Important legal notice

61999C0056

European Court reports 2000 Page I-03079

Opinion of the Advocate-General

I - Introduction

In the present case the Tribunal Administratif (Administrative Court), Paris (France) is raising an issue, by way of a reference for a preliminary ruling to the Court of Justice, concerning the validity of the Community regime governing early marketing of calves, as laid down in Council Regulation (EC) No 2222/96 of 18 November 1996 amending Regulation (EEC) No 805/68 on the common organization of the market in beef and veal, and Commission Regulation (EC) No 2311/96 of 2 December 1996 amending Regulation (EEC) No 3886/92 laying down detailed rules for the application of premium schemes in the beef and veal sector.

II - Applicable Community law

A - EC Treaty provisions

Amongst Community policies the EC Treaty expressly mentions (Title II) agriculture (Articles 38 to 47, now Articles 32 to 38 EC) to which the common market established by it is to extend (Article 38 of the EC Treaty, now, as subsequently amended, Article 32 EC).

Article 39(1) of the EC Treaty (now Article 33(1) EC) sets out the objectives of the common agricultural policy which are, inter alia, (b) to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture; and (c) to stabilise markets.

Under Article 40(2) and (3) of the EC Treaty (now, following amendment, Article 34(1) and (2) EC):

In order to attain the objectives set out in Article 39 a common organisation of agricultural markets shall be established.

The organisation shall take one of the following forms, depending on the product concerned:

(c) a European market organisation.

The common organisation shall be limited to pursuit of the objectives set out in Article 39 and shall exclude any discrimination between producers or consumers within the Community.

B - Establishment of a common organisation of the market in beef and veal

Pursuant to the provisions of Articles 42 (now Article 36 EC) and 43 (now, following amendment, Article 37 EC), the Council adopted Regulation (EEC) No 805/68, which codified the basic provisions concerning the common organisation of the market in beef and veal.

In order to restore equilibrium to the market in beef and veal which had been seriously disturbed, mainly as a result of consumer fears concerning bovine spongiform encephalopathy (BSE), a sharp fall in consumption, and the resultant collapse in prices paid to producers, the Council adopted Regulation No 2222/96. This regulation includes a certain number of measures to ensure that production is brought more closely into line with consumption.

Taking the view that improvement of the market in beef and veal required a reduction in the number of finished animals offered on the market with greater encouragement for withdrawal and/or marketing of young, light animals, the Council, first, modified the rules governing the processing premium in respect of young male calves originating in the Community which are withdrawn from production before they are over 10 days old, or 20 days old provided they take the necessary measures to ensure that in the latter case the animals are excluded from entering the human food chain (Article 4i(1) of Regulation No 805/68, as amended by Regulation No 2222/96) and, secondly, made provision in paragraph 2 of that article for the grant of an early marketing premium for calves.

Under the terms of Article 4i(2):

Member States may, until 30 November 1998, grant an early marketing premium for calves. The premium shall be granted on the slaughter, in a Member State, of each calf:

of a weight of not more than the average slaughter weight of calves in the Member State concerned, less 15%. The average slaughter weight per Member State shall be that deriving from Eurostat statistics for 1995 or any other official published statistical information for that year accepted by the Commission,

held, immediately before slaughter, in the Member State of slaughter for a period to be determined.

Moreover, Article 4i(4), (5) and (6) of Regulation No 805/68, as amended by Regulation No 2222/96, provided as follows:

Save in duly justified exceptional cases, the premiums referred to in paragraphs 1 and 2 must be paid within five months of the date of submission of the application.

In accordance with the procedure laid down in Article 27, the Commission:

shall adopt detailed rules for the application of this Article,

shall determine the maximum calf slaughter weights referred to in paragraph 2 which are applicable in each Member State,

shall set the processing premium at a level or, where appropriate, levels enabling a sufficient number of calves to be withdrawn from production in line with market requirements,

shall set the early marketing premium at a level enabling a sufficient number of calves to be slaughtered in line with market requirements,

may, at the request of a Member State, authorise the early marketing premium to be applied on a differentiated regional basis within a Member State, provided that the animals have been held immediately before slaughter in the slaughter area for a period to be determined,

may suspend the granting of either or both of the premiums referred to in this Article.

The Commission shall check, six months after the entry into force of the schemes referred to in this Article, whether such schemes have achieved satisfactory results.

Should this not be the case, the Commission shall submit an appropriate proposal to the Council, on which the Council, acting by a qualified majority, shall decide taking into account, in particular, the distribution of adjustment efforts between the Member States and possible distortions to trade.

The adoption of the foregoing provisions is justified as follows in the ninth, tenth and eleventh recitals in the preamble to Regulation No 2222/96:

Whereas the introduction of an early marketing premium for calves may also help to restore some balance to the market; whereas, in order to ensure that such a premium is properly geared to the production conditions in the Member States it is necessary to define the eligibility of calves in the Member States in terms of the statistically determined average carcase weight of calves slaughtered in each Member State; whereas such an average weight may vary within a given Member State; whereas it is necessary therefore to make provision for the Commission to authorise regionalised application of the premium; whereas, in order to avoid deflections of trade, a retention period is necessary; whereas, for the same reasons as in the case of the processing premium, setting the amount of the premium should be the Commission's responsibility;

Whereas production and consumer expectations vary considerably between Member States; whereas they should therefore be given a choice between the processing premium and the early marketing premium, but must be required to implement one or the other during the period 1 December 1996 to 30 November 1998;

Whereas after six months a check should be carried out on the early marketing scheme for calves and the processing premium scheme and on whether such schemes have been correctly implemented, with regard in particular to the effect achieved compared with the objective of reducing by about 1 000 000 the number of calves entering red meat production, to the distribution of adjustment efforts between the Member States and to possible distortions to trade.

Gascogne Limousin Viandes SA (hereinafter Gascogne) is a company incorporated under French law which produces fresh veal products.

By an application lodged on 26 June 1997 with the Paris Administrative Court Gascogne sought the setting aside of decisions by the Office National Interprofessionnel des Viandes de l'Elevage et de l'Aviculture (National Interdisciplinary Office for Meat, Livestock and Poultry Rearing - Ofival) under which Gascogne was refused the early-marketing premium for calves provided for under Regulation No 2222/96.

It is apparent from the case-file forwarded to the Court by the national court, and from the observations of the French Government, that those decisions were taken on 14 May, 11 and 20 June 1997 respectively and that they were based on the fact that the calves for which premium was claimed exceeded 108 kg in weight.

Under those circumstances the Paris Administrative Court took the view that resolution of the dispute before it and assessment of whether Gascognes claim was well founded were dependent on ascertaining whether the above provisions of Article 40 of the Treaty of 25 March 1957 preclude the adoption of aid measures benefiting products differently depending on criteria established at national level, albeit those products may be marketed in all of the Community Member States.

IV - Reply to the preliminary question

A - Admissibility

The Commission raises an issue of the admissibility of the preliminary question. It contends that the order for reference is particularly laconic inasmuch as it gives no indication of the dates and grounds on which Gascognes application for premium was rejected, or of the nature of the dispute between the parties. Similarly, it points out that there is also no mention made of the dates on which the calves were slaughtered and the applications for premium lodged, which are important matters in view of subsequent legislative amendments.

In my view it is plain from the narrative of the facts in the order for reference that the national court's description of the factual background to the preliminary questions is inadequate.

As the Court has consistently held, the need to provide an interpretation of Community law which will be of use to the national court makes it necessary that the national court define the factual and legislative context of the questions it is asking or, at the very least, explain the factual circumstances on which those questions are based. The information provided in orders for reference must not only be such as to enable the Court usefully to reply but also such as to give the Governments of the Member States and other interested parties the opportunity to submit observations pursuant to Article 20 of the EC Statute of the Court since, under the abovementioned provision, only the orders for reference are notified to the interested parties. Moreover, it has been consistently held that it is the Court's duty to ensure that the opportunity to submit observations is safeguarded, bearing in mind that by virtue of the abovementioned provision, only the orders for reference are notified to the interested parties.

Thus, the Court held to be inadmissible a preliminary question whose underlying facts could be established only by an analysis of the pleadings of the applicants in the main proceedings which are not communicated to the governments of the Member States and the other parties desirous of submitting written observations.

However, if the case-file forwarded by the national court and the written observations submitted by the parties to the main proceedings have given the Court enough information to enable it to interpret the rules of Community law in respect of the situation which is the subject of the main proceedings, the Court is able to give a useful reply to the national court.

I would also point out that the Court has indicated that, in the context of the collaboration between the Court and the national courts under Article 177 (now Article 234 EC) of the EC Treaty, the national court, which alone has direct knowledge of the facts of the case, is in the best position to assess, having regard to the particular features of the case, whether a preliminary ruling is necessary to enable it to give judgment.

31. I consider that, in the present case, the facts, as indicated in the written observations which have been submitted, are now sufficiently clear and that the Court is in a position to give a useful reply to the preliminary question submitted, notwithstanding the reservations prompted by the very laconic account of the facts given in the order for reference. That is because, as the Court has held, it is only in exceptional cases that it can refuse to give a reply, that is to say where it is quite obvious that the interpretation of Community law or the examination of the validity of a rule of Community law sought bears no relation to the actual subject-matter of the main action. However, I do not consider that to be so in the present case; there is therefore no danger of the Court giving a reply to an entirely hypothetical question.

B - Substance

(a) Problems raised

32. The French Government and Gascogne assert that the Community legislation on early marketing premium for calves infringed the principle of non-discrimination laid down in Article 40(3) of the Treaty and that its application resulted in distortions of competition.

33. Conversely, the Council and Commission deny that the regulation at issue is invalid owing to a breach of the principle of non-discrimination laid down in Article 40(3) of the Treaty.

35. Moreover, Gascogne considers that it was wrong for the statistics supplied to Eurostat by the Member States to be used in calculating the reference weight. It explains that veal carcases are not uniform as regards weight but that, within the same country, different carcases are offered for consumption depending on eating habits and trading practices.

36. It goes on to explain in detail that there is no common definition of calves for slaughter and of their characteristics nor are there any uniform reliable Community statistics in that regard, with the result that, by increasing without objective justification the weight difference as between carcases eligible for premium in the Netherlands and France, Regulation No 2222/96, which is based on those statistics, worsened the discrimination against French producers in breach of the second and third subparagraphs of Article 40(3) of the Treaty. The question arises as to the extent to which, in choosing that criterion, the Council infringed the principle of non-discrimination and the principle of proportionality, which are higher-ranking principles, because, according to Gascogne, in applying the principle of equal treatment, the principle of proportionality must be observed.

37. Finally, according to Gascogne, by uniformly reducing national carcase weights eligible for early-marketing premium for calves, which itself is uniform (apart from the abatement provided for in Regulation No 200/97), Regulation No 2222/96 imposed an unwarranted excessive burden in a totally uneven manner. The uniform coefficient of 15% applied to the average weight of carcases of animals slaughtered in each Member State takes no account of the average weight looked for on the market which determines the burden and the actual impact of the regulation on its addressees. French producers are being severely punished, not only in regard to exports owing to the fact that the main export markets, Italy and Germany, are consumers of heavier carcases than those acceptable in France, but also and chiefly on their own national market on which the heavier Dutch carcases benefiting from premium are sold, whereas they themselves are exposed to that competition without benefit of premium. As the French Government points out, Community legislation in the end benefited and profited traders producing the heaviest carcases.

38. The French Government considers that the distortion of competition is plainly discernible from the high percentage of Netherlands producers who participated in the programme in relation to their French competitors. It further maintains that those disadvantages for French producers were not removed by adoption of the provision for differentiation of the premium laid down in Regulation No 200/97. For that reason, it was necessary, following the BSE crisis, to maintain in each Member State the equilibrium of the sector of calves for slaughter.

(b) Reply to the preliminary question

39. The issues raised will be examined as follows: (1) after a review of the Court's case-law on the extent of the institutions' competence in regard to agricultural policy, (2) I shall examine whether adoption of the measure at issue resulted in an infringement of either the principle of non-discrimination - the issue raised by the national court - or (3) the principle of proportionality - an issue raised by Gascogne.

(1) Case-law of the Court on the extent of the competence of the Community institutions in regard to agricultural policy

(2) Infringement of principle of non-discrimination

41. The Court has consistently held that, under the second subparagraph of Article 40(3) of the Treaty, the common organization of agricultural markets must exclude any discrimination between producers or consumers within the Community. It has repeatedly held that that prohibition of discrimination is only a specific expression of the general principle of equality in Community law, which requires that comparable situations must not be treated differently and different situations must not be treated in the same way unless such treatment is objectively justified .

42. However, the Court has held that the principle of non-discrimination does not preclude a Community regulation which introduced a system of guarantee thresholds for the entire Community involving a reduction in the production aid of the relevant producers of all the Member States, even if exceeding those thresholds was not due to an increase in production in all those States. It ruled that in a common organization of markets with no system of national quotas all Community producers, regardless of the Member State in which they are based, must together, in an egalitarian manner, bear the consequences of the decisions which the Community institutions are led to adopt, in the exercise of their powers, in order to respond to the risk of an imbalance which may arise in the market between production and market outlets.

43. It is clear from the Court's case-law cited above that the choice of a given solution in order to resolve a problem in the context of a common organisation of the market in a product, as in the present case the market in beef meat, is an expression of the wide margin of discretion enjoyed by the Council under the Treaty in this area. Thus, the Council is competent to evaluate numerous factors in order to choose the solution which it considers to be the most appropriate.

44. In the present case the Council, in the exercise of that power, chose to grant, subject to certain conditions, an early marketing premium for calves in order to restabilise and restore to health the beef-meat sector. Moreover, for the purposes of granting the premium, the Council deemed the most appropriate criterion to be that of the average weight of carcases of calves slaughtered in the Member State concerned reduced by 15% in order to enable the quantity corresponding to each region to be attained.

45. The Council specifically adopted Regulation No 2222/96 in order to restore balance to the market in beef and veal which had been seriously disturbed, mainly as a result of consumer fears concerning bovine spongiform encephalopathy (BSE), and the sharp fall in consumption and the resultant collapse in prices paid to producers. In order to achieve that objective, the Council, exercising its wide margin of discretion which enabled it to adopt the requisite measures in order to restabilise and restore to health the market affected, decided to determine eligibility for premium of calves in each Member State on the basis of the criterion of the average carcase weight of calves slaughtered in each Member State, as indicated in the statistics for 1995, less 15%. It is true that the Council does not state the reasons why it opted for the rate of 15% but in my view that does not give rise to any problem since: firstly, it enjoys wide discretionary power in that regard; secondly; that choice was made in line with the objective pursued which was to reduce by around 1 000 000 the number of calves offered for red-meat production and consequently entering the human food chain, and, thirdly, no evidence has been adduced to show that the choice of that percentage by the Council was manifestly erroneous.

46. Moreover, as the Council and the Commission rightly emphasise, the choice of the criterion of the average carcase weight in the whole of the Community would not have been an appropriate measure for attaining that objective, for two reasons: (i) producers operating in Member States with production systems resulting in a heavier carcase weight would have been compelled to seek to reduce that weight disproportionately to the amount of the premium granted; (ii) operators in Member States where average carcase weight was lower would have been able to benefit from the premium without any alteration to their system of production.

47. That means that, if the Council had opted for a criterion based on the average weight of calves in the Community, less 15%, about one half of Community production would have been eligible for the premium, whilst a large proportion of the producers responsible for the other half of production would not have responded. Moreover, as the Council points out, owing to the wide divergence in calf weight as between the various Member States, the reduction required of certain producers would not have been sufficient to enable the objective to be achieved. Thus, the efficacy of the premium and the attainment of that objective would have been jeopardised. That would have constituted unlawful discrimination in favour of certain producers and to the detriment of certain others.

48. Moreover, support for the proposition that the abovementioned choice by the Council is not vitiated by unfair discrimination between Community producers may be found in the Courts case-law. Under that case-law the fact that the adoption of a specific measure in the context of the common organisation of a market may affect producers in different ways, depending upon the particular nature of their production or local conditions, cannot be regarded as discrimination if that measure is determined on the basis of objective rules, formulated to meet the needs of the general common organisation of the market.

49. The French Government cites the judgment of 29 February 1996 in Joined Cases C-296/93 and C-307/93 France and Ireland v Commission [1996] ECR I-795, in support of its allegations that, unlike the situation in that case, the Community rules at issue in the present case favoured and enured to the benefit of operators producing heavier carcases.

50. France and Ireland v Commission concerned the limitation on the weight of carcases eligible for intervention. The Court concluded that there had been no preferential treatment in favour of the producers of one country of the Community because the contested regulation in those cases did not exclude any category of products from intervention buying-in but obliged the producers concerned to adapt weights in certain of those categories. Moreover, provision was made for transitional measures giving producers the opportunity progressively to adapt their production.

51. According to the French Government, the present case differs from the abovementioned cases because, in the present case, the reference to different carcase weights depending on the Member State concerned - there being a single market as regards the weight of carcases - entailed excluding from the benefit of the premium producers who, in a Member State, were unable to slaughter their calves at a weight very much below that commonly practiced on the geographical market in question, whilst in other Member States the producers were not obliged to do so.

52. In light of the foregoing analysis I do not believe that the allegations of the French Government can be upheld. In adopting the contested measure, the Council paid due regard to the specific nature of each Member State's production and of the need to restabilise the market; it also afforded the Member States the possibility of submitting to the Commission for its approval other official statistics which would lead to an alteration in the reference weight applicable to them, that is to say it enabled account to be taken, as far as possible, of the specific features of the market in each Member State. Thus, whilst the Federal Republic of Germany availed itself of this possibility, that was not true of the French authorities.

53. Moreover, I would point out that, in its judgment in Deschamps and Others v Ofival, the Court held that the Community rules allowing the United Kingdom only to grant the variable slaughter premium for sheepmeat was perfectly compatible with Article 40(3) of the Treaty, if it was necessary in order to take account of the different market situations in the Community.

54. Under those circumstances, in view of the wide discretionary power vested in the Community institutions competent to adopt measures to restabilise the market, I do not consider that the differentiation of the average carcase weight of calves according to the Member State involves the objectively unwarranted application of different treatment to analogous situations and, consequently, it is consistent with the principle of non-discrimination laid down in Article 40(3) of the Treaty, as the Council and Commission rightly stress.

55. I also consider that the principle of solidarity and of coherence of the market in question justified the burdens stemming from restabilisation of the market being distributed amongst all Community producers so as to ensure attainment of the objectives of the scheme for early marketing of calves. It follows from the principle of Community solidarity that the burden of that obligation to restabilise the market must be imposed on all Community producers. In the context of that objective, all Community producers, regardless of the Member State in which they are based, must together, in an egalitarian manner, bear the consequences of the decisions which the Community institutions are led to adopt in the exercise of their powers in order to respond to the risk of an imbalance which may arise in the market between production and market outlets.

(3) Infringement of the principle of proportionality

57. Furthermore, as regards judicial review of application by the Community legislature of the principle of proportionality in the sector of the common agricultural policy, it should be pointed out that the Court has consistently held that in matters concerning the common agricultural policy, the Community legislature has a discretionary power which corresponds to the political responsibilities given to it by Articles 40 and 43. Consequently, the legality of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue.

58. As to the question whether the measures provided for in Article 4i(2) of Regulation No 805/68, as amended by Regulation No 2222/96, are invalid owing to an infringement of the principle of proportionality, that would be so if, regard being had to the objective of market restabilisation, those measures were manifestly inappropriate or unnecessary in relation to the objectives pursued.

59. Since I have already analysed the objective of the contested legislation, it now falls to determine whether the measure adopted by the Council is manifestly inappropriate or unnecessary for attainment of that objective and whether the disadvantages exceed the advantages.

60. The fact that it has not been persuasively shown that one of the possible criteria for substitution, for example the criterion of the average Community weight of the calf intended for slaughter, is manifestly more appropriate, that is to say preferable from the point of view of proportionality, progressive equality and certainty, proves that the criterion adopted is not inappropriate or above all manifestly inappropriate as a means of achieving the restabilisation of the market in beef and veal sought by the premium.

61. In actual fact, even if the Council's abovementioned choice of criterion is not in my view manifestly erroneous, the Council could from the outset have paid greater regard to the specific features of national producers and divergencies in average weights of veal carcases; that is made clear by two factors: (i) the first indent of Article 4i(2) of Regulation No 805/68 afforded to Member States the possibility of submitting for the Commissions approval other official statistics for 1995, a possibility availed of by Germany which obtained (Regulation No 18/97) an increase in average carcase weight from 103 to 112 kg; (ii) it should not be overlooked that, in order to alleviate the drawbacks arising from that situation, namely the relatively high cost of disposing of light carcases, the premium granted was increased by ECU 10 for animals slaughtered up to 13 April 1997 and by ECU 30 for animals slaughtered after 14 April 1997. Since this increase applied to all carcases of a weight equal to or greater than 110 kg but less than 120 kg, French producers were in a position to benefit from it.

62.Thus, the apportionment of obligations amongst producers on the basis of the average weight in each Member State of calves intended for slaughter constitutes a necessary choice based on an objective and convenient criterion.

63.Consequently, the legislation adopted by the Council does not contravene the principle of proportionality because it is neither superfluous nor manifestly inappropriate and because its drawbacks for the producers of one Member State (in this case, French producers) do not outweigh the advantages enjoyed by all Community producers owing to the success the efforts achieved in restabilising and restoring equilibrium to the market.

V - Conclusion

64.In light of the foregoing I propose that the Court should reply in the following terms to the question submitted by the Paris Administrative Court:

Determination, under Article 4i(2) of Regulation (EEC) No 805/68 of the Council on the common organisation of the market in beef and veal, as amended by Council Regulation No 2222/96 of 18 November 1996, of a maximum weight for calves, differentiated according to Member State, for the grant of early marketing premium for calves intended for slaughter does not involve discrimination prohibited under Article 40(3) of the EC Treaty.