JUDGMENT OF 13. 3. 1980 — CASE 124/79 VAN WALSUM v PRODUKTSCHAP VOOR VEE EN VLEES

In Case 124/79 REFERENCE to the Court under Article 177 of the EEC Treaty by the College van Beroep voor het Bedrijfsleven [Administrative Court of Last Instance in Matters of Trade and Industry], The Hague, for a preliminary ruling in the action pending before that court between

THE COURT (Second Chamber) composed of: A. Touffait, President of Chamber, P. Pescatore and O. Due, Judges, Advocate General: J.-P. Warner Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

I — Facts and written procedure

II — Written observations submitted to the Court

IIII — Oral procedure

Decision

Costs

I —. Facts and written procedure

(a). entitlement to a considerable part of the GATT quota is reserved to the processing industry if and so far as that industry has imported frozen beef and veal in application of the favourable system contained in Article 14 (1) (b) of Regulation (EEC) No 805/68 of the Council as last amended and

(b). traders to whom this favourable system does not apply are denied access to a considerable part of the GATT quota in the event of no share in that considerable part of the GATT quota being allocated to them by the national authority?

II —. Written observations submitted to the Court

(a). Article 3 (1) of Regulation No 3063/78 is of general scope and is not subject to any qualification. Traditional importers are just as much persons concerned as the processing industry. A significant part of the GATT quota having been reserved by the Produktschap's decision to the processing industry, the traditional importers have access only to the remaining quota share, and that in competition with the processing industry. The decision under attack is therefore incompatible with the wording of Article 3 (1) of Regulation No 3063/78.

(b). That provision is based upon the principle, expressed in the second recital of the preamble to Regulation No 3063/78, that equal and continuous access to the quota should be ensured for all persons concerned until the quota is used up. All persons concerned are therefore entitled to equal access to the whole of the quota; however, by reason of the decision in dispute the traditional importers do not have access to the significant part of the quota which is reserved to the processing industry. The Produktschap's decision accordingly offends also against the principle expressed in Regulation No 3063/78.

(c). Moreover, the decision in dispute is contrary to Article 40 (3) of the EEC Treaty under which, in the establishment of a common organization of agricultural markets, any discrimination between producers or consumers shall be excluded. By favouring in important respects one finite group of importers in comparison with another group of importers, the Produktschap's decision constitutes discrimination.

(d). The Member States do not have power to adopt, at a national level, complementary implementing measures in regard to products covered by a common organization of the market, especially when those measures may affect the price-formation mechanism. In the present case, since a large part of the GATT quota is reserved to the processing industry and since meat imported under that quota may be freely sold, the processing industry is placed in the position of being able to play a decisive role in fixing the price of the product in question. Accordingly, the principle flowing from Article 40 of the Treaty has been contravened.

(e). The answer to all the points in the question referred to the Court for a preliminary ruling should therefore be in the affirmative.

3. The Commission notes in general terms that the GATT quota is a Community quota and that it is therefore for the Community to determine the conditions under which it should be utilized, subject to the obligations which the Community has undertaken at an international level or in accordance with the general or sectoral aims of the economic policy which the institutions pursue in the context of their powers. The rules laid down by the Community for the allocation by the Member States of the quota must be regarded as purely implementing measures of an administrative nature; the limited nature of that delegation does not leave any power for action at national level which is contrary to Community principles of economic policy or which may offend against the principle of equality of treatment for all citizens of the Community. In regard to the quota subject to Regulation No 3063/78, the Member States have power only to lay down the technical and procedural rules necessary to ensure that the quota limits are observed and to guarantee equality of treatment for those benefiting from the quota.

IIII —. Oral procedure

1. By order of 31 July 1979, which was received at the Court on 6 August 1979, the College van Beroep voor het Bedrifjsleven referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of Article 3 of Council Regulation No 3063/78 of 18 December 1978 opening, allocating and providing for the administration of a Community tariff quota for frozen beef and veal falling within subheading 02.01 A II (b) of the Common Customs Tariff for the year 1979 (Official Journal, L 366, p. 6)

2. It appears from the file that, in the context of the General Agreement on Tariffs and Trade (GATT), the Community has agreed to open, at a rate of duty of 20 %, an annual Community tariff quota for the importation of beef and veal from nonmember countries which have subscribed to GATT (subheading 02.01 A II (b) of the Common Customs Tariff). The quota is allocated each year by the Community amongst the Member States, a single sub-quota being fixed for the Benelux countries which reallocate it amongst themselves. The quota allocated to the Benelux countries for 1979 by Regulation No 3063/78 amounts to a total of 4240 tonnes of which 2756 tonnes are allotted to the Netherlands under an internal scale of apportionment between the Benelux countries.

3. By decision of 11 July 1979 the Produktschap voor Vee en Vlees, which is responsible in the Netherlands for the allocation of the national quota, laid down a scale of apportionment of the quota amongst the undertakings concerned. On that occasion, as in previous years, it decided that the allocation would be made in proportion to the average imports of beef and veal taken into account and effected in the period of three calendar years immediately preceding the year in question. For that purpose the Produktschap regards as imports of beef and veal only those amounts which are subject to a full or partial levy or for which a Community quota has been opened. Imports for which the levy has been totally suspended are not taken into account.

4. By its decision of 11 July 1979 the Produktschap also included amongst the imports of meat taken into account for the purpose of dividing the quota imports which had been effected on the basis of Article 14 (1) (b) of Regulation No 805/68 of the Council of 27 June 1968 as amended by Article 3 of Council Regulation No 425/77 of 14 February 1977 (Official Journal, English Special Edition 1968 (I), p. 187, and Official Journal L 61, p. 1respectively). That provision provides for a total or partial suspension of levy for frozen meat intended for the processing industry for the manufacture of certain preserved foods. The amounts imported under that provision were taken into account by the Produktschap by reason of the fact that, during the period under consideration, they had benefited only from a partial suspension of levy.

5. The appellant in the main action considered itself to have been adversely affected by that new method of calculation adopted by the Produktschap. It maintained that since that new scheme reserved a significant part of the quota to the processing industry the opportunities for importing at the reduced rate of duty open to importers which do not carry on processing were significantly reduced. Since the allocation is carried out in proportion to imports in previous trading years that method would have the result of gradually increasing the share of the processing industry to the prejudice of importers so as completely to exclude the latter in the long term.

6. During the procedure before the national court the question arose whether the Produktschap's decision to include imports covered by Article 14 (1) (b) of Regulation No 425/77 in the reference figures for the allocation of the national GATT quota was, in those circumstances, incompatible with Article 3 (1) of Council Regulation No 3063/78 which obliges Member States to guarantee all persons concerned established within their territories free access to the quota shares allocated to them.

7. According to the College van Beroep, the compatibility of the Produktschap's decision with Community law is seriously in doubt. The College therefore decided to suspend the said decision, ad interim, since it was proved that it affected the interests of the appellant, and to make a reference to the Court of Justice under Article 177 of the EEC Treaty by requesting it to give a preliminary ruling on the following question:

8. In terms of Article 3 (1) of Regulation No 3063/78 the Member States shall take all appropriate steps to guarantee all persons concerned established within their territories free access to the quota shares allocated to them.

9. It appears from the second and fourth recitals in the preamble that that provision has the aim of ensuring equal and continuous access to the quota ... for all persons concerned while leaving to each Member State the choice of a management system for its share of the quota so that may ensure an allocation which is appropriate from an economic viewpoint.

10. The system practised by the Netherlands Produktschap, which consists in taking imports carried out in the course of previous trading years as a reference criterion, satisfies, in principle, those requirements in that it guarantees both continuity in the flow of imports and the adjustment of supplies to economic needs.

11. In fact, the complaint of the appellant in the main action relates exclusively to the fact that as from the 1979 season the Produktschap has included importers benefiting from the system of importation laid down in Article 14 (1) (b) of Regulation No 805/68, as amended by Regulation No 425/77, amongst the undertakings invited to take part in the allocation of the quota in question.

12. It does not appear, however, that, by that expansion, the Produktschap has unduly restricted free access by other persons concerned to the quota in question. Indeed, it appears from the explanations provided in the course of the proceedings that the taking into account of imports carried out under the said provision is due to the fact that those imports are at present subject to levy, albeit at a reduced rate. Contrary to what has been contended by the appellant in the main action, that expansion of the number of persons benefiting from the quota does not have the result, even in the long term, of excluding importers who do not satisfy the conditions for access to the benefit of the special system of importation provided for in Article 14 (1) (b) of Regulation No 805/68. If any relative disadvantage to the category of importers to which the appellant in the main action belongs were to arise, that disadvantage would only be the consequence of extending the benefit of participation in the GATT quota to a category of importers who unquestionably come within the concept of persons concerned referred to in Article 3 (1) of Regulation No 3063/78 and who have accordingly a legitimate interest in being included in the allocation of the quota.

13. It appears therefore that, according to the test laid down by the Court in its judgment of 23 January 1980 in Case 35/79 Grosoli and Others [1980] ECR, the Produktschap did not, by its decision of 11 July 1979, go outside the bounds of the power of management left to the Member State concerned.

14. It does not appear necessary to consider separately the argument based by the appellant in the main action on Article 40 (3) of the EEC Treaty in terms of which the common organization of a market shall exclude any discrimination between producers or consumers within the Community. Indeed, as moreover the appellant itself recognizes, Article 3 of Regulation No 3063/78 amounts only to a specific expression of that principle in the light of the particular facts of the allocation of the quota in question, regard being had to the objectives of economic policy which are pursued in the context of the common organization of the market in beef and veal.

15. The answer to the question submitted should therefore be that any methods of allocation laid down by a competent national authority, which involve including undertakings which benefit from the system contained in Article 14 (1) (b) of Regulation No 805/68 of the Council, as amended by Council Regulation No 425/77, amongst the persons concerned, who are referred to in the provisions of Article 3 (1) of Council Regulation No 3063/78 of 18 December 1978 opening, allocating and providing for the administration of a Community tariff quota for frozen beef and veal falling within subheading' 02.01 A II (b) of the Common Customs Tariff (1979), are compatible with those provisions, even if they result in a corresponding reduction in other importers' shares in the allocation of the quota in question.

16. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable.

On those grounds, THE COURT (Second Chamber), in answer to the questions submitted to it by the President of the College van Beroep voor het Bedrijfsleven by order of 31 July 1979, hereby rules: