61984J0281

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1 . ACTION FOR DAMAGES - IMMINENT AND FORESEEABLE DAMAGE - FINDING OF THE COMMUNITY' S LIABILITY - ACTION BEFORE THE COURT - ADMISSIBILITY

( EEC TREATY, ART . 215 )

2 . AGRICULTURE - MONETARY MEASURES - ALTERATION OF THE REPRESENTATIVE RATES - REDUCTION OF THE PROCESSING INDUSTRY' S PROFIT MARGIN - ADMISSIBILITY - INFRINGEMENT OF PROPERTY RIGHTS - NONE

( EEC TREATY, ART . 39 ( 1 ) ( B ); COUNCIL REGULATION NO 855/84; COMMISSION REGULATION NO 2677/84 )

3 . COMMUNITY LAW - PRINCIPLES - PROPORTIONALITY - CRITERIA

4 . AGRICULTURE - MONETARY MEASURES - ALTERATION IN REPRESENTATIVE RATES - TERMS OF APPLICATION IN THE SUGAR SECTOR - LOSSES SUFFERED BY SUGAR UNDERTAKINGS IN A MEMBER STATE - LIABILITY OF THE COMMUNITY - NONE

( EEC TREATY, ART . 215, SECOND PARAGRAPH; COUNCIL REGULATION NO 855/84; COMMISSION REGULATION NO 2677/84 )

1 . ARTICLE 215 OF THE TREATY DOES NOT PREVENT THE COURT FROM BEING ASKED TO DECLARE THE COMMUNITY LIABLE FOR IMMINENT DAMAGE FORESEEABLE WITH SUFFICIENT CERTAINTY EVEN IF THE DAMAGE CANNOT YET BE PRECISELY ASSESSED .

2 . THE LAWFULNESS OF REGULATIONS NOS 855/84 AND 2677/84 CANNOT BE CALLED IN QUESTION WITH REGARD TO ARTICLE 39 ( 1 ) OF THE TREATY SINCE ARTICLE 39 ( 1 ) ( B ) CANNOT BE INTERPRETED AS GUARANTEEING THE PROCESSING INDUSTRY A CERTAIN PROFIT MARGIN AND THE OTHER OBJECTIVES REFERRED TO IN ARTICLE 39 HAVE NOT BEEN JEOPARDIZED BY THE MODIFICATION OF THE REPRESENTATIVE RATES BY THE CONTESTED REGULATIONS .

NEITHER THE MONETARY COMPENSATORY AMOUNTS NOR THE REPRESENTATIVE RATES ARE INTENDED TO GUARANTEE THAT EACH INDIVIDUAL TRADER WILL RECEIVE FOR HIS PRODUCTS A PRICE THAT, EXPRESSED IN THE NATIONAL CURRENCY, DOES NOT VARY, SO THAT A REDUCTION OF THE VALUE IN NATIONAL CURRENCY OF THE STOCKS HELD BY TRADERS FOLLOWING A REVALUATION OF THE REPRESENTATIVE RATES INTENDED TO APPROXIMATE THOSE RATES TO THE CENTRAL RATES CANNOT IN ITSELF CONSTITUTE INTERFERENCE WITH THE PROPERTY RIGHTS OF THOSE TRADERS .

3 . IN ORDER TO CONSIDER WHETHER A PROVISION OF COMMUNITY LAW IS IN CONFORMITY WITH THE PRINCIPLE OF PROPORTIONALITY IT IS NECESSARY TO CHECK WHETHER THE MEASURES IMPOSED BY THE PROVISION ARE APPROPRIATE FOR ACHIEVING THE INTENDED OBJECTIVE AND WHETHER THEY EXCEED THE LIMITS OF WHAT IS NECESSARY TO THAT END .

4 . THE COMMUNITY IS NOT LIABLE TO SUGAR-PROCESSING UNDERTAKINGS IN A MEMBER STATE FOR LOSSES THEY SUFFER AS A RESULT OF THE ALTERATION OF THE REPRESENTATIVE RATES BY REGULATIONS NOS 855/84 AND 2677/84, SINCE THE ALTERATION AND THE TERMS OF ITS IMPLEMENTATION WERE NOT UNFORESEEABLE, MET THE GENERAL INTEREST AND CONTAINED TRANSITIONAL MEASURES INTENDED TO MITIGATE THE EFFECTS FOR THE SAID UNDERTAKINGS .

IN CASE 281/84

1 . ZUCKERFABRIK BEDBURG AG, BEDBURG, IN THE PERSON OF H . BUENGER AND E.*KOBLITZ, MEMBERS OF ITS BOARD OF DIRECTORS,

2 . LEHRTER ZUCKER AG, LEHRTE, IN THE PERSON OF H . SCHUUR AND E .* A.*BODE, MEMBERS OF ITS BOARD OF DIRECTORS,

3 . LIPPE-WESER ZUCKER AG, LAGE, IN THE PERSON OF K . MEYER ZU HOELSEN AND H . VON MENGERSEN, MEMBERS OF ITS BOARD OF DIRECTORS,

REPRESENTED BY DERINGER, TESSIN, HERRMANN AND SEDEMUND, RECHTSANWAELTE ENTITLED TO PRACTISE BEFORE THE OBERLANDESGERICHT, COLOGNE, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF LOESCH AND WOLTER, 8 RUE ZITHE,

APPLICANTS,

V

EUROPEAN ECONOMIC COMMUNITY, REPRESENTED BY

1 . COUNCIL OF THE EUROPEAN COMMUNITIES, REPRESENTED BY A.*SACCHETTINI, DIRECTOR OF ITS LEGAL DEPARTMENT, ACTING AS AGENT, ASSISTED BY A .* BRAUTIGAM, PRINCIPAL ADMINISTRATOR, A MEMBER OF ITS LEGAL DEPARTMENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF J . KAESER, MANAGER OF THE LEGAL DIRECTORATE OF THE EUROPEAN INVESTMENT BANK, 100 *BOULEVARD K . ADENAUER,

2 . COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY ITS LEGAL ADVISER, P . KARPENSTEIN, ACTING AS AGENT, ASSISTED BY PROFESSOR M . HILF, OF BIELEFELD, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF G . KREMLIS, A MEMBER OF ITS LEGAL DEPARTMENT, JEAN MONNET BUILDING, KIRCHBERG,

DEFENDANT,

APPLICATION UNDER ARTICLE 178 AND THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY,

THE COURT

COMPOSED OF : LORD MACKENZIE STUART, PRESIDENT, C . KAKOURIS, T .* F.*O' HIGGINS AND F . SCHOCKWEILER ( PRESIDENTS OF CHAMBERS ), G . BOSCO, T . KOOPMANS, O . DUE, K . BAHLMANN AND R . JOLIET, JUDGES,

ADVOCATE GENERAL : SIR GORDON SLYNN

REGISTRAR : P . HEIM

HAVING REGARD TO THE REPORT FOR THE HEARING AND FURTHER TO THE HEARING ON 2 JULY 1986 AT WHICH THE APPLICANTS WERE REPRESENTED BY A . DERINGER, THE COUNCIL OF THE EUROPEAN COMMUNITIES BY A . BRAUTIGAM AND THE COMMISSION BY P . KARPENSTEIN AND PROFESSOR HILF,

UPON HEARING THE OPINION OF THE ADVOCATE GENERAL DELIVERED AT THE SITTING ON 16 DECEMBER 1986,

GIVES THE FOLLOWING

JUDGMENT

1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 27 NOVEMBER 1984 ZUCKERFABRIK BEDBURG AG, LEHRTER ZUCKER AG AND LIPPE-WESER ZUCKER AG, SUGAR MANUFACTURERS IN THE FEDERAL REPUBLIC OF GERMANY, BROUGHT AN ACTION UNDER ARTICLE 178 AND THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY CLAIMING COMPENSATION FROM THE EUROPEAN ECONOMIC COMMUNITY FOR THE LOSS WHICH THEY HAD SUFFERED AS A RESULT OF COUNCIL REGULATION NO 855/84 OF 31 MARCH 1984 ON THE CALCULATION AND THE DISMANTLEMENT OF THE MONETARY COMPENSATORY AMOUNTS APPLICABLE TO CERTAIN AGRICULTURAL PRODUCTS ( OFFICIAL JOURNAL 1984, L*90, P.*1 ) AND COMMISSION REGULATION NO 2677/84 OF 20 SEPTEMBER 1984 ON TRANSITIONAL MEASURES IN READINESS FOR THE REVALUATION OF THE REPRESENTATIVE RATE FOR THE GERMAN MARK ON 1 JANUARY 1985 ( OFFICIAL JOURNAL 1984, L*253, P.*31 ).

2 IN ORDER TO OVERCOME THE DIFFICULTIES CAUSED BY MONETARY COMPENSATORY AMOUNTS AND AS PART OF THE EFFORTS TO REINTEGRATE THE AGRICULTURAL SECTOR INTO THE GENERAL ECONOMY, THE COUNCIL ADOPTED REGULATION NO 855/84 WHICH REVALUED THE REPRESENTATIVE RATES OF THE GERMAN MARK AND DUTCH GUILDER FROM 1 JANUARY 1985 BRINGING THEM CLOSER TO THE CENTRAL RATES AND MADE SOME CHANGES TO THE METHOD OF CALCULATING MONETARY COMPENSATORY AMOUNTS .

3 IN THE FEDERAL REPUBLIC OF GERMANY THE NEW CONVERSION RATES LED TO A REDUCTION IN SUPPORT PRICES FOR AGRICULTURAL PRODUCTS EXPRESSED IN NATIONAL CURRENCY AND CONSEQUENTLY TO A REDUCTION IN AGRICULTURAL INCOME . TO ALLEVIATE THE SITUATION THE GERMAN GOVERNMENT WAS AUTHORIZED UNDER ARTICLE 3 OF REGULATION NO 855/84 TO GRANT GERMAN FARMERS A SPECIAL AID PARTIALLY FINANCED ON A DEGRESSIVE BASIS BY THE COMMUNITY . FOLLOWING A REQUEST BY THE GERMAN GOVERNMENT THE COUNCIL, BY DECISION 84/361 OF 30*JUNE 1984 CONCERNING AN AID GRANTED TO FARMERS IN THE FEDERAL REPUBLIC OF GERMANY ( OFFICIAL JOURNAL 1984, L*185, P.*41 ), FIXED THE MAXIMUM AMOUNT OF AID AT 5% OF THE PRICE EXCLUSIVE OF VALUE-ADDED TAX PAID BY THE PURCHASER OF THE AGRICULTURAL PRODUCT FOR A PERIOD STARTING ON 1 JULY 1984, THAT IS TO SAY SIX MONTHS BEFORE THE REVALUATION OF THE REPRESENTATIVE RATE OF THE GERMAN MARK WAS TO TAKE EFFECT ON 1 JANUARY 1985 .

4 ARTICLE 7 OF REGULATION NO 855/84 GAVE THE COMMISSION POWER TO ADOPT TRANSITIONAL MEASURES INTER ALIA NECESSARY FOR :

"...

AVOIDING DISTURBANCES FOLLOWING THE REVALUATION OF THE REPRESENTATIVE RATES OF THE GERMAN MARK AND THE DUTCH GUILDER AS AT 1*JANUARY 1985 ".

5 BY TWO IDENTICAL LETTERS OF 9 AUGUST 1984 SENT TO THE COUNCIL AND THE COMMISSION, THE THREE APPLICANTS, ZUCKERFABRIK BEDBURG AG, LEHRTER ZUCKER AG AND LIPPE-WESER ZUCKER AG, REQUESTED THE COMMUNITY UNDER THE SECOND PARAGRAPH OF ARTICLE 215 OF THE TREATY TO MAKE GOOD THE DAMAGE WHICH THEY HAD ALREADY SUFFERED AND WOULD SUFFER AS A RESULT OF THE PRICE REDUCTION CONSEQUENT ON THE REVALUATION OF THE REPRESENTATIVE RATES . IN THAT RESPECT THE APPLICANTS STATED, INTER ALIA, THAT WHEREAS FOR OTHER MEMBER STATES THE NEW RATES APPLIED AT DIFFERENT DATES DEPENDING ON THE PRODUCTS, IN THE FEDERAL REPUBLIC OF GERMANY AND THE NETHERLANDS THE SAME RATES ENTERED INTO FORCE FOR ALL PRODUCTS ON 1*JANUARY 1985, THAT IS IN THE MIDDLE OF THE SUGAR MARKETING YEAR . THE APPLICANTS, ALONG WITH ALL OTHER GERMAN SUGAR MANUFACTURERS, CONSEQUENTLY HAD TO PAY BEET FARMERS FOR THE 1984 HARVEST AT THE OLD PRICE IN GERMAN MARKS WHICH WAS HIGHER BECAUSE OF THE REPRESENTATIVE RATE IN FORCE UNTIL THEN, WHEREAS FOR SUGAR MARKETED FROM 1 JANUARY 1985 THEY OBTAINED A LOWER PRICE IN GERMAN MARKS AS A RESULT OF THE NEW CONVERSION RATES . THAT PRICE REDUCTION ENTAILED A LOSS FOR THEM OF 5.15%, THAT IS THE DIFFERENCE BETWEEN THE OLD AND NEW INTERVENTION PRICE, WHICH AMOUNTS IN PRACTICE TO A DEPRECIATION OF THEIR ENTIRE SUGAR STOCK STILL AVAILABLE AT THAT DATE .

6 THE COUNCIL AND THE COMMISSION REJECTED THE APPLICANTS' REQUEST BY LETTERS DATED RESPECTIVELY 25 SEPTEMBER AND 1 OCTOBER 1984, BOTH REFERRING TO THE TRANSITIONAL MEASURES WHICH HAD IN THE MEANTIME BEEN ADOPTED BY THE COMMISSION UNDER ARTICLE 7 OF REGULATION NO 855/84, NAMELY REGULATION NO 2677/84 WHICH WAS PUBLISHED IN THE OFFICIAL JOURNAL OF 21 SEPTEMBER 1984 AND ENTERED INTO FORCE THE SAME DAY .

7 ARTICLES 1, 2 AND 3 OF REGULATION NO 2677/84 CONTAIN CERTAIN SPECIFIC TRANSITIONAL PROVISIONS FOR THE CEREALS, SUGAR AND POTATO STARCH SECTORS IN THE FEDERAL REPUBLIC OF GERMANY . THUS APPLICATION OF THE NEW REVALUED REPRESENTATIVE RATE WAS BROUGHT FORWARD TO 21 SEPTEMBER 1984 FOR INTERVENTION PURCHASES OF WHITE AND RAW SUGAR ( ARTICLE 2 ). AS REGARDS THE MINIMUM PRICES THAT HAD TO BE PAID FOR SUGARBEET BY SUGAR MANUFACTURERS PURSUANT TO COUNCIL REGULATION NO 1785/81 OF 30 JUNE 1981 ON THE COMMON ORGANIZATION OF THE MARKETS IN THE SUGAR SECTOR ( OFFICIAL JOURNAL 1981, L*177, P.*4 ), ARTICLE 3 ( 1 ) OF REGULATION NO 2677/84 PROVIDED THAT A SPECIAL CONVERSION RATE LYING BETWEEN THE OLD AND NEW RATES AND WEIGHTED ON THE BASIS OF THE PERIODS IN WHICH THE MANUFACTURERS BUY THE RAW MATERIAL AND MARKET THEIR FINAL PRODUCT SHOULD APPLY FOR THE ENTIRE 1984/85 MARKETING YEAR .

8 REFERENCE IS MADE TO THE REPORT FOR THE HEARING FOR A FULL ACCOUNT OF THE COMMUNITY PROVISIONS AT ISSUE, THE ARGUMENTS OF THE PARTIES AND THE FACTS ADDUCED BY THEM WHICH ARE MENTIONED OR DISCUSSED HEREINAFTER ONLY IN SO FAR AS IS NECESSARY FOR THE REASONING OF THE COURT .

9 IN THE APPLICANTS' VIEW, THE COMMUNITY IS LIABLE BECAUSE THE PROVISIONS OF REGULATIONS NOS 855/84 AND 2677/84 ARE UNLAWFUL . WITH REGARD TO REGULATION NO 855/84 IN PARTICULAR THE APPLICANTS MAKE THE FOLLOWING ALLEGATIONS :

( I ) INFRINGEMENT OF REGULATION NO 1785/81,

( II ) INFRINGEMENT OF THE RIGHT TO PROPERTY,

( III ) INFRINGEMENT OF THE PRINCIPLE OF NON-DISCRIMINATION,

( IV ) INFRINGEMENT OF THE GENERAL PRINCIPLE OF EQUALITY, AND

( V ) INFRINGEMENT OF THE PRINCIPLE OF PROPORTIONALITY .

TO DEMONSTRATE THE UNLAWFULNESS OF REGULATION NO 2677/84 THE APPLICANTS MAKE THE FOLLOWING SUBMISSIONS :

( A ) THE COMMISSION HAD NO POWER UNDER ARTICLE 7 OF REGULATION NO 855/84 TO ADOPT REGULATION NO 2677/84;

( B ) INFRINGEMENT OF THE PRINCIPLE OF NON-RETROACTIVITY IN THAT REGULATION NO 2677/84 PROVIDED THAT THE MINIMUM PRICE PAYABLE FOR SUGARBEET IN THE FEDERAL REPUBLIC OF GERMANY SHOULD BE REDUCED FOR THE WHOLE OF THE 1984/85 MARKETING YEAR .

ADMISSIBILITY

10 THE COUNCIL AND THE COMMISSION CALL IN QUESTION THE ADMISSIBILITY OF THE ACTION .

11 IN THE FIRST PLACE THE TWO INSTITUTIONS CONSIDER THAT THE PROCEDURE UNDER ARTICLE 177 OF THE TREATY GIVES THE APPLICANTS SUFFICIENT LEGAL PROTECTION AND PRECLUDES THEM FROM BRINGING AN ACTION FOR DAMAGES UNDER THE SECOND PARAGRAPH OF ARTICLE 215 . THE APPLICANTS COULD HAVE BROUGHT AN ACTION BEFORE A NATIONAL COURT IN RESPECT OF A CONSIGNMENT OF SUGAR OFFERED TO INTERVENTION CLAIMING PAYMENT OF THE OLD INTERVENTION PRICE AND CHALLENGED THE VALIDITY OF THE DATE THE NEW REVALUED RATE TOOK EFFECT . IF THE MATTER HAD BEEN REFERRED TO THE COURT OF JUSTICE FOR A PRELIMINARY RULING AND IT HAD DECLARED REGULATIONS NOS 855/84 AND 2677/84 TO BE INVALID, THE OLD RATES WOULD HAVE AUTOMATICALLY RE-APPLIED WITHOUT PRIOR INTERVENTION BY THE COMMUNITY LEGISLATURE BEING NECESSARY .

12 THAT ARGUMENT CANNOT BE ACCEPTED . THE CLAIMS MADE BY THE APPLICANTS UNDER ARTICLE 178 AND THE SECOND PARAGRAPH OF ARTICLE 215 OF THE TREATY ARE NOT CLAIMS FOR SUMS DUE BUT ACTIONS FOR COMPENSATION FOR LOSS RESULTING FROM THE ALLEGED UNLAWFULNESS OF THE REGULATIONS AT ISSUE . PURSUANT TO ARTICLE 178, IT IS THE COURT OF JUSTICE, TO THE EXCLUSION OF ANY NATIONAL COURT, WHICH HAS JURISDICTION TO DETERMINE THE COMMUNITY' S LIABILITY UNDER THE SECOND PARAGRAPH OF ARTICLE 215 OF THE TREATY .

13 IN THE SECOND PLACE THE COMMISSION CONSIDERS THAT THE APPLICATION IS PREMATURE IN THAT IT RELATES TO FUTURE LOSS, THE LIKELIHOOD OF WHICH HAS NOT BEEN ESTABLISHED . THE LOSS HAS BEEN CALCULATED IN THE APPLICATION SOLELY ON THE BASIS OF THE INTERVENTION PRICE, WHEREAS REFERENCE TO THE MARKET PRICE MAY SHOW THAT THERE IS NO LOSS AT ALL . THE APPLICANTS HAVE NOT EVEN STATED THE PRICES THEY ACTUALLY OBTAINED ON THE MARKET FROM SEPTEMBER TO NOVEMBER 1984 . TO ACCEPT THE ADMISSIBILITY OF SUCH A PREVENTATIVE ACTION AS SOON AS THE DAMAGE BEGAN TO MATERIALIZE WOULD ADVERSELY AFFECT THE RIGHTS OF THE DEFENCE .

14 THE COURT HAS CONSISTENTLY HELD ( SEE JOINED CASES 56 TO 66/74, KAMPFFMEYER AND OTHERS V COMMISSION AND COUNCIL (( 1976 )) ECR 711 ), THAT ARTICLE 215 OF THE TREATY DOES NOT PREVENT THE COURT FROM BEING ASKED TO DECLARE THE COMMUNITY LIABLE FOR IMMINENT DAMAGE FORESEEABLE WITH SUFFICIENT CERTAINTY EVEN IF THE DAMAGE CANNOT YET BE PRECISELY ASSESSED . IN THE PRESENT CASE THE LOSS FOR WHICH THE APPLICANTS SEEK COMPENSATION IS THE DEPRECIATION OF THEIR STOCK WHICH WAS GOING TO OCCUR BY 1 JANUARY 1985 AT THE LATEST . WHEN THE ACTION WAS BROUGHT, THE LOSS WAS ACTUALLY IMMINENT AND FORESEEABLE, THOUGH IT COULD BE ASSESSED ONLY ON THE ASSUMPTION THAT THE REDUCTION IN SUPPORT PRICES WOULD BRING ABOUT A CORRESPONDING REDUCTION IN MARKET PRICES . DURING THE WRITTEN PROCEDURE THE APPLICANTS RECALCULATED THE LOSS ACCORDING TO THE SAME CALCULATION METHOD BUT ON THE BASIS OF THE ACTUAL MARKET PRICES . THAT METHOD DID NOT ADVERSELY AFFECT THE RIGHTS OF THE DEFENCE .

15 IN THOSE CIRCUMSTANCES THERE IS NOTHING TO PREVENT THE COURT FROM CONSIDERING THE SUBSTANCE OF THE ACTION .

SUBSTANCE

16 BEFORE CONSIDERING THE APPLICANTS' SUBMISSIONS IT IS APPROPRIATE TO RESTATE THE PRINCIPLES WHICH ACCORDING TO THE CASE-LAW OF THE COURT GOVERN THE COMMUNITY' S NON-CONTRACTUAL LIABILITY .

17 ACCORDING TO ESTABLISHED CASE-LAW OF THE COURT ( SEE PRIMARILY CASE 4/69 LUETTICKE V COMMISSION (( 1971 )) ECR 325 ) BY VIRTUE OF THE SECOND PARAGRAPH OF ARTICLE 215 AND THE GENERAL PRINCIPLES TO WHICH THIS PROVISION REFERS, THE LIABILITY OF THE COMMUNITY PRESUPPOSES THE EXISTENCE OF A SET OF CIRCUMSTANCES COMPRISING THE UNLAWFULNESS OF THE CONDUCT ALLEGED AGAINST THE INSTITUTIONS, ACTUAL DAMAGE AND THE EXISTENCE OF A CAUSAL LINK BETWEEN THE CONDUCT AND THE ALLEGED DAMAGE .

18 THE APPLICANTS ALLEGE THAT THEIR LOSS HAS BEEN CAUSED BY LEGISLATIVE MEASURES . WITH REGARD TO SUCH MEASURES THE COURT HAS CONSISTENTLY HELD ( SEE PRIMARILY CASE 5/71 ZUCKERFABRIK SCHOEPPENSTEDT V COUNCIL (( 1971 )) ECR 975 ) THAT THE COMMUNITY IS NOT LIABLE UNLESS A SUFFICIENTLY FLAGRANT VIOLATION OF A SUPERIOR RULE OF LAW FOR THE PROTECTION OF THE INDIVIDUAL HAS OCCURRED .

19 THE PRESENT ACTION MUST BE JUDGED IN THE LIGHT OF THOSE REQUIREMENTS . IT IS FIRST OF ALL NECESSARY TO CONSIDER WHETHER THERE IS UNLAWFULNESS CORRESPONDING TO THE ABOVEMENTIONED CRITERIA SUCH AS TO VITIATE THE ALTERATION BY THE CONTESTED COUNCIL AND COMMISSION REGULATIONS OF THE REPRESENTATIVE RATES FOR THE SUGAR SECTOR .

20 IN SO FAR AS THE APPLICANTS SUBMIT THAT REGULATION NO 2677/84 IS UNLAWFUL BECAUSE THE COMMISSION IN ADOPTING IT DID NOT MAKE CORRECT USE OF ITS POWER UNDER ARTICLE 7 OF REGULATION NO 855/84 AND ALSO BECAUSE REGULATION NO 2677/84 INFRINGES THE PRINCIPLE OF NON-RETROACTIVITY BY AFFECTING CONTRACTS BETWEEN SUGARBEET FARMERS AND THE PROCESSING INDUSTRY WHICH HAVE ALREADY BEEN CONCLUDED AND IN PART ALREADY PERFORMED, IT MUST BE OBSERVED THAT THE COURT IN ITS JUDGMENT TODAY IN CASE 278/84 FEDERAL REPUBLIC OF GERMANY V COMMISSION A COPY OF WHICH IS ANNEXED TO THIS JUDGMENT, DISMISSED AN ARGUMENT SIMILAR TO THAT RELIED ON BY THE APPLICANTS . IN THE PRESENT PROCEEDINGS THEREFORE IT IS NECESSARY TO CONSIDER ONLY THE LAWFULNESS OF REGULATION NO 855/84, AS SUPPLEMENTED BY THE PROVISIONS OF REGULATION NO 2677/84 .

A . THE ALLEGED INFRINGEMENT OF REGULATION NO 1785/81

21 THE APPLICANTS SUBMIT THAT REGULATION NO 855/84 INFRINGES THE PRINCIPLES LAID DOWN IN ARTICLE 39 OF THE TREATY AS SPECIFICALLY IMPLEMENTED FOR THE SUGAR SECTOR BY REGULATION NO 1785/81 IN THAT IT CONTINUES TO REQUIRE THAT SUGAR MANUFACTURERS SHOULD PAY THE MINIMUM PRICE FOR BEET WHILE REDUCING THE INTERVENTION PRICE DURING THE MARKETING YEAR . HOWEVER, THAT PRICE MARGIN IS ESSENTIAL TO ENABLE THE SUGAR INDUSTRY TO CONTINUE TO OFFER BEET FARMERS THE PRICE GUARANTEE ENVISAGED IN REGULATION NO 1785/81 .

22 IT MUST FIRST OF ALL BE NOTED THAT REGULATION NO 1785/81 ON THE COMMON ORGANIZATION OF THE MARKETS IN THE SUGAR SECTOR DOES NOT REPRESENT A RULE OF LAW WHICH HAS PRECEDENCE OVER REGULATION NO 855/84 . TO ESTABLISH THAT THE PRINCIPLES REFERRED TO WERE INFRINGED IT IS THEREFORE NECESSARY TO SHOW THAT REGULATION NO 855/84 INFRINGES ARTICLE 39 OF THE TREATY .

23 ACCORDING TO ARTICLE 39 ( 1 ) OF THE TREATY THE OBJECTIVES OF THE COMMON AGRICULTURAL POLICY ARE TO ENSURE THE RATIONAL DEVELOPMENT OF AGRICULTURAL PRODUCTION ( SUBPARAGRAPH ( A )*), TO ENSURE A FAIR STANDARD OF LIVING FOR THE AGRICULTURAL COMMUNITY ( SUBPARAGRAPH ( B )*), TO STABILIZE MARKETS ( SUBPARAGRAPH ( C )*), TO ASSURE THE AVAILABILITY OF SUPPLIES ( SUBPARAGRAPH ( D )*) AND TO ENSURE THAT SUPPLIES REACH CONSUMERS AT REASONABLE PRICES ( SUBPARAGRAPH ( E )*). ARTICLE 39 ( 1 ) ( B ) CANNOT BE INTERPRETED AS GUARANTEEING THE PROCESSING INDUSTRY A CERTAIN PROFIT MARGIN AND THE APPLICANTS HAVE NOT ESTABLISHED THAT THE OTHER OBJECTIVES OF ARTICLE 39 HAVE BEEN JEOPARDIZED BY THE MODIFICATION OF THE REPRESENTATIVE RATES BROUGHT ABOUT BY THE CONTESTED REGULATIONS .

24 IT FOLLOWS THAT THE REFERENCE TO ARTICLE 39 OF THE TREATY DOES NOT SUFFICE TO CALL IN QUESTION THE LAWFULNESS OF THOSE REGULATIONS AND ACCORDINGLY THE FIRST SUBMISSION MUST BE DISMISSED .

B . RIGHT OF PROPERTY

25 THE APPLICANTS SUBMIT THAT REGULATION NO 855/84 INFRINGES THE RIGHT OF PROPERTY IN SO FAR AS IT REDUCES THE VALUE OF THE SUGAR STOCKS THEY HELD ON 1 JANUARY 1985 . BECAUSE OF THE OBLIGATION TO BUY QUANTITIES OF SUGARBEET AT PRICES FIXED IN ADVANCE AND THE FACT THAT THE REDUCTION IN THE SUPPORT PRICES INVOLVED A REDUCTION IN THE SALE PRICE OF THE SUGAR PRODUCED FROM THOSE BEETS THE APPLICANTS WERE UNABLE TO AVOID THE LOSSES .

26 IT MUST BE NOTED THAT REGULATION NO 855/84, WHICH REVALUES THE REPRESENTATIVE RATES AND ALTERS THE CALCULATION OF THE MONETARY COMPENSATORY AMOUNTS, FORMS PART OF THE GENERAL COMMUNITY POLICY INTENDED TO DEAL WITH DIFFICULTIES WHICH MONETARY INSTABILITY MAY CREATE FOR THE ORDERLY FUNCTIONING OF THE COMMON ORGANIZATIONS OF THE MARKETS . THE ESTABLISHMENT OF MONETARY COMPENSATORY AMOUNTS AND REPRESENTATIVE RATES IS INTENDED TO ENSURE THE MAINTENANCE OF NORMAL PATTERNS OF TRADE IN SPITE OF THE IMPACT OF DIVERGENT MONETARY POLICIES WHICH THE MEMBER STATES HAVE NOT YET BEEN ABLE TO COORDINATE . ON THE OTHER HAND, NEITHER THE MONETARY COMPENSATORY AMOUNTS NOR THE REPRESENTATIVE RATES ARE INTENDED TO GUARANTEE THAT EACH INDIVIDUAL TRADER WILL RECEIVE FOR HIS PRODUCTS A PRICE THAT, EXPRESSED IN THE NATIONAL CURRENCY, DOES NOT VARY . IT FOLLOWS THAT A REDUCTION OF THE VALUE IN NATIONAL CURRENCY OF THE STOCKS OF TRADERS FOLLOWING A REVALUATION OF THE REPRESENTATIVE RATES INTENDED TO APPROXIMATE THOSE RATES TO THE CENTRAL RATES CANNOT IN ITSELF CONSTITUTE INTERFERENCE WITH THE PROPERTY RIGHTS OF THOSE TRADERS .

27 IN SO FAR AS THE APPLICANTS INVOKE THEIR PARTICULAR SITUATION AS PROCESSORS ON THE SUGAR MARKET, WHICH IS A SPECIFIC SECTOR IN THAT THE APPLICANTS WERE REQUIRED TO BUY CERTAIN QUANTITIES OF BEET FROM THE 1984 HARVEST FROM BEET FARMERS AT A PRICE CALCULATED ACCORDING TO THE REPRESENTATIVE RATE APPLICABLE WHEN THE CONTRACTS WERE CONCLUDED WHEREAS THEY HAD TO SELL THE LARGER PART OF THE SUGAR FROM THAT HARVEST AT A PRICE REDUCED BY REASON OF THE NEW REPRESENTATIVE RATE, IT MUST BE NOTED THAT REGULATION NO 2677/84 TOOK ACCOUNT OF THAT PARTICULAR SITUATION . AS REGARDS THE MINIMUM PRICES FOR SUGARBEET, REGULATION NO 2677/84 PROVIDED THAT A WEIGHTED CONVERSION RATE, CALCULATED ON THE ASSUMPTION THAT THE PROCESSING INDUSTRY WOULD BE ABLE TO SELL BEFORE 1 JANUARY 1985 SOME 25% OF ITS PRODUCTION FROM THE CURRENT HARVEST AT BASICALLY UNCHANGED PRICES, WOULD APPLY FOR THE WHOLE OF THE 1984/85 MARKETING YEAR . THE FIGURES PRODUCED BY THE APPLICANTS THEMSELVES AND BY THE GERMAN GOVERNMENT SHOW THAT THAT ASSUMPTION PROVED TRUE . IT THUS APPEARS THAT COMMISSION REGULATION NO 2677/84 TOOK ACCOUNT OF THE PARTICULAR SITUATION OF THE SUGAR PROCESSING INDUSTRY IN THE FEDERAL REPUBLIC OF GERMANY SO THAT ITS POSITION IS NOT TO BE BASICALLY DISTINGUISHED FROM THAT OF ANY OTHER TRADERS OR PROCESSORS IN THE AGRICULTURAL SECTOR .

28 IN CONSEQUENCE THE SECOND SUBMISSION MUST ALSO BE DISMISSED .

C . THE PRINCIPLE OF NON-DISCRIMINATION

29 THE APPLICANTS STATE THAT THE NEW RATE ENTERED INTO FORCE AT THE BEGINNING OF THE SUGAR MARKETING YEAR ON 1 JULY 1984 IN THE MEMBER STATES WITH A DEVALUED CURRENCY, THAT IS TO SAY ALL THE MEMBER STATES EXCEPT THE FEDERAL REPUBLIC OF GERMANY AND THE NETHERLANDS, AND MANUFACTURERS IN THOSE MEMBER STATES WERE ABLE TO PASS ON THE NEW HIGHER MINIMUM PRICE OF SUGARBEET TO THE CONSUMER . THE APPLICANTS CLAIM THAT THE DIFFERENT TREATMENT GIVEN TO THEM CONSTITUTES DISCRIMINATION IN CONTRAVENTION OF THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE TREATY .

30 IN SO FAR AS THAT SUBMISSION RESTS ON THE FACT THAT THE REVALUATION OF THE CONVERSION RATES FOR MEMBER STATES WITH A STRONG CURRENCY DID NOT TAKE EFFECT AT THE BEGINNING OF THE MARKETING YEAR, THAT IS TO SAY ON 1*JULY 1984, BUT ONLY ON 1 JANUARY 1985, WHEN STOCKS WERE MUCH GREATER, IT MUST BE OBSERVED THAT, ACCORDING TO THE CALCULATIONS PRODUCED BY THE APPLICANTS THEMSELVES IN ANSWER TO QUESTIONS FROM THE COURT, IF THE NEW RATE HAD ENTERED INTO FORCE ON 1 JULY 1984 THEIR LOSSES WOULD HAVE BEEN CONSIDERABLY GREATER . IN SO FAR AS THE SUBMISSION IS BASED ON THE FACT THAT THE APPLICANTS WERE NOT ABLE TO PASS ON THE REDUCTION IN THEIR SALE PRICE, IT MUST BE OBSERVED THAT REGULATION NO 2677/84 DID IN FACT ALLOW THE REDUCTION TO BE PASSED ON BY REDUCING THE MINIMUM PRICES OF SUGARBEET FOR THE WHOLE OF THE MARKETING YEAR AT ISSUE .

31 IT FOLLOWS THAT THE ENTRY INTO FORCE OF REGULATION NO 855/84 ON 1*JANUARY 1985 DID NOT DISCRIMINATE AGAINST THE APPLICANTS IN COMPARISON WITH THEIR COMPETITORS IN MEMBER STATES WHERE THE CURRENCY WAS DEVALUED AND, CONSEQUENTLY, THE SUBMISSION OF INFRINGEMENT OF ARTICLE 40 OF THE TREATY MUST BE REJECTED .

D . THE GENERAL PRINCIPLE OF EQUALITY

32 THE APPLICANTS CLAIM THAT REGULATION NO 855/84 ALSO INFRINGES THE GENERAL PRINCIPLE OF EQUALITY WHEREBY BURDENS WHICH ARE ENVISAGED OR CONSIDERED NECESSARY UNDER COMMUNITY LAW SHOULD BE DISTRIBUTED EQUALLY AMONG ALL TRADERS . THE BURDEN IMPOSED ON GERMAN SUGAR UNDERTAKINGS AS A RESULT OF THE PRICE REDUCTION WAS CERTAINLY NOT IN THEIR INTEREST BUT IN THE INTEREST OF THE GENERAL POLICY OF THE COMMUNITY AND WAS NOT, ACCORDING TO THE APPLICANTS, DISTRIBUTED FAIRLY WITHIN THE SUGAR SECTOR .

33 THE OBJECTIVE OF ARTICLE 3 ( 1 ) OF REGULATION NO 2677/84 WAS TO ENSURE FAIR TREATMENT OF SUGAR MANUFACTURERS IN RELATION TO BEET FARMERS . THE LOSSES OF BEET FARMERS HAD ALREADY BEEN OFFSET BY COUNCIL DECISION 84/361 WHICH PROVIDED FOR AID FOR SUCH FARMERS WITH EFFECT FROM 1*JULY 1984 . TO BALANCE MATTERS OUT, REGULATION NO 2677/84 PROVIDED THAT THE CONVERSION RATE FOR THE CALCULATION OF THE MINIMUM PRICES OF SUGARBEET SHOULD BE ADJUSTED FOR THE WHOLE OF THE 1984/85 MARKETING YEAR SO THAT THE BURDEN OF THE PRICE REDUCTION EXPRESSED IN NATIONAL CURRENCY FROM 1*JANUARY 1985 WAS NOT BORNE BY THE SUGAR MANUFACTURERS ALONE . THE APPLICANTS HAVE NOT SHOWN THAT THE DISTRIBUTION OF THE BURDEN BY REGULATION NO 2677/84 WAS UNFAIR .

34 IN CONSEQUENCE, THE APPLICANTS' FOURTH SUBMISSION MUST BE REJECTED .

E . THE PRINCIPLE OF PROPORTIONALITY

35 THE APPLICANTS CONSIDER THAT REGULATION NO 855/84 INFRINGES THE PRINCIPLE OF PROPORTIONALITY IN THAT THE CHOICE OF 1*JANUARY 1985 AS THE DATE ON WHICH THE MONETARY MEASURES CAME INTO EFFECT AND THE BURDEN WHICH THAT CHOICE PLACED ON THE APPLICANTS WERE NOT ESSENTIAL TO ACHIEVE THE OBJECTIVE OF APPROXIMATING THE REPRESENTATIVE AND CENTRAL RATES AND THE BURDEN GOES FAR BEYOND WHAT IS ACCEPTABLE . THE CHOICE OF THE DATE IN QUESTION WAS A POLITICAL COMPROMISE AND THE DAMAGE CAUSED TO SUGAR PRODUCERS COULD HAVE BEEN AVOIDED, OR AT LEAST CONSIDERABLY REDUCED, IF THE COUNCIL HAD CHOSEN ANOTHER DATE SUCH AS 1 JULY 1985 WHEN THE "NORMAL" INCREASE IN SUPPORT PRICES IN ECU WOULD HAVE BEEN SUCH AS TO ABSORB LOSSES CAUSED BY THE NEW REPRESENTATIVE RATE .

36 IN ORDER TO CONSIDER WHETHER A PROVISION OF COMMUNITY LAW IS IN CONFORMITY WITH THE PRINCIPLE OF PROPORTIONALITY IT IS NECESSARY TO CHECK WHETHER THE MEASURES IMPOSED BY THE PROVISION ARE APPROPRIATE FOR ACHIEVING THE INTENDED OBJECTIVE AND WHETHER THEY EXCEED THE LIMITS OF WHAT IS NECESSARY TO THAT END ( SEE MOST RECENTLY THE JUDGMENT OF 18 SEPTEMBER 1986 IN CASE 116/82 COMMISSION V FEDERAL REPUBLIC OF GERMANY (( 1986 )) ECR 2519 ).

37 IN THAT RESPECT IT IS WORTH RECALLING THAT REGULATION NO 855/84 WAS ADOPTED AS PART OF THE EFFORTS TO BRING THE AGRICULTURAL SECTOR BACK TO THE ECONOMIC REALITY OF THE MARKETS BY PROGRESSIVELY REDUCING THE ARTIFICIAL DIFFERENCES BETWEEN THE REPRESENTATIVE AND THE CENTRAL RATES AND THUS BETWEEN THE PRICES OF AGRICULTURAL PRODUCTS EXPRESSED IN NATIONAL CURRENCIES . IT IS COMMON GROUND THAT REGULATION NO 855/84 IS APPROPRIATE FOR ACHIEVING THAT OBJECTIVE .

38 IN ITS JUDGMENT OF 8 JUNE 1977 ( CASE 97/76 MERKUR V COMMISSION (( 1977 )) ECR 1063 ) THE COURT HELD IN RELATION TO AN ALTERATION IN MONETARY COMPENSATORY AMOUNTS THAT THE LIABILITY OF THE COMMUNITY FOR INJURY SUFFERED BY TRADERS AS A RESULT OF THE ADOPTION OF SUCH LEGISLATIVE MEASURES WOULD BE INCURRED ONLY IF, IN THE ABSENCE OF ANY OVERRIDING PUBLIC INTEREST TO THE CONTRARY, THE COMMISSION WERE TO ABOLISH OR MODIFY THE MONETARY COMPENSATORY AMOUNTS APPLICABLE IN A SPECIFIC SECTOR WITH IMMEDIATE EFFECT, WITHOUT WARNING, AND IN A MANNER NOT FORESEEABLE BY A PRUDENT TRADER WITHOUT ANY APPROPRIATE TRANSITIONAL MEASURES . APART FROM THE FACT THAT THE MEASURES AT ISSUE IN THE PRESENT CASE ARE PART OF THE CONTINUED EFFORTS TO BRING THE COMMUNITY' S AGRICULTURAL POLICY CLOSER TO MONETARY REALITY AND THAT THEY WERE THUS NOT UNFORESEEABLE, IT MUST BE POINTED OUT THAT IT WOULD HAVE BEEN CONTRARY TO THE GENERAL INTEREST TO HAVE SET BACK THE ENTRY INTO EFFECT OF THE MEASURES ADOPTED ON 31 MARCH 1984 UNTIL 1 JULY 1985 IN ORDER TO MINIMIZE THE UNFAVOURABLE CONSEQUENCES FOR CERTAIN TRADERS; FURTHERMORE THOSE CONSEQUENCES WERE CONSIDERABLY MITIGATED IF NOT WHOLLY ELIMINATED BY THE TRANSITIONAL PROVISIONS OF ARTICLE 3 ( 1 ) OF REGULATION NO 2677/84 . IN THOSE CIRCUMSTANCES IT DOES NOT APPEAR TO THE COURT THAT THE MEASURES AT ISSUE EXCEED THE LIMITS OF WHAT IS APPROPRIATE AND NECESSARY TO ACHIEVE THE DESIRED AIM .

39 IT FOLLOWS THAT THE APPLICANTS' LAST SUBMISSION IS ALSO UNFOUNDED .

40 IN THOSE CIRCUMSTANCES THE ACTION MUST BE DISMISSED WITHOUT IT BEING NECESSARY TO CONSIDER THE OTHER CONDITIONS WHICH HAVE TO BE SATISFIED BEFORE THERE CAN BE ANY LIABILITY ON THE PART OF THE COMMUNITY TOWARDS THE APPLICANTS .

COSTS

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

On those grounds,

THE COURT

hereby :

( 1 ) Dismisses the application;

( 2 ) Orders the applicants jointly and severally to pay the costs .