C-111/76

BEERT VAN DEN HAZEL

on the interpretation of Articles 30 to 37 of the EEC Treaty and the provisions of Regulation No 123/67/EEC of the Council of 13 June 1967 (OJ, English Special Edition 1967, p. 63),

THE COURT

composed of: H. Kutscher, President, A. M. Donner and P. Pescatore, Presidents of Chambers, J. Mertens de Wilmars, M. Sørensen, Lord Mackenzie Stuart, A. O'Keeffe, G. Bosco and A.Touffait, Judges,

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

gives the following

The judgment making the reference and 1967 on the common organization of the the written observations submitted market in poultrymeat (OJ, English pursuant to Article 20 of the Protocol on Special Edition 1967, p. 63) and Articles the Statute of the Court of Justice of the 30 to 37 of the Treaty, on the EEC may be summarized as follows: elimination of quantitative restrictions between Member States. Regulation No 123/67 incorporates a system of levies on I — Facts and procedure imports and refunds on exports but without intervention on the market. The accused in the main action, who Article 2 thereof however empowers the runs a slaughter-house for poultry, was Council to take measures 'in order to charged and found guilty in the court of encourage action by trade and joint-trade first instance by the Economische organizations to facilitate the adjustment Politierechter (Magistrate in Economic of supply to market requirements, with Matters) of the Arrondissements­ the exception of action relating to the rechtbank (District Court), Haarlem of withdrawal from the market …'. infringing Article 2 (1) of the The Gerechtshof, Amsterdam, with Verordening Produktie Slachtpluimvee­ sector 1974 (Regulation concerning the which an appeal was filed, submitted by Production of Poultry for Slaughter). In a judgment of 28 October 1976 received order to counter a fall in the price of at the Court Registry on 24 November poultrymeat resulting from a surplus 1976, a request to the Court of Justice produced in 1974 this provision for a ruling on the following question: prohibits poultry slaughter-houses from 'Must the rules contained in the slaughtering between 1 July 1974 and 1 Verordening Produktie Slachtpluim­ January 1975 more fowls than veesector 1974 of the Produktschap voor corresponded to the number of Pluimvee en Eieren be regarded as being kilogrammes live-weight stated in the incompatible with Regulation No allocation form issued to them by the 123/67/EEC of the Council of the Produktschap voor Pluimvee en Eieren European Economic Community of 13 ('Production Board for Poultry and Eggs' June 1967 on the common organization hereinafter referred to as 'the of the market in poultrymeat or with Produktschap'). Since, after the judgment Articles 30 to 37 of the EEC Treaty?' of the Court of Justice of 30 October 1974 (Case 190/73, Van Haaster [1974] The Commission and the Netherlands ECR 1123), the Openbaar Ministerie Government submitted written (Department of Public Prosecutions inter observations in accordance with Article alia) doubted whether this regulation 20 of the Protocol on the Statute of the was compatible with the provision of Court of Justice of the EEC. Community law it submitted an appeal against the judgment of the After hearing the report of the Economische Politierechter. The Judge-Rapporteur and the views of the Community provisions which, it was Advocate-General the Court decided to maintained, had been infringed were open the oral procedure without any Regulation No 123/67/EEC of 13 June preparatory inquiry.

II — Observations submitted The market situation in 1974 under Article 20 of the Protocol on the Statute of The fall in prices in 1974 after an the Court of Justice of the increase in production caused losses in EEC the sector producing fowls for consumption. A — Observations of the Commission In order to counter this the Commission in 1974 fixed higher export refunds, at As a preliminary to its consideration of the same time insisting that the trade the question submitted the Commission and joint-trade institutions concerned surveys the Community provisions in the should also endeavour to attain a better poultrymeat sector, the market position balance on the market. For their part the in 1974 and the relevant Netherlands trade and joint-trade organizations agreed provisions. that it was necessary to reduce production by 10 % in 1974 and this was The Community provisions attained by reducing production for the second half of 1974 by 20 %. It is noteworthy that Regulation No 123/67/EEC of the Council of 13 June Provisions in Netherlands legislation 1967 on the common organization of the market in poultrymeat contains no Whilst in the other Member States measures concerning market concerned the undertakings responsible intervention. Both the Council itself and for all or almost all the production of the Commission in a communication of frozen chickens decided to reduce 23 January 1967 considered that it was production voluntarily with or without unnecessary to set up intervention financial aid from the public authorities, machinery properly so-called (a) because in the Netherlands the public authorities this production was not related to use of intervened directly in particular by the soil (b) because the structure and adopting, through the Produktschap, the techniques of production and Verordening Produktie Slachtpluim­ distribution in the relevant sector were veesector 1974. developing, in particular through a grouping of undertakings, towards an This regulation lays down for each 'industrialization' and (c) because of the slaughter-house a monthly quota for individual nature of the structure of slaughter for the period from 1 July 1974 production costs. The variable costs in to 1 January 1975 corresponding to fact represent between 74 % and 80 % 80 % of the live-weight of the fowls of the total costs so that a reduction in slaughtered during a reference period. production following a fall in demand Exceeding the quota constitutes a automatically involves a fall in the criminal offence. variable costs.

containing quantitative restrictions on established show that measures to the production of poultrymeat. standardize prices are to be left to the forces inherent in the production process Regulation No 123/67 itself. This explains why the agreements on voluntary restrictions concluded The organization of the market between producers are less open to established by Regulation No 123/67 not criticism than intervention by the only covers the trade in the products authorities because, whilst such concerned but also contains provisions agreements are not representative of which affect production and apply to this those forces inherent in the production stage or at any rate enable Community process, they are at all events derived measures to be adopted on production therefrom.

concerned. At the most the Member States can take The Council's decision not to establish measures to encourage action along the within the framework of Regulation No lines indicated in the abovementioned 123/67 intervention machinery for the Article 2 (1) by granting financial aid on poultrymeat sector clearly implies that the conditions prescribed in Articles 92 the Member State may not individually to 94 of the Treaty. establish national intervention machinery which would distort competition and The prohibition on quantitative infringe the prohibition against restrictions (Articles 30 to 37 of the discrimination laid down in Article 40 (3) Treaty) of the Treaty. Although the provisions of the Treaty on The Commission considers that this quantitative restrictions and measures argument also applies, mutatis mutandis, having equivalent effect refer only to to restrictions imposed on production in measures relating to marketing it must in this sector. fact be considered whether they are applicable to restrictions on production. Such direct intervention by the national Limitation of production at the stage of authorities would be at odds with the slaughter of the fowls might in fact have intention expressed in Regulation No an incidence not only upon the export of 123/67 to leave production for the poultrymeat but also on the marketing of marked to be adapted by the relevant chicks and of eggs.

JUDGMENT OF 18. 5. 1977 —CASE 111/76

case, namely that of a maximum price judgment of the Court of 30 October which was not in itself incompatible with 1974 in Case 190/73, Van Haaster. This the organization of the market. In such a was the judgment in view of which the case the Member States could continue to Openbaar Ministerie intervened against control within the framework of their the decision of the court of first instance general economic policy certain aspects which found the accused guilty. It is in of the production and marketing of fact necessary to consider whether the products. 1974 regulation, adopted prior to the Van Haaster judgment, was not also The Commission concludes that in the contrary to provisions of the Community relevant sector, poultrymeat, the market. prohibition on quantitative restrictions and measures having an equivalent effect The Netherlands Government first went does not constitute an independent factor over the difficulties in the sector for the with regard to national action to limit production of fowls for slaughtering in

Decision

1 By a judgment of 28 October 1976, which was registered at the Court Registry on 24 November 1976, the Gerechtshof, Amsterdam under Article 177 of the Treaty referred the following question for a preliminary ruling: 'Must the rules contained in the Verordening Produktie Slachtpluimveesector 1974 of the Produktschap voor Pluimvee en Eieren be regarded as being incompatible with Regulation No 123/67/EEC of the Council of the European Economic Community of 13 June 1967 on the common organization of the market in poultrymeat or with Articles 30 to 37 of the EEC Treaty?'

2 The national rules referred to in the question restrict for the second half of 1974 the slaughter of poultry by fixing quotas calculated in terms of a reference period.

3 In connexion with criminal proceedings instituted against the operator of a poultry slaughter-house for having slaughtered more poultry than the quota

JUDGMENT OF 18. 5. 1977 —CASE 111/76

permitted him by the Produktschap, the institution governed by public law controlling the organization of the market in this sector, the question arose whether the rules which, it was charged, the accused had infringed were compatible with Regulation No 123/67 of the Council or with Articles 30 to 37 of the Treaty.

OFFICIER VAN JUSTITIE v VAN DEN HAZEL

increasing refunds and also suggested that the producers in the various Member States should take action to limit voluntarily the production of poultry for slaughter.

10 According to the statements of the Commission in the course of the oral procedure concerted action amongst undertakings, which in certain cases, moreover, was encouraged by State aids led by methods which varied from one State to another to a fall in production of approximately 10 % in relation to 1973 which, according to the report of the Commission on the agricultural situation for 1974, was in accordance with the aim in view.

11 Since it had apparently not been possible to arrange this voluntary action amongst producers in the Netherlands, the Produktschap, the trade organization in this sector, with the concurrence of the Netherlands Minister of Agriculture, adopted a measure limiting the slaughter of poultry by fixing for the second half of 1974 quotas calculated on the amount of poultry slaughtered during a reference period.

12 The question submitted calls for a decision whether, taking account of the encouragement by the Community authorities to reduce production in order to counter the fall in prices, the national measure in dispute must be considered as incompatible with the provisions of Community law cited by the national court.

13 Once the Community has, pursuant to Article 40 of the Treaty, legislated for the establishment of the common organization of the market in a given sector, Member States are under an obligation to refrain from taking any measure which might undermine or create exceptions to it.

18 It thus follows from the general tenor of the regulation that, as regards the internal trade of the Community, the organization of the market in the product in question is based upon freedom of commercial transactions under conditions of genuine competition.

19 Even if the national restrictions on slaughter must be regarded as referring to the production and not to the marketing of the products they are also prohibited by Article 2 of Regulation No 123/67 as amounting to withdrawal of the products from the market and as constituting quantitative restrictions capable of affecting, potentially at any rate, the system of trade as it has been set up by the organization of the market established by Regulation No 123/67.

20 Nevertheless it must be considered whether the circumstance that the

Commission suggested to the trade and joint-trade organizations that they should accept a voluntary limitation of production by their members perhaps justifies an interpretation of Article 2 in accordance with which a decision of

OFFICIER VAN JUSTITIE v VAN DEN HAZEL

a national public authority entrusted with the organization of the trade imposing a common measure on all the undertakings concerned is in accordance with the said Article 2 and consequently permissible.

26 Furthermore it must be observed that there is in any event a marked difference between measures relating to voluntary reduction and binding measures imposed by an authority governed by public law.

JUDGMENT OF 18.5. 1977 —CASE 111/76

27 The reply to the question submitted must therefore be that Regulation No 123/67, especially Articles 2 and 13 thereof, must be interpreted as making measures enacted by the national authorities to impose a quota on the slaughtering of poultry incompatible with those provisions.

28 The reply which has been given renders superfluous an interpretation of Articles 30 to 37 of the Treaty.

Costs

29 The costs incurred by the Netherlands Government and the Commission of the European Communities which submitted observations to the Court are not recoverable.

Mackenzie Stuart O'Keeffe Bosco Touffait

Delivered in open court in Luxembourg on 18 May 1977.

A. Van Houtte H. Kutscher

Registrar President