27 June 2019 (*1)

(Reference for a preliminary ruling — Additional levy in the milk and milk products sector — Regulation (EEC) No 3950/92 — Second subparagraph of Article 2(1) — Establishment of the producers’ contribution to the payment of the additional levy due — Reallocation of unused reference quantities — National measure reallocating unused quantities on the basis of objective priority criteria)

In Case C‑348/18,

REQUEST for a preliminary ruling under Article 267 TFEU from the Consiglio di Stato (Council of State, Italy), made by decision of 22 February 2018, received at the Court on 29 May 2018, in the proceedings

Azienda Agricola Barausse Antonio e Gabriele — Società semplice

Agenzia per le Erogazioni in Agricoltura (AGEA),

intervening parties:

Comitato Spontaneo Produttori Latte (COSPLAT),

Società Agricola Galleana — Società semplice,

VS and Others,

THE COURT (Seventh Chamber),

composed of T. von Danwitz, President of the Chamber, A. Vajda and A. Kumin (Rapporteur), Judges,

Advocate General: M. Szpunar,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

–Azienda Agricola Barausse Antonio e Gabriele — Società semplice, by M. Aldegheri and E. Ermondi, avvocati,

–the Italian Government, by G. Palmieri, acting as Agent, and by P. Gentili, avvocato dello Stato,

–the European Commission, by X.A. Lewis and D. Bianchi and by F. Moro, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

1This request for a preliminary ruling concerns the interpretation of Article 2(1) of Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and milk products sector (OJ 1992 L 405, p. 1), as amended by Council Regulation (EC) No 1256/1999 of 17 May 1999 (OJ 1999 L 160, p. 73) (‘Regulation No 3950/92’).

2The request has been made in proceedings between Azienda Agricola Barausse Antonio e Gabriele — Società semplice and l’Agenzia per le Erogazioni in Agricoltura (AGEA) (Agricultural Payments Agency, Italy) concerning the equalling-out of milk quotas for the milk and milk products marketing period from 1 April 2000 to 31 March 2001.

Legal context

European Union law

Regulation No 3950/92

3The first, third, sixth and seventh recitals of Regulation No 3950/92 state:

‘Whereas, pursuant to Council Regulation (EEC) No 856/84 of 31 March 1984 amending Regulation (EEC) No 804/68 on the common organisation of the market in milk and milk products (OJ 1984 L 90, p. 10), an additional levy scheme was introduced from 2 April 1984 in the said sector; whereas the purpose of this scheme, introduced for nine years and due to expire of 31 March 1993, was to reduce the imbalance between supply and demand on the milk and milk-products market and the resulting structural surpluses; whereas the scheme remains necessary in the future in order to achieve a better market balance; whereas it should therefore continue to be applied for seven further consecutive 12-month periods starting on 1 April 1993;

…

Whereas the method adopted in 1984, consisting of the application of a levy to quantities of milk collected or sold for direct consumption above a certain guarantee threshold, must be maintained; whereas the said threshold is expressed for each Member State by a guaranteed total quantity which may not be exceeded by the sum of the individually allocated quantities for both deliveries and sales for direct consumption; …

…

Whereas if any of the total guaranteed quantities is overrun, the consequence for the Member State is that the producers who contributed to the overrun must pay the levy; …

Whereas, in order to keep the management of the scheme sufficiently flexible, provision should be made for individual overruns to be equalled out over all the individual reference quantities of the same type within the territory of a Member State; whereas in the case of deliveries, which constitute nearly all the quantities marketed, the need to ensure that the levy is fully effective throughout the Community justifies, in principle, continuing to allow Member States the choice between two methods of equalling out overruns of individual reference quantities, bearing in mind the variety of milk production and collection structures; whereas, in this connection, Member States should be authorised not to reallocate unused reference quantities at the end of a period, whether nationally or between purchasers, and to use the amount collected in excess of the levy due for funding national restructuring programmes and/or to refund it to producers of certain categories or producers who find themselves in an exceptional situation.’

4 Article 1 of Regulation No 3950/92 provides:

‘For eight new consecutive periods of 12 months commencing on 1 April 2000, an additional levy shall be payable by producers of cow’s milk on quantities of milk or milk equivalent delivered to a purchaser or sold directly for consumption during the 12-month period in question in excess of a quantity to be determined.

The levy shall be 115% of the target price for milk.’

5 Article 2 of that regulation provides:

‘1. The levy shall be payable on all quantities of milk or milk equivalent marketed during the 12-month period in question in excess of the relevant quantity referred to in Article 3. It shall be shared between the producers who contributed to the overrun.

In accordance with a decision of the Member State, the contribution of producers towards the levy payable shall be established, after the unused reference quantities have been reallocated or not, either at the level of the purchaser, in the light of the overrun remaining after unused reference quantities have been allocated in proportion to the reference quantities of each producer, or at national level, in the light of the overrun in the reference quantity of each individual producer.

…

6 Article 10 of the same regulation provides that the levy shall be considered as intervention to stabilise agricultural markets and shall be used to finance expenditure in the milk sector.

Regulation (EEC) No 536/93

7 The sixth recital of Commission Regulation (EEC) No 536/93 of 9 March 1993 laying down detailed rules on the application of the additional levy on milk and milk products (OJ 1993 L 57, p. 12) states:

‘Whereas pursuant to Article 2(4) of Regulation [No 3950/92] the Commission is responsible for laying down criteria for determining which priority categories of producer are to benefit from reimbursement of the levy where the Member State has decided not to fully reallocate unused quantities in its territory; whereas a Member State may only be authorised to use other criteria, in agreement with the Commission, in the event that the criteria laid down by the Commission cannot be fully applied in that Member State.’

8 Article 3 of Regulation No 536/93 provides:

‘1. At the end of each of the periods referred to in Article 1 of Regulation [No 3950/92], the purchaser shall establish a statement for each producer showing, opposite the producer’s reference quantity and the representative fat content of his production, the quantity and fat content of the milk and/or milk equivalent which he has delivered during the period.

…

…’

9 According to Article 5(1) of Regulation No 536/93:

‘1. Where appropriate, Member States shall determine the priority categories of producers as referred to in Article 2(4) of Regulation [No 3950/92] on the basis of one or more of the following objective criteria, in order of priority:

(a)formal acknowledgement by the competent authority of the Member State that all or part of the levy has been wrongly charged;

(b)the geographical location of the holding, and primarily mountain areas as defined in Article 3(3) of Council Directive 75/268/EEC [of 28 April 1975 on mountain and hill farming and farming in certain less-favoured areas (OJ 1975 L 128, p. 1)];

(c)the maximum stocking density on the holding for the purposes of extensive livestock production;

(d)the amount by which the individual reference quantity is exceeded;

(e)the volume of the producer’s reference quantity.

Where the financial resources available for a given period are not used up after the abovementioned criteria have been applied, the Member State may adopt other objective criteria with the agreement of the Commission.’

Regulation (EC) No 1788/2003

10Regulation No 3950/92 was repealed and replaced with effect from 1 April 2004 by Council Regulation (EC) No 1788/2003 of 29 September 2003 establishing a levy in the milk and milk products sector (OJ 2003 L 270, p. 123), which was itself repealed and replaced, with effect from 1 April 2008, by Council Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) (OJ 2007 L 299, p. 1).

11Under recitals 2 and 14 of Regulation No 1788/2003:

(2)‘(2) In order both to benefit from the lessons learned and to simplify and clarify the scheme, Regulation [No 3950/92] should be repealed and the rules governing the extended scheme should be reorganised and clarified.

…

(14)In order to ensure that administration of the scheme remains sufficiently flexible, the Member States should be authorised to reallocate unused reference quantities at the end of a period, either nationally or among purchasers.’

12According to Article 10(3) of that Regulation:

‘Each producer’s contribution to payment of the levy shall be established by decision of the Member State, after any unused part of the national reference quantity allocated to deliveries has or has not been re-allocated, in proportion to the individual reference quantities of each producer or according to objective criteria to be set by the Member States:

(a)either at national level on the basis of the amount by which each producer’s reference quantity has been exceeded,

(b)or firstly at the level of the purchaser and thereafter at national level where appropriate.’

Italian law

13Under Article 1(8) of decreto-legge n. 43, recante disposizioni urgenti per il settore lattierocaseario (Decree-Law No 43 on emergency provisions for the milk sector) of 1 March 1999 (GURI No 50 of 2 March 1999), converted into law, with amendments, as the legge ordinaria n. 118 (Ordinary Law No 118) of 27 April 1999 (GURI No 100 of 30 April 1999) (‘Decree-Law No 43/1999’):

‘National compensation shall be awarded for the periods 1995-1996, 1996-1997, 1997-1998 and 1998-1999, according to the following criteria and in the following order:

(a)in favour of producers who hold a quota in mountain areas, in accordance with [Directive 75/268];

(b)in favour of producers who hold an A quota and a B quota and where an order has been made to reduce the B quota, up to the limit of the reduced quantity;

(c)in favour of producers who hold a quota and who are situated in less-favoured areas, in accordance with [Directive 75/268], and in areas falling within Objective 1 under Council Regulation (EEC) No 2081/93 of 20 July 1993 [amending Regulation (EEC) No 2052/88 on the tasks of the Structural Funds and their effectiveness and on coordination of their activities between themselves and with the operations of the European Investment Bank and the other existing financial instruments (OJ 1993 L 193, p. 5)];

(d)in favour of producers who hold an A quota exclusively and who have exceeded their quota, up to a limit of five per cent of that quota;

(e)in favour of all other producers who hold a quota;

(e-bis)in favour of all other producers.’

14Article 1(5) of decreto-legge n. 8, recante disposizioni urgenti per la ripartizione dell’aumento comunitario del quantitativo globale di latte e regolazione provvisoria del settore lattiero-caseario (Decree-Law No 8 on emergency provisions for the allocation of the community-level increase in the overall quantity of milk and the provisional regulation of the milk sector) of 4 February 2000 (GURI No 30 of 7 February 2000), converted into law, with amendments, as legge n. 79 (Law No 79) of 7 April 2000 (GURI No 82 of 7 April 2000) (‘Decree-Law No 8/2000’) extended the application of the criteria referred to in Article 1(8) of Decree-Law No 43/1999 to subsequent milk and milk products marketing periods, including the period from 1 April 2000 to 31 March 2001.

The dispute in the main proceedings and the question referred for a preliminary ruling

15The applicant in the main proceedings runs a farming business producing milk. During the period from 1 April 2000 to 31 March 2001, it exceeded its individual reference quantity.

16By a decision of 26 July 2001, entitled ‘Milk quota scheme — national adjustment for 2000/2001 period’, AGEA informed producers of their production overruns and of the result of the equalling-out procedure. Pursuant to that decision, the unused individual reference quantities were reallocated on the basis of priority categories as provided for in the applicable legislation. The applicant in the main proceedings was not among the producers to benefit from the reallocation.

17The applicant in the main proceedings challenged the lawfulness of that decision, and also the lawfulness of AGEA’s decision adopted under Article 1(5) of Decree-Law No 8/2000 on the national adjustment for the milk and milk products marketing period from 1 April 2000 to 31 March 2001, before the Tribunale amministrativo regionale del Lazio — sede di Roma (Regional Administrative Court for Lazio — Rome, Italy).

Following the dismissal of its action, the applicant in the main proceedings brought an appeal before the Consiglio di Stato (Council of State, Italy).

The applicant in the main proceedings considers that the legal provisions laying down the detailed arrangements for redistribution, to which it was subject, in particular Article 1(8) of Decree-Law No 43/1999 and Article 1(5) of Decree-Law No 8/2000, are contrary to Regulations No 3950/92 and No 536/93. By providing for the additional levy to be quantified following the reallocation of unused reference quantities on the basis of priority categories, the Italian legislature infringed Article 2(1) of Regulation No 3950/92, which, in the event that a Member State opts to reallocate the unused reference quantities, prescribes a criterion based on parity and proportionality without any exception.

The Consiglio di Stato (Council of State) notes, first of all, that it is clear from reading Article 1(8) of Decree-Law No 43/1999 and from observing the practice followed by the Italian State that, of the two methods of adjustment authorised in abstracto by Article 2 of Regulation No 3950/92, the Italian State opted for the method consisting of the reallocation of unused reference quantities under the second subparagraph of Article 2(1) of Regulation No 3950/92. In the exercise of the option provided for in that provision, transfers to offset quotas that had been exceeded against quotas that had not been fully used and reallocations of unused individual reference quantities to producers with overruns were made according to a given order of categories, and not ‘in proportion to the reference quantities of each producer’.

Next, the Consiglio di Stato (Council of State) comments that, to find the arguments of the applicant in the main proceedings well founded would mean that the methods used to identify the beneficiaries of the reallocation of the unused individual reference quantities, which led to the exclusion of the applicant in the main proceedings, were unlawful, without prejudice to any finding as to the initial overrun.

Finally, the referring court notes that, according to leading national case-law, Regulation No 3950/92 does not impose any requirement for proportionality in the reallocation of unused quotas and, moreover, that the priority criteria comply with the provisions of Regulation No 1788/2003. However, the referring court doubts that such a consideration is compatible with the conditions, ratione temporis, of Regulation No 3950/92 and Regulation No 536/93. In particular, the referring court wonders whether those regulations must be interpreted as meaning that the reallocation of individual reference quantities must necessarily be made on the basis of parity and proportionality or whether Member States are permitted to designate categories of producer to whom priority is to be given.

In those circumstances, the Consiglio di Stato (Council of State) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Must Article 2(1) of [Regulation No 3950/92] be interpreted — also in the light of the grounds already set out by the [Court] in its judgment of 5 May 2011, Kurt und Thomas Etling and Others, (C‑230/09 and C‑231/09, EU:C:2011:271), in relation to Article 10(3) of [Regulation No 1788/2003] — as meaning that any unused portion of the national reference quantity allocated to deliveries can be re-allocated according to objective priority criteria determined by the Member States, or must that provision be interpreted as meaning that the equalling-out stage must be governed exclusively by the criterion of proportionality?’

Admissibility of the request for a preliminary ruling

The Italian Government contends that the request for a preliminary ruling is inadmissible. It maintains that the question referred by the national court is hypothetical and points out in that regard that the court of first instance dismissed the action brought by the applicant in the main proceedings on the ground that, in view of the general nature of its claims, it had simply opposed the system as a whole, yet had provided no evidence of a different milk production for the marketing period from 1 April 2000 to 31 March 2001 or of any entitlement to a different allocation of the quota. If that were confirmed on appeal, it would be inappropriate to apply Regulation No 3950/92 or, consequently, to seek an interpretation from the Court of Justice.

The Italian Government adds that the referring court has not adduced any factual evidence to suggest that there was some plausibility to the claim made by the applicant in the main proceedings seeking a different reference quantity or — at the very least — that its claim was not manifestly lacking in plausibility. According to the Italian Government, the referring court in essence treated the case as if it involved only a question of law, whereas the operative part of the decision at first instance makes it clear that it concerned above all a question of fact. The referring court should have provided the Court with the minimum factual information necessary to demonstrate why the interpretation sought was — at least potentially — useful.

In that regard, it should be recalled that it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine, in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of EU law, the Court is in principle required to give a ruling. The Court may refuse to rule on a question referred by a national court for a preliminary ruling only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (see judgment of 4 December 2018, Minister for Justice and Equality and Commissioner of An Garda Síochána, C‑378/17, EU:C:2018:979, paragraphs 26 and 27 and the case-law cited).

In the present case, first, the order for reference contains the factual or legal material necessary to enable the Court to give a useful answer to the referring court.

Secondly, there is nothing on the file to suggest that the interpretation of EU law sought is unrelated to the actual facts of the main action or its purpose or that the question is hypothetical.

It is apparent from the request for a preliminary ruling that the referring court is hearing a case in which the applicant in the main proceedings claims that the national legislation laying down the detailed rules for reallocation of unused individual quantities is incompatible with EU law and disputes the lawfulness of the additional levy imposed on it. Moreover, the referring court expressly states, in paragraph 9 of the order for reference, that its request for a preliminary ruling is relevant to the resolution of the dispute in the main proceedings, since, to find the arguments of the applicant in the main proceedings well founded would mean that the methods used to identify the beneficiaries of the reallocation of the unused individual reference quantities, which led to its exclusion, were unlawful, without prejudice to any finding as to the initial overrun.

It follows that the request for a preliminary ruling is admissible.

Consideration of the question referred

By the question referred, the referring court asks, in essence, whether the second subparagraph of Article 2(1) of Regulation 3950/92 must be interpreted as meaning that, where a Member State decides to reallocate unused reference quantities, that reallocation must be made between producers who have exceeded their reference quantities, in proportion to the individual reference quantities of each producer, or whether it can be made in accordance with objective priority criteria determined by that Member State.

According to settled case-law of the Court, in interpreting a provision of EU law it is necessary to consider not only its wording but also the context in which it occurs and the objects of the rules of which it forms part (judgment of 26 September 2018, Baumgartner, C‑513/17, EU:C:2018:772, paragraph 23 and the case-law cited).

33

The second subparagraph of Article 2(1) of Regulation No 3950/92 provides that, in accordance with a decision of the Member State, the contribution of producers towards the levy payable shall be established, after the unused reference quantities have been reallocated or not, either at the level of the purchaser, in the light of the overrun remaining after unused reference quantities have been allocated in proportion to the reference quantities of each producer, or at national level, in the light of the overrun in the reference quantity of each individual producer.

Consequently, and as confirmed by the seventh recital of that regulation, that provision allowed Member States the option of reallocating the unused part of the overall reference quantity to producers with overruns, before establishing the contribution of each producer to the payment of the levy due. The decision to carry out a reallocation is an optional precursor to establishing the contribution of producers and affects the result of the latter operation (see, by analogy, judgment of 5 May 2011, Kurt und Thomas Etling and Others, C‑230/09 and C‑231/09, EU:C:2011:271, paragraph 53).

35

Furthermore, it follows from the second subparagraph of Article 2(1) of Regulation No 3950/92 and from Article 3(3) of Regulation No 536/93 that the Member State has the option of reallocating unused reference quantities at the end of the period either at national level, directly to the producers concerned, or at the level of purchasers with a view to their subsequent allocation among the producers concerned.

36

However, despite the Italian Government’s contention to the contrary, while the second subparagraph of Article 2(1) of Regulation No 3950/92 grants Member States the option of reallocating unused reference quantities at the end of the period, it does not authorise them to determine the criteria on which that reallocation must take place.

37

It is clear from the wording of that provision that, if a Member State decides to reallocate unused reference quantities, those quantities are allocated ‘in proportion to the reference quantities of each producer’.

38

The Italian Government’s argument that that provision does not relate to the reallocation criteria themselves and that it mentions the proportionality criterion only for the purposes of the calculations that a purchaser must make when it has to apply the levy to producers is expressly contradicted by the case-law of the Court.

The Court has already held that it is clear from all the language versions of the second subparagraph of Article 2(1) of Regulation No 3950/92 that it is indeed the allocation of unused reference quantities which is to be carried out ‘in proportion to the reference quantities of each producer’ and that the contribution of producers to the payment of the levy due is, for its part, established by reference to the overrun of the reference quantity of each individual producer (judgment of 5 May 2011, Kurt und Thomas Etling and Others, C‑230/09 and C‑231/09, EU:C:2011:271, paragraph 64).

40

The second subparagraph of Article 2(1) of Regulation No 3950/92 therefore lays down a criterion according to which the reallocation of unused reference quantities must be made. Since that provision does not mention any other criterion or refer to the ability of Member States to determine criteria specific to them, that proportionality criterion must be regarded as the only factor on the basis of which the reallocation of unused reference quantities must be made.

41

That interpretation is confirmed by the context of the second subparagraph of Article 2(1) of Regulation No 3950/92. The possibility of reallocating unused reference quantities, in application of that provision, according to other criteria cannot be inferred from Article 2(4) of that regulation.

42

It follows from Article 2(4) of Regulation No 3950/92, and also from the sixth recital of Regulation No 536/93, that, where a Member State has considered it appropriate not to operate in its territory a total reallocation of unused references quantities, the Member State may, where the levy is payable and the amount collected is greater than that levy, use the excess to finance the measures referred to in the first indent of Article 8 of Regulation No 3950/92 and/or redistribute it to producers who fall within priority categories established by the Member State on the basis of objective criteria to be determined or who are affected by an exceptional situation resulting from a national provision unconnected with that scheme. Member States shall determine the priority categories on the basis of one or more objective criteria, set out in Article 5 of Regulation No 536/93, in order of priority.

43

The logic behind the option to reallocate all or part of the unused reference quantities, provided for in the second subparagraph of Article 2(1) of Regulation No 3950/92, is different from the logic behind the option, open to a Member State if it does not make a total reallocation of the unused quantities, to decide whether or not to redistribute to producers the overpayment of the levy in accordance with Article 2(4) of Regulation No 3950/92.

44

On the one hand, Article 2(1) of Regulation No 3950/92 aims to proportionately reduce the overrun of the producers’ reference quantities in order also to reduce the contribution of producers to the levy payable. On the other hand, the purpose of Article 2(4) of that regulation is to determine the allocation of the excess amount of the levy collected, by providing that the reimbursement thereof, where it is decided by a Member State, is made for the benefit of producers who fall within priority categories established on the basis of objective criteria laid down by the Commission.

45

Due to the difference in the logic underlying the mechanisms provided for in the second subparagraph of Article 2(1) and in Article 2(4) of Regulation No 3950/92 respectively, the relevance, for the purposes of the application of the first provision, of the criteria laid down in the second provision cannot be assumed and could only arise from an explicit reference to that effect in the regulation. Neither Regulation No 3950/92 nor Regulation No 536/93 provides for the application of those criteria where the second subparagraph of Article 2(1) of Regulation No 3950/92 is implemented.

46

As regards the Italian Government’s arguments concerning Article 10(3) of Regulation No 1788/2003, it must be noted that that provision provides that the reallocation of the unused part of the national reference quantity allocated to deliveries must be carried out in proportion to the individual reference quantity of each producer having overdelivered, or according to objective criteria to be set by the Member States (see, to that effect, judgment of 5 May 2011, Kurt und Thomas Etling and Others, C‑230/09 and C‑231/09, EU:C:2011:271, paragraph 79).

47

It is nevertheless common ground that Regulation No 1788/2003, which entered into force on 28 October 2003 and became applicable on 1 April 2004, is not applicable ratione temporis to the dispute in the main proceedings, which concerns the milk and milk products marketing period from 1 April 2000 to 31 March 2001.

It is true that, in so far as Regulation No 1788/2003 seeks, according to recital 2 thereof, to reorganise and clarify the rules laid down in Regulation No 3950/92, it may be taken into account in the interpretation of the latter regulation. Moreover, in that regard, the Court has held that Article 10(3) of Regulation No 1788/2003 pursued the same logic as the second subparagraph of Article 2(1) of Regulation No 3950/92, and that it did not appear that the option for Member States to reallocate unused reference quantities at the end of the period, as provided for in Article 10(3) of Regulation No 1788/2003, was an innovation in relation to the previous system, or that a notable modification of that system had been made by the legislature on that point (see, to that effect, judgment of 5 May 2011, Kurt und Thomas Etling and Others, C‑230/09 and C‑231/09, EU:C:2011:271, paragraphs 61 to 63).

However, while, in paragraphs 63 and 64 of the judgment of 5 May 2011 in Kurt und Thomas Etling and Others, C‑230/09 and C‑231/09, EU:C:2011:271, the Court certainly referred to the second subparagraph of Article 2(1) of Regulation No 3950/92 in order to determine the scope of the words ‘in proportion to the (individual) reference quantities of each producer or according to objective criteria to be set by the Member States’ that appear in Article 10(3) of Regulation No 1788/2003, it did not take a position on the question of whether the second subparagraph of Article 2(1) of Regulation No 3950/92, as has become the case with Article 10(3) of Regulation No 1788/2003, authorised the Member States to reallocate unused reference quantities on the basis of objective criteria to be established by those States.

It should also be noted that the Court has already held, in essence, that, where one wording is replaced by another, it must be assumed in the absence of evidence to the contrary that any difference in wording involves a difference in scope if the new wording leads to a different interpretation (judgment of 1 June 1961, Simon v Court of Justice, 15/60, EU:C:1961:11).

Consequently, it cannot be inferred from the introduction in Regulation No 1788/2003 of the authorisation to reallocate unused reference quantities in accordance with objective criteria to be determined by the Member States that such a possibility already existed in the context of the second subparagraph of Article 2(1) of Regulation No 3950/92.

As regards the objective of the levy, it must be borne in mind that the purpose of the additional levy system is to re-establish, by limiting milk production, the balance between supply and demand in the milk market, which is characterised by structural surpluses. This measure, therefore, is within the ambit of the objectives of rational development of milk production and, by contributing to a stabilisation of the income of the agricultural community affected, that of ensuring a fair standard of living for the agricultural community (judgments of 17 May 1988, Erpelding, 84/87, EU:C:1988:245, paragraph 26, and of 25 March 2004, Azienda Agricola Ettore Ribaldi and Others, C‑480/00, C‑482/00, C‑484/00, C‑489/00 to C‑491/00 and C‑497/00 to C‑499/00, EU:C:2004:179, paragraph 57). In accordance with Article 2(1) of Regulation No 3950/92, the additional levy established by Article 1 of that regulation is to be allocated among the producers who contributed to the overrun of the reference quantities (judgment of 24 January 2018, Commission v Italy, C‑433/15, EU:C:2018:31, paragraph 40).

Furthermore, as Article 10 of Regulation No 3950/92 clearly shows, the additional levy is to be considered to be intervention to stabilise agricultural markets and is to be used to finance expenditure in the milk sector. It follows that, apart from its obvious aim of requiring milk producers to observe the reference quantities allocated to them, the additional levy has an economic objective too, in that it is intended to bring to the Community the funds necessary for disposal of milk produced by producers in excess of their quotas (judgment of 25 March 2004, Azienda Agricola Ettore Ribaldi and Others, C‑480/00, C‑482/00, C‑484/00, C‑489/00 to C‑491/00 and C‑497/00 to C‑499/00, EU:C:2004:179, paragraph 59).

In so far as the exercise of the power granted to the Member State to reallocate unused reference quantities leads to a reduction in the overrun of the reference quantities of producers and, consequently, to the reduction of funds consisting of the levy due, a Member State cannot freely decide how that reallocation is carried out, since the EU legislature has circumscribed the exercise of that power by prescribing the conditions for such reallocation.

The purpose of the additional levy therefore gives weight to the interpretation that the criterion of proportional reallocation, which alone is provided for in the second subparagraph of Article 2(1) of Regulation No 3950/92, must be regarded as the sole criterion according to which unused reference quantities are to be reallocated. By contrast, and in any event, it cannot be inferred from a teleological interpretation that, in addition, even in the absence of any express authorisation to that effect, a Member State would be entitled to carry out a reallocation on the basis of other criteria.

In the light of the foregoing, the Italian Government’s arguments that the use of other criteria is not expressly prohibited by Regulation No 3950/92 or Regulation No 536/93, that it enables the objectives pursued in the milk sector to be achieved and that it does not infringe any general principle of EU law, such as the principles of proportionality, legal certainty and the protection of legitimate expectations, cannot succeed.

In so far as EU law, including its general principles, does not include common rules to that effect then, when the national authorities implement EU rules, they are to act in accordance with the procedural and substantive rules of their own national law but, when adopting measures to implement EU legislation, must exercise their discretion in compliance with the general rules of EU law, which include the principles of proportionality, legal certainty and the protection of legitimate expectations (see, to that effect, judgment of 25 March 2004, Azienda Agricola Ettore Ribaldi and Others, C‑480/00, C‑482/00, C‑484/00, C‑489/00 to C‑491/00 and C‑497/00 to C‑499/00).

EU:C:2004:179

paragraphs 42 and 43 and the case-law cited).

As has been pointed out in paragraph 40 of this judgment, the second subparagraph of Article 2(1) of Regulation No 3950/92 lays down a criterion according to which the reallocation of unused reference quantities must be made, thereby limiting Member States’ discretion.

In the light of all the foregoing, the answer to the question referred must be that the second subparagraph of Article 2(1) of Regulation No 3950/92 must be interpreted as meaning that, where a Member State decides to reallocate unused reference quantities, that reallocation must be made between producers who have exceeded their reference quantities, in proportion to the reference quantities at their disposal.

Costs

Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Seventh Chamber) hereby rules:

The second subparagraph of Article 2(1) of Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and milk products sector, as amended by Council Regulation (EC) No 1256/1999 of 17 May 1999, must be interpreted as meaning that, where a Member State decides to reallocate unused reference quantities, that reallocation must be made between producers who have exceeded their reference quantities, in proportion to the reference quantities at their disposal.

[Signatures]

*1 Language of the case: Italian.