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EU: EC calls on Germany to reform brandy market

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The European Commission is calling on Germany to reform the spirits monopoly act in respect of grain brandy "Kornbranntwein". As it stands, German producers receive aid which is not available to producers from the other Member States. The EC says this "can no longer be justified since 1989, when a Community regulation stipulated that grain brandy was to be considered an industrial product."

In a recommendation it adopted today the Commission called on the German authorities to take appropriate measures so that agricultural producers and industrial producers of grain brandy would no longer be entitled to operating aid from the German authorities.

"Similarly, these producers should no longer be authorised to receive aid of any kind to compensate for their early exit from the monopoly. The changes should be made to the legislation as soon as possible starting with the 2002/03 production year and should be in force by no later than 1 January 2004," the EC said in a statement.

This case was prompted by a complaint from six German industrial producers of grain brandy that their rivals, agricultural producers, were to continue to receive state aid that was incompatible with the European Union Treaty.

The complaint was lodged following the entry into force of the German act of 22 December 1999 (Haushaltssanierungsgezetz), which adjusted the German spirits monopoly with the result that the industrial brandy manufacturers would be entirely ineligible from 2006 onwards.


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