Report for the Hearing delivered in Case 118/86

I — Facts and procedure

1. The Netherlands Destructiewet (Law on the destruction of cattle carcasses and animal offal) of 21 February 1957 (Staatsblad, 1957/84, p. 155) regulates the operations intended to render animal offal innocuous by converting it into useful products, with the object, according to its preamble, of preventing any risk or damage to or impairment of public health.

2. At present there are four rendering plants in the Netherlands, each operating within the area assigned to it.

3. Poultry offal which is unfit for human consumption is covered by Regulation No 827/68 of the Council of 28 June 1968 on the common organization of the market in certain products listed in Annex II to the Treaty (Official Journal, English Special Edition 1968 (I), p. 209).

4. In November 1984, the Public Prosecutor's Office attached to the Arrondissementsrechtbank (District Court), Arnhem, brought charges against Nertsvoederfabriek Nederland BV for having, between January and October 1984, in breach of Article 5 of the Destructiewet, set up, brought into operation or maintained in operation without a licence, an installation intended exclusively or mainly for rendering animal offal innocuous by converting it into useful products and for having used that installation to process poultry offal into an end product (a brownish powder) suitable for incorporation in animal feedingstuffs by means of heating in a drying installation. The magistrate found the defendant guilty by judgment of 10 December 1984.

5. Nertsvoederfabriek Nederland BV, the defendant in the proceedings at first instance (hereinafter referred to as the defendant) and the Public Prosecutor's Office both appealed to the Gerechtshof, (Regional Court of Appeal), Arnhem. Before that court, the defendant maintained that the Destructiewet infringed Regulations Nos 827/68 and 2777/75 and Articles 34 and 37 (2) of the EEC Treaty, and referred to a letter from the Commission expressing the view that the Destructiewet was also indirectly in breach of Article 30 of the Treaty. The Public Prosecutor, on the other hand, contended that the Destructiewet was justified on grounds of the protection of the health of humans and animals within the meaning of Article 36 of the Treaty.

6. Consequently, the Gerechtshof, Arnhem, by order of 27 March 1986, stayed the proceedings and submitted the following question for a preliminary ruling under Article 177 of the EEC Treaty:

7. The order of the Gerechtshof, Arnhem, was received at the Court Registry on 21 May 1986.

8. Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted on 18 August 1986 by the Commission of the European Communities, represented by its Legal Adviser, Robert Caspar Fischer, on 20 August 1986 by Nertsvoerderfabriek Nederland BV, the defendant in the main proceedings, represented by H. J. Bronkhorst, of the Hague Bar, and by the Government of the Kingdom of the Netherlands, represented by E. F. Jacobs, acting Secretary-General, Ministry of Foreign Affairs.

9. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure wihout any preparatory inquiry. It nevertheless invited the defendant in the main proceedings and the Commission to reply in writing to a number of questions; the replies were given within the period prescribed.

II — Written observations submitted to the Court

1. According to Nertsvoederfabriek Nederland BV, the defendant in the main proceedings, the system created by the Destructiewet is incompatible with Regulations Nos 2777/75 and 827/68 and Articles 30, 34, 36 and 37 (2) of the EEC Treaty.

2. The Government of the Kingdom of the Netherlands points out, in general terms, referring to the judgment of 1 April 1982 in Joined Cases 141 to 143/81 Holdijk [1982] ECR 1299, that rules which do not have as their purpose or effect a specific restriction on exports, as in the case of the Destructiewet which requires that all offal is to be handed over to the local authorities in every case, cannot constitute an infringement of Articles 34 and 37 of the EEC Treaty.

3. The Commission states, with respect to the facts of the case, that the Destructiewet places Netherlands undertakings at a financial disadvantage by comparision with their competitors in other Member States. According to the Commission, the Destructiewet prohibits poultry slaughterers from building installations for the processing of offal into high-protein animal meal, in so far as that manufacturing process falls within the definition of destruction of offal contained in the Destructiewet; under that Law, there is no opportunity for poultry slaughterers wishing to do so to be licensed to carry out that process, even if only to process offal produced on their own premises, and a consequence of the Destructiewet is to deprive poultry slaughterers of the offal which they themselves wish to process into animal meal or to export.

III — Answers to the questions put by the Court

1. In reply to the question whether, in its opinion, Regulation No 2777/75 applies to poultry offal, Nertsvoederfabnek Nederland BV replied that, as a result of different consumer preferences and customs, in the Netherlands certain offal is regarded as unfit for human consumption, whereas it is not so regarded under Community law. Referring to the Explanatory Notes to the Common Customs Tariff, with respect to heading 02.02: Edible offals of poultry, the defendant in the main proceedings considers that the offal referred to therein falls within the ambit of Regulation No 2777/75; such offal is not, however, regarded by the Netherlands authorities as fit for human consumption and has to be made over to rendering plants.

2. In reply to a similar question, the Commission stated that, whilst poultry offal which is unfit for human consumption is in general covered by Regulation No 827/68, it may also in certain cases be covered by Regulation No 2777/75, since the downgrading of a slaughtered bird does not necessarily apply to all the offal. The Commission considers, however, that the difference is of no practical relevance, since the answer proposed by the Commission applies regardless of the market organization concerned.

1 Language of the Case: Dutch.