become ever more demanding, constantly calling for improved quality and health guarantees for products placed on the Community market. The EU has responded by drawing up strict rules to guarantee the quality of those products. Industry in the Community has no choice but to stake its all on quality and turn it into a competitive advantage vis-à-vis its outside rivals. This calls for a policy of differentiation, promotion and control.

The canning industry in the Community is now making a major effort to modernize and to adapt to the Community health requirements set out in Directive 493/91, with the relevant inspection provisions, as well as to the directives regulating the conditions of production, quality control and environmental management.

Also part of the whole process are technological innovation, R & D policy, cooperation with scientific institutes and research centres, ongoing improvement of human resources training and the search for new and improved ways of presenting the product (more environment-friendly packaging, labelling providing the consumer with information that is as extensive and as accurate as possible) - in short, we are talking about investment in quality, indeed in 'total quality'. The aim is not merely to ensure the quality of the products per se, but to integrate quality into all the processes, the technical and human resources, management and organization - into the enterprise as whole.

The particular nature of canned fisheries products calls for special, exhaustive checks on the raw material, the processing procedures and their stability and suitability for human consumption. It is necessary to examine and indicate the parameters for freshness, expiry, sell-by dates, storage conditions, preservation, nutritional value (content in terms of fatty acids, saturated and unsaturated fats, cholesterol, etc), contaminants and additives. All in all, these exhaustive checks must be operated to determine the quality standards and, where possible, allow the enterprise to apply for and obtain the appropriate international quality guarantee certification (series EN 29 000; European nomenclature - ISO-9000 standards).

The EU has made great strides in quality policy, but further progress still needs to be made, in terms of legislation, standardization and certification, if we are to make a decisive contribution to improving the differentiation and competitiveness of our industry, with the support of economic operators, consumer associations and publicity campaigns aimed at getting across the message of 'European quality'.

We should also introduce prizes and honours, and a 'European quality' tag or symbol, to support and encourage firms' efforts. We should also set up a quality register to allow products reaching the necessary standards to display the symbol, as a guarantee for the consumer and a means of validating them and differentiating them, on grounds of quality, from third-country imports which cannot lay claim to all the quality and health controls that apply in the EU.

The need for a reference laboratory at Community level

There is no quality without control. The technical and health conditions must be controlled scientifically by a Community network of laboratories specializing in preserving products and techniques for fish and shellfish. These products, in view of their specific nature and the distinct and complex set of problems which they raise, are governed by specific legislation which is different from that applying to preserved meat or vegetable products. Directive 91/493/EEC (Annex - Chapters IV and V) requires: specific checks on the raw material in its fresh state; parasite checks; chemicals checks (basic nitrogen and histamine); and checks on contaminants in the aquatic environment. The checks must be carried out in the laboratory of the establishment or in any other authorized laboratory.

For preserved aquaculture products, Directive 91/492/EEC lays down the limits in respect of DSP and PSP toxins for bivalve molluscs intended for processing. This requires a control analysis.

Quality control and consumer protection require that the same checks should apply to both EU products and products imported into the Community market with no guarantee that the same requirements have been fulfilled at the point of origin. If this is not done, the rules of the market will be distorted, with products with different technical and health specifications entering into direct competition. Not only does this affect prices, but it also has more serious repercussions for human health.

In the wake of recent, EU-funded scientific research at the University of Santiago de Compostela and the Marine Research Institute in Vigo (both in Spain), a technique has been evolved, based on nuclear biology and the analysis of nucleic acids, for determining via DNA whether a canned fish actually belongs or not to the species indicated on the label. Analyses carried out in various countries have suggested that up to 30% of labels may be misleading, especially in the case of tuna (thanks to the proliferation of species); this has obvious effects in terms of quality, price and consumer fraud.

It is therefore essential to undertake European-level cooperation in the field of laboratory analysis, and a Community reference laboratory must be created for cooperation, approval and analytic certification, to function as the ultimate guarantee of quality and technical and health protection for the European consumer.

Olive oil

Closely bound up with the question of quality is the use of olive oil in the canning of fisheries products. It is known today that the consumption of fish reduces the risk of cardiovascular illnesses. Fish fats are rich in polysaturated fatty acids: preserved fisheries products add nutritional variety to the consumer's diet, making it possible at all times of the year to make use of a high-quality protein source. The use of refined olive oil is a mark of identity ensuring quality, which has characterized the European preserving industry since its beginnings in Nantes. Today, sardines, tuna, mackerel and other types of blue fish are still canned in olive oil. Canned fish thus brings together two characteristic ingredients of the healthy 'Mediterranean diet', which are made available in this fashion to consumers worldwide all year long.

The main problem in recent years has been the substantial increase in the price of olive oil for canning in comparison with world prices; this has affected costs and competitiveness.

EU aid measures were introduced in Regulation 136/66/EEC; these are, however, considered insufficient by the sector, since they have little effect on the wide existing price gap. The Commission has promised to take the problem into account and adapt the system as part of the current reform of the COM in oil (see answer to questions E-3502/96 and 539/97). Close monitoring of this will be needed, in view of its importance for the sector as regards its quality image and its competitiveness vis-à-vis third-country products.

Structural policy

The huge problems facing the Community canning industry have already been explained. The process of restructuring, modernization and adaptation undertaken by the industry has also been stressed, as have the social and regional repercussions - on the Union's territorial, economic and social cohesion - of the industrial conversion of its canning sector.

What can EU structural policy do in support of the efforts being made by the sector?

The most important thing is not to leave the sector to its own devices: it must be included in the current reform of cohesion policies. The Structural Fund allocations for 1994-1999 to the processing industry must continue and, indeed, be increased in line with the heightened nature of the efforts and challenges for 2000-2006. The next phase of structural policy will require firms to ensure the profitability of their existing activities and to make a definitive effort to consolidate themselves on the market.

We are not asking for non-returnable public subsidies: we are talking about public policies for the encouragement and cofinancing of private efforts to alleviate, as far as possible, the competitive disadvantages arising from other factors related to other Community policies, including development cooperation.

The new COM in fisheries products and aquaculture

The existing COM stands in urgent need of a major reform, to enable it to adapt to the major changes which have occurred in the world of fisheries. The Community market is to a large extent conditioned by the dynamic of world trade and the growing pace of trade liberalization.

The new COM will have to adopt precise and effective mechanisms to bring the internal market into balance. To deal effectively with the major challenges to be faced, it will require a substantial increase in its budget. With a view to a more stable market, it will be necessary to improve the producer-processor relationship, with greater use of long-term contracts between producers and their organizations and the processing enterprises, thus helping ensure supply. The new COM must derive all possible advantage from the benefits of the internal market, creating as much mobility as possible within it to enable northern processed products to be sold in the south and vice versa, opening up new markets within the internal market to the benefit of fishermen and processors.

Rigorous checks should be carried out on the products; in view of the large-scale flow of thirdcountry products, controls will have to be stepped up to ensure that no outside products enter the EU without having to comply with the same rules as those required for Community products. Every effort must also be made to oversee the functioning of the GSPs, which should only be retained if they are fulfilling the objectives for which they were set up. Another possibility is that the Union's anti-fraud unit (UCLAF) should, in relation to checks on origin, set up a special section for fisheries matters: this section could intervene on the request of the Commission or a Member State to make on-the-spot checks on any anomaly arising in the sector, anywhere in the Union.

Consideration should also be given to compensatory measures for the Community industry when new tariff concessions are made. In all cases where Community canned products are affected, they should be considered as being sensitive products for which compensatory measures are required.

Another aspect requiring attention is the creation of some form of financial aid, for the same reasons as for vessels which are obliged to cease fishing temporarily or permanently; this would apply to cases where enterprises were obliged to suspend activity for reasons related to a necessary industrial restructuring.

The new COM should provide for the financing of targeted campaigns to promote EU canned products on 'made-in-Europe' lines - as being produced by European workers and enterprises, with the health and quality guarantees stressed above.

There is a vital need for a genuine quality policy, with prizes, quality registers and quality labels, to encourage producers and provide guarantees for consumers. Canned fisheries products should be eligible for the intervention mechanisms which apply to their fresh equivalent, such as the carry-over premium.

The reference prices and safeguard clauses should be made more effective, in line with market realities.

Finally, it would be desirable to consider reforming the existing compensation arrangements, to make them apply to contracts so that both parties - supplier and purchaser, vessel owner and processor - can benefit from them in future.

Last updated: 27 March 1999Legal notice