61978J0151

AGRICULTURE - COMMON ORGANIZATION OF THE MARKET - SUGAR - RELATIONS BETWEEN SUGAR MANUFACTURERS AND BEET GROWERS - RULES - EXCLUSIVE COMMUNITY COMPETENCE - INTERVENTION OF THE MEMBER STATES - PROHIBITION - DEROGATION PURSUANT TO A COMMUNITY REGULATION

( REGULATION ( EEC ) NO 741/75 OF THE COUNCIL , ART . 1 )

SINCE THE COMMON ORGANIZATION OF THE MARKET IN SUGAR COVERS RELATIONS BETWEEN SUGAR MANUFACTURERS AND BEET GROWERS , SUCH RELATIONS , IN SO FAR AS THEY SPECIFICALLY CONCERN SUGAR PRODUCTION , FALL EXCLUSIVELY WITHIN THE COMPETENCE OF THE COMMUNITY SO THAT THE MEMBER STATES ARE NO LONGER IN A POSITION TO ADOPT UNILATERAL MEASURES . IN VIEW OF POSSIBLE DIFFICULTIES IN THE CONCLUSION OF INTER-TRADE AGREEMENTS CONCERNING CONDITIONS FOR THE DELIVERY OF SUGAR-BEET , REGULATION NO 741/75 IS INTENDED TO REMOVE THAT DISABILITY ON THE PART OF THE MEMBER STATES IN THE CASES DEFINED BY THE REGULATION SO THAT THE MEMBER STATES ARE ENTITLED UNDER COMMUNITY LAW TO INTERVENE ON THE BASIS OF THEIR OWN POWERS AND IN ACCORDANCE WITH THE PROCEDURES OF THEIR OWN LEGAL SYSTEMS .

IN CASE 151/78

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE HOEJESTERET ( DANISH SUPREME COURT ) FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN

SUKKERFABRIKEN NYKOEBING LIMITERET

AND

MINISTRY OF AGRICULTURE

ON THE INTERPRETATION OF REGULATION ( EEC ) NO 741/75 OF THE COUNCIL OF 18 MARCH 1975 LAYING DOWN SPECIAL RULES FOR THE PURCHASE OF SUGAR-BEET ( OFFICIAL JOURNAL 1975 , L 74 , P . 2 ),

1BY A DECISION OF 28 JUNE 1978 , WHICH WAS RECEIVED AT THE COURT OF JUSTICE ON 30 JUNE 1978 , THE HOEJESTERET SUBMITTED TO THE COURT OF JUSTICE UNDER ARTICLE 177 OF THE EEC TREATY TWO PRELIMINARY QUESTIONS ON THE INTERPRETATION OF REGULATION ( EEC ) NO 741/75 OF THE COUNCIL OF 18 MARCH 1975 LAYING DOWN SPECIAL RULES FOR THE PURCHASE OF SUGAR-BEET ( OFFICIAL JOURNAL L 74 , P . 2 ).

2IN ORDER TO ARRIVE AT AN INTERPRETATION THIS REGULATION MUST BE CONSIDERED IN THE CONTEXT OF THE COMMON ORGANIZATION OF THE MARKET IN SUGAR AS IT WAS ESTABLISHED FIRST BY REGULATION NO 1009/67/EEC OF THE COUNCIL OF 18 DECEMBER 1967 ON THE COMMON ORGANIZATION OF THE MARKET IN SUGAR ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1967 , P . 304 ) AND SUBSEQUENTLY BY REGULATION ( EEC ) NO 3330/74 OF THE COUNCIL OF 19 DECEMBER 1974 ( OFFICIAL JOURNAL 1974 L 359 , P . 1 ) WHICH REPLACED IT .

3THAT ORGANIZATION ENTAILS THE FIXING OF PRODUCTION QUANTITIES FOR EACH MEMBER STATE WHILST THE LATTER DETERMINES QUOTAS FOR SUGAR MANUFACTURERS IN ACCORDANCE WITH CRITERIA LAID DOWN IN THE REGULATION .

4THE QUOTAS FIXED FOR MANUFACTURERS CONSIST OF A BASIC QUOTA , QUOTA A , WHICH CORRESPONDS TO THE REQUIREMENTS OF THE DOMESTIC MARKET , MAY BE MARKETED WITHOUT RESTRICTION AND MAY BE OFFERED TO INTERVENTION AGENCIES AT THE INTERVENTION PRICE , WITH A SUPPLEMENT UP TO A MAXIMUM QUOTA , QUOTA B , WHICH IS TREATED AS EQUIVALENT TO THE SUGAR OF THE BASIC QUOTA ONLY ON PAYMENT OF A PRODUCTION LEVY WHILST ANY SUGAR PRODUCED IN EXCESS OF THE MAXIMUM QUOTA MAY NOT BE DISTRIBUTED ON THE DOMESTIC MARKET BUT MUST BE EXPORTED TO NON-MEMBER COUNTRIES .

5IT IS ASSUMED IN THE REGULATIONS THAT THE ADVANTAGES OF THE GUARANTEE OF MARKETING BOTH THE BASIC QUOTA AND THE MAXIMUM QUOTA AT MINIMUM PRICES WILL BE PASSED ON BY SUGAR MANUFACTURERS TO BEET GROWERS AND IT IS LEFT TO THE MANUFACTURERS AND GROWERS TO LAY DOWN THE CONDITIONS GOVERNING DELIVERY WHILST REGULATION NO 3330/74 MERELY PROVIDES IN ARTICLE 6 THAT ' ' THE COUNCIL , ACTING BY A QUALIFIED MAJORITY ON A PROPOSAL FROM THE COMMISSION , SHALL ADOPT OUTLINE PROVISIONS IN RESPECT OF THE GENERAL CONDITIONS GOVERNING PURCHASE , DELIVERY , ACCEPTANCE AND PAYMENT TO WHICH AGREEMENTS WITHIN THE TRADE AT COMMUNITY , REGIONAL OR LOCAL LEVEL AND CONTRACTS CONCLUDED BETWEEN BUYERS AND SELLERS OF BEET MUST CONFORM . ' '

6THAT ARTICLE IS IDENTICAL WITH ARTICLE 6 OF REGULATION NO 1009/67 PURSUANT TO WHICH THE COUNCIL ADOPTED REGULATION ( EEC ) NO 206/68 LAYING DOWN OUTLINE PROVISIONS FOR CONTRACTS AND INTER-TRADE AGREEMENTS ON THE PURCHASE OF BEET ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 19 ) WHICH IS STILL IN FORCE .

7FURTHERMORE ARTICLE 30 OF REGULATION NO 3330/74 , LIKE THE PREVIOUS ARTICLE 30 OF REGULATION NO 1009/67 , PROVIDES THAT ' ' IN CONTRACTS FOR THE DELIVERY OF BEET FOR THE MANUFACTURE OF SUGAR , BEET SHALL BE DIFFERENTIATED DEPENDING ON WHETHER THE QUANTITIES OF SUGAR TO BE MANUFACTURED FROM IT ARE

( A ) WITHIN THE BASIC QUOTA ,

( B ) OUTSIDE THE BASIC QUOTA BUT WITHIN THE MAXIMUM QUOTA ,

( C ) OUTSIDE THE MAXIMUM QUOTA . ' '

THIS DIFFERENTIATION CLEARLY AFFECTS THE AGREED PURCHASE PRICES .

8ALTHOUGH THE COMMON ORGANIZATION OF THE MARKET PROVIDES FOR GENERAL RULES ON THE SALE AND PURCHASE OF SUGAR-BEET IT IS NEVERTHELESS CLEAR THAT THE AGREEMENTS AND CONTRACTS REFERRED TO CONTINUE TO BE GOVERNED , SUBJECT TO THE SAID GENERAL RULES , BY THE DOMESTIC LAW OF CONTRACT UNDER WHICH THEY WERE CONCLUDED .

9IT APPEARS FROM THE DECISION REFERRING THE MATTER TO THE COURT THAT THE APPELLANT IN THE MAIN ACTION ( HEREINAFTER REFERRED TO AS ' ' SUKKERFABRIKEN ' ' ) IS ORGANIZED IN THE FORM OF A CO-OPERATIVE WHICH HAS A SHARE CAPITAL OF DKR 7 000 000 DIVIDED INTO 8 750 SHARES AND WHOSE MEMBERS ARE OBLIGED TO CULTIVATE ONE TOENDE ( 0.56 HECTARE ) WITH SUGAR-BEET AND TO DELIVER THE BEET HARVESTED TO THE FACTORY .

10SINCE THE MEMBERS OF THE CO-OPERATIVE DID NOT PRODUCE ENOUGH FOR ITS REQUIREMENTS SUKKERFABRIKEN USUALLY PURCHASES MORE BEET FROM OTHER GROWERS WHO ARE NOT MEMBERS OF THE CO-OPERATIVE ( HEREINAFTER REFERRED TO AS ' ' PRODUCERS UNDER CONTRACT ' ' ).

11SINCE THE PRODUCTION QUANTITY ALLOTTED TO DENMARK ON ITS ACCESSION TO THE COMMUNITY EXCEEDED THE QUANTITIES WHICH HAD BEEN FIXED IN THE PAST BY NATIONAL LEGISLATION , SUKKERFABRIKEN ' S BASIC QUOTA ACCORDINGLY EXCEEDED THE QUANTITIES WHICH , UNDER THE PREVIOUS NATIONAL SYSTEM , COULD BE PRODUCED AT GUARANTEED PRICES .

12SINCE SUKKERFABRIKEN AND THE PRODUCERS UNDER CONTRACT COULD NOT AGREE HOW THAT INCREASE SHOULD AFFECT THE FIXING OF THE QUANTITIES COVERED BY THE BASIC QUOTA TO BE PURCHASED FROM THE MEMBERS OF THE CO-OPERATIVE AND THE PRODUCERS UNDER CONTRACT THE DANISH GOVERNMENT CONSIDERED IT NECESSARY TO INTERVENE IN ORDER TO EFFECT AN ALLOCATION .

13THE DANISH GOVERNMENT REPORTED TO THE COMMUNITY INSTITUTIONS THE DIFFICULTIES WHICH HAD ARISEN AND THE COUNCIL , ON THE PROPOSAL OF THE COMMISSION , ACCORDINGLY ADOPTED REGULATION NO 741/75 WHEREBY ' ' FAILING AN AGREEMENT IN CERTAIN CASES AS TO HOW THE QUANTITY OF BEET TO BE DELIVERED SHOULD BE ALLOCATED , THE MEMBER STATE CONCERNED MAY LAY DOWN SPECIAL RULES FOR SUCH ALLOCATION , ' ' IT IS PROVIDED IN ARTICLE 1 :

' ' WHERE THERE IS NO SET AGREEMENT WITHIN THE TRADE AS TO HOW THE QUANTITIES OF BEET WHICH THE MANUFACTURER OFFERS TO BUY BEFORE SOWING SHOULD BE ALLOCATED AMONG THE SELLERS , THESE QUANTITIES BEING INTENDED FOR THE MANUFACTURE OF SUGAR WITHIN THE BASIC QUOTA LIMITS , THE MEMBER STATE CONCERNED MAY ITSELF LAY DOWN RULES FOR SUCH ALLOCATION .

THESE RULES MAY ALSO GRANT TO TRADITIONAL SELLERS OF BEET AND TO CO-OPERATIVES DELIVERY RIGHTS OTHER THAN THOSE WHICH THEY WOULD ENJOY IF THEY BELONGED TO SUCH CO-OPERATIVES . ' '

14THE DANISH MINISTER FOR AGRICULTURE HAD INTERVENED BY ORDER NO 300 OF 20 JUNE 1975 ON THE ALLOCATION OF THE PRODUCTION RIGHTS WITHIN THE BASIC QUOTA BETWEEN THE MEMBERS OF THE CO-OPERATIVE OF SUKKERFABRIKEN AND THE PRODUCERS UNDER CONTRACT AND SUKKERFABRIKEN CONTESTED THE LEGALITY OF THE ORDER BEFORE THE NATIONAL COURTS .

15IN THE COURSE OF THAT ACTION THE HOEJESTERET REQUESTED THE COURT OF JUSTICE TO GIVE A PRELIMINARY RULING ON THE FOLLOWING QUESTIONS :

' ' A . WHERE AGREEMENT CANNOT BE REACHED BETWEEN SHAREHOLDERS IN A SUGAR FACTORY ORGANIZED AS A CO-OPERATIVE UNDERTAKING AND OTHER TRADITIONAL SELLERS OF BEET TO THE FACTORY AS TO THE ALLOCATION OF THE QUANTITIES WHICH MAY BE SUPPLIED WITHIN THE FACTORY ' S BASIC QUOTA AND WHERE THERE IS NO AGREEMENT ON THIS POINT WITHIN THE TRADE , IS IT IN ACCORDANCE WITH THE COMMUNITY REGULATIONS ON SUGAR , IN PARTICULAR REGULATION ( EEC ) NO 741/75 OF THE COUNCIL OF 18 MARCH 1975 , FOR A MEMBER STATE TO DETERMINE THE ALLOCATION , OR IS IT A REQUIREMENT OF THE REGULATIONS THAT A MEMBER STATE CAN ONLY DETERMINE THE ALLOCATION WHERE CONDITIONS OTHER THAN THOSE EXPRESSLY STATED IN THE PREAMBLE TO REGULATION ( EEC ) NO 741/75 OF THE COUNCIL AND IN ARTICLE 1 ( 1 ) THEREOF ARE MET?

B . IF THE CONDITIONS ON WHICH A MEMBER STATE CAN LAY DOWN RULES FOR ALLOCATING THE BASIC QUOTA ARE MET AND AN UNFAIR BASIS FOR SUCH ALLOCATION HAS NOT BEEN ADOPTED , IS IT IN ACCORDANCE WITH THE COMMUNITY REGULATIONS ON SUGAR , IN PARTICULAR REGULATION ( EEC ) NO 741/75 OF THE COUNCIL , FOR THE MEMBER STATE TO MAKE PROVISION FOR AN ALLOCATION BETWEEN THE MEMBERS AND OTHER TRADITIONAL SUPPLIERS TO THE UNDERTAKING IN QUESTION EVEN THOUGH SUCH ALLOCATION MEANS THAT THE BEET WHICH THE MEMBERS OF THE CO-OPERATIVE ARE OBLIGED AND ENTITLED UNDER THE UNDERTAKING ' S STATUTES TO DELIVER TO THE FACTORY CANNOT ENTIRELY BE SUPPLIED WITHIN THE BASIC QUOTA ALONE?

' '

16THE TWO QUESTIONS MAY BE CONSIDERED TOGETHER .

17SINCE , AS HAS BEEN STATED , THE COMMON ORGANIZATION OF THE MARKET IN SUGAR COVERS RELATIONS BETWEEN SUGAR MANUFACTURERS AND BEET GROWERS , SUCH RELATIONS , IN SO FAR AS THEY SPECIFICALLY CONCERN SUGAR PRODUCTION , FALL EXCLUSIVELY WITHIN THE COMPETENCE OF THE COMMUNITY SO THAT THE MEMBER STATES ARE NO LONGER IN A POSITION TO ADOPT UNILATERAL MEASURES .

18IN VIEW OF POSSIBLE DIFFICULTIES IN THE CONCLUSION OF AGREEMENTS , REGULATION NO 741/75 IS CLEARLY INTENDED TO REMOVE THAT DISABILITY ON THE PART OF THE MEMBER STATES IN THE CASES DEFINED BY THE REGULATION SO THAT THE MEMBER STATES ARE HENCEFORTH ENTITLED UNDER COMMUNITY LAW TO INTERVENE ON THE BASIS OF THEIR OWN POWERS AND IN ACCORDANCE WITH THE PROCEDURES OF THEIR OWN LEGAL SYSTEMS .

19THE STATEMENT IN THE PREAMBLE TO THE REGULATION WHICH , FURTHERMORE , IS EXCEPTIONALLY SUCCINCT , TO THE EFFECT THAT THE MEMBER STATE CONCERNED MAY LAY DOWN SPECIAL RULES , TOGETHER WITH THE FACT THAT THE REGULATION WAS ADOPTED NOT IN THE FORM OF AN AMENDMENT EITHER TO BASIC REGULATION NO 3330/74 , IN PARTICULAR ARTICLE 6 THEREOF , OR TO REGULATION NO 206/68 BUT AS A MEASURE BASED SOLELY ON ARTICLE 43 OF THE TREATY MILITATE IN FAVOUR OF THE INTERPRETATION THAT THE REGULATION IS INTENDED MERELY TO EXPLAIN THAT THE COMMON ORGANIZATION OF THE MARKET DOES NOT PRECLUDE ACTION ON THE PART OF THE MEMBER STATES IN THE MATTER IN QUESTION .

20THIS INTERPRETATION IS CONFIRMED BY THE FACT THAT IN REGULATION NO 741/75 NO RULES OR INFORMATION ARE PROVIDED ON THE PRESCRIBED PROCEDURE , THE FORMS OR THE COMPETENT AUTHORITIES FOR THE ACTION CONTEMPLATED , SUCH AS WOULD BE EXPECTED IF A RESTRICTION WERE TO BE PLACED UPON THE FREEDOM TO CONTRACT , WHICH ON THE OTHER HAND WAS SCRUPULOUSLY PRESERVED BY REGULATION NO 206/68 .

21THE WORDING OF THE QUESTIONS APPEARS TO BE BASED ON THE IDEA THAT REGULATION NO 741/75 CONFERS POWERS UPON THE MEMBER STATES WHICH MUST BE EXERCISED ON CONDITIONS AND IN ACCORDANCE WITH PROCEDURES GOVERNED BY COMMUNITY LAW .

22WHILST IT IS TRUE THAT REGULATION NO 741/75 , IN EMPOWERING THE MEMBER STATES TO INTERVENE , CANNOT RELEASE THEM FROM THEIR DUTY TO OBSERVE THE PRINCIPLES AND GENERAL RULES OF THE COMMON AGRICULTURAL POLICY THE POSITION NEVERTHELESS REMAINS THAT IT CONSTITUTES A MERE ENABLING PROVISION SO FAR AS COMMUNITY LAW IS CONCERNED AND LEAVES A DETERMINATION OF THE CONDITIONS AND SPECIFIC PROCEDURES WHICH ARE NECESSARY FOR ACTION TO BE TAKEN TO THE LEGAL SYSTEM OF THE MEMBER STATE IN QUESTION .

23FROM THIS POINT OF VIEW THE SECOND PARAGRAPH OF ARTICLE 1 OF REGULATION NO 741/75 APPEARS AS A MERE EXTENSION OF THE POWER CONFERRED BY THE FIRST PARAGRAPH TO SITUATIONS IN WHICH THE DIFFICULTIES DO NOT CONCERN THE ALLOCATION AMONGST ' ' THE SELLERS OF BEET ' ' , BUT ALSO TO SITUATIONS , LIKE THAT WHICH IS AT THE ORIGIN OF THE DISPUTE IN THE MAIN ACTION , WHERE THE ALLOCATION MUST BE EFFECTED BETWEEN SELLERS OF BEET ON THE ONE HAND AND GROWERS WHO ARE MEMBERS OF A CO-OPERATIVE WHICH IS THE SUGAR MANUFACTURER ON THE OTHER HAND , WHICH WOULD NOT , ON A LITERAL READING , BE COVERED BY THE FIRST PARAGRAPH AS IT IS WORDED .

24IT FOLLOWS FROM WHAT HAS BEEN STATED CONCERNING THE MEANING OF THE REGULATION THAT THE SECOND PARAGRAPH IS NOT INTENDED TO LAY DOWN ANY COMMUNITY RULE AFFECTING THE LEGAL SITUATION OF SELLERS TO A CO-OPERATIVE WHO ARE NOT MEMBERS , AS AGAINST THOSE WHO ARE , BUT MUST BE INTERPRETED AS ABOLISHING THE COMMUNITY PROHIBITION ON THE ADOPTION BY THE MEMBER STATE CONCERNED IN ACCORDANCE WITH THE PROVISIONS OF ITS OWN LEGAL SYSTEM OF THE RULES AND DECISIONS NECESSARY TO PERMIT IT TO CARRY OUT AN ALLOCATION IN THE CASE REFERRED TO BY THE SAID REGULATION .

25IT IS CLEAR FROM THE FOREGOING THAT THE ANSWER TO THE QUESTIONS SUBMITTED MUST BE THAT ARTICLE 1 OF REGULATION ( EEC ) NO 741/75 OF THE COUNCIL OF 18 MARCH 1975 LAYING DOWN SPECIAL RULES FOR THE PURCHASE OF SUGAR-BEET ( OFFICIAL JOURNAL L 74 , P . 2 ) IS INTENDED TO EMPOWER THE MEMBER STATES HAVING REGARD TO IMPEDIMENTS WHICH MIGHT RESULT FROM COMMUNITY POWERS , TO PROCEED IN CONFORMITY WITH THEIR NATIONAL LAW TO ALLOCATE DELIVERY RIGHTS FOR BEET WITHIN THE BASIC QUOTA LIMITS OF THE SUGAR MANUFACTURER CONCERNED WHEN THE CONDITION SET OUT IN ARTICLE 1 OF THE REGULATION IS FULFILLED .

COSTS

26THE COSTS INCURRED BY THE DANISH GOVERNMENT AND THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE .

27AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , THE DECISION AS TO COSTS IS A MATTER FOR THAT COURT .

ON THOSE GROUNDS ,

THE COURT ,

IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE HOEJESTERET ON 28 JUNE 1978 , HEREBY RULES :

ARTICLE 1 OF REGULATION ( EEC ) NO 741/75 OF THE COUNCIL OF 18 MARCH 1975 LAYING DOWN SPECIAL RULES FOR THE PURCHASE OF SUGAR BEET IS INTENDED TO EMPOWER MEMBER STATES , HAVING REGARD TO IMPEDIMENTS WHICH MIGHT RESULT FROM COMMUNITY POWERS , TO PROCEED IN CONFORMITY WITH THEIR NATIONAL LAW TO ALLOCATE DELIVERY RIGHTS FOR BEET WITHIN THE BASIC QUOTA LIMITS OF THE SUGAR MANUFACTURER CONCERNED WHEN THE CONDITION SET OUT IN ARTICLE 1 OF THE REGULATION IS FULFILLED .