OPINION OF ADVOCATE GENERAL

delivered on 28 September 1995 (*1)

1.Is a producer to whom two individual reference quantities have been allocated (one in respect of deliveries to purchasers and the other in respect of direct sales) liable to pay the additional levy on milk if one of those quantities has been exceeded in the case where, over the same period in which the scheme applied, the sum of the total corresponding reference quantities allocated to the Member State in question was not exceeded? That, in essence, is the problem raised by the question which has been submitted to the Court for a preliminary ruling by the Conseil d'État, Luxembourg.

I — Legislative framework

2.Article 5c of Regulation (EEC) No 804/68 of the Council of 27 June 1968, a provision added by Article 1 of Council Regulation (EEC) No 856/84 of 31 March 1984, introduced, with a view to curbing the increase in milk production, an additional levy payable on the quantities of milk or other milk products delivered to a purchaser for treatment or processing or sold directly to consumers which exceed a specified reference quantity.

3.So far as concerns payment of the levy due in respect of quantities delivered to a purchaser for treatment or processing, the scheme was applied in the Member States on the basis of one of the two possible formulas set out in Article 5c(1). Under formula ‘A’, the levy is payable by producers of milk or other milk products on the quantities delivered to purchasers and which, for the 12 months concerned, exceed a specified reference quantity. Under formula ‘B’, the levy is payable by purchasers of milk or other milk products on the quantities delivered to them by producers which exceed a specified reference quantity; in the context of this second formula, the levy payable by a purchaser is passed on to producers who have contributed to the purchaser's reference quantity being exceeded.

4.Article 5c(2) also provided that the levy is payable by every milk producer on the quantities of milk and/or milk equivalent which ‘he has sold for direct consumption’ and which, during the 12 months concerned, exceed a specified reference quantity.

5.The general rules regarding the application of the additional levy are contained in Council Regulation (EEC) No 857/84 of 31 March 1984, Article 2(1) of which set out the method for determining the reference quantity allocated for milk delivered to purchasers for treatment or processing (hereinafter the ‘reference quantity for deliveries’) and Article 6(1) of which set out the method for determining the reference quantity allocated for milk sold directly to consumers (hereinafter the ‘reference quantity for direct sales’).

6.Under Article 5c(3) of Regulation No 804/68, the sum of the reference quantities for deliveries allocated to producers subject to the levy in a particular Member State could not exceed a guaranteed total quantity, which differed for each Member State, equal to the sum of the quantities of milk delivered to undertakings treating or processing milk or other milk products in the Member State concerned during the 1981 calendar year, plus 1%.

7.Article 6(2) of Regulation No 857/84 introduced a corresponding provision covering reference quantities for direct sales under which the total of such individual reference quantities may not exceed a specified quantity fixed, at different levels for each Member State, in the annex to that regulation.

8.Article 6a of Regulation No 857/84, inserted by Article 1(3) of Council Regulation (EEC) No 590/85 of 26 February 1985, also provided that producers having two reference quantities, one for deliveries and one for direct sales, could, on request, obtain an increase in one of the reference quantities to enable them to adapt to changes in their marketing requirements. That increase could be granted for a 12-month period of application of the system and was subject to a reduction, for the same period, in the other reference quantity.

9.Finally, the first subparagraph of Article 5c(7) of Regulation No 804/68 provided that detailed rules for the application of the article were to be adopted in accordance with the procedure laid down in Article 30 of that regulation, while the second subparagraph of Article 5c(7), which was added by Article 1(3) of Council Regulation (EEC) No 1298/85 of 23 May 1985, provided that, according to the same procedure, the quantities indicated for each Member State in Article 5c(3) (which, it will be recalled, may not exceed the sum of the individual reference quantities for deliveries allocated to the corresponding Member State) ‘may be adjusted on the basis of objective and duly justified statistical data to take account of structural changes affecting, on the one hand, deliveries to purchasers and, on the other hand, direct sales to the consumer’. The third subparagraph of Article 5c(7), which was also added by the abovementioned provision of Regulation No 1298/85, provided that ‘these adjustments may not result in, for each Member State concerned, an increase in the sum total of the overall guaranteed quantity indicated in paragraph 3 and the total quantity fixed for direct sales’.

II — The main proceedings — The question submitted for a preliminary ruling

10.Mrs Catherine Schiltz-Thilmann runs a dairy farm. She delivers part of her production to a purchaser for subsequent processing, while she uses the remainder to make cheese and in this way sells it directly to consumers. She thus has two reference quantities, one for deliveries to a purchaser and the other for direct sales.

11.For the 1991/92 milk marketing year, the reference quantities allocated to Mrs Schiltz-Thilmann were 175805 kg for deliveries and 152654 kg in respect of direct sales. For the same period, the quantities which she delivered to a purchaser amounted to a total of 160594 kg, while the quantities sold directly to consumers came to 198044 kg. The unused portion of the reference quantity for deliveries to a purchaser, which came to15211 kg (175805 kg -160594 kg), was added, in accordance with Article 6a of Regulation No 857/84, to the reference quantity for direct sales, which thus came to 167865 kg (152654 kg +15211 kg). On that basis, the amount by which this latter reference quantity had been exceeded came to 30179 kg (198044 kg -167865 kg). The Minister of Agriculture, after reducing this difference by 5000 kg (‘in view of the fact that it had been impossible to market that milk for a variety of reasons’, as stated in the order for reference), definitively fixed the excess amount at 25179 kg and, by decision of 8 July 1992, requested Mrs Schiltz-Thilmann to pay LFR 245865 in respect of additional levy.

12.Mrs Schiltz-Thilmann (hereinafter ‘the plaintiff in the main proceedings’) instituted proceedings against that decision before the Conseil d'État, in which she essentially argues that the obligation to pay the additional levy cannot arise if, as was the case in Luxembourg for the 1991/92 marketing year, the sum of the overall guaranteed quantity which the total of the reference quantities for deliveries must not exceed and of the overall guaranteed quantity which the sum of the reference quantities for direct sales must not exceed was not exceeded. In view of the fact that it was not disputed that, for the period in question, ‘the national “purchaser” quota was not exhausted, whereas the national “direct sales” quota was exceeded’, the Conseil d'État formed the view that it was necessary to refer the following question to the Court of Justice for a preliminary ruling:

‘Do the provisions of Community law, in particular Article 6a of Regulation (EEC) No 857/84 and Article 5c(7) of Regulation (EEC) No 804/68, allow aggregation of “purchaser” and “direct sales” quotas in order to determine whether there has been overproduction at national level, or are those quotas independent of each other and for that reason not capable of being aggregated, subject to the possibility of transfer from one quota to the other within the limits of Article 6a of Regulation (EEC) No 857/84?’

III — Reply to the question submitted for a preliminary ruling

13.The facts of the dispute pending before the Conseil d'État lead to the conclusion that the question as to which the national court is unsure is essentially whether, under the provisions which constituted the additional levy scheme at the material time, the obligation to pay the levy arises when a person subject to that levy has exceeded one of the two individual reference quantities allocated to him, even though, during the same period of application of the scheme, the aggregate guaranteed amounts in respect of deliveries and direct sales were not exceeded in the Member State concerned.

14.I would point out that the introduction of the additional levy was intended to restore the balance on the milk market, which is characterized by structural surpluses, through limiting production. In order to attain to the maximum extent this objective, which, as the Court has held, is consistent with Article 39 of the Treaty,

two parallel control mechanisms were introduced, the first of which sought to limit the quantities of milk delivered to purchasers for subsequent treatment or processing (see, in particular, Article 5c(l) of Regulation No 804/68) and the second of which sought to curb the quantities of milk sold for direct consumption (see, in particular, Article 5c(2) of Regulation No 804/68).

Those two mechanisms were conceived on the basis of the fundamental concept of a ‘reference quantity’. In the context of the mechanism for the control of deliveries of milk, the ‘reference quantity’ is a quantity of milk representing the quantity of milk delivered by a producer (Formula A) or acquired by a purchaser, generally a dairy, (Formula B), during the reference year chosen by the Member State (Article 2 of Regulation No 857/84). In the context of the mechanism for the control of direct sales, the ‘reference quantity’ is a quantity of milk representing the quantity of milk sold by a producer for direct consumption over the course of the reference year (Article 6(1) of Regulation No 857/84).

The two mechanisms described above also feature the concept of ‘total quantity’, which varies for each Member State (in respect of deliveries, see Article 5c(3) of Regulation No 804/68, and, in respect of direct sales, Article 6(2) of Regulation No 857/84). This represents the maximum limit within which Member States must operate when allocating reference quantities, whether on the basis of the general rules governing determination of those quantities, set out in Articles 2 and 6(1) of Regulation No 857/84, or on that of the derogating provisions in Articles 3, 3a and 4 of that regulation, which provide for the allocation of additional or special reference quantities to certain categories of producer. Within the limits defined by the corresponding total quantities, Member States may also (under Article 4a(l) and (3) of Regulation No 857/84, added by Regulation No 590/85) allocate, with a wide margin of discretion to that end, the reference quantities not used by those who received them to other producers or purchasers in the same region and, if necessary, in other regions.

In my view, two fundamental principles can be derived from the foregoing considerations:

15.The necessary, but also sufficient, condition underlying the creation of an obligation to pay the additional levy lies in the fact of having exceeded the individual reference quantity allocated to the person in question in respect of deliveries or direct sales, readjusted, if necessary, following a decision by the competent national authority allocating to him a special or additional reference quantity pursuant to the relevant special provisions or also allocating to him a non-utilized reference quantity of another recipient pursuant to the discretionary power vested in Member States by Article 4a of Regulation No 857/84. Thus, where the individual reference quantity has been exceeded (and subject to application of Article 4a of Regulation No 857/84), the levy is payable even if the corresponding total quantity available to the Member State concerned has not been exceeded. Article 9(4) of Regulation No 857/84, inserted by Article 1(8) of Council Regulation (EEC) No 1305/85, is typical in this regard. The first subparagraph of Article 9(4) (which, even though initially introduced for the first two (12-month) periods of application of the additional levy scheme, was ultimately retained in force for the whole of the period of application) allowed Member States to allocate the levy collected to finance measures which encourage the definitive discontinuation of milk production. It follows clearly from the remainder of Article 9(4) that the levy is payable even where the corresponding total quantity allocated to the Member State in question has not been exceeded: in accordance with those provisions, allocation of the levy collected for the above purpose is authorized only ‘to the extent that the quantities actually delivered to purchasers and the quantities of direct sales actually effected do not exceed, respectively, the overall guaranteed quantity referred to in Article 5c(3) of Regulation (EEC) No 804/68 and the total quantity referred to in Article 6(2) of this regulation for the Member State concerned. Where one or other of those quantities is exceeded, the amount of the levy collected corresponding to the amount of the excess recorded shall be paid over to the Community' (emphasis added).

Although the two mechanisms for the control of milk production follow the same scheme, they operate in independent ways. Leaving aside the other differences (concerning, for instance, the methods for paying the levy) due in the main to the fact that the two activities concerned (deliveries for treatment or processing and direct sales to consumers) are carried out under different conditions, the most important matter in the present context is to ensure that, within these two mechanisms, the conditions governing the creation of the obligation to pay the levy are determined in an independent manner. Consequently, if a producer has two individual reference quantities at his disposal, one for deliveries and the other for direct sales, the fact that one of those quantities, for instance that in respect of direct sales, has been exceeded is sufficient to give rise to the obligation to pay the corresponding levy: the creation of that obligation, as indicated under (a) above, does not, in principle, depend on whether the total quantity allocated in respect of direct sales has been exceeded, or on whether the total quantity allocated in respect of deliveries, or the sum of those two total quantities, has been exceeded.

18.In my opinion, there is no support in any provision for a conclusion at variance with what I have just set out. It is undoubtedly correct that, despite the independent operation of the two mechanisms for the control of milk production, there exist between them ‘points of contact’, provided for in specific provisions, the most important of which were cited by the national court, namely Article 5c(7) of Regulation No 804/68 and Article 6a of Regulation No 857/84. The absolutely specific nature of those rules, however, makes it necessary, in my view, to hold that they do no more than introduce simple derogations to the principle of autonomy of the two mechanisms mentioned above. Consequently, they cannot justify the inference of a general rule under which the fact that a person has exceeded the individual reference quantity allocated to him does not give rise to an obligation to pay the levy in the case where, for the same period, the sum of the total quantity allocated in respect of deliveries and of that allocated in respect of direct sales has not been exceeded in the Member State in question.

More particularly:

19.Article 5c(7) of Regulation No 804/68, as supplemented by Article 1(3) of Regulation No 1298/85, provides the possibility of adjusting, in accordance with a specified procedure (that set out in Article 30 of Regulation No 804/68) and under certain conditions (recourse by the Member State concerned to ‘objective and duly justified statistical data’), the total quantity allocated for deliveries in order to take account of structural changes affecting deliveries to purchasers and direct sales to consumers. Article 6(2) of Regulation No 857/84, as supplemented by Article 1(4) of Regulation No 1305/85, similarly provides the possibility of adjusting, under the same conditions, the total quantity allocated for direct sales. Those two provisions are thus intended to effect a permanent alteration (and not an alteration limited to a single period of application of the scheme) in the level of total quantities in order to adjust them to structural modifications which are permanent in nature. Consequently, it is not possible to consider those provisions as introducing a principle allowing the exceeding of one of the total quantities to be offset automatically by the unused portion of the other quantity and, moreover, to satisfy temporary needs (that is to say, needs arising during a specific period of application of the scheme) attributable to the requirements of individual producers and not to changes more general in scope and of a structural nature which have arisen within the milk market.

Article 6a of Regulation No 857/84, which provides that producers who have two individual reference quantities, one for deliveries and one for direct sales, may, on request, obtain an increase in one of the two reference quantities, subject to a reduction of the same amount in the other reference quantity, applies only in respect of one single period of application of the scheme and is designed to enable the person concerned to deal with problems arising from a change in his marketing requirements. That being so, it is not possible to derive from Article 6a any rule by which it would be possible to offset the act of exceeding one of the two individual reference quantities, due to a conjunctural increase in production, not connected to a change in marketing requirements, and, moreover, to do so by virtue, not of the unused portion of the other reference quantity which the person has at his disposal, but of the unused portion of the total quantity corresponding to that which the Member State in question has at its disposal.

20.It follows from the 14th paragraph in the order for reference [final paragraph on page 3 of the English translation] that the plaintiff in the main proceedings has argued before the national court that the establishment of a connection between the obligation to pay the levy and the fact of having exceeded the sum of the total quantities available to the Member State in question would not run counter to the logic governing the additional levy scheme, since, if that sum has not been exceeded, there will not ultimately have been an increase in the total quantity of milk produced in the Member State in question.

21.That observation is, in principle, correct. However, identifying the fact giving rise to the obligation to pay the levy with the simple fact that the individual reference quantity has been exceeded may also be regarded as serving, albeit in a different way, the objective pursued by the Community legislature when it introduced the additional levy system: the effectiveness of the individual reference quantity as a means whereby to discourage production would be reduced, perhaps even significantly so, if the recipient of that quantity were able, despite having exceeded that quantity, to hope that he could avoid paying the levy if, by chance, the sum of the total quantities available to the Member State concerned had not in fact been exceeded.

22.

It might, perhaps, have been appropriate to introduce a full and coherent system of provisions, establishing, on the one hand, the relationship between the obligation to pay the levy and the fact of exceeding the sum of the total quantities, and, on the other hand, including the safety release valves necessary to ensure that this relationship would not adversely affect the objective pursued by the introduction of the additional levy. My view, however, is that the factors vital to the operation of such a system (the introduction of which is obviously a matter coming within the discretion of the Community legislature, a discretion which is particularly extensive in the area of the Common Agricultural Policy) cannot be inferred from the specific provisions in Article 5c(7) of Regulation No 804/68 and Article 6a of Regulation No 857/84, or from any other of the provisions which, over the period in question, composed the additional levy scheme.

IV — Conclusion

23.

In the light of the foregoing, I propose that the Court reply as follows to the question submitted to it by the Conseil d'État, Luxembourg:

It cannot be inferred from Article 5c(7) of Regulation (EEC) No 804/68 of the Council of 27 June 1968, from Article 6a of Council Regulation (EEC) No 857/84 of 31 March 1984, or from any other provision of the additional milk levy scheme that the obligation on a person who has received an individual reference quantity to pay the additional levy is conditional upon the sum of the total quantities available to the Member State concerned in respect of deliveries and of direct sales having been exceeded during the period over which the scheme in question was in force.

*1 Original language: Greek.

1 Regulation (EEC) No 804/68 on the common organization of the market in milk and milk products (OJ, English Special Edition 1968 (I), p. 176).

2 Regulation (EEC) No 856/84 amending Regulation (EEC) No 804/68 on the common organization of the market in milk and milk products (OJ 1984 L 90, p. 10).

3 The additional levy was originally introduced for five 12-month periods (beginning on 1 April 1984), which were finally extended to nine (see Article 1(1) of Council Regulation (EEC) No 816/92 of 31 March 1992 amending Regulation (EEC) No 804/68 on the common organization of the market in milk and milk products (OJ 1992 L 86, p. 83). Thus, the scheme of the additional levy continued to be governed, until 31 March 1993, by Article 5c of Regulation No 804/68, as previously amended and supplemented. Article 1(3) of Council Regulation (EEC) No 2071/92 of 30 June 1992 amending Regulation (EEC) No 804/68 (OJ 1992 L 215, p. 64), in force from 1 April 1993, replaced Article 5c with a provision indicating simply that the price system under Regulation No 804/68 ‘is established without prejudice to the implementation of the additional levy’. This latter scheme is already regulated, since 1 April 1993 and for seven periods of twelve months, by the provisions 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).

4 Regulation (EEC) No 857/84 adopting general rules for the application of the levy referred to in Article 5c of Regulation (EEC) No 804/68 in the milk and milk products sector (OJ 1984 L 90, p. 13). This regulation has now been repealed, with effect from 1 April 1993, by Articles 12 and 13 of Regulation No 3950/92 (already cited in footnote 3).

5 Regulation (EEC) No 590/85 amending Regulation (EEC) No 857/84 laying down general rules for the application of the levy referred to in Article 5c of Regulation (EEC) No 804/68 in the milk and milk products sector (OJ 1985 L 68, p. 1).

6 Regulation (EEC) No 1298/85 amending Regulation (EEC) No 804/68 on the common organization of the market in milk and milk products (OJ 1985 L 137, p. 5).

7 Although the original French text refers to the seventh indent, it is obvious that the question submitted must be referring to paragraph (7) of Article 5c of Regulation No 804/68.

8 Sec Case 84/87 Erpeldmg v Secretaire d'État à l'Agriculture et à la Viticulture [1988] ECR 2647. paragraph 26, Case C-290/91 Peter v Hauptzollamt Regensburg [1993] ECR I-2981, paragraph 13, and Case C-351/92 Graffi Hauptzollamt Koln-Rhcmau [1991] ECR I-3361, paragraph 26.

9 Cited above in footnote 5. Article 4a of Regulation No 857/84, initially introduced for the first period — lasting 12 months — of application of the additional-levy system, was finally maintained in force, following successive extensions, until 31 March 1993 (see Article 1(1) of Council Regulation (EEC) No 817/92 of 31 March 1992 amending Regulation (EEC) No 857/84 (OJ 1992 L 86, p. 85).

10 See Article 1(4) of Regulation No 817/92 of 31 March 1992 (OJ 1992 L 86, p. 85).

11 It also follows from Article 4a(3a) of Regulation No 857/84 that the fact of exceeding the individual reference quantity suffices to give rise to the obligation to pay the levy, regardless of whether the corresponding total quantity has or has not been exceeded. As will be recalled, Article 4a(l) and (3) permits Member States to allocate reference quantities which have not been used by certain producers or purchasers to producers or purchasers in the same region or in other regions. Article 4a(3a) (added by the second indent of Article 1(2) of Council Regulation (EEC) No 774/87 of 16 March 1987 amending Regulation (EEC) No 857/84 (OJ 1987 L 78, p. 3) and supplemented by Article 1(2) of Council Regulation (EEC) No 764/89 of 20 March 1989 amending Regulation (EEC) No 857/84 (OJ 1989 L 84, p. 2)) provides that ’the levy shall be charged on all quantities in excess of the individual reference quantities, after any corrections have been made. However, for the first two periods of application in each Member State of the additional levy scheme, levies shall be due to the Community only on the quantity by which either the overall guaranteed quantity referred to in Article 5c(3) of Regulation (EEC) No 804/68 and/or the overall guaranteed quantity referred to in Article 6(2) of this regulation is exceeded' (emphasis added).

12 See Case 120/86 Mulder v Minister van Landbouw en Visserij [1988] ECR 2321, paragraph 18.

I would point out that Article 4a of Regulation No 857/84, already mentioned several times, authorizes the allocation of unused reference quantities only within the context of the same mechanism of production control The wording of Article 4a(1) and (3) does not, in my view, justify adopting an interpretation under which, with a view to increasing the reference quantity allocated, for instance, in respect of direct sales, it would be possible to allocate to the producer an unused reference quantity originally granted in respect of deliveries. It is significant that the second recital in the preamble to Regulation No 590/85, which introduced the provision here being interpreted, indicates that the mechanism of allocating unused reference quantities ‘... in the context of deliveries and direct sales ... can ... be implemented only differently’.

See also the provisions of Article 5(5) and (6) of Commission Regulation (EEC) No 1546/88 of 3 June 1988 laying down detailed rules for the application of the additional levy referred to in Article 5c of Regulation (EEC) No 804/68 (OJ 1988 L 139, p. 12).

Instances in which there has been a strict interpretation of provisions introducing derogations to general rules on the additional levy scheme can be found in Erpelding (cited above in footnote 8), paragraphs 18 and 19, and Mulder (also cited above in footnote 11), paragraph 15, as well as in Case 113/88 Leukhardt v Hauptzollamt Reutlingen [1989] ECR 1991, paragraphs 12 to 14, Case C-177/90 Kühn v Landwirtschaftskammer Weser-Ems [1992] ECR I-35, paragraphs 8 to 11, and Case C-189/92 Le Nan v Coopérative Laitière de Ploudaniel [1994] ECR I-261, paragraphs 19 to 21.

Article 6 of Regulation No 1546/88 also provides that, under Article 5c(7) of Regulation No 804/68 and Article 6(2) of Regulation No 857/84, the quantities added to a total quantity are either allocated to the producers covered by Article 5(5) or (6) of Regulation No 1546/88 or, where appropriate, added to the reserve quantity which, according to Articles 5 and 6(3) of Regulation No 857/84, each Member State must constitute within each of the two total quantities which it holds, in order to make it possible to grant special or additional reference quantities to the categories of persons covered by Articles 3, 3a and 4 of Regulation No 857/84.

For the objective pursued by this provision, see Case C-22/90 France v Commission [1991] ECR I-5285, in particular paragraph 15.

The provisions already cited (see footnote 17) of Article 5(5) and (6) of Regulation No 1546/88 providing other ‘points of contact’ between the two mechanisms for the control of milk production also have an absolutely specific character. In accordance with Article 5(5), producers who have obtained a reference quantity for direct sales and who cease such sales totally or in part may obtain a reference quantity for deliveries if the Member State concerned is in a position to grant them that individual reference quantity from the total quantity which it has at its disposal. Article 5(6) deals with the reverse case: producers who held a reference quantity for deliveries and who cease their deliveries to purchasers, totally or in part, may obtain a reference quantity for direct sales, provided that the Member State concerned can grant them that individual reference quantity without exceeding the corresponding total quantity.

See, inter alia, Case 179/84 Bozzetti v Invemizzi and Ministero del Tesoro [1985] ECR 2301, paragraph 30, Case 265/87 Schräder v Hauptzollamt Gronau [1989] ECR 2237, paragraph 22, and Joined Cases C-267/88 to C-285/88 Wuidart and Others v Laiterie Coopérative Eupenoise and Others [1990] ECR I-435, paragraph 14.