Report for the Hearing delivered in Case 261/85
I — Facts and procedure
A— The legislation in question
As a result of the judgment delivered by the Court of Justice of the European Communities on 8 February 1983 in Case 124/81 Commission v United Kingdom [1983] ECR 203), the United Kingdom amended its legislation concerning milk. Pursuant to the Importation of Milk Act 1983 various regulations were issued in 1983 which entered into force on 16 November 1983, namely the Importation of Milk Regulations 1983 (SI 1983 No 1563), the Import of Milk (Scotland) Regulations 1983 (SI 1983 No 1545) and the Importation of Milk Regulations (Northern Ireland) 1983 (SI 1983 No 338).
Analogous provisions apply in Scotland by virtue of the Cream (Heat Treatment) (Scotland) Regulations 1983 (SI 1983 No 1515) and the Milk-Based Drinks (Scotland) Regulations 1983.
The effect of those regulations is to prevent milk produced in Northern Ireland from being used in the manufacture of heat treated milk-based drinks and cream in Great Britain.
Conversely, analogous regulations preclude the use of milk produced in Great Britain in the manufacture of heat treated milk-based drinks and cream in Northern Ireland.
Those regulations do not apply to milk imported into the United Kingdom in accordance with regulations 3 and 4 of the Importation of Milk Regulations 1983 (and the analogous Scottish provisions) where the milk in question may be classified, under the terms of the Regulations, as permitted imported milk.
Under Schedule 3 of the Regulations, the term permitted imported milk means, firstly, milk imported into England and Wales [and Scotland] pursuant to the disapplication, by regulation 4, of the importation prohibition contained in regulation 3, and in accordance with these regulations and, secondly, milk brought into England and Wales [and Scotland] from another part of the United Kingdom where that milk has been imported into that other part of the United Kingdom in accordance with legislation in force in that other part of the United Kingdom.
It follows from the last-mentioned provisions that imported milk may be used in the manufacture of heat treated milk-based drinks and cream in Great Britain and Northern Ireland where it fulfils all the conditions laid down in regulation 4 of the Importation of Milk Regulations 1983 (and the analogous Scottish provisions).
B — The infringement procedure
1. By a letter of 2 February 1984 (SG (84) D/1613) the Commission informed the United Kingdom that it was of the opinion that the absolute ban on imports of pasteurized milk and fresh pasteurized milk is contrary to Article 30 of the EEC Treaty and that it cannot be justified under Article 36. If an exporting Member State is able to provide adequate animal and public health guarantees the Commission sees no reason why the United Kingdom should not accept imports of pasteurized milk and fresh pasteurized cream from that Member State.
2. By a letter of 23 March 1984 sent to the Commission by the Office of the United Kingdom Permanent Representative to the Communities, the United Kingdom replied to the two points raised by the Commission. The United Kingdom accepted that the prohibition on the importation of pasteurized milk and fresh pasteurized cream was either a quantitative restriction or a measure having equivalent effect; however, it considered that the prohibition was justified under Article 36 of the Treaty by the need to protect human health, since the process of pasteurizing milk did not provide the same health guarantees as the ultra heat treatment (UHT); the same applied to cream where it was simply pasteurized and was not frozen. As regards trade in pasteurized milk between Great Britain and Northern Ireland, the United Kingdom observes that the Commission does not place any reliance in this respect on Article 30 of the Treaty; moreover the provisions in question are not contrary to the common organization of the markets in the dairy sector.
3. By a letter of 29 November 1984 (SG (84) D/15357), the Commission sent the United Kingdom the reasoned opinion provided for in Article 169 of the Treaty.
4. In a letter of 1 February 1985, from the Office of the United Kingdom Permanent Representative to the European Communities, the United Kingdom reiterated its view that the measures in question were justified on health grounds.
5. Since the United Kingdom did not take the necessary measures to comply with the reasoned opinion of 29 November 1984, the Commission decided to make the present application to the Court of Justice, which was lodged at the Court Registry on 20 August 1985.
6. In its defence, lodged on 23 January 1986 the United Kingdom stated that the provisions requiring the use of milk produced in Great Britain in the manufacture of heat-treated cream and milk-based drink in Great Britain and the analogous provisions for Northern Ireland, namely the Milk and Dairies (heat treatment of cream) Regulations 1983 (SI 1983 No 1509), the Cream (heat treatment) (Scotland) Regulations 1983 (SI 1983 No 1515) and the Milk-Based Drinks (Scotland) Regulations 1983, were in the process of being amended and it subsequently forwarded to the Commission the texts of the amending regulations.
7. Since those regulations came into operation on 1 June 1986 the Commission, in its reply, stated that it was withdrawing the part of its case which concerned the abovementioned requirement since it no longer existed. However, the Commission requested the Court to order the United Kingdom to pay the costs in respect of this part of its application since the Commission's withdrawal was justified by the United Kingdom's conduct.
II — Conclusions of the parties
The Commission claims that the Court should :
The United Kingdom contends that the Court should:
III — Summary of the submissions and arguments of the parties
1. The Commission ultimately restricts its case to the provisions which prohibit in all parts of the United Kingdom the importation of pasteurized milk and unfrozen pasteurized cream. It considers that they clearly constitute a measure having equivalent effect to a quantitative restriction. on imports.
2. The basis of the United Kingdom's defence is that the prohibitions on imports are justified by the strictness of its own legislation.
3. The Commission's reply
4. The United Kingdom's rejoinder
IV — Replies to the questions put by the Court
1. Replies of the United Kingdom
Question
The comprehensive system of control of the quality of milk which exists in the United Kingdom and on which the latter dwells at length in its defence (pp. 7 et seq.) is undoubtedly designed to ensure that the pasteurized milk produced in those conditions has intrinsic properties which guarantee its safe condition. The United Kingdom has in particular indicated that the analyses carried out both by qualified officers of the local authorities and by the Milk Marketing Board check the hygienic quality of pasteurized milk produced in the United Kingdom. The Government of the United Kingdom is requested to state clearly and precisely:
Reply
The United Kingdom makes four preliminary comments: First, one of the functions of the Milk Marketing Board is to analyse the quality of the untreated milk which is supplied to heat-treatment plants. The quality of the untreated milk may be considered by reference to its compositional quality, hygienic quality and antibiotic residues. In its reply the United Kingdom confines itself to hygienic quality.
Secondly, the intrinsic quality of heat-treated milk is enhanced by the code of practice for the assessment of milk quality issued by the Joint Committee of the Milk Marketing Board and Dairy Trade Federation. That code of practice is in effect a condition of sale.
Thirdly, the hygienic quality system employed within the United Kingdom is aimed at the minimization of risk to public health. No method of measurement exists which can guarantee that a consignment of milk injurious to health is not supplied to the consumer. Thus it is important to maintain and promote the highest standards of hygiene from farm to consumers.
Fourthly, the United Kingdom's system is intended to ensure that all untreated milk and all heat-treated milk achieves bacteriological and chemical standards which are at least equivalent to those prescribed for step 2 in Chapters VI and VII of Annex A to the directive.
Under the central testing of milk quality payment schemes the untreated milk of every producer is tested each week by the Milk Marketing Board at a substantial cost (at present more than UKL 2.5 million per annum).
The principal test used by the Milk Marketing Board is a measurement of total bacterial count (TBC), which is the equivalent of the plate count 30o C (per ml) test in Part D of Chapter VI of Annex A to the directive.
The Milk Marketing Board makes adjustments to producers' prices in respect of hygienic quality. The success of the test was described as follows by the Joint Milk Quality Committee in its 1986 report: Table IV gives a monthly breakdown of the litres and percentage of wholesale litres in each TBC band from April 1985 to March 1986. On average over 98% of ex-farm milk is placed in bands A, AX and B (that is to say, has a TBC of less than 100000).
The step 2 standards require a plate count of less than 100000. In June 1982 the mean TBC weighted average was 94000. Following the introduction of central testing in October 1982 substantial progress was made. The figure of 90000 TBC fell dramatically to 32000 TBC. By June 1985 it had been further reduced to 17000 and was at the same level in June 1986. In 1987 the Milk Marketing Board has increased the price penalty to 4.8 pence per litre for milk having a TBC in excess of 100000. In June 1986 only 1.6% of all litres of untreated milk had a TBC in excess of a 100000. This constitutes an objective assessment of the hygienic quality of the milk, the reason for the low TBC being the system for enforcement of hygienic quality.
It is important to minimize the risk of harmful bacteria entering the heat-treatment plant since pasteurization may fail to kill all bacteria, the process of pasteurization may be defective or harmful bacteria may cause post-pasteurization contamination.
As regards heat-treated milk, there is no equivalent to the Milk Marketing Board's central testing. However, a limited industry survey indicates that step 2 standards are generally achieved.
Licensed processors also operate their own system of checks and these can be rigorous, as is demonstrated by Appendix 3 to the United Kingdom's answers; these contain a description of the quality control system applied by one of the principal suppliers of pasteurized milk in the United Kingdom. Such a system of control, in which tests are carried out 365 days a year at the dairy, minimizes the hazard to public health. As in the case of untreated milk the principal safeguard against hazard to health is the existence of a comprehensive system.
Question
Reply
Requirements can indeed be formulated. Before 1 January 1989 the United Kingdom's requirements are equal to the totality of the United Kingdom system as described in the defence and in the preceding reply. After 1 January 1989 the United Kingdom's requirements will be the step 2 requirements of the directive. After that date verification will consist principally in checking the certificate of compliance provided for by the directive. Before 1 January 1989 suitable verification is impossible in the absence, firstly, of proof by the exporting State that is able to meet the requirements of the United Kingdom system and, secondly, of rapid and reliable methods of testing samples of pasteurized milk at the place of entry for, at least, TBC and coliform.
Question
On page 23 of its defence the United Kingdom says that it now has substantial and relevant experience as to the ability of exporting Member States to comply with the standards for UHT and sterilized milk required by the United Kingdom and that it has happened that milk coming from certain Member States does not offer all the guarantees required.
Reply
The United Kingdom considers that none of the other Member States is able to produce adequate guarantees. An offer of a guarantee has to be tested by proof of the adequacy of the guarantee, and despite the initiation of these proceedings by the Commission no such offer has been made.
Question
Reply
The hygienic quality of pasteurized milk supplied to consumers in the United Kingdom has been produced under a system of controls designed to minimize the risk of any injury to health. Within that system certain producers may adopt even more rigorous systems of quality control. The aim of the directive is to ensure that no producer can engage in intra-Community trade unless he is capable of achieving high quality standards. However, the probable existence of disparities in the quality of milk currently produced in other Member States only emphasizes the importance of the State system of controls and the State as ultimate guarantor of the quality of milk exported by its nationals.
2. Questions put to the Commission
Question
The Commission considers that the prohibition on importation of which it complains is disproportionate having regard to the objectives laid down in Article 36 of the Treaty in so far as that prohibition affects all the Member States without having regard to the specific nature of the imported product.
It maintains that whilst the Member States have different requirements as regards the control of the quality of milk it does not follow that the systems of control do not offer equivalent guarantees.
The Commission is requested to state what guarantees, in its view, the United Kingdom would be legitimately entitled to call for, what guarantees the other Member States would be able as of now to offer to the United Kingdom and what form those guarantees might take.
Reply
The Commission observes firstly that Directive 85/397/EEC lays down common standards for pasteurized milk which guarantee a satisfactory and sufficient level of protection of human health. The United Kingdom is entitled to require imports of pasteurized milk to comply with the standards contained in that directive.
A certificate issued by the competent authority of the Member State exporting to the United Kingdom stating that the particular batch of milk concerned complies with those standards is sufficient. The Commission adds that such a solution was suggested by the Court in Case 124/81 Commission v United Kingdom, cited above, and is in fact made considerably simpler as a result of the existence of commonly agreed standards at a Community level.
Question
On page 9 of the application the Commission says that certain bacteriological tests can be completed within a short time and monitoring of residue levels does not necessitate the detention of the product pending analysis. The Commission is requested to state what are the tests which would offer the United Kingdom the guarantees which it calls for whilst not causing imported products to be immobilized for a period during which they would become unfit for consumption?
Reply
The Commission emphasizes firstly that it would not be permissible for the United Kingdom to resort to systematic checking of imports of pasteurized milk from other Member States. The United Kingdom authorities must rely on the certificate issued by the exporting Member State and may only undertake random spot checks on specific consignments in a nondiscriminatory manner. The tests which could be undertaken by the United Kingdom without immobilizing the milk are as follows:
Question
On page 8 of its reply the Commission says that the United Kingdom is obliged to allow imports of milk which complies with the common standards laid down in the directive. A prohibition of imports of such milk cannot be justified under Article 36 as necessary for the protection of public health. The Commission is requested to state which are the Member States which have now adopted the measures needed to comply with the requirements of Directive 85/397/EEC of 5 August 1985.
Reply
Member States have until 1 January 1989 to implement the directive. No Member State has as yet officially informed the Commission of the measures which it has taken to implement the directive.
1 Language of the Case: English.