Opinion of Mr advocate general Reischl

Mr President,

Members of the Court,

The question at issue in the reference for a preliminary ruling with which we are concerned today is not new to us. It is concerned with the compensation for revaluation laid down in the German Law of 23 December 1969. That Law was passed following the revaluation of the German mark in 1969 and on the basis of Regulation No 2464/69 of the Council (Official Journal, English Special Edition 1969 (II), p. 527). The said Council regulation was continued in force and amended by the Council Decision of 21 January 1974 and the German Law was still in force in 1974.

Denkavit was refused the compensation for 1974 because it was not an agricultural undertaking within the meaning of German tax law which took as its criterion a certain relationship between the number of cattle and the amount of land used for agricultural purposes. Denkavit brought an action against this in the Finanzgericht Münster. This led to the first reference for a preliminary ruling by order dated 26 September 1977 in which the following questions were put:

In its judgment of 13 June 1978 ([1978] ECR 1317) the Court held that the concept of agriculture is not precisely defined in the Treaty but that it is not out of question that the expression agricultural producers in Regulation No 2464/69 which was relevant for the main action may include production of agricultural products by any method whatever. The Court further held that the Federal Republic of Germany, which had been simply empowered by the said regulation to grant aid, had not exceeded the limits of Community law by excluding industrial livestock keepers and breeders within the meaning of German tax law from aid; neither the provisions of the EEC Treaty nor Article 1 of Regulation No 2464/69 of the Council nor the provisions of the Council Decision of 21 January 1974 forbade the Federal Republic of Germany from acting in this way.

This preliminary ruling nevertheless does not enable the Finanzgericht Münster in its view to resolve the case pending before it. Adopting the plaintiff's view it considers that the Court has assumed false premises and therefore its judgment cannot be binding. It is alleged that the Court has assumed that agricultural livestock breeders and keepers within the meaning of German tax law have mainly used products of their own undertakings as fodder. This is not however true of agricultural calf fatteners with which the main proceedings are concerned. They indeed use the same fodder as industrial calf fatteners, namely milk-based substitute feeding-stuffs, which they purchase. They must do this if they wish to produce veal, since other fodder (apart from full-cream milk which does not come into consideration because of its high price) produces only red beef.

The Finanzgericht therefore once again stayed proceedings and by order dated 19 January 1979 made a fresh reference to the Court for a preliminary ruling. In view of the plaintiff's claim that the Court has so far not considered the question whether the Aufwertungsausgleichgesetz [Law on compensation for the effects of revaluation] discriminates against industrial calf fatteners, this time the following question was put:

My opinion on this is as follows:

1 Translated from the German.