61984J0279

++++

1 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - MILK AND MILK PRODUCTS - BUTTER IN STORAGE - SALE AT A REDUCED PRICE FOR DIRECT CONSUMPTION - "CHRISTMAS BUTTER" SCHEME - COMMISSION' S POWERS

( REGULATION NO 804/68 OF THE COUNCIL, ARTS 6, 12 AND 30, REGULATIONS NOS 985/68 AND 750/69 OF THE COUNCIL AND COUNCIL REGULATION NO 1269/79; COMMISSION REGULATION NO 2956/84 )

2 . AGRICULTURE - COMMON AGRICULTURAL POLICY - AIMS - RECONCILIATION - COMMISSION' S DISCRETION - GUARANTEE OF A REASONABLE INCOME FOR MILK PRODUCERS - "CHRISTMAS BUTTER" SCHEME FOR THE SALE OF BUTTER IN STORAGE AT REDUCED PRICES - LAWFULNESS

( EEC TREATY, ART . 39 ( 1 ); COMMISSION REGULATION NO 2956/84 )

3 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - DISCRIMINATION BETWEEN PRODUCERS OR CONSUMERS - "CHRISTMAS BUTTER" SCHEME FOR THE SALE OF BUTTER IN STORAGE AT REDUCED PRICES - EFFECTS ON THE MARGARINE MARKET - ABSENCE OF DISCRIMINATION

( EEC TREATY, ART . 40 ( 3 ), SECOND SUBPARAGRAPH; COMMISSION REGULATION NO 2956/84 )

4 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - MILK AND MILK PRODUCTS - BUTTER IN STORAGE - SALE AT A REDUCED PRICE FOR DIRECT CONSUMPTION - "CHRISTMAS BUTTER" SCHEME - LIMITED EFFECTIVENESS AND HIGH COST - PRINCIPLE OF PROPORTIONALITY - BREACH - NONE

( COMMISSION REGULATION NO 2956/84 )

1 . THE "CHRISTMAS BUTTER" SCHEME FOR THE SALE OF BUTTER IN STORAGE AT A REDUCED PRICE, DECIDED ON BY THE COMMISSION IN 1984 AND SET UP BY COMMISSION REGULATION NO 2956/84, MAY BE REGARDED AS A SPECIAL MEASURE, ADOPTED AT A TIME AT WHICH IT IS COMMON GROUND THAT THERE WERE LARGE SURPLUSES OF MILK PRODUCTS, AND INTENDED BOTH TO INCREASE CONSUMPTION AND TO REDUCE PUBLIC AND PRIVATE STOCKS AS WELL AS TO ENSURE THE NECESSARY ROTATION OF THOSE STOCKS . SUCH AN OPERATION FULFILS THE AIMS DEFINED BOTH BY ARTICLES 6 AND 12 OF REGULATION NO 804/68 AND BY REGULATIONS NOS 985/68 AND 750/69 OF THE COUNCIL AND COUNCIL REGULATION NO 1269/79, WHICH LAID DOWN GENERAL RULES FOR THE IMPLEMENTATION OF THOSE ARTICLES .

CONSEQUENTLY, IN ADOPTING REGULATION NO 2956/84, THE COMMISSION DID NOT EXCEED THE LIMITS OF THE POWERS DELEGATED TO IT BY THE COUNCIL AND WHICH IT MAY EXERCISE IN ACCORDANCE WITH THE MANAGEMENT COMMITTEE PROCEDURE FOR THE PURPOSE OF ENSURING THAT THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS FUNCTIONS .

2 . IN PURSUING THE VARIOUS AIMS LAID DOWN IN ARTICLE 39 OF THE TREATY, THE COMMUNITY INSTITUTIONS HAVE A PERMANENT DUTY TO RECONCILE THE INDIVIDUAL AIMS SO AS TO OVERCOME ANY CONFLICT BETWEEN THEM . ALTHOUGH THAT DUTY TO RECONCILE MEANS THAT NO SINGLE AIM MAY BE PURSUED IN ISOLATION IN SUCH A WAY AS TO MAKE THE ACHIEVEMENT OF THE OTHERS IMPOSSIBLE, THE COMMUNITY INSTITUTIONS MAY ALLOW ONE OF THEM TEMPORARY PRIORITY IN ORDER TO SATISFY THE DEMANDS OF THE ECONOMIC OR OTHER CONDITIONS IN VIEW OF WHICH THEIR DECISIONS ARE MADE .

IN THOSE CIRCUMSTANCES, THE COMMISSION WAS ENTITLED TO DEVOTE SPECIAL ATTENTION TO ENSURING A REASONABLE INCOME FOR MILK PRODUCERS BY ORGANIZING A CHRISTMAS BUTTER SCHEME SO AS TO SELL BUTTER IN STORAGE AT A REDUCED PRICE . BY FACILITATING THE DISPOSAL OF SURPLUSES CREATED BY THE INTERVENTION MACHINERY AND BY PERMITTING A RENEWAL OF THE BUTTER IN STORAGE, SUCH A SCHEME MAKES IT POSSIBLE TO MAINTAIN THE SYSTEM OF PRODUCTION PRICES WITHOUT CREATING A REAL AND LASTING DISTURBANCE OF THE MARGARINE MARKET .

3 . HAVING REGARD TO THE OBJECTIVE DIFFERENCES WHICH CHARACTERIZE THE LEGAL MACHINERY EMPLOYED AND THE ECONOMIC CONDITIONS ON THE MARKETS IN QUESTION, PRODUCERS OF BUTTER, ON THE ONE HAND, AND PRODUCERS OF FATS AND OIL-BEARING FRUITS AND MARGARINE, ON THE OTHER, ARE NOT IN COMPARABLE POSITIONS . THUS, THE CHRISTMAS BUTTER SCHEME FOR THE SALE OF BUTTER IN STORAGE AT A REDUCED PRICE SET UP BY REGULATION NO 2956/84 WHICH IS ESSENTIAL TO THE FUNCTIONING OF THE COMMON ORGANIZATION OF THE MARKET IN MILK PRODUCTS, CANNOT BE REGARDED AS GIVING RISE TO DISCRIMINATION AGAINST PRODUCERS OF MARGARINE CONTRARY TO THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE TREATY .

4 . BECAUSE IT LED BOTH TO ADDITIONAL SALES OF BUTTER AND TO A BETTER ROTATION AND A CERTAIN RENEWAL OF BUTTER STOCKS, THE CHRISTMAS BUTTER SCHEME SET UP BY REGULATION NO 2956/84 MAY NOT, NOTWITHSTANDING ITS LIMITED EFFECTIVENESS AND HIGH COST FROM THE POINT OF VIEW OF COMMUNITY FINANCES, BE REGARDED AS UNSUITABLE FOR THE PURPOSE OF ACHIEVING THE DESIRED AIMS NOR AS GOING FURTHER THAN WAS NECESSARY TO ACHIEVE THEM . THEREFORE, IT DOES NOT BREACH THE PRINCIPLE OF PROPORTIONALITY .

IN JOINED CASES 279, 280, 285 AND 286/84

FIRMA WALTER RAU LEBENSMITTELWERKE, HILTER, REPRESENTED BY ITS GENERAL PARTNER, ULRICH RAU, 4517 HILTER 1,

UNION DEUTSCHE LEBENSMITTELWERKE GMBH, REPRESENTED BY ITS MANAGING DIRECTORS, WERNER ISRAEL AND KURT FUNCK, 15 DAMMTORWALL, 2000 HAMBURG 36,

HEINRICH HAMKER LEBENSMITTELWERKE GMBH & CO . KG, REPRESENTED BY ITS GENERAL PARTNER, HAMKER BETEILIGUNGS GMBH, IN THE PERSON OF ITS MANAGER, HEINZ DABELSTEIN,

WESTFAELISCHES MARGARINEWERK WILHELM LINDEMANN KG, REPRESENTED BY ITS GENERAL PARTNER, LINDEMANN VERWALTUNGS GMBH, IN THE PERSON OF ITS MANAGER, DIETER LEJEUNE, 4980 BUENDE,

ASSISTED BY MESSRS MODEST, GUENDISCH, LANDRY, RAUSCHNING, FESTGE, HEEMANN, BAUER AND VOLKMANN-SCHLUCK, RECHTSANWAELTE, 9 A POSTSTRASSE, 2000 HAMBURG 36, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF E . ARENDT, 34B RUE PHILIPPE II,

APPLICANTS,

V

EUROPEAN ECONOMIC COMMUNITY, REPRESENTED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED IN ITS TURN BY BERNHARD JANSEN, A MEMBER OF ITS LEGAL DEPARTMENT, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF GEORGES KREMLIS, JEAN MONNET BUILDING, KIRCHBERG,

DEFENDANT,

APPLICATION UNDER ARTICLE 178 AND THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY FOR COMPENSATION FOR THE DAMAGE CAUSED TO THE APPLICANTS BY THE EUROPEAN ECONOMIC COMMUNITY BY THE IMPLEMENTATION OF COMMISSION REGULATION ( EEC ) NO 2956/84 OF 18 OCTOBER 1984 ON THE DISPOSAL OF BUTTER AT A REDUCED PRICE, AMENDING REGULATION ( EEC ) NO 1687/76 ( OFFICIAL JOURNAL 1984, L 279, P . 4 ),

THE COURT,

COMPOSED OF : LORD MACKENZIE STUART, PRESIDENT, Y . GALMOT, C . KAKOURIS AND F . SCHOCKWEILER ( PRESIDENTS OF CHAMBERS ), T . KOOPMANS, U . EVERLING, R . JOLIET, J.*C . MOITINHO DE ALMEIDA AND G.*C . RODRIGUEZ IGLESIAS, JUDGES,

ADVOCATE GENERAL : C.*O . LENZ

REGISTRAR : H.*A . RUEHL, PRINCIPAL ADMINISTRATOR

HAVING REGARD TO THE REPORT FOR THE HEARING AND FURTHER TO THE HEARING ON 3 JUNE 1986,

AFTER HEARING THE OPINION OF THE ADVOCATE GENERAL DELIVERED AT THE SITTING ON 5 DECEMBER 1986,

GIVES THE FOLLOWING

JUDGMENT

1 BY FOUR APPLICATIONS LODGED AT THE COURT REGISTRY ON 26 NOVEMBER 1984, AND JOINED FOR THE PURPOSES OF THE JUDGMENT BY ORDER OF THE COURT OF 7 JULY 1986, FIRMA WALTER RAU, UNION DEUTSCHE LEBENSMITTELWERKE, HEINRICH HAMKER LEBENSMITTELWERKE AND WESTFAELISCHES MARGARINEWERK WILHELM LINDEMANN, WHICH MANUFACTURE MARGARINE IN THE FEDERAL REPUBLIC OF GERMANY, BROUGHT ACTIONS UNDER THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY FOR COMPENSATION FOR THE DAMAGE WHICH THEY CONSIDERED THEY HAD SUFFERED AS A RESULT OF THE "CHRISTMAS BUTTER" SCHEME ADOPTED PURSUANT TO, AND SUBJECT TO THE RULES LAID DOWN IN, COMMISSION REGULATION NO 2956/84 OF 18 OCTOBER 1984 ON THE DISPOSAL OF BUTTER AT A REDUCED PRICE AND AMENDING REGULATION ( EEC ) NO 1687/76 ( OFFICIAL JOURNAL L 279, P . 4 ).

2 ACCORDING TO THE PREAMBLE, THE REGULATION IS BASED ON THE CONSIDERATIONS THAT THERE ARE LARGE QUANTITIES OF BUTTER ON THE MARKET, THAT THERE ARE STOCKS OF BUTTER IN THE COMMUNITY, THAT ALL APPROPRIATE MEANS SHOULD BE USED TO INCREASE BUTTER CONSUMPTION, THAT A REDUCTION IN PRICES TO THE FINAL CONSUMER IS AN APPROPRIATE MEANS OF ATTAINING THAT OBJECTIVE, THAT IT IS NOT POSSIBLE TO DISPOSE OF ALL THE BUTTER IN STOCK ON NORMAL TERMS, THAT PROLONGED STORAGE SHOULD BE AVOIDED IN VIEW OF THE HIGH COST INVOLVED AND THAT THE CHRISTMAS AND NEW YEAR HOLIDAYS MAY PROVIDE AN OPPORTUNITY FOR SELLING BUTTER AT A REDUCED PRICE FOR DIRECT CONSUMPTION . TITLE I OF THE REGULATION THEN SETS UP THE "CHRISTMAS BUTTER" SCHEME DESIGNED TO SELL ON THE MARKET, WITH A REDUCTION OF 1.6 ECU PER KILOGRAM, 200*000 TONNES OF BUTTER ( OF WHICH 50*000 TONNES WERE TO BE SOLD IN THE FEDERAL REPUBLIC OF GERMANY ).

3 REFERENCE IS MADE TO THE REPORT FOR THE HEARING FOR THE FACTS OF THE CASE AND THE SUBMISSIONS AND ARGUMENTS OF THE PARTIES, WHICH ARE MENTIONED OR DISCUSSED HEREINAFTER ONLY IN SO FAR AS IS NECESSARY FOR THE REASONING OF THE COURT .

4 THE APPLICANTS CONSIDER THAT AS A RULE AN OPERATION OF THE SCALE OF THE ONE IN QUESTION, BOTH IN REGARD TO THE QUANTITIES SOLD AND THE REDUCTION OFFERED IN THE PRICE, SERIOUSLY DISRUPTS THE MARKET IN EDIBLE FATS . IT SUDDENLY OFFERS FOR CONSUMPTION A LARGE QUANTITY OF BUTTER AT PRICES GREATLY REDUCED AS THE RESULT OF COMMUNITY SUBSIDIES . THE APPLICANTS INCUR LOSSES BECAUSE THE BUTTER IN QUESTION IS BOUGHT IN PREFERENCE NOT MERELY TO FRESH BUTTER, WHICH IS THEN TAKEN INTO INTERVENTION STOCK, BUT ALSO TO MARGARINE, A SUBSTITUTE AND COMPETING PRODUCT SALES OF WHICH DROP NOTICEABLY DURING AND AFTER A CHRISTMAS BUTTER SCHEME .

5 IT CAN BE SEEN FROM THE WRITTEN PLEADINGS AND THE OBSERVATIONS SUBMITTED TO THE COURT THAT THE APPLICANTS RELY IN SUPPORT OF THEIR APPLICATION FOR COMPENSATION ON FIVE SUBMISSIONS, ALL OF WHICH ALLEGE THAT REGULATION NO 2956/84 IS UNLAWFUL . IN THEIR VIEW, THAT REGULATION :

( A ) WAS ADOPTED IN THE ABSENCE OF POWERS TO DO SO;

( B ) IS CONTRARY TO THE PRINCIPLE OF MARKET STABILIZATION;

( C ) BREACHES THE PRINCIPLE OF NON-DISCRIMINATION;

( D ) BREACHES THE PRINCIPLE OF PROPORTIONALITY;

( E ) INFRINGES THE RIGHT TO THE FREE EXERCISE OF A PROFESSION .

THE SUBMISSION ALLEGING LACK OF POWERS ON THE PART OF THE COMMISSION

6 ACCORDING TO THE CITATIONS IN THE PREAMBLE TO THE CONTESTED COMMISSION REGULATION SETTING UP THE 1984 CHRISTMAS BUTTER SCHEME, THE SCHEME IS BASED ON THE PROVISIONS OF BOTH ARTICLE 6 AND ARTICLE 12 OF REGULATION NO 804/68 OF THE COUNCIL OF 27 JUNE 1968 ON THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS ( OFFICIAL JOURNAL, ENGLISH SPECIAL EDITION 1968 ( I ), P . 176 ). ARTICLE 6 ( 2 ) AND ( 3 ) PERMITS SPECIAL MEASURES TO BE TAKEN TO PROMOTE THE DISPOSAL OF BUTTER HELD IN PUBLIC OR PRIVATE STORAGE WHEN IT CANNOT BE DISPOSED OF UNDER NORMAL CONDITIONS . ARTICLE 12 ( 1 ), AS AMENDED BY REGULATION NO 559/76 OF 15 MARCH 1976 ( OFFICIAL JOURNAL L 67, P . 9 ), PERMITS OTHER MEASURES TO BE TAKEN IN ORDER TO FACILITATE THE DISPOSAL OF SURPLUSES OF MILK PRODUCTS OR TO PREVENT NEW SURPLUSES FROM BUILDING UP .

7 WITH REGARD TO THE ACTUAL IMPLEMENTATION OF SUCH SPECIAL MEASURES, THE DIVISION OF POWERS BETWEEN THE COUNCIL AND THE COMMISSION IS LAID DOWN AS FOLLOWS IN REGULATION NO 804/68 : GENERAL RULES FOR THE IMPLEMENTATION OF SUCH MEASURES ARE TO BE DETERMINED BY THE COUNCIL ( ARTICLE 6 ( 6 ) AND ARTICLE 12 ( 2 ) RESPECTIVELY OF REGULATION NO 804/68 ) AND THE COMMISSION IS TO ADOPT DETAILED RULES FOR THE IMPLEMENTATION OF THE SAID MEASURES IN ACCORDANCE WITH THE MANAGEMENT COMMITTEE PROCEDURE, PROVIDED FOR IN ARTICLE 30 OF THE SAME REGULATION ( ARTICLES 6 ( 7 ) AND 12 ( 3 ) OF REGULATION NO 804/68 ).

8 THE APPLICANTS CLAIM THAT IN THE ABSENCE OF GENERAL RULES LAID DOWN BY THE COUNCIL, THE COMMISSION HAD NO POWER TO SET UP THE CHRISTMAS BUTTER SCHEME AT ISSUE THROUGH THE ADOPTION OF DETAILED RULES FOR THE IMPLEMENTATION OF INTERVENTION MEASURES .

9 IN ORDER TO ASSESS IN THIS CASE THE POWERS OF THE COMMISSION, IT MUST BE DETERMINED :

( 1 ) WHETHER THE COUNCIL IN FACT ADOPTED THE GENERAL RULES PROVIDED FOR IN ARTICLES 6 ( 3 ) AND 12 ( 2 ) OF REGULATION NO 804/68;

( 2 ) WHETHER THE CHRISTMAS BUTTER SCHEME SET UP BY THE CONTESTED REGULATION WAS ONE OF THE MEASURES PROVIDED FOR BOTH BY ARTICLES 6 AND 12 OF REGULATION NO 804/68 AND BY THOSE GENERAL RULES .

10 THE FIRST CONCLUSION TO BE DRAWN FROM A CONSIDERATION OF THE APPLICABLE MEASURES IS THAT, CONTRARY TO THE APPLICANTS' CLAIMS, THE COUNCIL ITSELF ADOPTED THE GENERAL RULES PROVIDED FOR IN ARTICLES 6 AND 12 OF REGULATION NO 804/68 .

11 WITH REGARD FIRST TO THE APPLICATION OF ARTICLE 6 OF THAT REGULATION, IT MUST BE NOTED THAT THE COUNCIL ADOPTED TWO REGULATIONS . FIRST, REGULATION NO 985/68 OF 15 JULY 1968 LAYING DOWN GENERAL RULES FOR INTERVENTION ON THE MARKET IN BUTTER AND CREAM ( OFFICIAL JOURNAL, ENGLISH SPECIAL EDITION 1968 ( I ), P . 256 ) PROVIDED FOR THE GRANTING OF AID FOR BUTTER IN PRIVATE STORAGE AND FOR THE POSSIBILITY OF INCREASING THAT AID IF THE MARKET DEVELOPED UNFAVOURABLY . SECONDLY, REGULATION NO 750/69 OF THE COUNCIL OF 22 APRIL 1969 AMENDING REGULATION NO 985/68 ( OFFICIAL JOURNAL, ENGLISH SPECIAL EDITION 1969 ( I ), P . 204 ) PERMITTED THE ADOPTION OF APPROPRIATE MEASURES FOR THE DISPOSAL OF BUTTER IN PUBLIC STORAGE WHICH COULD NOT BE MARKETED ON NORMAL TERMS .

12 WITH REGARD TO THE IMPLEMENTATION OF ARTICLE 12 OF REGULATION NO 804/68, THE COUNCIL ADOPTED REGULATION NO 1269/79 OF 25 JUNE 1979 ( OFFICIAL JOURNAL L 161, P . 8 ), ARTICLES 2 ( 1 ) AND 4 OF WHICH AUTHORIZE THE GRANTING OF AID DESIGNED TO INCREASE CONSUMPTION OF BUTTER BY REDUCING THE PRICE TO THE ULTIMATE CONSUMER .

13 IN THE SECOND PLACE, IT IS NECESSARY TO DETERMINE WHETHER THE CHRISTMAS BUTTER SCHEME SET UP BY THE CONTESTED REGULATION IN FACT COMES WITHIN THE SCOPE OF THE POWERS DELEGATED BY THE COUNCIL TO THE COMMISSION .

14 IN ORDER TO ASSESS THE EXTENT OF THE IMPLEMENTING POWERS GRANTED IN PRINCIPLE TO THE COMMISSION IN REGARD TO THE COMMON AGRICULTURAL POLICY, IT MUST FIRST BE NOTED THAT, AS THE COURT DECIDED IN ITS JUDGMENT OF 30 OCTOBER 1975 ( CASE 23/75 REY SODA V CASSA CONGUAGLIO ZUCCHERO (( 1975 )) ECR 1279 ), IT FOLLOWS FROM THE CONTEXT OF THE TREATY IN WHICH ARTICLE 155 MUST BE PLACED AND ALSO FROM PRACTICAL REQUIREMENTS THAT THE CONCEPT OF IMPLEMENTATION MUST BE GIVEN A WIDE INTERPRETATION . SINCE ONLY THE COMMISSION IS IN A POSITION TO KEEP TRACK OF AGRICULTURAL MARKET TRENDS AND TO ACT QUICKLY WHEN NECESSARY, THE COUNCIL MAY CONFER ON IT WIDE POWERS OF DISCRETION AND ACTION IN THAT SPHERE, AND WHEN IT DOES SO THE LIMITS OF THOSE POWERS MUST BE DETERMINED IN THE LIGHT OF THE ESSENTIAL GENERAL AIMS OF THE MARKET ORGANIZATION .

15 IN THAT CONTEXT, THE CHRISTMAS BUTTER SCHEME MAY BE REGARDED AS A SPECIAL MEASURE, ADOPTED AT A TIME AT WHICH IT IS COMMON GROUND THAT THERE WERE LARGE SURPLUSES OF MILK PRODUCTS, AND INTENDED BOTH TO INCREASE CONSUMPTION AND TO REDUCE PUBLIC AND PRIVATE STOCKS AS WELL AS TO ENSURE THE NECESSARY ROTATION OF THOSE STOCKS . SUCH AN OPERATION FULFILS THE AIMS DEFINED BOTH BY ARTICLES 6 AND 12 OF REGULATION NO 804/68 AND BY THE ABOVEMENTIONED COUNCIL REGULATIONS LAYING DOWN GENERAL RULES FOR THE IMPLEMENTATION OF THOSE ARTICLES .

16 CONSEQUENTLY, THE COMMISSION HAD POWER UNDER ARTICLES 6 ( 7 ) AND 12 ( 3 ) OF REGULATION NO 804/68 TO ADOPT DETAILED RULES FOR THE IMPLEMENTATION OF THE CHRISTMAS BUTTER SCHEME IN ACCORDANCE WITH THE PROCEDURE LAID DOWN IN ARTICLE 30 OF THE SAME REGULATION, THAT IS TO SAY, AFTER OBTAINING THE OPINION OF THE MANAGEMENT COMMITTEE FOR MILK AND MILK PRODUCTS, UNLESS THE MEASURES WERE NOT IN ACCORDANCE WITH THE OPINION OF THE COMMITTEE .

17 SINCE THE COMMITTEE DID NOT GIVE ITS OPINION ON THE PROPOSAL REFERRED TO IT BY THE COMMISSION WITHIN THE TIME-LIMIT LAID DOWN IN ARTICLE 30 ( 2 ) THE COMMISSION CLEARLY HAD THE POWER TO ADOPT THE CONTESTED REGULATION .

18 IT FOLLOWS THAT THE SUBMISSION ALLEGING LACK OF POWERS ON THE PART OF THE COMMISSION MUST BE REJECTED .

THE SUBMISSION ALLEGING FAILURE TO OBSERVE THE PRINCIPLE OF MARKET STABILIZATION

19 IT CAN BE SEEN FROM THE ARGUMENTS PRESENTED IN THAT REGARD BY THE APPLICANT COMPANIES THAT THIS SUBMISSION IS IN FACT COMPOSED OF TWO PARTS .

IN THE FIRST PLACE, THE APPLICANTS CLAIM THAT THE COMMISSION FAILED TO TAKE ACCOUNT OF THE OBJECTIVE OF MARKET STABILIZATION LAID DOWN IN ARTICLE 39 ( 1 ) ( C ) OF THE TREATY AND ARTICLE 6 ( 3 ) OF REGULATION NO 804/68 OF THE COUNCIL OF 27 JUNE 1968 ON THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS ( OFFICIAL JOURNAL, ENGLISH SPECIAL EDITION 1968 ( I ), P . 176 ).

IN THE SECOND PLACE, THEY CLAIM THAT OVER THE LAST FEW YEARS, THE CHRISTMAS BUTTER SCHEMES HAVE BECOME A PERMANENT INSTRUMENT OF COMMUNITY ACTION IN THE AREA OF MILK POLICY AND THE COMMISSION IS SEEKING BY THAT METHOD TO CORRECT THE NORMAL CONSEQUENCES OF THE PRICE MECHANISMS RESULTING FROM THE COMMON MARKET ORGANIZATIONS SET UP BY THE COUNCIL IN THE MILK AND OILS AND FATS SECTORS . CONSEQUENTLY, THE CHRISTMAS BUTTER SCHEMES ARE NOT WITHIN THE POWERS CONFERRED ON THE COMMISSION BY THE COUNCIL .

THE FIRST PART OF THE SUBMISSION

20 ACCORDING TO THE APPLICANTS, THE CHRISTMAS BUTTER SCHEMES CREATE DISTORTIONS ON THE MARKET WHICH DISTURB, CONTRARY TO ARTICLE 39 OF THE TREATY, THE BALANCE BETWEEN THE BUTTER AND MARGARINE MARKETS, EACH PRODUCT COMPETING WITH AND BEING A SUBSTITUTE FOR THE OTHER .

21 THAT SUBMISSION CANNOT BE ACCEPTED . IT MUST BE POINTED OUT IN THAT REGARD THAT ACCORDING TO THE SETTLED CASE-LAW OF THE COURT ( JUDGMENT OF 24 OCTOBER 1973 IN CASE 5/73 BALKAN IMPORT-EXPORT V HAUPTZOLLAMT BERLIN-PACKHOF (( 1973 )) ECR 1091; JUDGMENT OF 20 OCTOBER 1977 IN CASE 29/77 ROQUETTE FRERES V FRANCE (( 1977 )) ECR 1835; JUDGMENT OF 6 DECEMBER 1984 IN CASE 59/83 BIOVILAC V EEC (( 1984 )) ECR 4057 ), IN PURSUING THE VARIOUS AIMS LAID DOWN IN ARTICLE 39 OF THE TREATY, THE COMMUNITY INSTITUTIONS HAVE A PERMANENT DUTY TO RECONCILE THE INDIVIDUAL AIMS . ALTHOUGH THAT DUTY TO RECONCILE MEANS THAT NO SINGLE AIM MAY BE PURSUED IN ISOLATION IN SUCH A WAY AS TO MAKE THE ACHIEVEMENT OF THE OTHERS IMPOSSIBLE, THE COMMUNITY INSTITUTIONS MAY ALLOW ONE OF THEM TEMPORARY PRIORITY IN ORDER TO SATISFY THE DEMANDS OF THE ECONOMIC OR OTHER CONDITIONS IN VIEW OF WHICH THEIR DECISIONS ARE MADE .

22 IN REGARD MORE PARTICULARLY TO THE ASSESSMENT OF THE LEGALITY OF A MEASURE ADOPTED IN THE CONTEXT OF A GENERAL POLICY IN THE MILK PRODUCTS SECTOR, THE COURT DECIDED IN BIOVILAC, CITED ABOVE, THAT ONE OF THE MAIN AIMS OF THAT POLICY WAS TO ENSURE IN ACCORDANCE WITH ARTICLE 39 ( 1 ) ( B ) OF THE TREATY THAT COMMUNITY MILK PRODUCERS RECEIVED A REASONABLE INCOME THROUGH THE FIXING OF A TARGET PRICE FOR MILK WHICH WAS GUARANTEED BY INTERVENTION BUYING OF THE PRINCIPAL PRODUCTS INTO WHICH MILK IS PROCESSED, IN PARTICULAR, BUTTER . IN THOSE CIRCUMSTANCES, IT WOULD APPEAR THAT THE COMMISSION WAS ENTITLED, WITHOUT INFRINGING ARTICLE 39 ( 1 ) OF THE EEC TREATY, TO DEVOTE SPECIAL ATTENTION TO ENSURING A REASONABLE INCOME FOR MILK PRODUCERS BY ORGANIZING A CHRISTMAS BUTTER SCHEME . SUCH A SCHEME CLEARLY HAS A DIRECT CONNECTION WITH THAT AIM BECAUSE, BY FACILITATING THE DISPOSAL OF SURPLUSES CREATED BY THE INTERVENTION MACHINERY AND BY PERMITTING A RENEWAL OF THE BUTTER IN STORAGE, IT MAKES IT POSSIBLE TO MAINTAIN THE SYSTEM OF PRODUCTION PRICES .

23 FURTHERMORE, HAVING REGARD IN PARTICULAR TO THE DEVELOPMENT WHICH HAS BEEN NOTED OF THE RESPECTIVE MARKET SHARES OF BUTTER AND MARGARINE IN OVERALL COMMUNITY CONSUMPTION OF FATS, IT DOES NOT APPEAR FROM THE DOCUMENTS ON THE FILE THAT A CHRISTMAS BUTTER SCHEME OF THE TYPE AT ISSUE WAS OF SUCH A NATURE AS TO CREATE A REAL AND DURABLE DISTURBANCE OF THE MARGARINE MARKET .

THE SECOND PART OF THE SUBMISSION

24 AS HAS BEEN POINTED OUT ABOVE, THE PURPOSES OF THE CONTESTED REGULATION IN FAVOURING THE DISPOSAL OF STORED BUTTER ARE BOTH TO REDUCE PUBLIC AND PRIVATE STOCKS AND TO ENSURE THE NECESSARY ROTATION OF THOSE STOCKS . SUCH PURPOSES MERELY ENSURE THE NORMAL FUNCTIONING OF THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS AND DO NOT, AS THE APPLICANTS WRONGLY CLAIM, CORRECT THE CONSEQUENCES OF THE PRICE MECHANISMS RESULTING FROM THE COMMON MARKET ORGANIZATION SET UP BY THE COUNCIL IN THE MILK AND OILS AND FATS SECTORS .

25 THE REMAINDER OF THE ARGUMENTS PUT FORWARD IN SUPPORT OF THE SECOND PART OF THE ABOVEMENTIONED SUBMISSION ARE THE SAME AS THOSE PUT FORWARD IN SUPPORT OF THE MORE GENERAL CONCLUSION ALLEGING LACK OF POWERS ON THE PART OF THE COMMISSION . IN ORDER TO REPLY TO THEM, THEREFORE, IT IS SUFFICIENT TO REFER TO WHAT HAS BEEN SAID ABOVE IN THAT REGARD .

THE SUBMISSION ALLEGING BREACH OF THE PRINCIPLE OF NON-DISCRIMINATION LAID DOWN IN ARTICLE 40 ( 3 ) OF THE TREATY

26 ACCORDING TO THE APPLICANTS, THE CONTESTED CHRISTMAS BUTTER SCHEME GAVE RISE TO UNJUSTIFIED DISCRIMINATION EITHER BETWEEN MILK PRODUCERS AND THE PRODUCERS OF FATS AND OIL-BEARING FRUITS USED IN THE MANUFACTURE OF MARGARINE OR BETWEEN MILK PROCESSORS AND MARGARINE PRODUCERS, TO THE DETRIMENT OF THE LATTER, WHO SUFFERED A DIRECT AND SIGNIFICANT COMPETITIVE DISADVANTAGE . FURTHERMORE, THE COMMISSION DID NOT TAKE ACCOUNT OF ALL THE FACTORS CHARACTERIZING EACH OF THE COMMON MARKET ORGANIZATIONS AT ISSUE .

27 IT IS COMMON GROUND THAT BOTH BUTTER AND MARGARINE, AS PRODUCTS OBTAINED BY PROCESSING AGRICULTURAL PRODUCTS, ARE COVERED BY THE COMMON AGRICULTURAL POLICY, AND THAT THEY COMPETE WITH EACH OTHER AND ARE PARTIAL SUBSTITUTES FOR EACH OTHER . CONSEQUENTLY, THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE TREATY, WHICH PROVIDES THAT THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS "SHALL EXCLUDE ANY DISCRIMINATION BETWEEN PRODUCERS OR CONSUMERS WITHIN THE COMMUNITY" CLEARLY APPLIES IN THIS CASE .

28 HOWEVER, IT MUST BE POINTED OUT THAT ACCORDING TO SETTLED CASE-LAW ( JUDGMENT OF 25 OCTOBER 1978 IN JOINED CASES 103 AND 145/77 ROYAL SCHOLTEN HONIG V INTERVENTION BOARD FOR AGRICULTURAL PRODUCE (( 1978 )) ECR 2037; JUDGMENT OF 12 JUNE 1979 IN CASE 166/78 ITALY V COUNCIL (( 1979 )) ECR 2575; JUDGMENT OF 27 SEPTEMBER 1979 IN CASE 230/78 ERIDANIA V MINISTER FOR AGRICULTURE AND FORESTRY (( 1979 )) ECR 2749; JUDGMENT OF 6 DECEMBER 1984 IN BIOVILAC, CITED ABOVE ) THE PROHIBITION OF DISCRIMINATION LAID DOWN IN THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE TREATY, AS A SPECIFIC EXPRESSION OF THE GENERAL PRINCIPLE OF EQUALITY, DOES NOT PREVENT COMPARABLE SITUATIONS FROM BEING TREATED DIFFERENTLY IF SUCH A DIFFERENCE IN TREATMENT IS OBJECTIVELY JUSTIFIED . IN THIS CASE, THREE ESSENTIAL DIFFERENCES MUST BE NOTED BETWEEN THE BUTTER AND MARGARINE MARKETS .

29 IN THE FIRST PLACE, THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS, WHICH INCLUDES BUTTER, SET UP BY REGULATION NO 804/68 OF THE COUNCIL, WAS CONCEIVED IN A VERY SPECIAL CONTEXT COMPARED TO THAT OF OILS AND FATS OF VEGETABLE ORIGIN, HAVING REGARD TO THE IMPORTANCE OF MILK PRODUCTION IN THE EUROPEAN ECONOMIC COMMUNITY AND THE DIFFERENT CONDITIONS OF SUPPLY IN THE COMMUNITY FOR MILK PRODUCTS, ON THE ONE HAND, AND OILS AND FATS OF VEGETABLE ORIGIN ON THE OTHER . THUS, REGULATION NO 804/68 ESTABLISHED INTERVENTION MACHINERY AND METHODS OF PRICE FORMATION DIFFERENT FROM THOSE LAID DOWN IN REGULATION NO 136/66 OF THE COUNCIL OF 22 SEPTEMBER 1966 ( OFFICIAL JOURNAL, ENGLISH SPECIAL EDITION 1965-66, P . 221 ), AS AMENDED, ON THE ESTABLISHMENT OF A COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS, WHICH INCLUDES MARGARINE . WHEREAS IN THE CONTEXT OF THE COMMON ORGANIZATION OF THE MARKET IN THE MILK SECTOR THE MARKET IS REGULATED ESSENTIALLY BY MEANS OF AN INTERVENTION PRICE FOR BUTTER AND MILK POWDER, IT IS REGULATED IN THE CONTEXT OF THE COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS ESSENTIALLY BY A SYSTEM OF PRODUCTION AIDS AND INTERVENTION IS MERELY COMPLEMENTARY .

30 SECONDLY, THE PLACE OCCUPIED BY THE PRODUCTS AT ISSUE IN THEIR RESPECTIVE MARKET ORGANIZATION IS ENTIRELY DIFFERENT . BUTTER, IN THE SAME WAY AS SKIMMED-MILK POWDER, OCCUPIES A FUNDAMENTAL PLACE IN THE COMMON ORGANIZATION OF THE MARKET IN THE MILK AND MILK PRODUCTS SECTOR SINCE IT SERVES TO SUPPORT THE MARKET . MARGARINE DOES NOT PLAY A COMPARABLE ROLE IN THE COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS .

31 THIRDLY, THE MARKET IN OILS AND FATS OF VEGETABLE ORIGIN IS NOT AFFECTED BY PROBLEMS COMPARABLE TO THOSE AFFECTING THE MARKET IN MILK PRODUCTS . AS THE COURT POINTED OUT IN ITS JUDGMENT OF 25 FEBRUARY 1979 ( CASE 138/78 STOELTING V HAUPTZOLLAMT HAMBURG-JONAS (( 1979 )) ECR 713 ), THE SITUATION OF THE MILK MARKET IN THE COMMUNITY IS DOMINATED BY A STRUCTURAL SURPLUS OF BUTTER AND SKIMMED-MILK POWDER RESULTING IN AN IMBALANCE BETWEEN SUPPLY AND DEMAND IN REGARD TO THOSE PRODUCTS . CONSEQUENTLY, IN ORDER TO DEAL WITH THE SPECIAL DIFFICULTIES ENCOUNTERED IN THE MILK PRODUCTS SECTOR, THE COMMUNITY INSTITUTIONS ARE REQUIRED BOTH TO AVOID AN INCREASE IN STOCKS AND TO PROMOTE THE DISPOSAL OF STOCKS ALREADY ESTABLISHED .

32 IT FOLLOWS FROM THE FOREGOING THAT HAVING REGARD TO THE OBJECTIVE DIFFERENCES WHICH CHARACTERIZE THE LEGAL MACHINERY EMPLOYED AND THE ECONOMIC CONDITIONS ON THE MARKETS IN QUESTION, PRODUCERS OF MILK AND BUTTER, ON THE ONE HAND, AND PRODUCERS OF FATS AND OIL-BEARING FRUITS AND OF MARGARINE ON THE OTHER ARE NOT IN COMPARABLE POSITIONS . THUS, THE CONTESTED CHRISTMAS BUTTER SCHEME, WHICH IS PART OF THE VERY FUNCTIONING OF THE COMMON ORGANIZATION OF THE MARKET IN MILK PRODUCTS, CANNOT BE REGARDED AS GIVING RISE TO DISCRIMINATION AGAINST PRODUCERS OF MARGARINE .

THE SUBMISSION ALLEGING BREACH OF THE PRINCIPLE OF PROPORTIONALITY

33 THE APPLICANTS CLAIM THAT THE SALES OF CHRISTMAS BUTTER ARE NEITHER A NECESSARY NOR AN APPROPRIATE MEANS OF INCREASING BUTTER CONSUMPTION AND AVOIDING LONG PERIODS OF STORAGE, AND THEY CONTEST THE APPROPRIATENESS AND EFFICACY, HAVING REGARD TO ITS COST, OF THE CHRISTMAS BUTTER SCHEME SET UP BY THE CONTESTED REGULATION . FURTHERMORE, OTHER SOLUTIONS, MORE EFFECTIVE AND LESS RESTRICTIVE THAN MEASURES SUCH AS THE CHRISTMAS BUTTER SCHEMES, EXIST TO RESOLVE THE PROBLEM OF BUTTER STOCKS AND SURPLUSES .

34 IT IS SETTLED CASE-LAW THAT IN ORDER TO ESTABLISH WHETHER A PROVISION OF COMMUNITY LAW COMPLIES WITH THE PRINCIPLE OF PROPORTIONALITY, IT MUST BE ASCERTAINED WHETHER THE MEANS WHICH IT EMPLOYS ARE SUITABLE FOR THE PURPOSE OF ACHIEVING THE DESIRED OBJECTIVE AND WHETHER THEY DO NOT GO BEYOND WHAT IS NECESSARY TO ACHIEVE IT . FURTHERMORE, AS THE COURT STATED IN ITS JUDGMENT OF 21 FEBRUARY 1979 ( STOELTING, CITED ABOVE ), IF A MEASURE IS PATENTLY UNSUITED TO THE OBJECTIVE WHICH THE COMPETENT INSTITUTION SEEKS TO PURSUE THIS MAY AFFECT ITS LEGALITY; HOWEVER, THE COMMUNITY INSTITUTIONS MUST BE RECOGNIZED AS HAVING A DISCRETIONARY POWER IN REGARD TO THE COMMON AGRICULTURAL POLICY WHICH REFLECTS THE RESPONSIBILITIES WHICH THE TREATY IMPOSES ON THEM .

35 IN THIS CASE, IT CAN BE SEEN FROM THE STATEMENT OF THE REASONS ON WHICH THE CONTESTED REGULATION IS BASED THAT THE ESSENTIAL AIMS OF THE LATTER WERE TO INCREASE THE CONSUMPTION OF BUTTER NOT MERELY IN ORDER TO MAKE AN OVERALL REDUCTION IN BUTTER STOCKS BUT ALSO TO AVOID PROLONGING THE PERIOD OF STORAGE OF OLDER BUTTER WHICH, BEYOND A CERTAIN PERIOD, BECOMES UNFIT FOR HUMAN CONSUMPTION AND MUST BE FURTHER PROCESSED . IT CAN BE SEEN FROM THE DOCUMENTS ON THE FILE AND FROM THE ARGUMENTS MADE BEFORE THE COURT THAT, ON THE ONE HAND, THE CONTESTED SCHEME ACTUALLY LED TO ADDITIONAL SALES OF APPROXIMATELY 40*000 TONNES OF BUTTER IN THE COMMUNITY, THUS AVOIDING THE STORAGE OF THAT QUANTITY AND, ON THE OTHER HAND, THERE WAS CONSEQUENTLY A BETTER ROTATION AND A CERTAIN RENEWAL OF BUTTER STOCKS . THOSE OBJECTIVES ARE AMONG THOSE ASSIGNED TO THE INTERVENTION SYSTEM BY ARTICLE 6 ( 4 ) OF REGULATION NO 804/68 .

36 FURTHERMORE, IT DOES NOT APPEAR EITHER FROM THE DOCUMENTS ON THE FILE OR FROM THE ARGUMENTS MADE BEFORE THE COURT THAT THE COMMISSION COMMITTED A MANIFEST ERROR OF ASSESSMENT IN CONSIDERING THAT IT DID NOT HAVE ANY OTHER POSSIBLE WAY OF ACHIEVING THE DESIRED OBJECTIVES BY MORE EFFICIENT AND LESS ONEROUS MEANS UNDER CONDITIONS WHICH WERE LEGALLY, ECONOMICALLY AND PSYCHOLOGICALLY ACCEPTABLE .

37 IN THOSE CIRCUMSTANCES, AND ALTHOUGH IT MUST BE ADMITTED, AS THE COMMISSION ITSELF ADMITS, THAT SCHEMES SUCH AS THE CHRISTMAS BUTTER SCHEME ARE OF LIMITED EFFECTIVENESS AND ARE VERY COSTLY FROM THE POINT OF VIEW OF COMMUNITY FINANCES, IT DOES NOT APPEAR THAT THE CONTESTED MEASURE WAS UNSUITABLE FOR THE PURPOSE OF ACHIEVING THE DESIRED AIMS OR THAT IT WENT FURTHER THAN WAS NECESSARY TO ACHIEVE THEM . THEREFORE, THE SUBMISSION ALLEGING BREACH OF THE PRINCIPLE OF PROPORTIONALITY MUST BE REJECTED .

THE SUBMISSION ALLEGING THAT THE CONTESTED CHRISTMAS BUTTER SCHEME INFRINGES THE PRINCIPLE OF THE FREE EXERCISE OF A PROFESSION

38 AS THE COMMISSION POINTS OUT, THIS SUBMISSION WAS RAISED FOR THE FIRST TIME IN THE APPLICANTS' REPLIES . IN ACCORDANCE WITH ARTICLE 42 ( 2 ) OF THE RULES OF PROCEDURE, THIS NEW SUBMISSION MUST BE REJECTED AS INADMISSIBLE .

39 IT FOLLOWS FROM THE FOREGOING, AND WITHOUT IT BEING NECESSARY TO CONSIDER THE OBJECTIONS OF INADMISSIBILITY RAISED BY THE COMMISSION, THAT THE APPLICATIONS MUST BE DISMISSED .

COSTS

40 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS . SINCE THE APPLICANTS HAVE FAILED IN THEIR SUBMISSIONS, THEY MUST BE ORDERED TO PAY THE COSTS .

ON THOSE GROUNDS,

THE COURT

HEREBY :

( 1 ) DISMISSES THE APPLICATIONS;

( 2 ) ORDERS THE APPLICANTS TO PAY THE COSTS .