C-116/76

JUDGMENT OF THE COURT 5 JULY 1977 <apnote>1</apnote>

Granaria BV

v Hoofdproduktschap voor Akkerbouwprodukten (preliminary ruling requested by the College van Beroep voor het Bedrijfsleven)

'Skimmed-milk powder'

Case 116/76

1. Agriculture — Common organization of the markets — Community arrangements — Burden of costs — Discriminatory distribution between the various agricultural sectors — Not permissible (EEC Treaty, Article 39 and second subparagraph of Article 40 (3))

HOOFDPRODUKTSCHAP VOOR AKKERBOUWPRODUKTEN, The Hague,

1 — Language of the Case: Dutch.

JUDGMENT OF 5. 7. 1977 — CASE 116/76

on the validity of Council Regulation (EEC) No 563/76 of 15 March 1976 on the compulsory purchase of skimmed-milk powder held by intervention agencies for use in feeding-stuffs (OJ L 67 of 15. 3. 1976, p. 18),

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,

Despite this price system, the Com­ of this protein in feeding-stuffs for munity is experiencing a surplus of milk animals other than calves, provision which takes the form, in particular, of should be made for the compulsory the accumulation of considerable purchase of a certain quantity of intervention stocks of skimmed-milk skimmed-milk powder. The fifth recital powder. indicates that in view of the amount of

GRANARIA v HOOFDPRODUKTSCHAP VOOR AKKERBOUWPRODUKTEN

regulation, the successive buyers of the Tariff.

products referred to in Articles 2 and 3, or of protein products processed Replying to this request on the same day, therefrom are to bear the burden of the the defendant in the main action stated costs arising under the arrangements laid that, under the terms of Regulation down in the regulation (Article 5). (EEC) No 563/76, in particular Articles 3 and 11 thereof, it was not possible to The regulation entered into force on 15 issue a protein certificate for which no March 1976. It was stated to apply from security had been provided. 1 April 1976, with the exception of Articles 3 (1) and 5 in so far as it 4. The plaintiff in the main action concerned the costs arising from the instituted proceedings against the de­ implementation of Article 3 (1), both of cision of the Hoofdproduktschap before which were to apply from 19 March 1976 the College van Beroep voor het (first and second paragraphs of Article Bedrijfsleven (an administrative court for 11). economic matters). Before the College,

JUDGMENT OF 5. 7. 1977 — CASE 116/76

then be said that the regulation VI — Is the Council empowered by the states the reasons on which it is Treaty to prescribe, as it does in based as required by Article 190 Article 5 of the regulation, that of the Treaty? the purchaser shall bear the costs it the last question is answered in which arise for the vendor from

the negative does that then have the implementation in accor­ the consequence that the dance with a Community regulation is not binding as being regulation of a contract which was in conflict with Article 190? concluded before the entry into II — Are the rules contained in the force of the regulation? regulation, whereby the issue of a If the question is answered in protein certificate required for the negative is the regulation the free circulation in the consequently not binding? Community of the products VII — Is the third subparagraph of referred to in Article 3 of the Article 11 of the regulation to be regulation is conditional after 1 interpreted as meaning that the April 1976 either on the Member States were already submission of proof of the authorized before 1 April 1976 to purchase and the denaturation of make the provision of a security a skimmed-milk powder or condition for the issue of a provision of a security and, protein certificate although it is before 1 April 1976 but after 19 provided in the second sub-

GRANARIA v HOOFDPRODUKTSCHAP VOOR AKKERBOUWPRODUKTEN

JUDGMENT OF 5. 7. 1977 — CASE 116/76

563/76 for an importer such as any case accord with the objective of Granaria were to be debited to the multiplying the outlets for skimmed- successive buyers in accordance with milk powder and in this way getting rid Article 5 of Regulation (EEC) No of surpluses. If this had been the 563/76. Council's objective, it would have confined itself to providing for the Infringement of this legal principle, disposal of greater quantities of which the Court of Justice must uphold, skimmed-milk powder in any way at all. may mean that Regulation (EEC) No 563/76 has no binding effect on the The fact that, because of the obligation to points indicated by the College, re­ purchase, the substantial stocks of gardless of the extent to which the skimmed-milk powder available are not regulation also contravenes any manda­ continuing to increase is regarded by the tory general provision. Council as an additional advantage. However, this supplementary consider­ As the College did not, in its questions, ation relates to the efficacy of the consider the possibility of an infringe­ measure, not to its purpose. ment of this legal principle, those questions must wherever possible be Article 11 of the regulation is not in understood as also to be asking to what accord with its title and recitals. In any extent, in the actual circumstances case since a requirement laid down in an prevailing on 24 March 1976, the article of a regulation does not form part institutions of the Community and the of the statement of reasons on which it is competent national authorities of the based, it is not possible to read into Member States in giving effect to the Article 11 an objective of the regulation provisions of Regulation (EEC) No in question which is at variance with the 563/76 have taken, as far as Granaria is relevant considerations set out on this

According to Granaria, it is clear from In principle, this seems quite possible the title and the recitals in the preamble but there is no such double objective in to Regulation (EEC) No 563/76 that its the case of Regulation (EEC) No 563/76. objective was to increase utilization of the protein contained in the large In the first place the title and the recitals available stocks of skimmed-milk powder in the preamble to the regulation do not in feeding-stuffs for animals other than allow of it. In the second place this calves. The statement of the reasons on would conflict with the restriction which the regulation is based make imposed on the utilization of milk absolutely no reference to intervention powder, that is to say, its utilization arrangements designed to eliminate the exclusively for feeding-stuffs. surpluses of skimmed-milk powder. Granaria further contends that if the The condition that the milk powder objective referred to in subparagraph (a) must be denatured to ensure that it is of the first question does constitute an used only for animal feed does not in objective of Regulation (EEC) No 563/76

GRANARIA v HOOFDPRODUKTSCHAP VOOR AKKERBOUWPRODUKTEN

of the Treaty. Second question The Council states that the statement of reasons on which a regulation is based Before going into this question Grana­ may be confined to indicating the ria first points out that, in accor­ general situation which led to its dance with the case-law of the Court, an adoption on the one hand and the agricultural regulation of the Council can general objectives which it is intended to be reviewed in the light of the provisions achieve on the other: judgment of the of Article 39 of the Treaty as a separate

JUDGMENT OF 5. 7. 1977 — CASE 116/76

The 'neutral' in relation to the other ob obligation to purchase does not, in jectives. On the other hand a regu consequence, ensure technical progress, lation which conflicts with one or more the rational development of agricultural of the objectives of the agricultural policy production or the optimum utilization of is not valid even if it promotes the the factors of production, in particular, achievement of other objectives. This labour. applies in the case of Regulation (EEC) No 563/76 which, as a Council measure Article 39 (1) (b) has no independent which must be treated independently significance but must be construed in the from the standpoint of Article 40 of the light of the objectives set forth in Article Treaty, is in conflict with one or more of 39 (1) (a). the objectives set out in Article 39 of the The result of the obligation to purchase Treaty. is to increase the costs of breeders of non-dairy cattle without at the same time Regulation (EEC) No 563/76 does not increasing their income.

Agricultural productivity could never objectives set out in Article 39 (1) (a) and theless increase also if and to the extent (b). to which the regulation ensured optimum utilization of the factors of If the objectives of the common production, in particular labour. The agricultural policy defined in Article 39 answer to this question depends on the (1) (a) and (b) are viewed as a whole, it objective of the regulation. In this becomes clear that these objectives can respect, the first and second questions of only be attained by structural measures the College are connected. and not by measures of market policy such as compulsory puchase. If the object of Regulation (EEC) No Nor can Regulation (EEC) No 563/76, 563/76 is to increase the utilization of viewed from this standpoint, promote animal protein it might still be con those objectives of the common agri sidered as a 'neutral' measure in terms of

GRANARIA v HOOFDPRODUKTSCHAP VOOR AKKERBOUWPRODUKTEN

In order to ascertain whether the denaturing raises technical problems; and obligation to purchase stabilizes markets national or European requirements (Article 39 (1) (c)), it is necessary to regarding the permitted additives to establish what, in this case, is the market foodstuffs are liable to be contravened. to be stabilized.

With regard to the first part of the If the market in question is that in second question, Granaria contends that feeding-stuffs the obligation to purchase if the objective of Regulation (EEC) No might possibly be regarded as a measure 563/76 is to effect an appreciable for stabilizing markets. reduction in stocks of skimmed-milk powder, it is contrary to Article 39 (1) (a) The obligation to purchase contributes to (c) inclusive, and that if its objective is nothing towards the stabilization of the to increase the utilization of protein, it market in skimmed-milk powder by may be 'neutral' in relation to those reducing over-production. The crux of provisions, but despite this last objective the problem, which is the production, a it cannot promote the objectives of structurally important element in relation Article 39 (1) (a) and (b) since in order to to demand, of skimmed-milk powder in do so structural measures must also be the Community, remains the same. From adopted. this viewpoint, therefore, Regulation (EEC) No 563/76 does not produce any On the second part of the second stabilization of the market because the question Granaria argues that an intervention price for milk powder is agricultural regulation within the not adjusted to the demand for meaning of Article 40 of the Treaty skimmed-milk powder. The price is far which conflicts with one or more of the too high. objectives laid down in Article 39 of the Treaty is on this ground without binding In order to stabilize markets, a regulation force and must be inapplicable in its can, of course, as Regulation (EEC) No entirety since it is the central principle of 563/76 has done, build up demand by the rules which is itself involved in this encouraging outlets but it can only do case.

The rules at issue are the result of the The obligation to purchase, in particular, has the effect of stabilizing markets. It price maintenance policy and accord­ made it possible to dispose of be­ ingly help to increase the individual tween 300 000 to 400 000 tonnes of earnings of persons engaged in skimmed-milk powder and it therefore agriculture (Article 39 (1) (b)). corresponds to the objective set out in Article 39 (1) (c). Above all, the contested measure accords with the objective of stabilization of Nor does the contested regulation in­ the market (Article 39 (1) (c)). Any fringe the provisions laid down in sub­ consideration of it from this point of paragraphs (a) and (b) of Article 39 (1). view must have regard to the market in milk as a whole. It is very difficult to The Commission states that, in view of restore a satisfactory balance between the very wide wording of the objectives supply and demand. In consequence, the listed in Article 39 (1) and their Community institutions must be able, on relationship with each other, it is only in a provisional basis, to employ unor­ extreme cases that it is possible to thodox measures in so far as they are establish that rules promulgated by a essential for the improvement of outlets. Community institution are clearly outside the scope of those objectives. The The measures are also appropriate for the Court has already declared that those purpose of attaining the objective of the objectives cannot always in practice be contested regulation because they put pursued simultaneously and that the comparatively large quantities of the Community institutions may accordingly allow any one of them temporary product to new use. The fact that the intervention stocks continued to increase priority. for a time after the entry into force of the regulation in no way detracts from the The question whether the rules accord efficacy of the regulation since the with the objective laid down in Article increase in stocks during that period was 39 (1) (a) involves a complicated in any case less than the quantities which economic value-judgment implying wide it was possible to dispose of as a result of powers of discretion: for the purposes of the regulation. judicial review, there must have been at least a serious error in the assessment of the economic considerations. Further­ The compulsory purchase system was, more, the rules which were introduced moreover, also necessary because there are merely a supplementary measure was no other way of quickly achieving arising from the implementation of a the desired result. Action directly related market policy, which has for many years to the causes of the structural surpluses been based upon rationalization and would not, in the short term, have been improvement of organizational structures. able to help in reducing the stocks.

Nor does the contested regulation Granaria contends that Regulation constitute a protective measure; this is (EEC) No 563/76 involves prohibited clear from its title and its recitals. Nor discrimination between consumers of does a situation of emergency, which feeding-stuffs. Consumers of feeding­ often plays a part in the case of stuffs intended for animals other than protective measures, have any direct dairy cattle pay a higher price but, unlike relevance to Regulation (EEC) No consumers of feeding-stuffs for dairy 563/76. cattle, do not receive any compensation through the medium of the intervention Because the regulation needlessly in­ price for milk powder. fringes Articles 3 (f), 85 and 86 of the Treaty and, furthermore, in this respect There is a further group of producers and consumers who are the victims of gives an insufficient statement of the discrimination: some manufacturers of reasons on which it is based within the

According to the Hoofdproduktschap, a forfeited securities and quasi-duties or distinction must be drawn between the concealed levies. In this connexion it concept of discrimination and that of refers particularly to Article 10 (2) of the preferential treatment. It is the latter regulation under which any security which exists in this case, inasmuch as forfeited shall be used to offset the manufacturers of skimmed-milk powder intervention expenditure of the European receive an indirect subsidy as a result of Agricultural Guidance and Guarantee the obligation to purchase. Fund. As the Fund appears in the Communities' budget, the financial In the Council's view, the obligation to consequences of applying the regulation, purchase covers, in principle, all those which are borne by the Fund, form part who use protein feeding-stuffs. of the budget. The Communities' budget is principally financed out of the It is true that poultry-farmers are obliged Communities own resources as defined to use a proportion of the skimmed-milk in the Council Decision of 21 April 1970 powder coming from surpluses for which on the Replacement of Financial they are not responsible but, when Contributions from Member States by account is taken of the provisions of the the Communities' own Resources (OJ first sentence of Article 38 (1) and Article English Special Edition 1970 (I), p. 224). 43 (2) of the Treaty, no discrimination arises in this case. Granaria goes on to consider whether securities declared forfeit are own In support of its view the Council refers, resources within the meaning of Article 2 in addition, to Article 39 (2) (c) of the or 'other revenue' within the meaning of Treaty. Article 4 (1) of that decision and whether The Commission states that the contested the quasi-duties or the concealed levies arrangements affect virtually the whole of come within the scope of those the feeding-stuffs industry and that they provisions. draw no distinction between the various groups involved. Neither forfeited securities, quasi-duties nor concealed levies arising from the fact There is, moreover, no principle laying that the price of skimmed-milk powder down that a particular industry must, on is higher than the prices of competing its own, bear the cost involved in solving products on the market in feeding-stuffs its own problems. There must exist some are covered by the above-mentioned connexion between the industry 'called provisions of the decision relating to own upon to bear the cost' and the industry resources. Regulation (EEC) No 563/76 is 'benefited'. Such a link does in fact exist in consequence contrary to that decision, between all sectors of agriculture and, in is without binding force and must be particular, between the vegetable protein inapplicable in its entirety because the and the animal protein sectors. decision has greater authority.

Article 201 of the Treaty. Moreover, introduce all manner of taxes in so far as Article 40 (3) contains no restriction they accord with the objectives set out in relating to Article 201 of the Treaty in Article 39. the fixing of levies. Sixth question The Council states that there is, in this case, no question of providing the Granaria states that if the objective of Community with its own resources but of Regulation (EEC) No 563/76 is to reduce introducing a security to ensure that the stocks of skimmed-milk powder the obligation to purchase is complied with. Council can, by means of emergency The Court has, in previous cases, already protective measures, under certain con­ had to consider similar arrangements for ditions interfere with existing contrac­ security and has declared them to be tual relationships. lawful. When the security is forfeited the revenue therefrom forms part of the On the other hand, if the objective is to encourage the utilization of protein, it 'other revenue' referred to in Article 4 (1) does not possess this power since such an of the decision on the Communities own resources. intervention in contractual relationships is not necessary in order to increase the utilization of protein. In that case the The Commission considers that, since the regulation has no binding force and must applicant is not affected, it cannot be inapplicable in its entirety owing to contend before the national court either the fact that Article 5 is a vital provision that Article 10 (2) of Regulation (EEC] of the measure promulgated by the No 563/76 is invalid or that 'revenue regulation taken as a whole. which the sale of skimmed-milk powder provides for the intervention agencies is The Hoofdproduktschap claims that unlawful. Even if the provisions referred there are in fact two questions: one is to were contravened this would only whether a regulation promulgated under mean that the forfeited securities and the Article 43 of the Treaty can in principle price of skimmed-milk powder con­ govern civil law relationships and, if the stituted revenue in the budgets of the reply is in the affirmative, the related Member States. This eventuality is question is whether such rules can also therefore outside the framework of affect existing contractual relationships. anything that can be the subject of a question for a ruling on validity under In view of the provisions of Article 40 (3) Article 177 of the Treaty. Moreover, even of the Treaty, under which the common if the alleged invalidity could be organization of the markets may include established, this could not affect the all measures required to attain the validity of the scheme as such. The objectives set out in Article 39, the first question which budget the revenue must question must be answered in the be allocated to is a secondary and affirmative. separate one from the economic aspects of the scheme. As the provision of a security is permitted within the limits of Article 40 The Commission does not understand of the Treaty, because it is required by how the obligation to purchase could the circumstances of this case, the second constitute a Community tax. Even if, question must also be answered in the because of the fixing of a security, the affirmative.

The Council could have been criticized if If the words 'these provisions' refer to it had not adopted that provision. If prior each and every provision of the contracts had not been covered by the regulation which would be consistent new rules this would in fact have with its construction, the security should compromised the attainment of the have been provided with effect from 1 objective of economic policy underlying April 1966 inasmuch as the Community the obligation to purchase. implementing rules had not been adopted at that date. Article 5 was therefore dictated by an overriding matter of public interest The words 'these provisions' do not refer within the meaning of the judgment of to the provisions of Article 3 (1) or of the Court of 14 May 1975 in Case 74/74 Article 5 of the regulation, which have CNTA v Commission, [1975] ECR 533. applied since 19 March 1976, because if they did so the words would be The Commission does not see why meaningless; Article 3 (1) of the Article 5 should make the 'scheme' regulation requires only the presentation invalid in its entirety. The existence of of a 'protein certificate'. The other the scheme and a reasonable application provisions, in particular Article 1 and of it do not depend upon its applicability Article 3 (2) of the regulation which, or otherwise to prior contracts. together with Article 3 (1), form a whole, were not yet applicable between 19 Seventh question March and 1 April 1976. The force of Article 3 (1) alone, in conjunction with Granaria contends that, in adopting Article 5 of the regulation, could not the third paragraph of Article 11 of have been so great during this period Regulation (EEC) No 563/76, the that, before issuing 'protein certificates' Council wished to prevent the regulation only, the Member States would have had from becoming a dead letter after 1 April to obtain a security guaranteeing that this 1976, the date on which the regulation single provision would be complied with. was to be applicable in its entirety, in so far as the institutions had not adopted If, on the other hand, the words 'these detailed implementing rules. provisions' refer to the 'implementing rules on the matter' mentioned at the Article 11 must be interpreted as meaning that, at the material time, from beginning of the third paragraph of Article 11, it must be borne in mind that 19 March to 1 April 1976, the third paragraph of Article 11 had entered into these implementing rules could not be force but was not yet applicable. This applicable before 1 April 1976. Since, at means that, during that period, Member the time when Regulation (EEC) No States would have been bound to issue 563/76 was adopted, there was as yet protein certificates on demand without no certainty that the Community those concerned having to provide a implementing rules would be ready by 1 security. April 1976, there would have been good reason for obtaining, as from that Although this interpretation of Article 11 date, certain guarantees that all the might seem to be correct the wording of arrangements in the regulation and in its the article is not altogether clear. Much implementing rules would be complied depends on the interpretation to be given with.

conditional on the prior provision of a in the third paragraph of Article 11 and security, because the institutions and the the expression 'caution' ('security') in Member States had not drawn up the Article 3 (2), that the security is not the contested instruments with sufficient same in each case. Thus the rules did not care. provide for Article 3 (2) of the regulation to come into force on 19 March 1976. The issue which the national court indicates by implication in the second The Council is in consequence of the part of its seventh question must be opinion that the third paragraph of resolved by answering the first part of the Article 11 of the regulation must be question in the manner suggested by understood as meaning that the Member Granaria. States had the power and the duty, before 1 April 1976, to require the provision of According to the Hoofdproduktschap the a security as a condition for the issue of effect of the second paragraph of Article the 'protein certificate'. 11 of Regulation (EEC) No 563/76 is to According to the Commission, so long as lay down that, with effect from 19 March the implementing rules for Regulation 1976, importation is subject to the (EEC) No 563/76 had not been adopted, presentation of a 'protein certificate'. In neither the provisions of Article 3 (2) nor this connexion the third paragraph of the document referred to in Article 6 Article 11 obliges the Member States to could have practical application. Article 3 take certain measures: to require the (1) became applicable on 19 March 1976, importer to give a commitment with the result that the provisional accompanied by a security guaranteeing national measures provided for in the that the implementing rules to be third paragraph of Article 11 guaran­ adopted by the Commission will be teeing that it would be respected also respected. The first part of the question came into force on 19 March. must, accordingly, be answered in the affirmative. III — Oral procedure The second part of the question must also be answered in the affirmative: the The plaintiff in the main action, represented by. B. H. ter Kuile, fact that the Community security referred Advocate, of The Hague, the defendant to in Article 3 (2) of the regulation could in the main action, represented by J. be provided only on and after 1 April Goosens of the Ministry for Agriculture 1976 does not prevent the Member States and Fisheries, the Council, represented from requiring a national security with by its Legal Adviser, B. Schloh, acting as effect from 19 March 1976. This security Agent, assisted by G. Peeters, and the was converted into a Community security Commission, represented by its Legal on 1 April 1976. Advisers, P. Gilsdorf and J. H. J. Bourgeois, acting as Agents, submitted According to the Council, the third oral observations at the hearing on 3 May paragraph of Article 11 refers to the free 1977. circulation of products for which a 'protein certificate' must be presented The Court had invited the Commission

In Joined Cases 83 and 94/76 and 4 and In the first case the supply price fixed by 15/77, the applicants replied that the the Community for this type of use three factors, dehydration, storage and determines the price on the market. For denaturing, represented a total of about the period in question the supply price 27 u.a. or DM 95 per 100 kg, and that was 52 u.a. per 100 kg of skimmed-milk the value of 100 kg of skimmed-milk powder. In the second case the market powder as animal feed was roughly price of the product is fixed on the basis between DM 50 and 65. of its value as animal feed compared with substitute products and, in particular, of The Commission replied that the cost of the price of soya oil cake. During the manufacturing skimmed-milk powder time when the contested regulation was on average 15 u.a. per 100 kg. The applied, the price of soya oil cake was denaturing costs involved in the scheme about 18 u.a. per 100 kg. The price of in question are between 1 and 3 u.a. per soya at the present time is 25 u. a. per 100 kg according to the denaturing 100 kg. method. The value of skimmed-milk powder as animal feed varies according The Advocate General delivered his to whether the product is used for opinion at the hearing on 7 June feeding. calves or for swine and poultry. 1977.

Decision

1 By order of 7 December 1976, which was received at the Court Registry on 9 December 1976, the College van Beroep voor het Bedrijfsleven referred to the Court a number of questions under Article 177 of the EEC Treaty concerning the interpretation of certain provisions of the Treaty and the interpretation and validity of Council Regulation (EEC) No 563/76 of 15 March 1976 on the compulsory purchase of skimmed-milk powder held by intervention agencies for use in feeding-stuffs (OJ L 67, p. 18).

6 To this end the regulation made the grant of the aids provided for certain vegetable protein products as well as the free circulation in the Community of certain imported animal feed products subject to the obligation to purchase specified quantities of skimmed-milk powder.

7 In order to ensure that this obligation was fulfilled the grant of aid and free circulation were subject to the provision of a security or the production, on the prescribed form, of evidence of the purchase and of the denaturing of the prescribed quantities of skimmed-milk powder.

8 Under Article 1 of Commission Regulation (EEC) No 753/76 of 31 March 1976 laying down detailed rules for the sale of skimmed-milk powder for use in animal feed (OJ L 88, p. 1), skimmed-milk powder held by the intervention agencies was resold by them in fulfilment of the obligation to purchase at a price of 5216 u. a. per 100 kg, multiplied by a coefficient which, in the case of the Netherlands, amounted to 0-8874.

9 The denaturing costs to be borne by the purchaser were between 1 and 3 u. a. per 100 kg.

10 During the period when Regulation (EEC) No 563/76 applied, the market price of soya oil cake, a vegetable product with a nutritional value comparable

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16 Because of the close connexion between these grounds of complaint, it will be appropriate to consider them together.

17 Under Article 39, the objectives of the common agricultural policy are to be the rational development of agricultural production, the assurance of a fair standard of living for the whole of the agricultural community, the stabilization of markets and the availability of supplies to consumers at reasonable prices.

GRANARIA v HOOFDPRODUKTSCHAP VOOR AKKERBOUWPRODUKTEN

18 Although Article 39 thus enables the common agricultural policy to be defined in terms of a wide choice of measures involving guidance or intervention, the fact nevertheless remains that the second subparagraph of Article 40 (3) provides that the common organization of the agricultural markets shall be limited to pursuit of the objectives set out in Article 39.

19 Furthermore, the same subparagraph lays down that the common organization of the markets 'shall exclude any discrimination between producers or consumers within the Community'.

20 Thus the statement of the objectives contained in Article 39, taken together with the rules in the second subparagraph of Article 40 (3), supplies both positive and negative criteria by which the legality of the measures adopted in this matter may be appraised.

26 In consequence, the answer must be that Council Regulation (EEC) No 563/76 of 15 March 1976 is null and void.

27 In view of this reply, there is no need to consider the questions submitted by the College van Beroep in so far as they refer to rules of Community law other than those treated above.

Costs

28 The costs incurred by the Council and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable.

29 As these proceedings are, in so far 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,

A. Van Houtte H. Kutscher

Registrar President