OPINION OF MR ADVOCATE-GENERAL MAYRAS

DELIVERED ON 2 OCTOBER 1974 (*1)

Mr President,

Members of the Court,

The question referred to you by the police court magistrate in economic matters of Haarlem is whether the system for controlling the production of hyacinth bulbs, set up in the Netherlands by a regulation of the Netherlands organization for the production of ornamental flowers, can be reconciled with the provisions of Regulation No 234/68 of the Council on the establishment of a common organization of the market in live trees and other plants, bulbs, roots and the like, cut flowers and ornamental foliage.

There is no need to go once again into the circumstances in which the Dutch magistrate came to refer this question; may I however remind you that as far as I was concerned and for reasons developed in my first opinion I did in the light of the Court record as it stood in April last, consider that the national system of cultivation licences for hyacinth bulbs was incompatible with the provisions of the Community Regulation.

In other words I considered that, in the present case at least, the existence of a common organization of the market did not allow national authorities to continue a system of controlling production which involves in particular the individual grant of cultivation licences for specific areas, which in reality amounts to a national measure organizing the market.

Having considered the matter, the Court thought it right to request further information on two points:

Firstly, whether at the time when Regulation No 234/68 was prepared, there existed in the Netherlands in relation to floriculture, a regulation similar to that of 1971, and whether the Commission and the Council at that time knew of such regulation; if so, the Court desired to know whether the Commission or the Council had adopted a position in the matter.

Secondly, the Court asked the Commission to state whether in other sectors governed by common organizations of the market there existed, or still exist at the present time, national regulations on the production of certain agricultural products that are comparable to the system applying in the Netherlands to the production of hyacinth bulbs.

The Court in fact thought it interesting to know whether Community Regulations on these agricultural products did or did not contain express provisions that embody a finding as to whether such national regulations are compatible with the common organization of the market in question.

After Mr Van Haaster, the Government of the Kingdom of the Netherlands and finally the Commission had in a more or less precise manner replied to the questions thus formulated in your order of 4 July 1974, it is today my task to express my final opinion on the basis of this request for additional information:

Right at the start I can tell you that the fresh examination which I have undertaken has not altered my original conclusions.

In my opinion the answers' to the first question are in no way conclusive for a solution of the problem of interpretation which it is the Court's task to undertake.

What do the Netherlands Government and the Commission in fact tell us?

First of all, that at the time when Regulation No 234/68 was being drafted, there already existed in the Netherlands a regulation relating to the cultivation of bulbs in general, that is to say not only hyacinths but also a much more important production — of tulips and narcissi. This was the subject of a regulation of 16 July 1962.

When in 1964-1965, the Commission prepared a project of a common organization of the market in floriculture, it was aware of this national system, certain aspects of which, it may be added, at that time induced it to consider the institution of a procedure under Article 169 of the Treaty.

At any rate, that the Community authorities were not unaware of the existence of this system, even if the Netherlands Government had not given them any official information, can be treated as an established fact.

There can be no doubt that during the preparatory stages of the future Regulation No 234/68 and particularly in the successive proposals which the Commission was called upon to prepare, the Dutch system was closely examined.

But even the fact that the Commission at this stage of the preparatory work issued an opinion that certain national measures of intervention and of control of production could ‘be temporarily retained’ does not in any way lead me to believe that it had thus a priori admitted that such measures are compatible with the common organization of the market which in 1968 was to be instituted by Regulation No 234/68 of the Council.

On this point, the Commission itself emphasizes in its written observations that if in one of the proposals which it was led to make in 1966, Article 6 (1) expressly tended to confer upon Member States the power of decreeing intervention measures and of laying down minimum export prices, this proposal did not however involve any reference — at any rate express — to the control of cultivation, that is to say, to the system of cultivation licences.

It also emphasizes that the new proposal submitted to the Council on 23 February 1967 did not reproduce Article 6 of the former proposal.

Rather curiously, from this account of the successive preparatory stages of the Regulation the Commission nonetheless concludes that this Community provision does not exclude the intervention of ‘supplementary measures’ — we are not told very clearly whether these ought to be national measures or measures taken by the Community institutions.

I did not think I can follow them along this track.

Firstly, because this would amount to interpreting Regulation No 234/68 through its preparatory stages, looking for the intentions, the motives of the Community legislator, a course which the Court has always refused to take.

I believe that a more certain method in this respect would be to take the Regulation as it is — an objective text, binding in its entirety and of course having direct effect — and to base my interpretation upon the specifix wording of its provisions and their general tenor. Next, because this Regulation does not tend towards a gradual setting up of a Common organization of the market in products of floriculture, which during a transitional period would leave room for certain national measures, but in fact has the appearance, of tending towards the bringing about of a definitive organization of the market in question, even if less complete, or shall we say, less ‘perfect’ than other texts of an analogous nature.

Finally, because the extent of its Article 10, which in particular excludes quantitative restrictions in trade within the Community, does not seem to be affected by the ‘a posteriori’ explanations which have just been given to us, both by the Commission and by the Government of the Netherlands.

To summarize this first point, I therefore consider that the fact that the Commission and the Council had been aware of the Dutch national regulations relating to the production of bulbs for flower growing and also the fact that Regulation No 234/68 did not expressly prohibit the system of cultivation licences, does not allow the conclusion that ‘a contrario’ and implicitly the Council had admitted that such a system was compatible with the setting up of a common organization of the market.

On the contrary, in line with my first opinion, I found an interesting element, referred to in the information given by Mr Van Haaster's legal adviser when addressing the Court. The latter explained that during 1966, that is to say at the very time when Regulation No 234/68 was being drafted, the competent Dutch authorities decided to abolish, as at 1 January 1967, the regulations relating to the cultivation of tulip and narcissus bulbs, no doubt because they considered that these provisions could not be kept in existence when there was a common organization of the market which shortly was to take the place of earlier national provisions.

The fact that as regards hyacinth bulbs the national system of production control should have continued remains inexplicable, or at any rate unexplained.

Perhaps it is simply an omission, though in that case it is difficult to understand that a new regulation should have been passed in 1971, that is to say after the publication of the Community provision.

But in the final resort it is in my view of little importance. Thus to continue cultivation licences solely for hyacinth bulbs is certainly not sufficient to confer upon this system a stamp of compatibility with Community law.

Let us now go on to study the second question, which was only put to the Commission. It is the more interesting one and I do realize that had the Commission been able to bring in evidence in respect of other agricultural markets as to the permitted or even intended co-existence of definitive and complete common organizations, on the one hand, and internal measures virtually constituting national organizations of the market on the other hand, you would be inclined to think that a production control laid down by a Member State and going so far as to permit individual cultivation licences could not, no doubt, be considered incompatible with the Community text as to the establishment of the common organization in the same sector, — in the present case for the production of hyacinth bulbs.

You would in that event rightly have been entitled to fear the chain-reaction effects which a judgment of this Court, declaring the Dutch regulations to be incompatible with a Community text, could not fail to have in other sectors of the common agricultural market.

But, Mr President, members of the Court, the examples quoted by the Commission seem to have no analogy with the case of cultivation of hyacinth bulbs. They can after all be explained by special arguments that lie completely outside the problem at present before the Court.

Dealing first with the cereal sector, it is true that the common organization of the market has in the case of several Member States — amongst them the Federal Republic and France — allowed the continued existence of regulations which do not have the purpose of limiting cereal production but of reducing grave disadvantages which — since before the war it might be added — have resulted from a ‘structural excess capacity’ of mills. There we have a well-known problem which in 1935 induced the French authorities to set up the ‘Office national interprofessionnel des Céréales’ and to prepare a regulatory system for mills; for analogous reasons the German legislator later adopted a law called the ‘Mühlenstrukturgesetz’.

Let us only remember that the purpose of such measures was to improve the situation in a processing industry for agricultural products, not to limit the production of those products. The example therefore provides nothing that is conclusive for solving the present case.

The example of the Dutch regulation for the egg and poultry sector is no more conclusive; this regulation amounts in essence to a quality control for such animal production, since it is its purpose to preserve the purity of the strain of poultry for breeding purposes.

If we go on to the tobacco sector, it must be remembered that two of the Member States, France and Italy, had a legal monopoly in respect of the manufacture and marketing of tobacco; in the case of Italy this monopoly even covered directly the cultivation of tobacco; in France there was a set of regulations having as its purpose to reserve the right of cultivation to certain persons or bodies.

Whilst it is true that the basic Community regulations has expressly declared national provisions that are so strict on matters of production to be incompatible with the principles which it has laid down, it goes without saying that such an express prohibition was in the event indispensable to the extent that it did not affect more than a part of the State monopolies in question. The situation therefore had to be perfectly clear at the time when the Community provision came into force.

As for the wine sector, this is a common organization, which on certain points is provisional and which in any event covers part only, which largely allows the continued existence of national protection measures. It is quite easy to understand, bearing in mind the importance, not only from an economic, but also from social and political points of view, of wine-growing in States like France, Italy or even Germany and Luxembourg, that the Community authorities should until now have been anxious not to go too fast nor too far on the road towards an integrated market. Also, whilst the Commission has proposed a Community regulation for the winegrowing section, the Council has not so far adopted it and this control has remained within the competence of the national authorities.

Finally, the example derived from British legislation on hop production is even less relevant, since the question is still the subject of negotiations between the Community and the United Kingdom, and bearing in mind also that the control of cultivation has, according to the Commission, not even been the subject of discussions.

As we can see, these different situations have only a distant connection with the present case.

It is therefore on a due regard for the principles of the Treaty in the matter of common organizations of agricultural markets that in my view the Court must base its interpretation, and in particular on Article 43 (3), from which one derives the principle that a common organization — always provided it is definitive — automatically replaces the existing national organizations.

I would add that taking together the provisions of Regulation No 234/68, and in particular its Article 10, it is clear that the organization of the markets which it sets up is based on the freedom of commercial transactions within the Community. Now, as I have shown in my first opinion, a rationing of production by the system of cultivation licences cannot but have a real or at any rate potential incidence on the volume of trade. After all, these considerations are in line with the Court's case-law, mapped out by the S.A.I.L. judgment of 21 March 1972 (Rec. 1972, p. 119), the Riseria Geddo judgment of 12 July 1973 ([1973] E.C.R. 865) and finally the Grosoli judgment of 12 December 1973 ([1973] E.C.R. 1555).

I have no hesitation in arriving at the conclusion, thus confirming my first opinion, that the Court ought to find that the rules laid down by Regulation of the Council No 234/68 on the establishment of a common organization of the market in live trees and other plants, bulbs, roots and the like, cut flowers and ornamental foliage, and in particular by Article 10 of this Regulation, do not permit a Member State to maintain or set up a national system of control of production for hyacinth bulbs that involves in particular the delivery of individual cultivation licences.

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(*1) Translated from the French.