C-190/73

2. Agriculture — Common organization of the markets — Live trees and other plants, bulbs, roots and the like, cut flowers and ornamental foliage — National organization — Rationing of production — Quantitative restrictions (Regulation No 234/68 of the Council, Article 10)

1. A national organization of the market the totality of the provisions on the having the purpose of rationing establishment of a common organiza­ production affects — or is at any rate tion of the market in live trees and capable of affecting — the freedom of other plants, bulbs, roots and the like, trade in the internal trade of the cut flowers and ornamental foliage, Community and must accordingly be excludes the existence of any national considered a measure having an effect system having the purpose of equivalent to quantitative restrictions. quantitatively restricting the cultiva­ tion of one of the products falling 2. Article 10 of Regulation No 234/68, within the common organization of interpreted within the framework of the market.

In Case 190/73

Reference to the Court under Article 177 of the EEC Treaty by the Economic Magistrate of the 'Arrondissementsrechtbank' (District Court) of Haarlem, The Netherlands, for a preliminary ruling in the action pending before that court between

1 — Language of the Case: Dutch.

JUDGMENT OF 30. 10. 1974 — CASE 190/73

Advocate-General: H. Mayras Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts

The facts of the case, the procedure and (Regulation of 1971 relating to the the observations submitted under Article cultivation of hyacinths), made on 29 20 of the Protocol on the Statute of the June 1971 by the 'Produktschap voor Court of Justice of the European Siergewassen', an organization of pro­ Economic Community may be summa­ ducers of ornamental plants approved rized as follows: by the Ministry of Ariculture by decree of 28 July 1971, prohibited the cultivation of hyacinth bulbs by any horticulturist who is not the holder of a cultivation I — Facts and written pro­ licence in force for the cultivation year cedure in question. Under Article 3 of the Regulation of In the Netherlands, Article 2 (1) and (2) 1971, the cultivation licence is issued of the 'Hyacintenteeltverordening 1971' annually by the 'Produktschap' for a

OFFICIER VAN JUSTITIE v HAASTER

By summons of 15 November 1973, Johannes Wilhelmus Joseph Van The Court, on the report of the Haaster, a bulbgrower residing at Judge-Rapporteur, after hearing the Hillegom (The Netherlands) appeared Advocate-General, decided to open the before the Economic Magistrate of the oral procedure without any preparatory Arrondissementsrechtbank of Haarlem, inquiry. for having in May 1971 contravened the Regulation of 1971 by growing hyacinth bulbs on several parcels of land without

the regulations made in the Netherlands Regulation No 234/68 of the Council of 27 February 1968 on the establishment in relation to this market, argues that the 1971 Regulation relating to the of a common organization of the market cultivation of hyacinths involves in live trees and other plants bulbs, restrictions upon the production and the roots and the like, cut flowers and sale of hyacinth bulbs contrary to Article ornamental foliage (OJ L 55, p. 1). 10 of Regulation No 234/68.

Article 10 (1) of Regulation No 234/68.

(a) As regards this, it must be view to stabilizing the market; remembered that the notion of a nevertheless Article 12 thereof envisages measure having an effect equivalent to a the possibility of the Council taking quantitative restriction only refers to measures that might be necessary with a regulations relating to trade in view to supplementing the provisions of agricultural products and does not this Regulation in the light of the extend to measures relating to experience acquired, a possibility of production itself. which no use has been made up to the The notion of a measure having an present time. The reference to the equivalent effect to a quantitative procedure under Article 43 (2) of restriction in Regulation No 234/68 has the Treaty emphasizes the Council's the same meaning as in Title I, Chapter intention to make a Regulation having 2 of the EEC Treaty, the purpose of only a limited objective. which is the free movement of goods; As regards the provisions for carrying the prohibition set out in Article 10 of Regulation No 234/68 into effect, it Regulation No 234/68 must therefore be must be emphasized that the Community interpreted in the light of the preamble measures provided under Article 2 to to this Regulation, under the terms of promote a better organization of which 'the common organization of the marketing have not as yet been taken; market involves the removal at the the same applied to unification, under internal frontiers of the Community of Article 9, of national systems of all obstacles to the free movement of the importation in relation to third goods in question'. countries, and of protective measures. A control of production such as is (c) The Regulation of 1971 relating to involved in the national proceedings is the cultivation of hyacinths establishes a limited to regulating the cultivation of control system which is already quite bulbs and does not involve any old, having the purpose of ensuring the restriction on trade between Member

In the 234/68 has only a limited purpose. absence of a Community system for Pursuant to its first Article, it involves a controlling cultivation, the continuation system of quality standards and of trade of national measures is perfectly with third countries; free movement of justified. funds within the Community is ensured After having referred to the essential by the prohibition of any customs duty provisions of the Regulation of 1971 or charge having an equivalent effect, of relating to the cultivation of hyacinths, any quantitative restriction or measure the Commission of the European having an equivalent effect, and of Communities considers that the question recourse to Article 44 of the Treaty, as submitted to the Court is tantamount to well as by application of Articles 92 to an enquiry whether the prohibition of

OFFICIER VAN JUSTITIE v HAASTER

is not however the case here. quantitative restrictions or measures having an equivalent effect aimed at by By their nature, measures limiting those provisions do not in principle production have a similar effect upon include measures for limiting pro the domestic market and upon exports; duction. Their sense and their place in they bear equally upon exports and the Treaty show that they apply to upon the flow of goods to the domestic goods and to products but not to market. activities; they only take effect at the They can only be called measures having marketing stage and therefore in no way an effect equivalent to quantitative affect the power of Member States to restrictions in the hypothetical case — regulate national production. This difficult to conceive without the addition finding clearly results from Article 37, of supplementary measures at the which limits the application of the commercial level — where they could principles set out in the preceding act as a greater brake upon exports than Articles solely to State monopolies upon the flow of goods to the domestic having a commercial character, market and where they would have a concerning the trade in a particular restrictive effect in excess of the effects product. proper to such measures.

Many measures, No 234/68 do not apply to measures by despite their restrictive effect upon trade, which a Member State limits production, are not incompatible with Articles 30 to unless these measures act as a greater 34: they fall within the framework of the brake upon exports than upon the flow powers or possibilities which the Treaty of the goods in question to the market of has implicitly or explicitly left to the Member State concerned and unless Member States and a restrictive effect this restrictive effect exceeds the effects upon trade is inherent in them; this is in proper to such measures, as would be particular the case with national the case if the latter pursued an object regulations relating to the quality of incompatible with the Treaty.

JUDGMENT OF 30. 10. 1974 — CASE 190/73

In the framework of a Schiff, Secretary-General of the Ministry common organization of the markets, for Foreign Affairs and J. Kuipers, Administrator with the Ministry of provisions relating to national regula Agriculture, and the Commission of the tions are only adopted where such Communities, represented by its Legal national regulations interfere with the Adviser, J. H. J. Bourgeois, acting as system of the organization of the agent, made their oral observations and markets concerned or seem incompatible gave their replies to questions asked by with the principles of the common the Court at the hearing on 30 April agricultural policy; nevertheless the 1974. absence of such express provisions does not imply that the national regulations At this hearing the new facts, in the matter of production are in any hereinafter summarized, were submitted to the Court: case and definitely compatible with the organization of the market involved. Mr J. W. J. Van Haaster points out that In the event, neither Regulation No the measures for organizing the market 234/68 nor an implementing provision in force in the Netherlands in respect of the sector of flower bulbs and of flowers prohibits or expressly regulates national grown from bulbs involve not only a measures for limiting production; system of cultivation licences for hyacinth besides, no measure has been taken bulbs but also an intervention body, the

The question whether autonomous conjunction, the cultivation licence and measures for limiting production, the surplus fund ensure that Dutch decreed by Member States, are contrary bulbgrowers enjoy within the Common to the organization of the market Market a near monopoly position since some 95 % of the total Community because they affect the proper production is of Dutch origin. They are functioning of the price system does not also the means of controlling and arise in the case of the organization of limiting production; they allow the markets involved in this case: this is production prices, and consequently limited to aid measures in respect of marketing prices, to be artificially certain trade and joint trade initiatives maintained at an excessively high level. and to a system of quality standards. They therefore tend to have a negative Bearing in mind the terms used to define influence upon trade within the organization of the markets and its Community and are incompatible with limited purpose, independent national the common organization of the market measures having the object of limiting established by Regulation No 234/68. production are not inconsistent with Article 10 of Regulation, for example, Regulation No 234/68. prohibits quantitative restrictions or

measures having an equivalent effect in 234/68 solely in the context of the 1971 trade within the Community; and on a Regulation relating to the cultivation of monopoly market such as that in hyacinths; the surplus fund and the hyacinth bulbs any measure taken in support measures which it permits are relation to production and prices not affected by the question submitted to necessarily has a direct influence upon the Court. trade. The Dutch support measures As regards the cultivation licences it is likewise fall within the ambit of Article right to point out — and on this point 92 (1), and perhaps even of Article 37, of the Commission would like to define the EEC Treaty. more clearly its written observations — The fact that measures to promote a that national measures for restricting better organization of production and production cannot as such and by marketing in the field of floriculture themselves amount to measures having envisaged by Article 2 of Regulation No an effect equivalent to quantitative 234/68 have not as yet been taken at restrictions. For this to be different Community level does not mean that the would require that, added to the Menber States are in this field quite free measures restricting production, there to act as they see fit. should also be measures in the field of marketing, and that the totality of this The Government of the Kingdom of the national set of regulations should have Netherlands points out that there is no effects more restrictive upon export than legal link between the surplus fund and upon the flow to the domestic market. the Regulation of 1971 relating to Besides, Regulation No 234/68 does not

Besides, the measures in force in the Netherlands introduction of national measures going beyond already existing regulations. In encourage a stabilization of the domestic the event, one has a common market; for its part Regulation No organization of the market with limited 234/68, establishing a common objectives, no instrument of which is organization with limited objectives, affected, altered or modified by the providing as the sole Community existence of the national regulations measure for stabilizing rates, the fixing limiting production. The Advocate-Gen of minimum prices for exports to third

JUDGMENT OF 30. 10. 1974 — CASE 190/73

at the hearing on 17 September 1974. Community organization of the markets in this sector. This statement is made on The supplementary observations submit the basis of a confidential working ted in reply to the questions raised by document dated 20 May 1963, a letter the Court may be summarized as fol from the Dutch government to the lows; Mr J. W. J. Van Haaster maintains Commission dated 19 March 1964, the that a national regulation of the same subsequent exchange of correspondence, nature as the 1971 Regulation relating to deliberations of the Council, in par the cultivation of hyacinths was in force ticular at its meetings on 25 and 26 in the Netherlands at the date when

shown that the various national rules are in accordance with the Community Regulation No 234/68 itself, without organization. the Council having on this occasion expressly stated its position regarding The Government of the Kingdom of the the control of cultivation existing in the Netherlands confirms that a national Netherlands, of which it was aware. Regulation similar to the Regulation of 1971 relating to the cultivation of The opinion of the Economic and Social

Committee on the Commission's Nor did the Council think it useful to proposal (OJ 178 p 22) likewise showed make its point of view known on the that the existence of certain Dutch subject of the system of control of provisions on the organization of the cultivation in force in the Netherlands in market, and in particular on the control the wording of the Regulation or in a of cultivation, could not be overlooked. declaration; the Dutch delegation for its It clearly follows from Regulation No part did not make any promise to 234/68, and in particular Article 12 abolish the system. thereof, that the national measures The Commission and the Council were which are not in conflict with the thus aware of the Dutch Regulation Community organization of the market limiting production when Regulation No can continue pending decisions by the 234/68 was being prepared; it is clear institutions of the Community. that they considered that there was The Commission confirms having been, nothing to preclude it from remaining fully in force. at the time its proposal for the establishment of a common organization The Commission moreover refers to of the markets for horticultural products certain national Regulations which in in 1965 was worked out, perfectly one way or another limit production in informed of the regulations in force in sectors governed by the common this sector in the Netherlands. organizations of the agricultural markets. It is true the Dutch Government did not specially draw attention to its existence; In the cereal sector the Federal Republic on the other hand, in the previous year, of Germany France and Belgium have during the preparatory phase of issued Regulations intended to limit procedure under Article 169 of the EEC production in the flour milling industry Treaty aimed at other aspects of these or authorized measures involving quotas regulations, the Dutch Government had or limitation of milling capacity. mentioned the existence of a system of None of the Community Regulations control of cultivation and referred to the governing this sector states whether Regulation relating to the cultivation of these national systems limiting pro­ flower blubs. The Dutch regulations had duction are compatible or incompatible been examined and discussed by the with the common organization of the market. Council, within the working party concerned and the special committee on In the eggs and poultry sector in the agriculture. Netherlands there are rules in force

maximum of acreage cultivated. Article 816/70 of the Council on 28 April 1970 12 of Regulation No 727/70 states that laying down additional provisions for provisions which grant to certain natural the common organization of the market or legal persons the exclusive right to in wine (OJ L 99, p 1) contains certain cultivate tobacco are incompatible with provisions to relate supply to demand. the Regulation. In the hop sector, in the United In the wine sector, production is limited Kingdom there are rules laying down a in France by a limitation on the surface basic annual quota for every registered covered by vines; permission must be producer. This control of cultivation was obtained for planting vines in the not specifically discussed at the time of Federal Republic of Germany and the negotiations conducted with a view Luxembourg. Although the Council did to the accession of the United Kingdom not adopt the proposal from the to the Community. Commission to establish Community The Advocate-General delivered a rules for vine planting, Regulation No second opinion on 2 October 1974.

Grounds

1 By judgment dated 10 December 1973, lodged at the Registry on 17 De­ cember 1973, the Economic Magistrate of the Arrondissementsrechtbank of Haarlem has referred to the Court, under Article 177 of the EEC Treaty, a question for a preliminary ruling, on the interpretation of Regulation No 234/68 of the Council of 27 February 1968 on the establishment of a common organization of the market in live trees and other plants, bulbs, roots and the like, cut flowers and ornamental foliage (OJ L 55, p. 1), in the light of certain provisions of the Dutch regulation relating to hyancinth cultivation, made on 29 June 1971 by the 'Produktschap voor Siergewassen' and approved by the Minister of Agriculture by decree of 28 July 1971.

6 Accordingly it is necessary to put Article 10, which in the first place relates to marketing, back into the global system of the organization of the market set up by Regulation No 234/68.

7 In the absence of express provisions as to the compatibility of a national regulation restricting production with the organization of the market set up by Regulation No 234/68, it is necessary to seek the solution to the question referred in the light of the objects and the purposes of the Regulation within the framework of the principles laid down by the Treaty itself.

8 In the sector of live trees and other plants, bulbs, roots and the like, cut flowers and ornamental foliage, Regulation No 234/68 has set up an organization of the market characterized in the words of Article 1 thereof, by 'common quality standards and a trading system'.

9 As regards trade, Article 10 has the purpose of eliminating any quantitative restrictions or measures having equivalent effect in the internal trade of the Community by in particular prohibiting customs duties or measures having equivalent effect and quantitative restrictions or measures having equivalent effect.

10 Moreover, Article 11 declares that in principle the provisions of Articles 92 and 93 of the Treaty shall apply to trade in the products in question, with a view to eliminating interference with competition by the grant of state aid.

11 Apart from rules concerning the marketing of the products the organization of the market also involves diverse provisions applicable to the production stage.

17 A national organization having the purpose of rationing production affects — or is at any rate capable of affecting — the system of trade thus defined, and must accordingly be considered a measure having an effect equivalent to quantitative restrictions within the meaning of the Regulation.

18 Accordingly the question referred ought to be answered to the effect that Article 10 of Regulation No 234/68, interpreted within the framework of the totality of the provisions on the establishment of a common organization of the market in live trees and other plants, bulbs, roots and the like, cut flowers and ornamental foliage, excludes the existence of any national system having the purpose of quantitatively restricting the cultivation of one of the products falling within the common organization of the market.

OFFICIER VAN JUSTITIE v HAASTER

Costs

19/20 The costs incurred by the Government of the Kingdom of the Netherlands and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable, and as these proceedings are, insofar as the parties to the main action are concerned, a step in the action pending before the national court, costs are a matter for that court.

On those grounds,

Registrar President