Select Committee on European Communities Report


24.  PROPOSED REGULATION LAYING DOWN SPECIAL PROVISIONS RELATING TO QUALITY WINES PRODUCED IN SPECIFIED REGIONS (6356/98)

Letter from Lord Tordoff, Chairman of the Committee, to the Lord Donoughue, Parliamentary Secretary (Lords), Ministry of Agriculture, Fisheries and Food

  The above proposal was considered by Sub-Committee B at its meeting this morning.

  The Committee notes the concerns expressed in your Explanatory Memorandum, dated 11 March, that the proposal is both pre-emptive of a case currently before the ECJ and could have wider implications for other products. You also state that the industry is being consulted on the proposal. We would appreciate clarification of these wider implications and being informed of the outcome of your consultation.

  In the meantime, this letter maintains the scrutiny reserve.

7 May 1998

Letter from Lord Donoughue, Minister for Farming and the Food Industry, Ministry of Agriculture, Fisheries and Food, to Lord Tordoff, Chairman of the Committee

  You wrote to me last month seeking clarification of the wider implications of the above proposal. You also asked to be informed of the outcome of the consultation exercise. You may already have seen a copy of my letter of 24 April responding to a request for further information from the Chairman of the Select Committee on European Legislation. I attach a further copy for ease of reference (not printed).

  We are concerned that if this proposal were to be adopted, there could well be implications for other food sectors. For example, there was a recently well-publicised case turning on whether Parma ham has to be sliced in the region of origin. For this reason, we have consulted a wide range of trade associations in the food sector. The consultation exercise has now ended and we are studying the results. I expect to write to you with these in the near future.

  In the meantime, I note that the Committee has not cleared the proposal.

30 June 1998

Letter from Lord Donoughue, Minister for Farming and the Food Industry, Ministry of Agriculture, Fisheries and Food, to Jimmy Hood MP, Chairman of the Select Committee on European Legislation, House of Commons

  In its Twenty-third Report of the 1997-98 Session, your Committee asked for information on the outcome of consultations with the industry, for an assessment of the existing level of bottling of quality wines in the United Kingdom, and for the Government's view on the proposal.

  The Wine and Spirits Association, the main trade association representing UK importers of wine, is opposed to the proposal, which they believe might restrict the economic activity of some of its members. The Scotch Whisky Association, on the other hand, has no objections to the proposal and feels that it might have certain advantages for their own members, some of whom would like to see compulsory bottling of whisky in the region of production. In response to the Committee's comments, we shall also be consulting certain trade associations outside the alcoholic drink sector, in view of the possible relevance to them of the proposal.

  We estimate that between 12 and 15 bottler firms might be directly affected by this proposal. About half of these also manufacture beverages such as fortified British wine and rely on bottling of imported bulk wine to support their commercial viability. The value of imports of bulk quality wine into the UK from the rest of the Community was £21 million in 1997.

of the Community was £21 million in 1997.

  If it is adopted, this proposal risks causing substantial loss of business to UK operators. There are also wider implications which were set out in the Explanatory Memorandum. We shall, therefore, be opposing the proposal in Brussels discussions. I note that the Committee has not cleared the proposal and I will report to you on developments.

24 April 1998

Letter from Lord Donoughue, Minister for Farming and the Food Industry, Ministry of Agriculture, Fisheries and Food, to Lord Tordoff, Chairman of the Committee

  In my letter of 30 June, I promised to provide your Committee with the results of the consultation exercise on this proposal.

  I reported in my letter of 24 April to Jimmy Hood, copied to you, that the Wine and Spirits Association are opposed to the proposal but the Scotch Whisky Association has no objections to it and feels that it might have certain advantages for their own members, some of whom would like to see compulsory bottling of whisky in the region of production.

  A copy of the proposal was also sent to 18 other associations representing the food and drink industries. A list of those consulted is attached. Replies were received from: the Food and Drink Federation; the Provision Trade Federation; the Dairy Industry Federation and Matthew Clark Brands Limited (writing on behalf of the UK Bulk Wine Importers Group).

  All four respondents are opposed to the proposal. The respondents are generally of the view that this is a restrictive practice, perhaps designed to maintain inefficient local production and prevent industry rationalisation. Matthew Clark Brands Limited put forward several arguments against the Commission's technical reasons for the proposal. Those associations representing the food industry are concerned that this proposal may set a precedent for other sectors.

  These views reinforce the Government's difficulties with this proposal. We would prefer not to see any discussion of it until the European Court of Justice (ECJ) has delivered its ruling. In the meantime, it continues to be our intention to oppose it in Brussels discussions. However, the Commission's proposals on reform of the Community wine regime are expected imminently. The approach the UK adopts in any negotiations on the compulsory bottling at source proposal, will, notwithstanding our opposition to it, need to be judged in the light of other, wider interests affecting the UK wine industry which will need to be addressed as part of the reform process.

13 July 1998

Annex

3 July 1998

LIST OF TRADE ASSOCIATIONS CONSULTED   The Rice Association

  British Rice Millers Association

  Coffee Trade Federation Ltd

  Cocoa Association of London

  Tea Packers Association

  National Federation of Meat and Food Traders

  British Meat Manufacturers Association

  Federation of Fresh Meat Wholesalers

  International Meat Trade Association

  Seed Crushers and Oil Processors Association

  Fresh Produce Consortium (UK)

  National Dried Fruit Trade Association (UK) Ltd

  Federation of Agricultural Cooperatives (UK) Ltd

  Provision Trade Federation

  Food and Drink Federation

  Dairy Industry Federation

  Specialist Cheese Makers Association

  UK Bulk Wine Importers Group


 
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