Legal provisions of COM(2010)728 - Amendment of Council Regulation (EC) No 1234/2007 as regards contractual relations in the milk and milk products sector

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dossier COM(2010)728 - Amendment of Council Regulation (EC) No 1234/2007 as regards contractual relations in the milk and milk products sector.
document COM(2010)728 EN
date March 14, 2012

Contents

Article 1 - Amendments to Regulation (EC) No 1234/2007

Regulation (EC) No 1234/2007 is hereby amended as follows:

(1)in point (a) of the first paragraph of Article 122, the following point is inserted:

‘(iiia)milk and milk products;’;

(2)in Article 123, the following paragraph is added:

‘4.   Member States may also recognise interbranch organisations which:

(a)have formally requested recognition and are made up of representatives of economic activities linked to the production of raw milk and linked to at least one of the following stages of the supply chain: processing of or trade in, including distribution of, products of the milk and milk products sector;

(b)are formed on the initiative of all or some of the representatives referred to in point (a);

(c)carry out, in one or more regions of the Union, taking into account the interests of the members of those interbranch organisations and of consumers, one or more of the following activities:

(i)improving the knowledge and the transparency of production and the market, including by publication of statistical data on the prices, volumes and durations of contracts for the delivery of raw milk which have been previously concluded, and by providing analyses of potential future market developments at regional, national and international level;

(ii)helping to coordinate better the way the products of the milk and milk products sector are placed on the market, in particular by means of research and market studies;

(iii)promoting consumption of, and providing information on, milk and milk products in both internal and external markets;

(iv)exploring potential export markets;

(v)drawing up standard forms of contract compatible with Union rules for the sale of raw milk to purchasers and/or the supply of processed products to distributors and retailers, taking into account the need to achieve fair competitive conditions and to avoid market distortions;

(vi)providing the information and carrying out the research necessary to adjust production in favour of products more suited to market requirements and consumer tastes and expectations, in particular with regard to product quality and protection of the environment;

(vii)maintaining and developing the production potential of the dairy sector, inter alia, by promoting innovation and supporting programmes for applied research and development in order to exploit the full potential of milk and milk products, especially in order to create value-added products which are more attractive to the consumer;

(viii)seeking ways of restricting the use of animal-health products, improving the management of other inputs and enhancing food safety and animal health;

(ix)developing methods and instruments for improving product quality at all stages of production and marketing;

(x)exploiting the potential of organic farming and protecting and promoting such farming as well as the production of products with designations of origin, quality labels and geographical indications; and

(xi)promoting integrated production or other environmentally sound production methods.’;

(3)in Chapter II of Title II of Part II, the following Section is inserted:

‘Section IIA

Rules concerning producer organisations and interbranch organisations in the milk and milk products sector

Article 126 - a Recognition of producer organisations and their associations in the milk and milk products sector

1. Member States shall recognise as producer organisations in the milk and milk products sector all legal entities or clearly defined parts of legal entities applying for such recognition, provided that:

(a)they meet the requirements laid down in points (b) and (c) of the first paragraph of Article 122;

(b)they have a minimum number of members and/or cover a minimum volume of marketable production, to be laid down by the Member State concerned, in the area where they operate;

(c)there is sufficient evidence that they can carry out their activities properly, both over time and in terms of effectiveness and concentration of supply;

(d)they have a statute that is consistent with points (a), (b) and (c) of this paragraph.

2. In response to an application, Member States may recognise an association of recognised producer organisations in the milk and milk products sector if the Member State concerned considers that this association is capable of carrying out effectively any of the activities of a recognised producer organisation and that it fulfils the conditions laid down in paragraph 1.

3. Member States may decide that producer organisations which have been recognised before 2 April 2012 on the basis of national law and which fulfil the conditions laid down in paragraph 1 of this Article are to be considered to be recognised as producer organisations pursuant to point (iiia) of point (a) of the first paragraph of Article 122.

Producer organisations which have been recognised before 2 April 2012 on the basis of national law and which do not fulfil the conditions laid down in paragraph 1 of this Article may continue to exercise their activities under national law until 3 October 2012.

4. Member States shall:

(a)decide whether to grant a recognition to a producer organisation within 4 months of the lodging of an application accompanied by all the relevant supporting evidence; this application shall be lodged with the Member State where the organisation has its headquarters;

(b)carry out, at intervals to be determined by them, checks to ascertain that recognised producer organisations and associations of producer organisations are complying with the provisions of this Chapter;

(c)in the event of non-compliance or irregularities in the implementation of the measures provided for in this Chapter, impose on those organisations and associations the applicable penalties they have laid down and decide whether, if necessary, recognition should be withdrawn;

(d)inform the Commission once a year, and no later than 31 March, of every decision to grant, refuse or withdraw recognition which they have taken during the previous calendar year.

Article 126 - b Recognition of interbranch organisations in the milk and milk products sector

1. Member States may recognise interbranch organisations in the milk and milk products sector provided that such organisations:

(a)meet the requirements laid down in Article 123(4);

(b)carry out their activities in one or more regions in the territory concerned;

(c)account for a significant share of the economic activities referred to in Article 123(4)(a);

(d)do not themselves engage in the production of processing of or the trade in products in the milk and milk products sector.

2. Member States may decide that interbranch organisations which have been recognised before 2 April 2012 on the basis of national law and which fulfil the conditions laid down in paragraph 1 are to be considered to be recognised as interbranch organisations under Article 123(4).

3. Where Member States make use of the option to recognise an interbranch organisation in accordance with paragraph 1 and/or 2, they shall:

(a)decide whether to grant recognition to the interbranch organisation within 4 months of the lodging of an application accompanied by all the relevant supporting evidence; this application shall be lodged with the Member State where the organisation has its headquarters;

(b)carry out, at intervals to be determined by them, checks to verify that recognised interbranch organisations are complying with the conditions governing their recognition;

(c)in the event of non-compliance or irregularities in the implementation of the measures provided for in this Regulation, impose on those organisations the applicable penalties they have laid down and decide whether, if necessary, recognition should be withdrawn;

(d)withdraw recognition if:

(i)the requirements and conditions for recognition laid down in this Article are no longer met;

(ii)the interbranch organisation engages in any of the agreements, decisions and concerted practices referred to in Article 177a(4), without prejudice to any other penalties to be imposed pursuant to national law;

(iii)the interbranch organisation fails to comply with the notification obligation referred to in Article 177a(2);

(e)inform the Commission once a year, and no later than 31 March, of every decision to grant, refuse or withdraw recognition taken during the previous calendar year.

Article 126 - c Contractual negotiations in the milk and milk products sector

1. A producer organisation in the milk and milk products sector which is recognised under Article 122 may negotiate on behalf of its farmer members, in respect of part or all of their joint production, contracts for the delivery of raw milk by a farmer to a processor of raw milk, or to a collector within the meaning of the second subparagraph of Article 185f(1).

2. The negotiations by the producer organisation may take place:

(a)whether or not there is a transfer of ownership of the raw milk by the farmers to the producer organisation;

(b)whether or not the price negotiated is the same as regards the joint production of some or all of the farmer members;

(c)provided that, for a particular producer organisation:

(i)the volume of raw milk covered by such negotiations does not exceed 3,5 % of total Union production; and

(ii)the volume of raw milk covered by such negotiations which is produced in any particular Member State does not exceed 33 % of the total national production of that Member State; and

(iii)the volume of raw milk covered by such negotiations which is delivered in any particular Member State does not exceed 33 % of the total national production of that Member State;

(d)provided that the farmers concerned are not members of any other producer organisation which also negotiates such contracts on their behalf; however, Member States may derogate from this condition in duly justified cases where farmers hold two distinct production units located in different geographic areas;

(e)provided that the raw milk is not covered by an obligation to deliver arising from the farmer’s membership of a cooperative in accordance with the conditions set out in the cooperative’s statutes or the rules and decisions provided for in or derived from these statutes; and

(f)provided that the producer organisation notifies the competent authorities of the Member State or Member States in which it operates of the volume of raw milk covered by such negotiations.

3. Notwithstanding the conditions set out in points (ii) and (iii) of point (c) of paragraph 2, a producer organisation may negotiate pursuant to paragraph 1, provided that, with regard to that producer organisation, the volume of raw milk covered by the negotiations which is produced in or delivered in a Member State having a total annual raw milk production of less than 500 000 tonnes does not exceed 45 % of the total national production of that Member State.

4. For the purposes of this Article, references to producer organisations shall also include associations of such producer organisations.

5. For the purposes of applying point (c) of paragraph 2 and paragraph 3, the Commission shall publish, by such means as it considers appropriate, the amounts of raw milk production in the Union and the Member States using the most up-to-date information available.

6. By way of derogation from point (c) of paragraph 2 and paragraph 3, even where the thresholds set out therein are not exceeded, the competition authority referred to in the second subparagraph of this paragraph may decide in an individual case that a particular negotiation by the producer organisation should either be reopened or should not take place at all if it considers that this is necessary in order to prevent competition being excluded or in order to avoid seriously damaging SME processors of raw milk in its territory.

For negotiations covering more than one Member State, the decision referred to in the first subparagraph shall be taken by the Commission without applying the procedure referred to in Article 195(2) or Article 196b(2). In other cases, that decision shall be taken by the national competition authority of the Member State to which the negotiations relate.

The decisions referred to in this paragraph shall not apply earlier than the date of their notification to the undertakings concerned.

7. For the purposes of this Article:

(a)a “national competition authority” means the authority referred to in Article 5 of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 101 and 102 of the Treaty (8);

(b)an “SME” means a micro-, small- or medium-sized enterprise within the meaning of Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (9).

8. The Member States in which negotiations take place in accordance with this Article shall notify the Commission of the application of point (f) of paragraph 2 and paragraph 6.

Article 126 - d Regulation of supply for cheese with a protected designation of origin or protected geographical indication

1. Upon the request of a producer organisation recognised under point (a) of the first paragraph of Article 122, an interbranch organisation recognised under Article 123(4) or a group of operators referred to in Article 5(1) of Regulation (EC) No 510/2006, Member States may lay down, for a limited period of time, binding rules for the regulation of the supply of cheese benefiting from a protected designation of origin or from a protected geographical indication under Article 2(1)(a) and (b) of Regulation (EC) No 510/2006.

2. The rules referred to in paragraph 1 shall comply with the conditions set out in paragraph 4 and shall be subject to the existence of a prior agreement between the parties in the geographical area referred to in Article 4(2)(c) of Regulation (EC) No 510/2006. Such an agreement shall be concluded between at least two thirds of the milk producers or their representatives representing at least two thirds of the raw milk used for the production of the cheese referred to in paragraph 1 and, if appropriate, at least two thirds of the producers of that cheese representing at least two thirds of the production of that cheese in the geographical area referred to in Article 4(2)(c) of Regulation (EC) No 510/2006.

3. For the purpose of paragraph 1, concerning cheese benefiting from a protected geographical indication, the geographical area of origin of the raw milk, as set in the product specification for the cheese, shall be the same as the geographical area referred to in Article 4(2)(c) of Regulation (EC) No 510/2006 related to that cheese.

4. The rules referred to in paragraph 1:

(a)shall only cover the regulation of supply of the product concerned and shall have the aim of adapting the supply of that cheese to demand;

(b)shall have effect only on the product concerned;

(c)may be made binding for no more than 3 years and be renewed after this period, following a new request, as referred to in paragraph 1;

(d)shall not damage the trade of products other than those concerned by the rules referred to in paragraph 1;

(e)shall not relate to any transaction after the first marketing of the cheese concerned;

(f)shall not allow for price fixing, including where prices are set for guidance or recommendation;

(g)shall not render unavailable an excessive proportion of the product concerned that would otherwise be available;

(h)shall not create discrimination, constitute a barrier for new entrants in the market, or lead to small producers being adversely affected;

(i)shall contribute to maintaining the quality and/or the development of the product concerned;

(j)shall be without prejudice to Article 126c.

5. The rules referred to in paragraph 1 shall be published in an official publication of the Member State concerned.

6. Member States shall carry out checks in order to ensure that the conditions laid down in paragraph 4 are complied with, and, where it has been found by the competent national authorities that such conditions have not been complied with, shall repeal the rules referred to in paragraph 1.

7. Member States shall notify the Commission forthwith of the rules referred to in paragraph 1 which they have adopted. The Commission shall inform Member States of any notification of such rules.

8. The Commission may at any time adopt implementing acts requiring that a Member State repeal the rules laid down by that Member State pursuant to paragraph 1 if the Commission finds that those rules do not comply with the conditions laid down in paragraph 4, prevent or distort competition in a substantial part of the internal market or jeopardise free trade or the attainment of the objectives of Article 39 TFEU. Those implementing acts shall be adopted without applying the procedure referred to in Article 195(2) or Article 196b(2).

Article 126 - e Commission powers in relation to producer organisations and interbranch organisations in the milk and milk products sector

1. In order to ensure that the objectives and responsibilities of producer organisations and associations of producer organisations in the milk and milk products sector are clearly defined, so as to contribute to the effectiveness of the actions of such organisations without imposing an undue burden, the Commission shall be empowered to adopt delegated acts in accordance with Article 196a which lay down:

(a)the conditions for recognising transnational producer organisations and transnational associations of producer organisations;

(b)rules relating to the establishment and the conditions of administrative assistance to be given by the relevant competent authorities in the case of transnational cooperation;

(c)additional rules regarding the calculation of the volume of raw milk covered by the negotiations referred to in Article 126c(2)(c) and Article 126c(3).

2. The Commission may adopt implementing acts laying down detailed rules necessary for:

(a)the implementation of the conditions for recognition of producer organisations and their associations and interbranch organisations set out in Articles 126a and 126b;

(b)the notification referred to in Article 126c(2)(f);

(c)the notifications to be made by the Member States to the Commission in accordance with Article 126a(4)(d), Article 126b(3)(e), Article 126c(8) and Article 126d(7);

(d)the procedures relating to administrative assistance in the case of transnational cooperation.

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 196b(2).

(4)in Article 175 the words ‘subject to Articles 176 to 177 of this Regulation’ are replaced by the words ‘subject to Articles 176 to 177a of this Regulation’;

(5)the following Article is inserted:

‘Article 177a

Agreements, decisions and concerted practices in the milk and milk products sector

1. Article 101(1) TFEU shall not apply to the agreements, decisions and concerted practices of recognised interbranch organisations for the purpose of carrying out the activities referred to in Article 123(4)(c) of this Regulation.

2. Paragraph 1 shall only apply if:

(a)the agreements, decisions and concerted practices have been notified to the Commission; and

(b)within 3 months of receipt of all the details required, the Commission, without applying the procedure referred to in Article 195(2) or Article 196b(2), has not found that the agreements, decisions or concerted practices are incompatible with Union rules.

3. The agreements, decisions and concerted practices may not be put into effect before the period referred to in point (b) of paragraph 2 elapses.

4. Agreements, decisions and concerted practices shall in any case be declared incompatible with Union rules if they:

(a)may lead to the partitioning of markets in any form within the Union;

(b)may affect the sound operation of the market organisation;

(c)may create distortions of competition and are not essential to achieving the objectives of the common agricultural policy pursued by the interbranch organisation activity;

(d)entail the fixing of prices;

(e)may create discrimination or eliminate competition in respect of a substantial proportion of the products in question.

5. If, after the period referred to in point (b) of paragraph 2 has expired, the Commission finds that the conditions for applying paragraph 1 have not been met, it shall, without applying the procedure referred to in Article 195(2) or Article 196b(2), take a decision declaring that Article 101(1) TFEU applies to the agreement, decision or concerted practice in question.

That Commission decision shall not apply earlier than the date of its notification to the interbranch organisation concerned, unless that interbranch organisation has given incorrect information or has abused the exemption provided for in paragraph 1 of this Article.

6. In the case of multiannual agreements, the notification for the first year shall be valid for the subsequent years of the agreement. However, the Commission may, on its own initiative or at the request of another Member State, issue a finding of incompatibility at any time.

7. The Commission may adopt implementing acts laying down measures necessary for the uniform application of this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 196b(2).’;

(6)Article 184 is amended as follows:

(a)point 6 is replaced by the following:

‘6.before 31 December 2010 and 31 December 2012 to the European Parliament and Council regarding the evolution of the market situation and the consequent conditions for smoothly phasing out the milk quota system, accompanied, if necessary, by appropriate proposals;’;

(b)the following point is added:

‘9.by 30 June 2014 and by 31 December 2018 to the European Parliament and the Council regarding the development of the market situation in the milk and milk products sector and in particular on the operation of point (iiia) of point (a) of the first paragraph of Article 122, of Article 123(4) and of Articles 126c, 126d, 177a, 185e and 185f, assessing, in particular, the effects on milk producers and milk production in disadvantaged regions in connection with the general objective of maintaining production in such regions, and covering potential incentives to encourage farmers to enter into joint production agreements together with any appropriate proposals.’,

(7)the following Articles are inserted:

‘Article 185e

Compulsory declarations in the milk and milk products sector

From 1 April 2015, the first purchasers of raw milk shall declare to the competent national authority the quantity of raw milk that has been delivered to them each month.

For the purpose of this Article and of Article 185f, a “first purchaser” means an undertaking or group which buys milk from producers in order to:

(a)subject it to collecting, packing, storing, chilling or processing, including under a contract;

(b)sell it to one or more undertakings treating or processing milk or other milk products.

Member States shall notify the Commission of the quantity of raw milk referred to in the first subparagraph.

The Commission may adopt implementing acts laying down rules on the content, format and timing of such declarations and measures relating to the notifications to be made by the Member States in accordance with this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 196b(2).

Article 185 - f Contractual relations in the milk and milk products sector

1. If a Member State decides that every delivery of raw milk in its territory by a farmer to a processor of raw milk must be covered by a written contract between the parties and/or decides that first purchasers must make a written offer for a contract for the delivery of raw milk by the farmers, such a contract and/or such an offer for a contract shall fulfil the conditions laid down in paragraph 2.

Where the Member State decides that deliveries of raw milk by a farmer to a processor of raw milk must be covered by a written contract between the parties, it shall also decide which stage or stages of the delivery shall be covered by such a contract if the delivery of raw milk is made through one or more collectors. For the purposes of this Article, a “collector” means an undertaking which transports raw milk from a farmer or another collector to a processor of raw milk or another collector, where the ownership of the raw milk is transferred in each case.

2. The contract and/or the offer for a contract shall:

(a)be made in advance of the delivery;

(b)be made in writing; and

(c)include, in particular, the following elements:

(i)the price payable for the delivery, which shall:

—be static and be set out in the contract, and/or,

—be calculated by combining various factors set out in the contract, which may include market indicators reflecting changes in market conditions, the volume delivered and the quality or composition of the raw milk delivered,

(ii)the volume of raw milk which may and/or must be delivered and the timing of such deliveries;

(iii)the duration of the contract, which may include either a definite or an indefinite duration with termination clauses;

(iv)details regarding payment periods and procedures;

(v)arrangements for collecting or delivering raw milk; and

(vi)rules applicable in the event of force majeure.

3. By way of derogation from paragraph 1, a contract and/or an offer for a contract shall not be required where raw milk is delivered by a farmer to a cooperative of which the farmer is a member if the statutes of that cooperative or the rules and decisions provided for in or derived from these statutes contain provisions having similar effects to the provisions set out in points (a), (b) and (c) of paragraph 2.

4. All elements of contracts for the delivery of raw milk concluded by farmers, collectors or processors of raw milk, including the elements referred to in paragraph 2(c), shall be freely negotiated between the parties.

Notwithstanding the first subparagraph,

(i)where a Member State decides to make written contracts for the delivery of raw milk compulsory in accordance with paragraph 1 of this Article, it may establish a minimum duration, applicable only to written contracts between a farmer and the first purchaser of raw milk. Such a minimum duration shall be at least 6 months and shall not impair the proper functioning of the internal market; and/or

(ii)where a Member State decides that the first purchaser of raw milk must make a written offer for a contract to the farmer in accordance with paragraph 1, it may provide that the offer must include a minimum duration for the contract, set by national law for this purpose. Such a minimum duration shall be at least 6 months and shall not impair the proper functioning of the internal market.

The second subparagraph shall be without prejudice to the farmer’s right to refuse such a minimum duration provided that he does so in writing. In this case, the parties shall be free to negotiate all elements of the contract, including those elements referred to in paragraph 2(c).

5. The Member States which make use of the options referred to in this Article shall notify the Commission of how they are applied.

6. The Commission may adopt implementing acts laying down measures necessary for the uniform application of points (a) and (b) of paragraph 2 and paragraph 3 of this Article and measures relating to notifications to be made by the Member States in accordance with this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 196b(2).’;

(8)in Chapter I of Part VII, the following Articles are added:

‘Article 196a

Exercise of the delegation

1. The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.

2. The power to adopt delegated acts referred to in Article 126e(1) shall be conferred on the Commission for a period of 5 years from 2 April 2012. The Commission shall draw up a report in respect of the delegation of power not later than 9 months before the end of the five-year period. The delegation of power shall be tacitly extended for periods of an identical duration, unless the European Parliament or the Council opposes such extension not later than 3 months before the end of each period.

3. The delegation of power referred to in Article 126e(1) may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.

4. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.

5. A delegated act adopted pursuant to Article 126e(1) shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of 2 months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by 2 months at the initiative of the European Parliament or of the Council.

Article 196 - b Committee procedure

1. The Commission shall be assisted by a committee which shall be referred to as the Committee for the Common Organisation of Agricultural Markets. That committee is a committee within the meaning of Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers (10).

2. Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.

(9)in Article 204, the following paragraph is added:

‘7.   As regards the milk and milk products sector, point (iiia) of point (a) of the first paragraph of Article 122, Article 123(4) and Articles 126a, 126b, 126e, and 177a shall apply from 2 April 2012 until 30 June 2020 and Articles 126c, 126d, 185e and 185f shall apply from 3 October 2012 until 30 June 2020.’.

Article 2 - Entry into force

1. This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Union.

2. It shall apply from 2 April 2012.

However, Articles 126c, 126d, 185e and 185f of Regulation (EC) No 1234/2007, as inserted by this Regulation, shall apply from 3 October 2012.

This Regulation shall be binding in its entirety and directly applicable in all Member States.