Report for the Hearing delivered in Case 113/88
I — Facts and written procedure
1. The applicable provisions of Community law
2. The German provisions implementing the Community rules
The additional milk levy was implemented in the Federal Republic of Germany by the Verordnung über die Abgaben im Rahmen von Garantiemengen im Bereich der Marktorganisation für Milch und Milcherzeugnisse (Milch-Garantiemengen-Verordnung) (Regulation on levies in connection with guaranteed quantities under the organization of the market for milk and milk products (milk guaranteed quantities regulation)) of 25 May 1984 (Bundesgesetzblatt I, p. 720), as most recently amended by the Regulation of 18 June 1986 (Bundesgesetzblatt I, p. 911).
Paragraph 1 of the Regulation lays down the principle that in Germany it is the producer and not the purchaser who must pay the levy. Paragraph 4(2) provides that the reference quantity shall be the quantity delivered by the milk producer to a purchaser in the calendar year 1983, minus 4%. This rate of abatement shall be raised if the quantity delivered in the calendar year 1983 is higher than that delivered in 1981.
3. The main proceedings
In 1980 Karl Leukhardt, a farmer, delivered 188954 kg of milk to the dairy Milchwerk Tübingen. The figures for 1981, 1982 and 1983 were 160707 kg, 142417 kg and 142747 kg respectively. On the basis of the delivery in 1983 the dairy allocated him a reference quantity of 138300 kg.
On 26 October 1984 the competent Landwirtschaftsamt (Agricultural Office) issued Mr Leukhardt with a certificate which attested that from March 1981 onwards he had suffered an excessive loss of milk cows which had persistently affected his milk production. For that reason the quantity delivered in 1981 could be taken into account. By written notice of 6 December 1984 Milchwerk Tübingen allocated Mr Leukhardt a new reference quantity of 155500 kg, calculated on the basis of the quantity delivered in 1981.
The plaintiff then brought proceedings against the Hauptzollamt (Principal Customs Office) Reutlingen in which he claims that the reference quantity to be allocated to him should be calculated on the basis of his deliveries in 1980.
He submits first that it is contrary to the prohibition of discrimination laid down in Article 40(3) of the EEC Treaty and the general principle of equality developed in the Court's case-law to refer to 1981 or 1982 as the reference year not only in the case of a producer whose milk production was adversely affected by an extraordinary event in 1983, but also in the case of milk producers whose milk production was in addition affected by an extraordinary event in 1981 and 1982. By virtue of the principle of equality, the plaintiff in the main proceedings is entitled to require that the calculation of the reference quantity be based on the milk delivered in the 1980 calendar year, which would give rise to a reference quantity of approximately 182600 kg.
In the alternative, Mr Leukhardt submits that the reference quantity should be recalculated on the basis of the quantity delivered in 1981 plus 1%, as set out in Article 2(1) of Regulation No 857/84, which would result in a reference quantity of 162314 kg.
In the opinion of the Hauptzollamt, the defendant in the main proceedings, it is not contrary to the Community law principle of equality or to the prohibition of discrimination laid down in Article 40(3) of the EEC Treaty to refer to 1981, if it was the producer's most favourable calendar reference year, pursuant to Article 3(3) of Regulation No 857/84, even if milk production in that year was also adversely affected by an exceptional event. Nor is the plaintiff entitled to rely on the method provided for in Article 2(1) of that Regulation, since the methods for the calculation of the reference quantity set out in Article 2(1) and (2) are to be chosen by the Member States and not by the individual milk producers.
Having regard to these arguments of the parties the Finanzgericht Baden-Württemberg stayed its proceedings, by order of 8 April 1988, and referred the following questions for a preliminary ruling pursuant to Article 177 of the EEC Treaty:
In the grounds of the order making the reference the Finanzgericht observes that the fact that Article 3(3) of Regulation No 857/84 limits the reference years available to a producer to 1981, 1982 or 1983 may be a breach of the prohibition of discrimination contained in Article 40(3) of the EEC Treaty or the Community law principle of equality. Since the plaintiff is in a worse position than a comparable producer whose milk production was not affected by an exceptional event until after the end of 1981 and whose 1981 milk delivery was therefore comparatively higher, Article 3(3) may be invalid in so far as no substantial objective reasons may be found to justify the equal treatment of the plaintiff and the other producer. With regard to the second preliminary question the Finanzgericht appears to be inclined to accept the arguments of the defendant Hauptzollamt.
4. Procedure before the Court of Justice
The order making the reference was received at the Court Registry on 11 April 1988.
In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities written observations were submitted by the plaintiff in the main proceedings, Karl Leukhardt, represented by Lutz Frauendorf, Rechtsanwalt, Tübingen, by the Government of the Federal Republic of Germany, represented by Martin Seidel, and by the Commission of the European Communities, represented by its Legal Adviser Peter Karpenstein.
Upon hearing the Repon of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry.
Pursuant to Anicie 95 of the Rules of Procedure the Court decided on 7 December 1988 to assign the case to the Third Chamber.
II — Written observations
1. The first question
2. The second question
III — Answers to questions asked by the Court
1. In answer to the Court's question as to whether the first question referred should be regarded as already settled by the judgment of 17 May 1988 in Case 84/87 Erpelding, Mr Leukhardt submits in essence that that judgment did not provide the desired interpretation of Regulation No 857/84 consistent with the EEC Treaty and left open the question of the calculation of the reference quantity in a case where Article 3(3) of Regulation No 857/84 is applied. That question is not limited to the problem of the choice of the reference year. The method of calculation established by the Bundesfinanzhof in its judgment of 27 January 1987 (supra) (fixing of the reference quantity on the basis of the production in 1981, plus 1%) is unobjectionable.
2. In answer to a question from the Court the Commission states that the practice of the Member States is in conformity with the rules confirmed by the Court in its judgment of 28 April 1988 in Case 61/87 Thevenot. In cases when Article 3(3) of Regulation No 857/84 is applied reference may certainly be made to a reference year other than that generally chosen by the Member State. However, apart from the choice of the reference year the other rules in Article 2 for the determination of the producers' reference quantity continue to apply. Accordingly, the weightings to be applied to the reference quantities of producers to whom Article 3(3) is applied are those applicable to producers to whom Article 3(3) is not applied.
1 Language of the case German