C-57/72

WESTZUCKER v EINFUHR- UND VORRATSSTELLE ZUCKER

In Case 57/72

Reference to the Court, under Article 177 of the EEC Treaty, by the Hessi­ scher Verwaltungsgerichtshof for a preliminary ruling in the action pending before that court between

WESTZUCKER GMBH, having its registred office at Dortmund, and

EINFUHR- und VORRATSSTELLE FÜR ZUCKER, having its head office at Frankfurt- on-Main,

on the validity of Article 1 (1) and Article 2 of Regulation No 354/69 of the Commission of 26 February 1969, altering the premiums for denaturing sugar fixed by Regulation No 840/68, as well as of Article 2 (2), last sentence, of Regulation No 833/68 of the Commission of 28 June 1968, laying down rules concerning the denaturing of sugar for animal feeding stuffs,

I — Facts and procedure sugar (OJ No 308, p. 1), provides in particular, by Article 9 (2) thereof, that In order to ensure that the necessary intervention agencies designated by guarantees in respect of employment and sugar-producing Member States may standards of living are maintained for grant denaturing premiums for sugar Community growers of sugar beet and rendered unfit for human consumption. sugar cane, Regulation No 1009/67 of In application of Article 9 (7) of the Council of 18 December 1967, on the Regulation No 1009/67, the Council laid common organization of the market in down general rules on the denaturing of

JUDGMENT OF 14. 3. 1973 — CASE 57/72

sugar for animal feeding stuffs by way of guarantee which shall be forfeit Regulation No 768/68 of 18 June 1968 in whole or in part if the denaturing is (OJ No L 143, p. 12). not carried out or is only partially Article 1 (1) of that Regulation provides carried out during the period of validity that the only white or raw sugar of the authorization.

(c) the foreseeable market prices in the Under the terms of Article 4, the grant of important consumer regions of the the certificate for denaturing constitutes Community for animal feeding stuffs title to payment after denaturing of the with which white sugar for denaturing premium indicated in the denaturing has to compete; certificate, and the obligation to denature the sugar in accordance with (d) the comparison between the the conditions laid down in the nutritive value of white sugar and certificate. the nutritive value of the competing Article 5 of the said Regulation provides animal feeding stuffs; that the certificate for the denaturing (e) the whole of the sugar surplus premium shall be valid from the day of available for denaturing in the issue until the expiration of the eleventh Community, account being taken of month following that during which it the nature and quality of such sugar. was issued. The premium for denaturing white sugar Under the terms of Article 5 (1), the was fixed at 14-03 units of account per denaturing premium shall, in principle, 100 kg by Article 1 (1) of Regulation be granted by the Member State within No 840/68 of the Commission, also of whose territory the denaturing takes place. 28 June 1968, fixing premiums for denaturing sugar for animal feeding Under the terms of Article 5 (2), a stuffs. denaturing premium is only granted on In application of Article 2 (2), second presentation of a request before sentence, of Regulation No 833/68, the denaturing. German Minister of Food, Agriculture Member States shall on such request and Forestry on 6 August 1968 adopted issue a certificate for a denaturing a regulation concerning the granting of a premium. premium for denaturing sugar for animal The issue of this certificate shall be feeding stuffs (Bundesanzeiger No 145, subject to the lodging of a deposit by VI, p. 11).

Consequently, Article 1 of that Westzucker pointed out to the Regulation fixed the premium for Verwaltungsgericht of Frankfurt-on- denaturing white sugar at 0 units of Main that, despite the fact that it had in account per 100 kg. the meantime been granted denaturing Under the terms of Article 2 of the premiums, it had not obtained satisfaction in the sense that Regulation Regulation this provision entered into No 840/68, which was applicable to its force on 27 February 1969. application of 27 February 1969, had On the same date, Westzucker GmbH, fixed a denaturing premium higher than whose registered office is at Dortmund, that provided for by Regulation No sent two telex messages applying to the 1764/69 (14-03 and 12-50 units of Einfuhr- und Vorratsstelle fur Zucker account per 100 kg respectively). (Sugar Import and Storage Agency) at The Verwaltungsgericht of Frankfurt-on- Frankfurt-on-Main for the grant to it of Main dismissed the appeal as unfounded premium certificates for denaturing a by judgment of 10 December 1970. quantity of 14 075 metric tons of white Westzucker appealed against this sugar to be imported from France under judgment to the Hessischer Verwal­ contracts entered into with French tungsgerichtshof (Administrative Court undertakings between 27 February 1968 of Hesse). and 24 February 1969. The Vlth Senate of that court decided, The Einfuhr- und Vorratsstelle rejected by order dated 21 July 1972, to suspend this application by telex message of 28 its decision until the Court of Justice has February 1969, on the ground that, by given a preliminary ruling on the validity Regulation No 354/69, the Commission of had fixed the premium for denaturing 1. Article 1 (1) of Regulation No white sugar at 0 units of account, with 354/69 of the Commission of 26 effect from 27 February 1969. February 1969, altering the premiums Westzucker entered an objection to this for denaturing sugar fixed by decision on 24 March 1969. Regulation No 840/68; The objection was dismissed on 5 May 2. Article 2 of the said Regulation No 1969. 354/69;

Unlike Article 2 (2) of Regulation No 766/68 of the Council of 18 June 1968, II — Observations submitted laying down general rules for granting to the Court export refunds on sugar (OJ No L 143, p. 6), Regulation No 768/68 of the The oral and written observations Council included no authorization for

submitted to the Court may be the Commission to suspend the fixing of summarized as follows: denaturing premiums. If the Council had intended to confer such a power on the Commission, it would have expressed J. As to the validity of Article 1 (1) of such intention as clearly and precisely as Regulation No 354/69 (first question) it did, on the subject of refunds on exports, in Regulation No 766/68 After recalling the structure of the published the same day. common organization of the market in Subparagraph (e) of Article 2 of sugar and the body of Community and Regulation No 768/68, under the terms national provisions applicable to that of which the whole of the sugar surplus market, particularly the measures available for denaturing in the relating to refunds on exports and Community must be taken into account denaturing premiums, Westzucker sub­ when fixing the denaturing premium, mits that the Commission did not have cannot be interpreted as enabling the power to suspend the grant of Commission to fix denaturing premiums

WESTZUCKER v EINFUHR- UND VORRATSSTELLE ZUCKER

those criteria. However, in Regulation transformed into animal feeding stuffs; No 354/69 it did not take account of the the manufacturers of fodder must be criteria referred to in subparagraphs (a) able to rely on a regular and sufficient to (d); it could not have done so supply of denatured sugar in order to moreover, as it intended to suspend the guarantee the required consistency in the fixing of denaturing premiums. composition of their products; the Article 1 of Regulation No 354/69 is null Community should give preference to and void, as it does not fall within the intra-Community relations as opposed to powers conferred on the Commission by foreign trade. Article 9 (8) of Regulation No 1009/67, Even supposing that surpluses of sugar in conjunction with Regulation No on the market were eliminated or that 768/68. their elimination could have been anticipated in the near future and that (b) In order to eliminate surpluses, the Council laid down the order in which Article 2 (e) of Regulation No 768/68

tion No 749/68 of the Council of 18 Moreover, it must be remembered that June 1968, on financing the intervention there are not two categories of surpluses, expenditure on the internal market in which can be differentiated one from the sugar during the 1967/1968 season (OJ other, but merely a global quantity No L 137, p. 2), which considers it which, quite apart from the system 'advisable to market the largest possible which the Commission is bound to

before that date. It is established considerations: as the market price of maize is determined by the intervention therefore that surpluses existed, but the price and the target price, both being reasoning underlying Regulation No 354/69 is based on the absence of higher than the world market price, the cost of denaturing is normally lower surpluses. than that of the refund granted on Article 1 of Regulation No 354/69 is null

about 9 150 000 metric tons and that the The Commission was perfectly aware of provision for sugar requirements and this. It intentionally increased the consumption in the Community had provisions for bridging stocks at the been set at 5 935 000 metric tons. The expense of the provisions for denaturing Commission merely eliminated the and thus, in disregard of the actual surpluses on paper when increasing the situation, eliminated the surpluses on provision for bridging stocks at 30 June paper. The fact that the market price of 1969 from 2 029 000 metric tons to sugar in the Community corresponded 2 172 000 metric tons, an increase of to the intervention price was evidence of 143 000 metric tons. In so doing, it the existence of surpluses; this was not exceeded the discretionary power taken into consideration by the conferred on it by the Council. Article 5 Management Committee and the of Regulation No 432/68 of the Council Commission or else was intentionally of 9 April 1968, fixing, for the ignored. 1968/1969 sugar season, the derived intervention prices, the minimum prices (d) In adopting Regulation No 354/69, the Commission allowed itself to be of sugar beet, the threshold prices and the quantity guaranteed as well as the guided by considerations not germane to the matter in order to facilitate the production contribution (OJ No L 89, p. 4) obliged the Commission to limit, in acquisition by Italy of 75 000 metric tons the supply statements, bridging stocks to of white sugar, on the one hand, and to 2 029 000 metric tons. In fact, that permit an increase in the volume of provision had fixed the guaranteed exports of sugar from the French quantity referred to in Article 26 (1) of Antilles, on the other hand. Regulation No 1009/67 at 6 594 000 In application of Regulation No 457/68 metric tons for the 1968/1969 sugar of the Commission of 11 April 1968, on season, divided into 13 monthly amounts the export of the surplus amount of (including a bridging reserve equal to the sugar in Italy (OJ No L 91, p. 22) and monthly amount) of 507 230 metric tons Regulation No 1788/68 of the each. In order to ensure a carry over to Commission of 8 November 1968, the start of production in the following amending Regulation No 457/68 on the

final amount of Italian surplus sugar to Regulation No 1009/67 envisages be exported (OJ No L 273, p. 10), the measures of an obligatory nature for the Italian Republic was under an stabilization of the market in sugar, to obligation, before 1 July 1969, to export apply in every case during the whole an amount of 209 669 metric tons of sugar season, but also measures to be white sugar to third countries without adopted only if necessary, when and for export refunds. For this purpose, Italy as long as the market situation demands was to buy sugar in other Member it, taking into account the objectives of States; in order to mitigate the the common organization.

ought to have taken account of the grant of a denaturing premium cannot particular wishes of Italy and France, it depend solely on the level of the prices was not necessary for it to act at the of maize, to the exclusion of other expense of denaturing. Article 1 of considerations and, in particular, of any Regulation No 354/69 is therefore also void because of this, since it is based on discretionary power of the Commission. considerations not germane to the matter Moreover, the merely enabling character and infringes the principle of of Article 9 (2) of Regulation No proportionality. 1009/67 is in conformity with the objectives of the denaturing premium The Commission considers that in within the framework of the common replying to the first question, one should organization of the markets. The aim of examine, on the one hand, whether it this premium is to put sugar to a use had the power to fix the amount of the which, by reason of its price, is not denaturing premium at zero and, on the normal and which allows it to compete other hand, whether in exercising that with feed grain, some types of which power it was guilty of a misuse of also show substantial surpluses.

dure. That power included the power to supply situation and, less still, in the case fix, at least temporarily, the amount of of shortage. Therefore it necessarily the premium at zero and, as a result, involves adaptation to the market provisionally to suspend the grant of the situation and the grant of the premium premium. must be capable of being suspended

when the market is balanced or in As it cannot be contested that the deficit. The Community certainly did not Commission has the power to fix the intend by this special measure to give amount of the denaturing premium at sugar merchants the benefit during the zero, it remains to be seen whether whole season of a general and constant Article 1 of Regulation No 354/69 guarantee of disposal and of the observed the criteria set by Article 2 of premium. Regulation No 768/68. Article 9 (8) of Regulation No 1009/67 As it stated in the recitals in the charged the Commission with fixing the Preamble to Regulation No 354/69 that

By this provision premium set in particular by it is obliged to examine whether the subparagraphs (c), (d) and (e) of that supplies situation in the Community not provision are not present, the only permits but also dictates the Commission can, from the point of view disposal on the market for animal of legal technique, either purely and feedings stuffs, with the help of the simply repeal the previous Regulation denaturing premium, of surpluses which fixing the premium or reduce its amount are too large and which cannot be to zero, as it did by Regulation No disposed of elsewhere. The decision to

not the case here. Moreover a different no way capable of being justified by interpretation would not reconcile with objective factors. Article 2 of Regulation No 768/68 as it This reduction was based on the would deprive of all meaning the provisional statement of supplies of 18 discretionary power conferred on the February 1969. This statement com Commission to fix the amount of the prised, according to the statistical data premium and its obligation to take supplied by the Member States, the account of the precise circumstances on situation of existing stocks and the indi which the grant of the premium cations of future trends in production, depends. imports, exports and consumption and Nor does such a reservation of power to pointed to a balanced position of sup the Council follow from Regulation No plies in that the foreseeable requirements

WESTZUCKER v EINFUHR- UND VORRATSSTELLE ZUCKER

The denatured sugar mentioned in the final market situation had clearly eased statement is simply a provisional therefore and one was able to allow at statistical result from which no least provisionally, for the disposal of significant conclusion can be drawn in stocks for human consumption at a this case. The determining factor, from sufficiently advantageous price. From the the point of view of actual requirements, point of view of the organization of the is not the quantity denatured as at 30 markets, the grant of high subsidies for June 1969, but the estimate of the use of these stocks for animal requirements to be satisfied, for human feedings stuffs was therefore no longer consumption or for other purposes, until necessary. sugar from the new harvest and new The fact that prices were increasing and production is available. were higher than the intervention price, The figure of 352 000 metric tons but without having yet reached the level indicates merely that, of the 407 000 of the target price, in no way established metric tons in respect of which premium the existence of surpluses nor the certificates were issued up to 26 necessity to resort to denaturing. It is not February 1969, only that quantity had correct that supply and demand balance been denatured.

The Commission February 1969 led to the finding that the considered it its duty, in order to preserve premium certificates issued up to then the proper functioning of the market and for a total of 407 000 metric tons to ensure that the population was practically exhausted the 426 000 metric adequately supplied, to check the tons appearing in the statement. This artificial and accelerated reduction of indicated sufficient stocks to cover the stocks by denaturing. Faced with a forseeable requirements of human choice between the reduction of refunds consumption; denaturing could have on exports and the restriction of been continued only at the expense of denaturing premiums, it opted for the stocks considered as necessary for that provisional suspension of denaturing

JUDGMENT OF 14. 3. 1973 — CASE 57/72

If market. eventually about 29 000 metric tons was A large reduction in, or suspension of disposed of on the Community domestic refunds on exports did not appear to be market, the reason for that is that it is indicated; the amounts of the refunds established that in Italy production for had already been fixed at a relatively 1968/1969 could not reach the basic low level with the object essentially of quota laid down; this was, however, maintaining traditional trade relations only capable of being established after and long term trade commitments. the publication of Regulation No 354/69.

It is economic objectives, an alteration of the certainly not guilty of a misuse of power. denaturing premium should have had priority rather than the suppression of refunds. From the financial point of view, it also appeared more 2. As to the validity of Article 2 of advantageous to take action against the Regulation No 354/69 (second denaturing premium the amount of question) which was higher than that of the refund. Westzucker points out that, under Article 191 of the EEC Treaty, A slight reduction of that amount would regulations shall enter into force on the not have had the desired result; it could date specified in them or, in the absence have lead to an inflation af applications thereof, on the twentieth day following for certificates. A drastic and prohibitive their publication. The entry into force of reduction of the premium would have a regulation on the same day as it is been difficult to reconcile with Article 2 published is an exception, particularly of Regulation No 768/68.

WESTZUCKER v EINFUHR- UND VORRATSSTELLE ZUCKER

In putting an immediate stop to speculative applications. This risk is also denaturing, the Commission intervened limited by the fact that the denaturing in already existing legal situations in the premium is fixed in relation to the Federal Republic of Germany without intervention price and that the applicant any objective necessity, thus jeopardizing can be forced to obtain supplies at the interests which merited protection. target price. Article 2 of Regulation No 354/69 therefore infringes the principles of legal (c) The immediate entry into force of certainty and of proportionality. Regulation No 354/69 caused heavy losses to undertakings which, relying on The Commission emphasizes that the the existing system, had bought white right to stipulate the entry into force of a sugar for denaturing and had possibly regulation as the day of its publication in already sold it to a manufacturer of food the Official Journal of the Communities for animals as sugar intended for animal is no longer capable of being disputed feeding stuffs at a price agreed upon in since the judgment of the Court of relation to the denaturing premium. Justice of 13 December 1967 in Case Protection for these prior contracts 17/67, Firma M. Neumann v should have been assured, as it has been Hauptzollamt Hof (Rec. 1967, p. 571). in the framework of other common Control by the judiciary of this freedom organizations of the agricultural markets. of the legislature should be limited to Nothing prevented the Commission from considering whether or not, in the case authorizing the grant of denaturing in question, the Commission was guilty certificates, at the rate originally fixed by of a misuse of power.

As would still have allowed for the grant of any application duly lodged gives a right denaturing premiums for at least 100 000 to the premium certificate which cannot metric tons of white sugar, and the be withdrawn, the Commission had to obligation for traders to observe the act in such a way that, between terms of the contracts already concluded publication and entry into force of the would have prevented the quantities of Regulation, there was no further time white sugar to which those contracts still to lodge quick applications. referred being put back on the market (b) The situation at 26 February 1969 for white sugar intended for human in no way excluded the risk of an consumption. excessive flow of premium applications

in the event of granting a period of Commission produces 'retroactive' grace. results for dealings in hand ignores the The imminent suppression of a system of fact that, by guaranteeing the amount of subsidies would encourage the parties the premium applied for during the concerned to try to obtain the benefit of whole period of validity of the the subsidy at its initial level. There were certificate, Regulations Nos 768/68 and good reasons for expecting such a 833/68 afford sufficient protection of reaction in the sugar trade after confidence. The certificates already reduction of the premium as the rate of issued are not affected by the reduction the premium had been relatively of the premium; confidence in the favourable and since there was no way maintenance of the premium does not of foreseeing the moment when the need more extensive protection. establishing of surpluses would again The entry into force of a regulation on justify a premium nor whether it would the third day following the date of its reach as favourable a level, the traders, publication has the object merely of considering the fact that the denaturing ensuring its application on the date certificates had a period of validity of specified by all departments concerned. eleven months and that they guaranteed The granting of this period of grace the rate of premium indicated in them, however must not lead to undesirable had tried to apply for 'reserve' premiums consequences; in the case in question, it more especially as the costs of lodging a was not necessary as the intervention deposit had not been substantial. agencies entrusted with issuing the The Commission could not have premium certificate for denaturing were estimated the quantities for which respresented on the Management applications would still be lodged; an Committee at the time Regulation No excessive number of new applications 354/69 was discussed. would have treatened to disturb the (e) The German applicants were not development of the market.

Community'. In fact, it would have not a serious handicap for German been superfluous expressly to state in traders. the wording of the Regulation how the various interests arose with regard to the reduction of the premium to zero 3. As to the validity of Article 2 (2), last and the fact that there were no longer sentence, of Regulation No 833/68 any real surpluses, and the inference that (third question) the Commission necessarily drew from this for the entry into force of its Westzucker states that Regulation No decision. 1009/67 does not authorize Member (d) The argument that the immediately States, directly or indirectly, to adopt applicable measure taken by the supplementary measures or provisions of

application. On the contrary, the of a premium certificate, an indication of Council reserves the right, by Article 9 the denaturing undertaking and the (7), to adopt general rules applicable to sugar-works doing the supplying. denaturing; by Article 9 (8), it Because of this, it was not possible in the authorized the Commission merely to Federal Republic to obtain reserve or adopt conditions for the grant of provisional certificates. Thus in premiums and their amount. It did not transferring, albeit partially, to the enable the Commission to transfer to the Member States the powers conferred on Member States, in whole or in part, the it for regulating the conditions of issue authorization which had been given to it. of a denaturing certificate, the However by Article 2 (2), last sentence, Commission infringed the principle of of Regulation No 833/68, the equality. Commission authorized Member States to call for additional information at the The Commission is of the opinion that a time the application for issue of a provision enabling Member States to premium certificate for denaturing was require the premium application to include information additional to the

The Commission has thus purported to in the organization of the markets authorize the Member States to impose devolves on the competent agencies of additional basic conditions for the issue the Member States. On the organization of premium certificates for denaturing; al and procedural level, these require a but such issue cannot be subject to fairly wide freedom of action according conditions which are not uniform to the nature of the task and adapted to the circumstances of national law. throughout the Community. In its judgments of 1 February 1972 (Cases The supremacy of Community law 49/71 and 50/71, Hagen OHG and requires that the additional information Wünsche OHG v Einfuhr- und which a Member State may call for is Vorratsstelle für Getreide und Futtermit compatible with the Community rules in tel; Recueil 1972, pp. 23 and 53), the question. However, incompatibility of a Court of Justice held that conditions of supplementary national provision with intervention must be made uniform Community rules in no case admits of whether it is a matter of conditions the conclusion that the enabling decided by the Community authorities Community rule is void. The validity of or supplementary conditions which, in derived national law must be considered certain cases, the intervention agencies of by reference to Community law, and not each Member State are authorized to the reverse. This is especially true of adopt.

JUDGMENT OF 14. 3. 1973 — CASE 57/72

Grounds of judgment

1 By order dated 21 July 1972, received at the Court Registry on 4 August 1972, the Hessischer Verwaltungsgerichtshof, under Article 177 of the EEC Treaty, referred questions relating to the validity of certain provisions of Regulation No 833/68 of the Commission of 28 June 1968, laying down rules concerning the denaturing of sugar for animal feeding stuffs (OJ No L 151, p. 29) and Regulation No 354/69 of the Commission of 26 February 1969, altering the premiums for denaturing sugar (OJ No L 49, p. 14).

On the first question

2 The Court is asked by the first question to rule on the validity of Article 1 (1) of Regulation No 354/69 which fixed the premium for denaturing white sugar at 0 units of account per 100 kgs.

In this respect, the Verwaltungsgerichtshof asks whether the Commission had power to adopt a measure the effect of which was to suspend payment of the premium or whether such a measure could only have been adopted by the Council.

Article 9 (2) of Regulation No 1009/67 lays down as to this that intervention agencies may grant denaturing premiums for sugar rendered unfit for human consumption'.

Under the terms of Article 9 (7), the Council reserves the power subsequently to determine 'general rules for the application of the above paragraphs', including the system of denaturing premiums.

Under the terms of Article 9 (8), 'detailed rules for the application of this Article...' are adopted in accordance with Article 40, that is by the Commission in accordance with the so-called Management Committee procedure, and '(shall deal) in particular with ... conditions for granting denaturing premiums and the amount of such premiums'.

5 The general rules on the denaturing of sugar for animal feeding stuffs were laid down by Regulation No 768/68 of the Council of 18 June 1968 (OJ No L 143, p. 12), on the basis of Article 9 (7).

The Commission in turn laid down detailed rules for the denaturing of sugar by Regulation No 833/68, adopted by virtue of Article 9 (8) of the main Regulation, the provisions adopted by the Council in implementing Regulation No 768/68 also having been taken into account.

In execution of these provisions, the Commission first fixed the denaturing premium at 14·03 units of account per 100 kg of white sugar by Regulation No 840/68 of 28 June 1968 (OJ No L 151, p. 50).

7 That power, which is given by Article 9 (2) of Regulation No 1009/67 to 'intervention agencies', can only be exercised within the framework of conditions to be determined in accordance with Article 9 (7) and (8), that is in conformity, on the one hand, with the general rules laid down by the Council and, on the other hand, with the detailed rules of application laid down by the Commission in accordance with the so-called Management Committee procedure.

As the general rules laid down by Article 9 (7) were fixed by Regulation No 768/68, it follows that it was the Council's intention that the fixing of all other detailed rules of application were to be referred to the Commission.

This interpretation conforms as much with the spirit of Article 155 of the EEC Treaty, which provides that the Commission shall 'exercise the powers conferred on it by the Council for the implementation of the rules laid down by the latter' as to the wording of Article 9 (8) of Regulation No 1009/67 the drafting of which shows, by the use of the words 'in particular', that the concept of 'detailed rules for the application ...' must be given a wide meaning.

Therefore the Commission was enabled, under Article 9 (8) of Regulation No 1009/67, to exercise the powers necessary to ensure the functioning of the system of denaturing premiums, insofar as the Council had not itself provided for it in implementing Regulation No 768/68.

8 It follows that, subject to the general rules laid down by the Council, the Commission has the right to decide on both the grant and the amount of denaturing premiums and that, therefore, it has the power to decide whether they should be suspended.

The only difference established in this respect by the Regulation is that certain actions, and in particular those with the object of regulating imports and exports, have a permanent, or at least regular, character, while others, including denaturing are essentially discretionary. The choice of interventions is in effect conditional at one and the same time upon the variable circumstances of the market, the financial charges arising from the implementation of the chosen measures and the difficulties which the disposal of denatured sugar may create on the market for feeding stuffs.

One cannot therefore admit of a priority in favour of denaturing programmes as opposed to the other means of intervention provided for by Regulation No 1009/67.

11 According to the opinion of the plaintiff in the main action, the Commission relied on an incorrect appreciation of the economic situation at the time in question in relation as much to the actual market data as to the provisions for future contingencies, as surpluses existed on the market which required denaturing premiums to be maintained.

Therefore the finding in the Preamble to Regulation No 354/69 that 'the market for sugar is at present being reorganized', did not correspond to the facts at that time.

12 As stated in the recitals in the Preamble to Regulation No 768/68 of the Council, in order to fix the denaturing premium 'objective tests should be adopted, taking account of the most rational use in relation to the situation on the sugar market and the competitive position of sugar with regard to other animal feeding stuffs for which it can be a substitute'.

Finally, it also falls to the Commission to fix the timing and spacing of its interventions, taking account of both the development and trends of the market and possible necessary adjustments due to the effect of the measures implemented.

14 Thus the Commission enjoys a significant freedom of evaluation, which must be exercised in the light of the objectives of the economic policy laid down by Regulation No 1009/67 within the framework of the common agricultural policy.

When examining the lawfulness of the exercise of such freedom, the courts cannot substitute their own evaluation of the matter for that of the competent authority but must restrict themselves to examing whether the evaluation of the competent authority contains a patent error or constitutes a misuse of power.

15 The allegations of the plaintiff in the main action have revealed no indication of such an error or such a misuse of power.

In fact the argument of the plaintiff in the main action is reduced essentially to stating that at the time of the measure in dispute, the market in sugar was

WESTZUCKER v EINFUHR- UND VORRATSSTELLE ZUCKER

The validity of Regulation No/354/69 cannot, therefore, be held to be affected.

On the second question

18 The second question is whether Article 2 of Regulation No 354/69, which specified the entry into force of the Regulation on a date coinciding with that of publication in the Official Journal of the Communities, is valid.

It is also asked whether that provision could be considered to be invalid because it was not especially reasoned and whether the Commission should possibly have been obliged to include transitional provisions in the Regulation for purchasing contracts entered into before publication of the Regulation.

JUDGMENT OF 14. 3. 1973 — CASE 57/72

19 Under the terms of Article 191 of the EEC Treaty, Regulations shall enter into force 'on the date specified in them or, in the absence thereof, on the twentieth day following their publication'.

It is appropriate to note, moreover, that the objective of the organization of the market introduced by Regulation No 1009/67 is not to confer on the undertakings concerned a guarantee of being able to carry out denaturing under the most advantageous financial conditions but to ensure the normal functioning of the market in sugar on the basis of the price policy defined by the Council.

On the third question

21 Finally it is asked whether Article 2 (2), second sentence, of Regulation No 833/68 of the Commission is valid in that it permits Member States to require

WESTZUCKER v EINFUHR- UND VORRATSSTELLE ZUCKER

additional information in applications for the grant of denaturing premiums over and above that specified in the first sentence of that provision.

22 The plaintiff in the main action submits that, by making use of that authorization, the German authorities have discriminated against their own nationals in making it more difficult for contracts which could give, rise to the benefit of a denaturing premium to be concluded.

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

As these proceedings are, insofar as the parties to the main action are concerned, a step in the action pending before the Hessischer Verwaltungs­ gerichtshof, the decisions as to costs is a matter for that court.

On those grounds,

Upon reading the pleadings; Upon hearing the report of the Judge Rapporteur; Upon hearing the oral observations of the plaintiff in the main action and the

JUDGMENT OF 14. 3. 1973 — CASE 57/72

Delivered in open court in Luxembourg on 14 March 1973.

A. Van Houtte R. Lecourt

Registrar President