61976J0114

1 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - COMMUNITY ARRANGEMENTS - BURDEN OF COSTS - DISCRIMINATORY DISTRIBUTION BETWEEN THE VARIOUS AGRICULTURAL SECTORS - NOT PERMISSIBLE

( EEC TREATY , ARTICLE 39 AND SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ))

2 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - SKIMMED-MILK POWDER HELD BY INTERVENTION AGENCIES - COMPULSORY PURCHASE - COUNCIL REGULATION ( EEC ) NO 563/76 - INVALIDITY

1 . COMMUNITY ARRANGEMENTS WHICH IMPOSE A DISCRIMINATORY DISTRIBUTION OF THE BURDEN OF COSTS BETWEEN THE VARIOUS SECTORS OF AGRICULTURAL PRODUCTION CANNOT BE JUSTIFIED FOR THE PURPOSE OF ATTAINING THE OBJECTIVES OF THE COMMON AGRICULTURAL POLICY .

2 . COUNCIL REGULATION NO 563/76 OF 15 MARCH 1976 ON THE COMPULSORY PURCHASE OF SKIMMED-MILK POWDER HELD BY INTERVENTION AGENCIES FOR USE IN FEEDING-STUFFS IS NULL AND VOID .

IN CASE 114/76

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE LANDGERICHT OLDENBURG FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE IT BETWEEN

BELA-MUHLE JOSEF BERGMANN KG , LANGFORDEN ( GERMANY ),

AND

GROWS-FARM GMBH & CO . KG , LANGFORDEN ( GERMANY ),

ON THE VALIDITY OF COUNCIL REGULATION ( EEC ) NO 563/76 OF 15 MARCH 1976 ON THE COMPULSORY PURCHASE OF SKIMMED-MILK POWDER HELD BY INTERVENTION AGENCIES FOR USE IN FEEDING-STUFFS ( OJ L 67 , P . 18 ),

1 BY ORDER OF 8 SEPTEMBER 1976 , WHICH REACHED THE COURT ON 2 DECEMBER 1976 , THE LANDGERICHT OLDENBURG ASKED THE COURT UNDER ARTICLE 177 OF THE EEC TREATY FOR A RULING ON THE VALIDITY OF COUNCIL REGULATION ( EEC ) NO 563/76 OF 15 MARCH 1976 ON THE COMPULSORY PURCHASE OF SKIMMED-MILK POWDER HELD BY INTERVENTION AGENCIES FOR USE IN FEEDING-STUFFS ( OJ L 67 , P . 18 ). THE REFERENCE WAS MADE IN CONNEXION WITH CIVIL PROCEEDINGS CONCERNING THE PERFORMANCE OF A CONTRACT FOR DELIVERY OF FEEDING-STUFFS CONCLUDED BETWEEN A PRODUCER OF CONCENTRATED FEEDING-STUFFS , THE PLAINTIFF IN THE MAIN ACTION , AND THE PROPRIETOR OF A BATTERY HEN UNIT , THE DEFENDANT IN THE MAIN ACTION . IN ADDITION TO THE PRICE AGREED UNDER THE CONTRACT THE PLAINTIFF IN THE MAIN ACTION ASKED FOR PAYMENT OF A SUM EQUIVALENT TO THE CHARGE ARISING UNDER REGULATION ( EEC ) NO 563/76 THE VALIDITY OF WHICH IS , HOWEVER , CONTESTED BY THE DEFENDANT IN THE MAIN ACTION .

2 REGULATION ( EEC ) NO 563/76 WAS PROMULGATED AT A TIME WHEN THE STOCKS OF SKIMMED-MILK POWDER BOUGHT IN BY THE INTERVENTION AGENCIES PURSUANT TO REGULATION ( EEC ) NO 804/68 OF THE COUNCIL OF 27 JUNE 1968 ON THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS ( OJ ENGLISH SPECIAL EDITION 1968 , P . 176 ) HAD REACHED CONSIDERABLE PROPORTIONS AND WERE CONTINUING TO INCREASE DESPITE THE MEASURES ADOPTED BY THE COMMUNITY INSTITUTIONS TO CURB THE TENDENCY TOWARDS OVER-PRODUCTION OF MILK AND TO INCREASE THE SALE OF SKIMMED-MILK POWDER . THE SYSTEM ESTABLISHED BY REGULATION ( EEC ) NO 563/76 THE APPLICATION OF WHICH WAS NOT EXTENDED BEYOND THE END OF THE ORIGINAL PERIOD OF APPLICATION , WHICH EXPIRED ON 31 OCTOBER 1976 , WAS DESIGNED TO REDUCE STOCKS THROUGH THE INCREASED USE IN FEEDING-STUFFS OF THE PROTEIN CONTAINED IN SKIMMED-MILK POWDER . TO THIS END THE REGULATION MADE THE GRANT OF THE AIDS PROVIDED FOR CERTAIN VEGETABLE PROTEIN PRODUCTS AS WELL AS THE FREE CIRCULATION IN THE COMMUNITY OF CERTAIN IMPORTED ANIMAL FEED PRODUCTS SUBJECT TO THE OBLIGATION TO PURCHASE SPECIFIED QUANTITIES OF SKIMMED-MILK POWDER . IN ORDER TO ENSURE THAT THIS OBLIGATION WAS FULFILLED THE GRANT OF AID AND FREE CIRCULATION WERE SUBJECT TO THE PROVISION OF A SECURITY OR THE PRODUCTION , ON THE PRESCRIBED FORM , OF EVIDENCE OF THE PURCHASE AND OF THE DENATURING OF THE PRESCRIBED QUANTITIES OF SKIMMED-MILK POWDER .

3 UNDER ARTICLE 1 OF COMMISSION REGULATION ( EEC ) NO 753/76 OF 31 MARCH 1976 LAYING DOWN DETAILED RULES FOR THE SALE OF SKIMMED-MILK POWDER FOR USE IN ANIMAL FEED ( OJ L 88 , P . 1 ), SKIMMED-MILK POWDER HELD BY THE INTERVENTION AGENCIES WAS RESOLD BY THEM IN FULFILMENT OF THE OBLIGATION TO PURCHASE AT A PRICE OF 52.16 U.A . PER 100 KG MULTIPLIED BY A COEFFICIENT WHICH , IN THE CASE OF THE FEDERAL REPUBLIC OF GERMANY , AMOUNTED TO 0.8325 . THE DENATURING COSTS TO BE BORNE BY THE PURCHASER WERE BETWEEN 1 AND 3 U.A . PER 100 KG . DURING THE PERIOD WHEN REGULATION ( EEC ) NO 563/76 APPLIED , THE MARKET PRICE OF SOYA OIL CAKE , A VEGETABLE PRODUCT WITH A NUTRITIONAL VALUE COMPARABLE TO THAT OF SKIMMED-MILK POWDER FOR USE IN ANIMAL FEED OTHER THAN THAT FOR YOUNG CALVES , VARIED BETWEEN 13.30 AND 20.40 U.A . PER 100 KG , THE AVERAGE BEING ABOUT 18 U.A . PER 100 KG . THE COMPULSORY PURCHASE OF SKIMMED-MILK POWDER WAS , THEREFORE , IMPOSED AT A PRICE EQUAL TO ABOUT THREE TIMES ITS VALUE AS ANIMAL FEED . THE SECURITY , WHICH WAS RELEASED ONLY ON PRODUCTION OF PROOF OF THE PURCHASE OF A SPECIFIED QUANTITY OF POWDERED SKIMMED MILK , WAS FIXED AT SUCH AN AMOUNT THAT , IF IT WAS FORFEITED , ITS EFFECT ON THE PRICES OF FEEDING-STUFFS WAS SLIGHTLY MORE THAN THE INCREASE DUE TO THE PURCHASE OF POWDERED SKIMMED MILK .

4 ARTICLE 5 OF THE REGULATION LAID DOWN THAT , IN THE CASE OF CONTRACTS CONCLUDED BEFORE THE DATE OF ENTRY INTO FORCE OF THE REGULATION , THE BURDEN OF THE COSTS ARISING UNDER THE ARRANGEMENTS WAS TO BE BORNE BY THE SUCCESSIVE BUYERS OF THE PRODUCTS IN QUESTION . THE REGULATION DID NOT CONTAIN ANY SIMILAR PROVISION MAKING IT POSSIBLE FOR CONSUMERS OF FEEDING-STUFFS , SUCH AS BREEDERS OF POULTRY AND PIGS , TO INCORPORATE THE INCREASE IN THE PRICE OF THEIR PRODUCTS .

5 THE VALIDITY OF THESE ARRANGEMENTS HAS BEEN CONTESTED ON GROUNDS OF CONFLICT IN PARTICULAR WITH THE OBJECTIVES OF THE COMMON AGRICULTURAL POLICY AS DEFINED IN ARTICLE 39 OF THE TREATY , THE PROHIBITION OF DISCRIMINATION LAID DOWN IN THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) AND THE PRINCIPLE OF PROPORTIONALITY BETWEEN THE MEANS EMPLOYED AND THE END IN VIEW . BECAUSE OF THE CLOSE CONNEXION BETWEEN THESE GROUNDS OF COMPLAINT , IT WILL BE APPROPRIATE TO CONSIDER THEM TOGETHER .

6 UNDER ARTICLE 39 , THE OBJECTIVES OF THE COMMON AGRICULTURAL POLICY ARE TO BE THE RATIONAL DEVELOPMENT OF AGRICULTURAL PRODUCTION , THE ASSURANCE OF A FAIR STANDARD OF LIVING FOR THE WHOLE OF THE AGRICULTURAL COMMUNITY , THE STABILIZATION OF MARKETS AND THE AVAILABILITY OF SUPPLIES TO CONSUMERS AT REASONABLE PRICES . ALTHOUGH ARTICLE 39 THUS ENABLES THE COMMON AGRICULTURAL POLICY TO BE DEFINED IN TERMS OF A WIDE CHOICE OF MEASURES INVOLVING GUIDANCE OR INTERVENTION , THE FACT NEVERTHELESS REMAINS THAT THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) PROVIDES THAT THE COMMON ORGANIZATION OF THE AGRICULTURAL MARKETS SHALL BE LIMITED TO PURSUIT OF THE OBJECTIVES SET OUT IN ARTICLE 39 . FURTHERMORE , THE SAME SUBPARAGRAPH LAYS DOWN THAT THE COMMON ORGANIZATION OF THE MARKETS ' SHALL EXCLUDE ANY DISCRIMINATION BETWEEN PRODUCERS OR CONSUMERS WITHIN THE COMMUNITY ' . THUS THE STATEMENT OF THE OBJECTIVES CONTAINED IN ARTICLE 39 , TAKEN TOGETHER WITH THE RULES IN THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ), SUPPLIES BOTH POSITIVE AND NEGATIVE CRITERIA BY WHICH THE LEGALITY OF THE MEASURES ADOPTED IN THIS MATTER MAY BE AP- PRAISED .

7 THE ARRANGEMENTS MADE BY REGULATION ( EEC ) NO 563/76 CONSTITUTED A TEMPORARY MEASURE INTENDED TO COUNTERACT THE CONSEQUENCES OF A CHRONIC IMBALANCE IN THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS . A FEATURE OF THESE ARRANGEMENTS WAS THE IMPOSITION NOT ONLY ON PRODUCERS OF MILK AND MILK PRODUCTS BUT ALSO , AND MORE ESPECIALLY , ON PRODUCERS IN OTHER AGRICULTURAL SECTORS OF A FINANCIAL BURDEN WHICH TOOK THE FORM , FIRST , OF THE COMPULSORY PURCHASE OF CERTAIN QUANTITIES OF AN ANIMAL FEED PRODUCT AND , SECONDLY , OF THE FIXING OF A PURCHASE PRICE FOR THAT PRODUCT AT A LEVEL THREE TIMES HIGHER THAN THAT OF THE SUBSTANCES WHICH IT REPLACED . THE OBLIGATION TO PURCHASE AT SUCH A DISPROPORTIONATE PRICE CONSTITUTED A DISCRIMINATORY DISTRIBUTION OF THE BURDEN OF COSTS BETWEEN THE VARIOUS AGRICULTURAL SECTORS . NOR , MOREOVER , WAS SUCH AN OBLIGATION NECESSARY IN ORDER TO ATTAIN THE OBJECTIVE IN VIEW , NAMELY , THE DISPOSAL OF STOCKS OF SKIMMED-MILK POWDER . IT COULD NOT THEREFORE BE JUSTIFIED FOR THE PURPOSES OF ATTAINING THE OBJECTIVES OF THE COMMON AGRICULTURAL POLICY .

8 IN CONSEQUENCE , THE ANSWER MUST BE THAT COUNCIL REGULATION ( EEC ) NO 563/76 OF 15 MARCH 1976 IS NULL AND VOID .

COSTS

9 THE COSTS INCURRED BY THE COUNCIL AND THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE AND AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , THE COSTS ARE A MATTER FOR THAT COURT .

ON THOSE GROUNDS ,

THE COURT ,

IN ANSWER TO THE QUESTION REFERRED TO IT BY THE LANDGERICHT OLDENBURG BY ORDER OF 8 SEPTEMBER 1976 , HEREBY RULES :

COUNCIL REGULATION ( EEC ) NO 563/76 OF 15 MARCH 1976 ON THE COMPULSORY PURCHASE OF SKIMMED-MILK POWDER HELD BY INTERVENTION AGENCIES FOR USE IN FEEDING-STUFFS IS NULL AND VOID .