2005/262/EC: Commission Decision of 20 April 2004 on the aid implemented by France in favour of the Coopérative d'exportation du livre français (CELF) (notified under document number C(2004) 1361)Text with EEA relevance.

• Articles: 6

Article 1

The aid to the Coopérative d'exportation du livre français (CELF) for processing small orders of French-language books, implemented by France between 1980 and 2001, is aid that is caught by Article 87(1) of the EC Treaty. Since France failed to notify the aid to the Commission before implementing it, the aid was granted unlawfully. It is, however, compatible with the common market under Article 87(3)(d) of the Treaty.

Article 2

This Decision is addressed to the French Republic.

Schedules & Appendices

ANNEX I Table showing the trend of aid granted since 1980, in euro

ANNEX I

Table showing the trend of aid granted since 1980, in euro

1980

91 470

1981

91 470

1982

205 510

1983

164 640

1984

137 200

1985

141 780

1986

248 490

1987

214 950

1988

213 430

1989

259 160

1990

304 900

1991

373 500

1992

422 280

1993

382 650

1994

304 900

1995

304 900

1996

304 900

1997

243 920

1998

182 940

1999

121 960

2000

60 980

2001

38 110

2002

0

ANNEX II Decline in the compensation for CELF's expenses

ANNEX II

Decline in the compensation for CELF's expenses

Information supplied by the French authorities

Year

Amount of aid (euro)

Total charges

Percentage covered

1994

304 900

683 788

44,59 %

1995

304 900

697 177

43,73 %

1996

304 900

624 206

48,85 %

1997

243 920

680 023

35,87 %

1998

182 940

664 783

22,63 %

1999

121 960

635 577

19,19 %

2000

60 980

572 670

10,65 %

2001

38 110

509 048

7,49 %

2002

0

0

0

ANNEX III Processing orders

ANNEX III

Processing orders

Information extracted from SIDE's comments

New customer

(a)

Dispatch to the buyer of a file containing:

—

the general conditions of sale (e-mail, fax or mail)

—

request to open an account (e-mail, fax or mail)

(b)

After receipt of the request to open an account, check on the customer's solvency at Coface

(c)

If there is no problem, an account is opened for the customer

(d)

If there is a problem, the customer can only be served ‘pro forma’, (i.e. after payment of an estimate)

Customer holds an account

(a)

Identification of the customer (in particular from his account number)

Inputting of the item ordered (searching among 640 000 titles, including books, audio cassettes, audio CDs and CD-ROMs)

Inputting: once the item has been identified, the quantity, order date and customer reference are keyed in, and the inputting validated

—

If other order lines have to be inputted, the operation is repeated

—

The method of dispatching orders can be altered to suit the customer's wishes

(b)

If the work ordered is not in the database

—

The item is inputted manually:

the title, name of author, ISBN, publisher and supplier are given

(c)

Each order for a book automatically generates a ‘supplier’ order

(d)

Special software automatically transmits orders to suppliers who have the right equipment and are, hence, listed

(e)

Order forms are then printed automatically and sent by fax, mail or messenger to the suppliers concerned

ANNEX IV Breakdown of CELF's cost-accounting items — 1994

ANNEX IV

Breakdown of CELF's cost-accounting items — 1994

based on information supplied by the French authorities

Figures (Francs and euro)

FRF

EUR

Cost of purchasing books

2 068 293

315 309

—

Purchase

2 026 011

308 863

—

Transport and messengers

42 282

6 446

Staff costs

1 670 963

254 737

—

Reception (of works), direct labour

217 641

33 179

—

Packaging, direct labour

53 409

8 142

—    Sales department, direct labour

—

Area 1

149 770

22 832

—

Area 2

157 627

24 030

—

Area 3

49 390

7 529

—

Wages and salaries, General Services

1 022 285

155 846

—

Wages and salaries, Marketing

20 841

3 177

Overheads

518 926

79 110

—

Packaging consumed

14 770

2 252

—

Administrative supplies

183 784

28 018

—

Freight out

148 056

22 571

—

Commission on sales

36 540

5 570

—

Telephone, telex

29 103

4 437

—

Collection charges

26 294

4 008

—

Loan repayment insurance

20 929

3 191

—

Depreciation of tangible fixed assets

20 609

3 142

—

Other

38 841

5 921

Individual, indirect fixed charges

188 524

28 740

—

Trade tax

14 064

2 144

—

Charges to provisions

51 890

7 911

—

External services

66 828

10 188

—

Exceptional charges

46 733

7 124

—

Other

9 009

1 373

Total cost

4 446 706

677 896

Exchange rate: EUR 1 = FRF 6,55957

Comments and explanations

1.

Purchasing and transport (including messengers) costs . The cost was calculated taking into account the total cost of these activities allocated according to the number of books, i.e. FFR 38 795 874 (EUR 5 914 393). This amount is divided by the number of books to obtain the unit cost per book. The total number of books sold by CELF in 1994 was 467 673, so the unit cost per book is FFR 82,95 (EUR 12,65). To determine what was the purchasing and transport cost to be allocated to small orders, the unit cost per book is multiplied by the number of ‘small orders’ books, giving a total of FFR 2 068 293 (EUR 315 309).

2.

Staff costs . A coefficient of 3 (based on the number of books) was applied to this item, as the reception of small orders gives rise to difficulties peculiar to this category. The reception of works from large publishers or distributors is computerised using the EAN code, which makes recognition of the work by optical scanning possible. Conversely, works published by small publishers often do not contain a bar code, which means that manual recognition is necessary.

Large publishers delivered to Parisian customers for a contribution to the transport costs fixed by the trade association, which is FFR 0,75/kg, whereas the price paid messengers is FFR 6,5/kg for the packages used for works from small distributors. As invoices to foreign booksellers are flat-rate, that source of supply means a reduction in margins.

Giving small orders a coefficient of 3 thus makes it possible to include an appropriate charge for their processing in the cost accounting.

3.

Packaging . The direct labour is taken into account on the basis of the number of books.

4.

Sales department . The cost of direct labour was calculated by applying a coefficient of 3, since small orders involve more onerous processing as regards sales administration. The differences of treatment make it possible to include the appropriate charge for their processing in the cost accounting.

Additional explanations on coding the order . If there are difficulties with coding orders, further work is needed. The work has to be carried out irrespective of the amount of the order.

In addition, research is required before an order can be inputted: ISBN, publishers' catalogues, various data bases, check on the availability (or not) of the work, check on the match between order and publisher. Difficulties associated with the quality of the order form, in particular in identifying the order, will give rise to extra costs. Such difficulties often occur in the case of small orders. Large bookshops, which have a considerable turnover with CELF, are generally large-scale firms that use high-performance tools to enable them to rationalise their management, and in particular to transmit standardised orders, i.e. ones containing clear identification features. Among CELF's customers are numerous small bookshops, whose activity does not always allow modern international business resources to be used. Thus orders coming from this type of establishment are sometimes difficult to decipher and only include some of the information necessary for meeting the order, which means extra work and, hence, extra cost.

5.

Wages and salaries, general services (management, IT, switchboard, accounting, marketing, cleaning). The costs are allocated according to the number of books, except for accounting where the criterion is the number of invoices.

6.

Overheads (packaging consumed, freight out and depreciation of tangible fixed assets) . Costs are calculated on the basis of number of books.

7.

Overheads (administrative supplies) . Costs are calculated on the basis of the number of invoices.

8.

Overheads (commission on sales and loan repayment insurance) . Costs are calculated on the basis of turnover.

9.

Overheads (telephone, telex and collection charges) . A coefficient of 2,5 is applied, since telephone costs vary in accordance with many factors, in particular customer replies and publisher searches. These costs concern several operations, including reception of the order form from the bookseller, coding the order, inputting the order and accounting, whose purpose is to record all the flows relating to the operations described.

10.

Trade tax and charges to provisions . Costs are calculated on the basis of turnover. External services (e.g. rents, travel and promotion costs, etc.) and exceptional charges. Costs are calculated on the basis of the number of books.