3.6.77 Official Journal of the European Communities No L 137/7 COUNCIL REGULATION (EEC) No 1170/77 of 17 May 1977 amending Regulation (EEC) No 1696/71 on the common organization of the market in hops THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in particular Articles 42, 43, 113 and 235 thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Parlia- ment (1), Having regard to the opinion of the Economic and Social Committee (2), Whereas, since the implementation of Council Regula- tion (EEC) No 1696/71 of 26 July 1971 on the common organization of the market in hops (%), as amended by the Act of Accession (%), the situation in the market in hops, both world-wide and at the Community level, has changed radically as shown by the imbalance between supply and demand which has led to a slump in prices; whereas this imbalance is the result partly of an excessive increase in the area under hops, particularly of certain varieties, and partly of the use of smaller quantities of hops in the manu- facture of beer, which have led to the formation of large stocks of hop powder and hop extract ; whereas, therefore, certain Community rules should be amended with a view to securing better stabilization of the market ; Whereas a policy of quality should be adopted by laying down minimum quality characteristics and by applying a certification system to cover at least the place of production, the year of harvest and the variety ; whereas the marketing of non-certified products and the import of products that do not meet the equivalent minimum characteristics should be prohibited ; Whereas to prevent underestimation of producers’ incomes, an essential factor in fixing the amount of aid, the average income should be calculated solely on the basis of areas in full production ; Whereas, to reinforce the role of aid as a factor in channelling production, such aid should be deter- (1) OJ No C 6, 10. 1. 1977, p. 142. () O] No C $6, 7. 3. 1977, p. 23. () OJ No L 175, 4. 8. 1971, p. 1. () O) No L 73, 27. 3. 1972, p. 14. mined not by variety but by groups of varieties having common characteristics and the same ultimate use; Whereas hop producers should be capable of exerting their influence in achieving a balance between supply and demand, which is necessary if prices and incomes are to be stabilized ; whereas this object could more easily be achieved and producers could have more impact on production policy and the management of supply if they formed producer groups; whereas, to provide recognized producer groups with the means ‘to achieve this object, one of the conditions of recogni- tion should be that the groups should market the entire production of their members and should divide their production aid among their members proportio- nately to areas under hops and having regard to the market situation ; Whereas, in view of the present state of the market, any increase in the area under hops should be prohi- bited for a specified period so as to prevent the crea- tion of structural surpluses; whereas, moreover, the qualitative adjustment of Community production to market trends should be pursued by continuing, during the same period, the granting of aid to producer groups for conversion to other varieties and the reorganization of hop gardens; whereas, however, the granting of this aid should be subject to a substan- tial reduction in the area converted ; Whereas the experience gained through the applica- tion of Regulation (EEC) No 1696/71 has shown the need for instruments, other than adjustments to the amount of production aid, to enable preventive measures to be taken when there is a risk of structura. surpluses or market disturbances; Whereas it may be necessary to introduce transitional measures in respect of the application of the amend- ments contained in this Regulation; whereas, for administrative reasons, the measures concerning aid to production should not be applicable until the 1977 harvest, but on account of present market trends the other amendments and particularly those concerning aid for varietal conversion should be applied at once,