1.

Are the following circumstances and measures contrary to Articles 30 and 34 or 38 to 47 of the EEC Treaty, Articles 42 and 60 of the Act of Accession or the regulation on the common organization of the market in fruit and vegetables?

2.

If the first question is answered, at least partially, in the affirmative, is that answer affected by the fact that the majority of the growers have declared themselves in favour of the continuation of the Development Council?

3.

Do the provisions of Community law with which the measures described in the first question may possibly be incompatible have direct effect so as to confer on individuals rights upon which they may rely before the national courts?

If so,

4.

If any of the measures described in the first question is incompatible with Article 30 or Article 34 of the Treaty, did that incompatibility arise on 1 January 1975, the date mentioned in Article 42 of the Act of Accession or on 1 February 1973, the date referred to in Article 60 thereof?

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The compatibility with Community law of the advertising for British apples and pears,

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The compatibility with Community law of the action taken by the Council regarding quality standards.

1.

At the hearing, the Development Council expressed serious doubts as to whether such an examination was appropriate. It pointed out that that question, which had been raised for the first time in the proceedings before this Court, was entirely new and unconnected with any of the matters contemplated by the national court. It takes the view that to give an answer on that point would jeopardize the balance between the prerogatives of the national courts on the one hand and of the Court of Justice on the other, in the matter of references for preliminary rulings. It considers that to do so might endanger the rights of the parties to the main proceedings, who would have been able to submit observations or at least more wide-ranging observations on those questions before the national court and before this Court if they had been raised at a stage in the proceedings prior to the submission of written observations by a Community institution and a Member State, which are not parties to the dispute.

Those remarks, which are indeed relevant, would have convinced me if, in addition, the question of the classification of the contested charges as aids had seemed to me to be decisive for resolving the dispute.

But that does not seem to me to be the case. It is clear from the judgments of this Court of 29 November 1978 ( 4 ) and of 26 June 1979 ( 5 ) that, in a dispute bearing upon an agricultural sector governed by a common organization of the market, the problem which arises must first be considered from that point of view. By virtue of Article 38 (2) of the Treaty, the general rules for the establishment of the common market must be regarded as subordinate to the specific provisions adopted in the context of the common agricultural policy. The latter provisions include, for the reasons already set out in the Pigs Marketing Board judgment, ( 6 ) the provisions of the Treaty relating to the removal of tariff and trade barriers to intra-Community trade. ( 7 ) It is necessary to accord priority to an examination of the rules of agricultural law particularly in relation to the provisions of the chapter of the Treaty relating to the rules on competition, that is to say Articles 85 to 94 in their entirety. By virtue of Article 31 of Regulation No 1035/72 on the common organization of the market in fruit and vegetables recourse by a Member State to the provisions of Articles 92 to 94 on aids cannot take priority over the provisions of the regulation on the organization of that sector of the market. ( 8 )

In these circumstances, I shall deal with the question of the compatibility with Articles 92 to 94 of the Treaty of the charge levied on growers only summarily and as a secondary consideration, in case the Court does not agree with my analysis.

2.

This question assumed great importance in the oral procedure, probably because of the position adopted by the Commission. It considers that the activities of the Development Council contravene Community law.

Its view is based on the incontestable fact that services such as those provided by the Development Council constitute aid within the meaning of Article 92 of the Treaty, even if they are financed by a charge levied on the growers. In the Court's judgment of 22 March 1977, ( 9 ) it was held in respect of measures similar to those involved in this case, that “A measure adopted by the public authority and favouring certain undertakings or products does not lose the character of a gratuitous advantage by the fact that it is wholly or partially financed by contributions imposed by the public authority and levied on the undertakings concerned”. ( 10 ) The services rendered by the Development Council to the growers of apples and pears therefore certainly constitute aid within the meaning of Article 92 of the Treaty.

It is also apparent from the documents before the Court that the maximum amount of the levy has been increased on three occasions since the United Kingdom's accession to the Community, namely on 1 April 1975 and on 7 May and 18 December 1980. I share the view expressed by Mr Advocate General Warner in his Opinion in the Pigs and Bacon Commission case ( 11 ) that an increase of a parafiscal charge intended to finance an aid may constitute an alteration to aid within the meaning of Article 93 (3). The Commission states that it was not informed in advance of the alteration in any of the three cases, contrary to the requirements of Article 93 (3). As a result, in the Commission's view, that aid has been illegal since 1 April 1975, the date on which the rate was altered for the first time.

That view is vigorously contested by the United Kingdom Government. It considers that it has at all times kept the Commission informed of the Development Council's activities and in particular of changes in the amount of the charge, in accordance with the provisions of the Treaty on State aids. In that connection it produced copy extracts from the inventory of aids granted in the United Kingdom in the fruit and vegetables sector, which it has notified to the Commission. The extracts produced relate to the years 1973, 1974, 1976, 1979, 1980 and 1981. It may be seen that the amount of the aid is in fact mentioned in each extract. ( 12 ) But the Commission correctly states in reply that that information is of a kind different from the notification required by Article 93 (3) of the Treaty — it is provided after the aid is put into effect, whereas Article 93 (3) requires prior notification.

However, that consideration does not seem to me to be decisive with regard to the dispute. I consider that the procedure laid down in Article 93 (3) was not applicable in this case. Whilst I share Mr Advocate General Warner's view that “there is ... no reason to interpret Article 93 (3) otherwise than strictly”, ( 13 ) I also agree with Mr Advocate General Trabucchi's view that “adjustments of minor importance provided for in the basic system” are exempted from the requirement of notification. ( 14 ) In this case, I consider that the change in the amount of the aid, which, according to the United Kingdom, was made only in order to take account of inflation, must be treated as secondary, or indeed negligible.

1.

In this case, it is incontestable that the campaigns in question are intended to enable British growers to recover their share of the market. ( 15 ) Certain documents in the file clearly show that their share has decreased in recent years, to the advantage of growers in other member countries of the Community (in particular France) and even growers in nonmember countries (South Africa, New Zealand).

Thus, and in view of the extremely broad terms in which the case-law of the Court defines the concept of a measure having an effect equivalent to quantitative restrictions on imports, such campaigns might be regarded as contrary to Article 30 of the Treaty. It would then be the responsibility of the court making the reference to establish whether the conditions laid down in the judgments of this Court are actually satisfied with regard to the promotional activities of the Development Council.

But it seems to me to be difficult to assert that the contested activity of the Development Council in fact consists of the “establishment of a national practice, introduced by the ... government and prosecuted with its assistance, the potential effect of which on imports from other Member States is comparable to that resulting from government measures of a binding nature”. ( 16 ) In fact, by contrast with the Irish Goods Council, the Apple and Pear Development Council has not received public grants to cover its advertising campaigns, the aims and broad outlines of which have not been defined by the United Kingdom Government. ( 17 )

2.

The Development Council's annual reports show that it has undertaken promotional activities for certain varieties of fruit. I refer to the action taken to promote Cox and Bramley apples. ( 18 )

It is necessary to assess the compatibility of such activities with Regulation No 1035/72 on the common organization of the market in fruit and vegetables and with Article 40 (3) of the Treaty.

1.

It is not in doubt that the constitution of the Development Council to which the national court refers again in the first subquestion is in no way incompatible with Community law.

I should make clear that the expression “Constitution of the Council” refers to the members of the Development Council (growers, employees, independent members and persons having special knowledge of matters relating to marketing or distribution) who are appointed by the Minister. ( 21 )

The same applies to other activities actually carried out by the Development Council, such as market surveys and, on a very modest scale, scientific research or the promotion thereof.

It seems clear that the Development Council has never exercised and still does not exercise the functions listed in Schedule I to the 1966 and 1980 Orders.

2.

The obligation to register (second subquestion submitted by the national court) merely constitutes in my opinion a means of ensuring collection of the compulsory charge referred to in the fourth subquestion. It appears necessary to oblige growers to register with the Development Council so as to make possible the effective collection of the charge which they must pay. It does not seem to me that making noncompliance with that obligation a specific criminal offence is sufficient to make that obligation separate from the collection of the charge.

3.

Likewise, the Development Council's entitlement to require growers to furnish returns and information on their business and the fact that noncompliance with that obligation is made a criminal offence do not seem to me to be contrary to any rule or principle of Community law.

4.

On the other hand, the matter of appraising the lawfulness of the annual compulsory charge paid by growers to the Development Council to enable it to cover the costs of its activities is more complex.

I must emphasize that I shall confine myself to giving my opinion on the legality of the charge in itself and not in its capacity as a means of enabling activities on the part of the Development Council which might be incompatible with Community law to be financed. If the national court finds that the activities carried out with regard both to advertising and to quality standards are incompatible with Community law, that finding of incompatibility must of course extend to the charge which finances them.

I can say without hesitation that the charge, being a measure of a pecuniary nature, cannot be analysed in the light of Article 30 et seq. of the Treaty. ( 22 )

It is also clear from the case-law of this Court that the charge cannot be viewed as a charge having an effect equivalent to customs duties on imports or exports which are prohibited by Articles 13 and 16 of the Treaty respectively, because it is not imposed on apples and pears by reason of a crossing of an intra-Community frontier. ( 23 )

It still remains to examine the compatibility of the charge with the rules on the common organization of the markets. In its judgment of 10 March 1981 ( 24 ) the Court held that a charge to be borne by producers and levied on the value of certain agricultural products falling within a common organization of the market is not, in principle, incompatible with the rules of that common organization unless it had “the effect of impeding the proper functioning of the machinery established as part of the relevant common organizations for the formation of common prices and to regulate market supplies”. ( 25 ) In this case, it seems clear to me that the charge has no such effects. But I must add that, as I have already said, certain of the activities financed by it may possibly have such effects.

5.

Finally, as regards the last subquestion submitted by the British court, it seems to me to be logical to exempt very small growers from the obligations described in the foregoing subquestions. It may be assumed that growers with less than two hectares of land planted with apple or pear trees or fewer than 50 apple or pear trees do not market their production or do so only to an extremely limited extent.

1.

The court asks whether the rules of Community law which may have been infringed by the Development Council have direct effect so as to confer upon individuals rights enforceable in the courts of a Member State.

In answering the first question, I have considered the possibility that certain of the Development Council's activities may be incompatible on the one hand with the rules on the common organization of the market in fruit and vegetables and on the other hand with Article 40 (3) of the Treaty.

The direct effect of the rules on the common organization of the markets derives from the fact that they form part of a regulation which, by virtue of Article 189 of the Treaty, is “directly applicable in all Member States”. ( 26 )

Within the framework of the markets in fruit and vegetables, the direct effect' of Article 40 (3) derives from its implementation in Regulation No 1035/72. ( 27 )

2.

It is also incontestable that if it were ascertained that the charge was intended for the financing of activities which are incompatible with those provisions, growers would be able to rely upon that fact as a complete defence to any action to recover the charge. ( 28 )

3.

The direct effect of the provisions which may have been infringed can also, in principle, serve as a ground for claiming restitution of the annual charges paid by the growers. Such a claim for restitution must be limited to the portion of the charge used for financing activities contrary to Community law. It is for the national court to determine on that basis, and in accordance with the procedures laid down by its national law, how that restitution ought to take place. ( 29 )

4.

The national court then asks whether a claim for restitution of the charges extends to the charges paid before promulgation of the judgment giving the preliminary ruling or whether it is limited to such payments as may be made thereafter.

5.

Finally, the national court asks whether, in deciding whether to order restitution of any charges, the court of the Member State is entitled to take into account the fact that the money raised by the charges has been used for purposes from which the grower has or might have derived a benefit.

The case-law of the Court is also wellestablished on this point. The Court has held that “There is nothing from the point of view of Community law to prevent national courts from taking account, in accordance with their national law, of the fact that it has been possible for charges unduly levied to be incorporated in the prices of the undertaking liable for the charge and to be passed on to purchasers ( 33 ).” The Court has even stated specifically “that the protection of rights guaranteed in the matter by the Community legal order [the rights which the national courts are obliged to safeguard] does not require an order for the recovery of charges improperly levied to be granted in conditions such as would involve an unjustified enrichment of those entitled”. ( 34 )

It seems to me that that solution may be applied to the cases referred to by the national court where a charge has been used for purposes from which those who have paid it may benefit.

I.

II.

If the measures in question are incompatible with Community law, neither the consent of a majority of growers nor, a fortiori, consultation with other interested parties has the effect of remedying that incompatibility.

III.

Article 40 (3) of the Treaty and Regulation No 1035/72 of the Council have direct effect so as to confer upon individuals rights enforceable in the national courts:

IV.

If any of the Development Council's activities proves to be contrary to Article 30 of the Treaty, as implemented by Regulation No 1035/72, that incompatibility should be regarded as having commenced on 1 February 1973, by virtue of Article 60 (1) of the Act of Accession.