(1)

The specific rules on the aid that Germany may grant in the framework of the German Alcohol Monopoly (‘the Monopoly’) as provided for in Article 182(4) of Council Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) (3) will expire on 31 December 2010.

(2)

According to the report submitted by the Commission pursuant to Article 184(3) of Regulation (EC) No 1234/2007, the importance of the Monopoly has decreased in recent years. Between 2001 and 2008, about 70 agricultural bonded distilleries (landwirtschaftliche Verschlussbrennereien) left the Monopoly. The volumes sold by the Monopoly have fallen since 2003 and the budget decreased from EUR 110 million in 2003 to EUR 80 million in 2008. Some distilleries have thus already made efforts to prepare for their entry into the free market by creating cooperatives, investing in less energy-consuming equipment to reduce production costs and increasingly marketing their alcohol directly. However, more time is needed to facilitate this adaptation process and to enable distillers to survive on the free market. An extension of several more years is deemed necessary to complete the process of abolishing the Monopoly, as well as the aid, and to allow for its definitive phasing-out.

(3)

In some parts of Germany, alcohol distilleries are traditionally linked to small and medium-sized farms and play an important role for the farms to continue their activities by providing an additional income to farmers and securing employment in rural areas. Agricultural bonded distilleries processing mainly cereals and potatoes should therefore continue to be able to receive aid through the Monopoly until 31 December 2013. By that date, all bonded distilleries should have entered the free market. This deadline also coincides with the beginning of the new programming period for rural development 2014-2020, meaning, for Germany, the possibility of transferring parts of the funds used for the Monopoly into its rural development programme.

(4)

The small-scale flat-rate distilleries (Abfindungsbrennereien), distillery users (Stoffbesitzer) and fruit cooperative distilleries (Obstgemeinschaftsbrennereien) contribute in particular to the preservation of traditional landscapes and biodiversity by helping to preserve orchards, which supply distillers with raw material. Taking this into account, as well as the fact that the production of those distilleries is local and very limited, they should continue to be able to benefit from the aid granted under the Monopoly for a final period until 31 December 2017. By this date, the Monopoly is to be abolished. In order to ensure that this aid is indeed in the course of being phased out, Germany should present, on a yearly basis, annual phasing-out plans, as from 2013.

(5)

The production of ethyl alcohol in the framework of the Monopoly is limited and corresponds at present to less than 10 % of the total production of ethyl alcohol of agricultural origin in Germany. Since, in particular, all bonded distilleries will have entered the free market by 31 December 2013, that percentage will decrease considerably after that date.

(6)

In order to ensure continuity in the granting of the aid, this Regulation should apply from 1 January 2011.

(7)

Regulation (EC) No 1234/2007 should therefore be amended accordingly,