Report for the Hearing delivered in Joined Cases C-267/88 to C-285/88

I — Facts and written procedure

1. Relevant Community legislation

2. The Belgian legislation implementing the Community arrangements

In connection with the implementation of the Community system imposing an additional levy on milk, the Kingdom of Belgium treated its national territory as a single region within the meaning of Article 5c(l) of Regulation No 804/68. It opted for the 1983 reference year under Formula A (the producer formula). The reference quantity is equal to the quantity of milk or other milk products delivered by the producer in 1983, weighted by a coefficient of 95% overall and of 97% for small producers.

The Belgian legislation also provides for the grant of additional reference quantities to farmers who have adopted a milk production development plan, to young farmers and to those whose milk production during the reference year adopted has been affected by exceptional events (Royal Decree of 29 June 1984 on the application of the additional levy referred to in Article 5c of Regulation (EEC) No 804/68 for the period from 2 April 1984 to 31 March 1985, Moniteur belge, 5. 7. 1984, p. 9813; Ministerial Decree of 13 September 1984 on the application of the additional levy referred to in Article 5c of Regulation (EEC) No 804/68 for the period from 2 April 1984 to 31 March 1985, Moniteur beige, 15. 9. 1984, p. 12784; the aforesaid legislation has frequently been amended).

3. The disputes in the main proceedings

The disputes in the main proceedings are between various milk producers, on the one hand, and, on the other, the dairies to which they are affiliated, the Office national du lait et ses dérivés and the Belgian State. The dairies withheld certain sums by way of the additional levy on milk from the price of the milk which the producers in question had delivered to them.

In the proceedings instituted by them, the producers concerned seek an order requiring the dairies to repay the sums withheld on the ground that the levies were unlawfully charged. A further claim is that the judgments should be declared common and capable of being relied upon as against the Office national du lait et ses dérivés and the Belgian State.

In support of their action, the plaintiffs in the main proceedings argue in the first place that the additional levy system introduced by Article 5c of Regulation No 804/68 is contrary to the prohibition of discrimination between Community producers, laid down by Article 40(3) of the EEC Treaty, in so far as, in view of the choice left to the Member States between Formula A and Formula B, producers benefit or otherwise from the possibility of offsetting within a dairy and are therefore subject, if they exceed their individual reference quantity, to the application of a different rate of levy.

The plaintiffs in the main proceedings also maintain that the derogations provided for by the Community system in favour of certain Member States are contrary to the prohibition of discrimination between Community producers and jeopardize the establishment of a common agricultural policy.

Finally, they consider that, by offering each Member State the possibility of regarding its territory as a single region, the Community rules infringe Article 39(2)(a) of the Treaty, according to which, in working out the common agricultural policy, account must be taken of structural and natural disparities between the various agricultural regions. Alternatively, they allege that the Belgian rules adopted for the implementation of the Community arrangements disregard the specific features of each production region and the specific situation of each farmer.

In order to enable it to assess those arguments, the tribunal de premier instance (Court of First Instance), Verviers, by judgments of 20 September 1988, stayed the proceedings and referred to the Court of Justice for a preliminary ruling pursuant to Article 177 of the EEC Treaty the following questions, which are identical in the 19 cases concerned:

4. Procedine before the Court

The orders for reference were lodged at the Court Registry on 29 September 1988.

By order of 18 January 1989 the Court decided to join the cases for the purposes of the procedure and the judgment.

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 plaintiffs in the main proceedings in the 19 cases, represented by Roger Bourgeois and Véronique Martin, of the Liège Bar, by the Belgian Government, represented by M. J. Willems, Director of the European Affairs Department at the Ministry of Foreign Affairs, Foreign Trade and Cooperation with Developing Countries, by the United Kingdom, represented by S. J. Hay of the Treasury Solicitor's Department, acting as Agent, by the Council of the European Communities, represented by Arthur Bräutigam, Principal Administrator in the Council's Legal Department, and by the Commission of the European Communities, represented by Patrick Hetsch and Derek Grant Lawrence, members of the Commission's Legal Department, acting as Agents.

On hearing the Report of the Judge-Rapporteur and the views of the Advocate General, the Court decided on 4 October 1989 to assign the case to the Third Chamber pursuant to Article 95 of the Rules of Procedure and to open the oral procedure without any preparatory inquiry.

II — Written observations

1. Questions (a) and (b) (choice of Formula A or Formula B)

In order to mitigate the strictness of the system, the Community legislature inserted Article 4a in Regulation No 857/84, which enables Member States to allocate the non-utilized quantities of certain producers to other producers in the same region and in other regions. The difference in the rate of levy applicable and regional or interregional offsetting are factors likely to place producers in a comparable situation, whatever the formula chosen by the Member State.

Accordingly, any producer, regardless of the formula adopted, may qualify, as a result of the operation of inbuilt or optional offsetting, for exemption from the levy in respect of part of the quantities in excess of the reference quantity. The system of milk production quotas therefore leads, in the case of producers under both Formula A and Formula B, to the application of an additional levy only to quantities which exceed, after offsetting, the reference quantity established. In so doing, the system also makes it possible to limit to what is strictly necessary, that is to say to overproduction which may jeopardize efforts to curb production, the imposition of heavy penalties. In conclusion, the Commission suggests that Questions (a) and (b) should be answered as follows:

2. Question (c) (specific rules in favour of certain Member States)

In conclusion, the Commission suggests that Question (c) should be answered in the following terms:

3. Question (d) (concept of region)

In conclusion, the Commission suggests that Question (d) should be answered as follows :

1 Language of the case: French.