C-2/77
ECLI:EU:C:1977:124
- Súd
- Súdny dvor Európskej únie
- IČS
- 61977CJ0002
- Zdroj
- eur-lex.europa.eu ↗
JUDGMENT OF 12. 7. 1977 — CASE 2/77
In case 2/77
Reference to the Court under Article 177 of the EEC Treaty by the Finanzgericht Münster for a preliminary ruling in the action pending before that court between
HOFFMANN'S STÄRKEFABRIKEN AG, Bad Salzuflen, Germany,
and
HAUPTZOLLAMT BIELEFELD,
on the validity of Article 1 (1) of Regulation (EEC) No 3113/74 of the Council of 9 December 1974 OJ L 332 of 12. 12. 1974, p. 1) and on the interpretation of the second subparagraph of Article 40 (3) of the EEC Treaty and of Article 1 of Regulation No 231/75 of the Commission of 30 January 1975 OJ L 24 of 31. 1. 1975, p. 42),
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
JUDGMENT
Facts and issues
The judgment making the reference and cereals (OJ English Special Edition 1967, the written observations submitted p. 33) lays down in Article 11 (1) that 'A pursuant to Article 20 of the Statute of production refund shall be granted: the Court of Justice of the EEC may be (a) for maize and common wheat used by summarized as follows: the starch industry for the manufacture of starch and quellmehl; I — Facts and procedure (b) for potato starch; (c) for maize used in the maize industry 1. Regulation No 120/67/EEC of the for the manufacture of maize groats Council of 13 June 1967 on the and meal (gritz) used by the brewing common organization of the market in industry'.
HOFFMANN'S STÄRKEFABRIKEN v HAUPTZOLLAMT BIELEFELD
According to the first recital in the indeed, they almost always exceeded preamble to Regulation No 371/67/EEC between August 1973 and October 1974. of the Council of 25 July 1967 fixing the This 'appreciable and persistent variation abovementioned refunds for the year in the prices of the basic products on the beginning on 1 August 1967 (OJ English world market' led the Council to review Special Edition 1967, p. 219) the granting the 'supply price' which had been fixed of this refund was justified by 'the special at 68 u.a. since 1967. For the marketing situation on the market in starches and, year 1974/75 the price was successively in particular, the need for that industry fixed at: to keep starch prices competitive with - 82 u.a. from 1 August 1974 by those for substitute products' in order Regulation No 1132/74 of the that 'the basic products required for use Council of 29 April 1974 (OJ L 128 by that industry may be made available at of 10. 5. 1974, p. 24); a lower price than that which would - 87-45 u.a. from 7 October 1974 by result from the application of the system Regulation No 2518/74 of the of levies and common prices'. Commission of 4 October 1974 (OJ L 270 of 5. 10. 1974, p. 1) adopted in implementation of Regulation No In order to attain this objective the 2496/74 of the Council of 2 October refund was calculated so that it would cover the difference between the 1974 amending the prices applicable in agriculture for the 1974/75 Community threshold price and a fixed marketing year OJ L 268, of 3. 10. amount of 68 units of account per metric 1974. p . 1); ton considered as the normal 'supply - 103·10 u.a. from 1 April 1975 by price' for the starch industry. Article 2 of Regulation No 3113/74 of the Regulation No 371/67/EEC provided Council of 9 December 1974 (OJ L that if 'prices of the basic products ... 332 of 12. 12. 1974, p. 1). show appreciable and persistent variations on the world market' in Accordingly the refund, which amounted relation to the 'supply price' the latter to 39-45 u.a. per metric ton before the might be altered by the Council, acting 1974/75 marketing year went to 24·60 in accordance with the voting procedure u.a. at the beginning of that marketing laid down in Article 43 (2) of the Treaty year, remained unaltered in October on a proposal from the Commission; it is 1974 (since the alteration in the supply self-evident that this alteration brought price was accompanied by an increase in about changes in the amounts of the refund. the threshold price) by degrees reached 30·10 u.a. in March 1975, owing to monthly increases in the threshold price 2. From the end of 1972 the world rates was reduced to 15·55 u.a. from 1 April for maize rose constantly, gradually 1975 and amounted to 18·85 u.a. per approaching the threshold price which, metric ton in July 1975.
world price threshold price supply price refund
June 1974 106·25 107·45 68·00 39·45
1974/75
August 1974 125·71 106·60 82·00 24·60
October 1974 132·91 112·05 87·45 24·60
April 1975 93·39 118·65 103·10 15·55
July 1975 101·42 121·95 103·10 18·85
JUDGMENT OF 12. 7. 1977 — CASE 2/77
whilst the production refund on maize laid down in Article 43 (2) of the Treaty starch protects Community processors on a proposal from the Commission, who produce starch against importers of shall adopt rules for the application of products processed from starch it is also this article and fix the amount of the intended to remedy the disorganization production refund' (first citation in the of the market in starch arising from preamble to Regulation No 3113/74). competition from synthetic products derived from oil.
Since there is a risk that First Question (Question 1 (a)) the starch market may for its part cause imbalance in the market in other products and vice versa a refund bearing There is no merit in the argument of the a certain relation to that in respect of plaintiff in the main action to the effect maize starch is granted in respect of that Regulation No 3113/74 is void those other products (potato starch, because the conditions prescribed by quellmehl, broken rice and maize groats).
Article 7 of Regulation No 1132/74 (appreciable and persistent variations in Since the increase in the world price of the prices on the world markets) are not cereals caused frequent increases in the fulfilled, since Regulation No 3113/74 is threshold price whilst the supply price 'of the same generation' as Regulation No 1132/74 and has the same citations remained unchanged from 1967 to 1974 as the latter. the increase in the refund which followed entailed a very heavy burden on the Community finances. This led the The reference in the first recital in the Council to abolish the refund on several preamble to Regulation No 3113/74 to products, such as quellmehl, and to the said Article 7 of Regulation No reduce the refund on maize starch. 1132/74 is a reference to the economic Furthermore, it became clear in the justification for the refund, disputes the course of the 1974/75 marketing year size of the refund and states the reasons that even a reduced refund on maize for altering the fixed amount.
starch was becoming less and less justifiable, particularly because of the In view of the fact that this was the third reduction in competition from substitute reduction of the refund within the same products; this situation gave rise to marketing year the Council incorporated Regulation No 3113/74 which is in two precautionary measures: first, it dispute. postponed by five months the date of entry into force (1 April 1975 instead of Since the Council was aware that it was 1 December 1974) and secondly it made no longer a case of mere adaptation to provision for the adoption of transitional fluctuations in the world price but of a measures (Article 2 of Regulation No more complex situation calling in 3113/74). question the refund itself, 'the size of which is no longer economically
justified', it did not avail itself of the Regulation No 3113/74, whereby the Council made a choice of economic procedure under Article 7 of Regulation No 1132/74, acting in this matter in policy, is thus in keeping with an accordance with the proposal of the intention, desired and expressed from the Commission, and instead acted by way of beginning of 1974, to reduce the refund. a regulation having the same status as the latter regulation, that is to say, founded The plaintiff's line of argument amounts upon the basic regulation for maize, to maintaining that since provision was Regulation No 120/67, Article 11 (3) of made in Regulation No 1132/74 for which states, The Council, acting in review for economic reasons this accordance with the voting procedure precludes review for structural ends.
HOFFMANN'S STÄRKEFABRIKEN v HAUPTZOLLAMT BIELEFELD
Second Question (Question 1 (b)) implementation of those two provisions (Article 7 of Regulation No 1132/74 and According to the Council the right Article 11 (3) of Regulation No 120/67) conferred by Regulation No 120/67 is is effected by identical procedures: the not so clearly defined as the plaintiff in Council must in both cases act by a the main action claims. Regulation No qualified majority on a proposal from the 120/67 leaves the Council with a certain Commission. discretion in the light of the economic circumstances and this discretion it has Moreover the measures in dispute were properly exercised. fully justified by the situation of the market. Third Question (Question 1 (c)). Because of the refunds it was possible for The Council concedes that the annual manufacturers of maize starch to buy fixing of agricultural prices indeed their raw materials at a price not constitutes a basic rule in the common necessarily that on the world market but agricultural policy but it disputes that at a competitive price lower than the this infers that agricultural prices cannot Community threshold price with in any circumstances be changed during reference to which the amount of the the marketing year even if it is clear that levies is established. Because of the they no longer fulfil their function. increase in world prices and in threshold prices and the consequent increase in the In any event the fixing of supply prices refund manufacturers of maize starch, is irrelevant since they are not fixed who initially had to obtain their supplies annually. at a price distinctly higher than the price on the world market in 1974, enjoyed a The line of argument based on the distinctly unrealistic supply price since it judgment in the Deuka case (judgment corresponded to approximately 60 % of of the Court of 18 March 1975 in Case the world price. 78/74 [1975] ECR 421) confirms that an exceptional alteration in the supply price The Commission points out that even may be effected if legal certainty is after the first reduction in the refund in ensured, as it was in the present case. October 1974 the supply price of 87·45 u.a. per metric ton was still B — Observations submitted by the approximately 15 u.a. per metric ton Commission lower than the price ruling on the world market. Only Regulation No 3113/74 made it possible to re-establish relatively First Question (Question 1 (a)) reasonable prices. According to the plaintiff in the main action the supply The Commission too emphasizes that price should have been constantly the legal basis cited in Regulation No adapted to the short-term and purely 3113/74 is not Article 7 of Regulation seasonal variations in the world prices of No 1132/74 but the provision in Article maize. This is not the function of the
11 (3) of Regulation No 120/67/EEC supply price: its function is independent which merely authorizes and charges the and this independence corresponds to its Council in quite general terms, to adopt objective: it is not required to provide a the rules necessary for the granting of mere guarantee that the starch industry production refunds and to determine on may obtain maize on the conditions this basis the method of calculation and prevailing on the world market since it the amounts of such refunds. The would have been much easier to attain Commission moreover observes that the this objective by suspending the levies.
JUDGMENT OF 12. 7. 1977 — CASE 2/77
procedure which, in accordance with conditions laid down in Article 7 of Article 11 (3) of Regulation No 120/67 Regulation No 1132/74: the Court already empowered the Council to merely checks whether Regulation No improve in general implementing 3113/74 was not based on a manifestly Regulation No 1132/74. This contra false appraisal of the fulfilment of those diction between the extremely strict conditions or whether the regulation was material conditions for altering the not vitiated by misuse of powers. In the refunds and the formal conditions for the present case strict compliance with the wholesale alteration of Regulation No criteria in Article 7 is essential. 1132/74 can only be resolved as follows: — The Council is bound by the The plaintiff in the main action has conditions in Article 7 when only the submitted for consideration by the Court supply price of maize has to be a table showing the prices of maize on adapted to the altered conditions and the world market during the years 1974 the rules as a whole relating to the and 1975, the threshold price, the limits refunds remain unchanged; of the refund, the refund and the levy on — On the other hand the general power the first of each month in the course of to adopt regulations altering the the same period. This table shows that amount of the refund by a the conditions laid down by Article 7 modification of the system of refunds were fulfilled neither during the period is not affected by Article 7 (for of validity of Regulation No 3113/74 nor example, alteration of the system of at the time when it was adopted. refunds to a fixed amount from the
1975/76 marketing year, Regulation The plaintiff in the main action notes No 1955/75 of the Council of 22 more particularly: July 1975, OJ L 200 of 31. 7. 1975); — The aim in view in rendering — Regulation No 3113/74 merely alters alteration of the refunds subject to the 'supply prices' appearing in the existence of appreciable and Articles 1, 4 and 5 of Regulation No persistent variations in world prices 1132/74 and does not affect the other was a regard for the stability of the provisions of the regulation, system of refunds. The object of the including Article 7. system was not to carry out It was thus adopted within the adaptations intended only to remain framework of the limited power to in force for a short period. With enact regulations contained in this regard particularly to the provisions provision. of Regulation No 3113/74 it was The fact that the first citation in the clear at the time when they were preamble to Regulation No 3113/74 adopted that, independently of the mentions Article 11 (3) of Regulation development of the price on the No 120/67 is not conclusive since world market, they were intended to this provision restriction the general apply for four months only, from 1 power is not an enabling provision. It April 1975 until the beginning of the is sufficient that the enabling new marketing year. provision should be mentioned in the — The criterion to which reference
recitals in the preamble to the must be made in order to establish
regulation, as it was in this case. variations in prices on the world market must be the world price of The plaintiff in the main action maize at the time when the price of maintains that the Council is thus bound maize intended for processing into by the conditions laid down in Article 7 starch was last fixed. At the time of Regulation No 1132/74. According to when Regulation No 3113/74 was the plaintiff the Court checks only adopted the rates for maize on the marginally the fulfilment of the world market were at the same level
HOFFMANN'S STÄRKEFABRIKEN v HAUPTZOLLAMT BIELEFELD
as they were at the entry into force of upper limit of the refund, the threshold the last adapting measure at the price of maize, is linked to the marketing beginning of the 1974/75 marketing year for maize and that the lower limit, year and a tendency to fall was the supply price, is not expressly so already clearly perceptible. linked. — With regard to the concern to reduce the heavy financial burden entailed Nevertheless the plaintiff observes: by the refunds the plaintiff in the — With regard to the 1974/75 main action considers that this marketing year the Council expressly concern alone is not such as to justify stated that the refund would be of itself the reduction of the refund: a maintained at the level at which it refund which had remained unaltered stood on 7 October 1974.
In throughout the 1974/75 marketing Regulation No 2496/74 of the year did not exceed half of the Council of 2 October 1974 (OJ L 268 average refund granted during the of 3. 10. 1974, p. 1), which effects a years subsequent to 1966. general increase in agricultural prices, Furthermore in the four months it was carefully specified in Article 1 concerned (1 April 1975 to 31 July (2) that the supply prices would be 1975) the levy was higher than at any increased so that .
. . 'for the other time in the year 1974. remainder of the 1974/75 marketing year, the refunds to producers laid The plaintiff in the main action maintains that the Council and the down in that regulation [No 1132/74] shall be maintained at the level Commission have diverted Article 7, and resulting from the implementation of the margin of discretion which was the rules which were valid when the conferred upon them under this present regulation entered into force'. provision, from its objective in order This provision shows that the gradually to abolish the refund, an Council intended to recognize that objective which was not covered by Article 7 and which could not be the refund could not be changed as, if this were not so, the Council could justified having regard to the conditions have simply fixed the amount of the laid down by Article 7. refund without stating that the refunds would be maintained 'for the Second Question (Question 1 (b)) remainder of the .
. . marketing year'. Since Regulation No 3113/74 constitutes From the time when, in the wording a regulation in implementation of Article which it has adopted, the Council 11 of Regulation No 120/67 it had to be referred so clearly to the marketing compatible with the latter. Article 11 of year it was bound to keep to the Regulation No 120/67 grants a right to marketing year. the production refund and the regulation — The Court of Justice has also ruled in in dispute detracts from that right. The its two judgments in the Deuka cases existence of a right to the refund (judgment of 18 March 1975, Case pursuant to Regulation No 120/67 is 78/74 [1975] ECR 421; judgment of confirmed by the fact that, under 25 June 1975, Case 5/75 [1975] ECR Regulation No 2727/75 of the Council of 759) that whilst the principle that no 29 October 1975 on the common alteration may be made during the organization of the market in cereals (OJ marketing year does not entirely rule L 281 of 1. 11. 1975, p. 1), Article 11 (1) out alterations adversely affecting the becomes, an optional provision. persons concerned provisions of this nature are exceptional.
In those Third Question (Question 1 (c)) circumstances the interest of the The plaintiff in the main action concedes Community in effecting rapid that from a formal standpoint only the alterations in the course of the
HOFFMANN'S STÄRKEFABRIKEN v HAUPTZOLLAMT BIELEFELD
justified by objective considerations, the — Regulation No 231/75, indicating plaintiff in the main action further that there was no need to take considers whether considerations of this account of the alteration brought nature may justify the different treatment about by Regulation No 3113/74, was of the potato-starch industry and the superfluous since even without this maize-starch industry. It also arrives at a regulation, the principle that negative conclusion and puts forward the measures shall not be retrospective following considerations: and that existing rights shall be (1) The fact that producers of starch protected has this effect. from potatoes have a vested right is — Article 1 (1) of Regulation No not sufficient to justify the unequal 3113/74 is inapplicable in so far as it treatment meted out to producers of entailed a reduction in the starch from maize even if it is production refund granted for maize assumed that the latter did not starch for the period 1 April 1975 to possess a vested right. 31 July 1975. The only means of (2) Nor does the fact that this inequality observing the principle of the of treatment was merely temporary prohibition on discrimination is to provide any ground for declaring it of annul the system of rules which is at no account from the legal point of odds with that principle or, to adopt view. For the plaintiff maintenance of the wording of Regulation No 231/75 the inequality of treatment would of the Commission, to say that it have meant something like an extra 'shall not be taken into account'. 1 000 000 DM in refunds. (3) Finally, the unequal treatment cannot At the hearing on 18 May 1977 the be justified by relying upon different plaintiff in the main action, represented conditions of production since by Barbara Rapp-Jung of the Bar of Article 2 of Regulation No 1132/74 is Frankfurt am Main, the Council of the particularly clear on this point. The European Communities, represented by principle that amounts of the refunds its Agents, Mr Vignes and Mr Frohn and shall be the same infers that it is the Commission of the European essential to avoid differences in the Communities, represented by its Agent, refunds even by reason of differences Mr Kalbe, submitted their oral in the conditions of production. observations.
The plaintiff in the main action The Advocate General delivered his concludes that: opinion at the hearing on 22 June 1977.
Decision
1 By an order of 20 December 1976 which reached the Court Registry on 4 January 1977 the Finanzgericht Munster referred to the Court, pursuant to Article 177 of the EEC Treaty, two questions, the first of which relates to the validity of Article 1 (1) of Regulation No 3113/74 of the Council of 9 December 1974 (OJ L 332 of 12. 12. 1974) amending Regulation No 1132/74 on production refunds in the cereals and rice sectors, and the second, referred as an alternative, concerns the interpretation of the second subparagraph of Article 40 (3) of the EEC Treaty in relation to the methods of calculating the production refund on potato starch and maize starch.
JUDGMENT OF 12. 7. 1977 — CASE 2/77
Those questions were referred in the course of a dispute between the plaintiff in the main action, the Hoffmann's Starkefabriken undertaking, and the Hauptzollamt, Bielefeld concerning the amount payable by way of production refund to the plaintiff in respect of maize intended for the manufacture of starch.
2 Article 11 of Regulation No 120 of the Council of 13 June 1967 on the common organization of the market in cereals (OJ English Special Edition 1967, p. 33), as amended with effect from 1 August 1974 by Article 5 of Regulation No 1125/74 of the Council of 29 April 1974 (OJ 128 of 10. 5. 1974, p. 12), provides that a production refund shall be granted:
'(a) for maize and common wheat used in the Community for the manufacture of starch;
(b) for potato starch;
(c) for maize groats and meal (gritz) used in the Community for the manufacture of glucose by direct hydrolysis;
(d) for maize used in the Community by the maize industry for the manufacture of maize groats and meal (gritz) used in the Community brewing industry for the production of beer.'
According to the tenth recital in the preamble to Regulation No 120/67 the granting of that refund was, with regard to maize intended for the manufacture of starch, justified by the circumstance that 'because of the special situation on the market in starches and, in particular, the need for that industry to keep prices competitive with those for substitute products, it is necessary to ensure by means of a production refund that the basic products used by the industry are made available to it at a lower price than that which would result from applying the system of levies and common prices'.
According to the same recital: 'for similar reasons and because of the interchangeability of starches with quellmehl and maize groats and meal, production refunds should also be granted in respect of the latter products'.
Pursuant to Article 11 (3) of the said regulation the Council, acting in accordance with the voting procedure laid down in Article 43 (2) of the Treaty on a proposal from the Commission, shall adopt rules for the application of this article and fix the amount of the production refund.
HOFFMANN'S STÄRKEFABRIKEN v HAUPTZOLLAMT BIELEFELD
3 Pursuant to Article 11 (3), Article 1 of Regulation No 371/67 of the Council of 25 July 1967 fixing production refunds on starches and quellmehl, laid down that the production refund on maize for the manufacture of starch should be equal to the difference per 100 kg between the threshold price of maize and a 'supply price', a fixed sum of 68 u.a. per metric ton corresponding to the price at which it was considered desirable and usual for manufacturers of maize starch to acquire maize, taking account of their competitive position with regard, on the one hand, to producers of synthetic starches and, on the other hand, to producers of potato starch.
According to Article 2 of the same regulation if the prices of the basic products mentioned in Article 1, which include maize, 'show appreciable and persistent variations' in relation to the supply price the amount of the latter may be altered by the Council, acting in accordance with the voting procedure laid down in Article 43 (2) of the Treaty on a proposal from the Commission.
Regulation No 371/67 was repealed and replaced by Regulation No 1132/74 of the Council of 29 April 1974, Article 7 of which repeats Article 2 referred to above.
It is clear from these considerations that the essential objective of the system in question was to allow starch manufacturers, in order to ensure that they remained competitive, to purchase their raw materials at a price nearer to prices on the world market than the price obtained simply by applying the threshold price.
4 After the 1974/1975 marketing year the Council, or the Commission in implementation of a regulation of the Council, successively increased the supply price, bringing it to 82 u.a. per metric ton in August 1974 by Regulation No 1132/74 (OJ L 128 of 10 May 1974), to 87.45 u.a. per metric ton in October 1974 by Regulation No 2518/74 (OJ L 270 of 5 October 1974) and to 103·10 u.a. per metric ton from 1 April 1975 by the regulation the validity of which is called in question, whilst also reducing the amount of the refund, except in the second instance, where the increase in the supply price was matched by a like increase in the threshold price.
The plaintiff in the main action disputed the legality of the last reduction and claimed from the Hauptzollamt Bielefeld payment of a refund calculated on the basis of the supply price as previously fixed.
JUDGMENT OF 12. 7. 1977 — CASE 2/77
I — The validity of Article 1 (1) of Regulation No 3113/74 of the Council of 9 December 1974
5 The first question asks whether: 'Article 1 (1) of Regulation No 3113/74 of the Council is invalid or inapplicable
(a) because the requirements of Article 7 of Regulation No 1132/74 of the Council of 29 April 1974 (OJ L 128 of 10. 5. 1974, p. 24) are not fulfilled;
(b) because Article 11 of Regulation No 120/67 of the Council of 13 June 1967 (OJ English Special Edition 1967, p. 33) has been infringed;
(c) because of the violation of the principle, established in Regulation No 120/67, that agricultural prices shall not be changed during the marketing year.'
6 As to (a)
The plaintiff in the main action maintains that the condition of an appreciable and persistent variation in the price of maize on the world market, in particular an increase in relation to the supply price, was not fulfilled in December 1974 when the Council, by means of the contested regulation, increased the supply price to 103·10 u.a. per metric ton.
On the contrary, it is clear from the figures produced that world prices remained stable in relation to those prevailing at the date of the previous fixing of the supply price at 87·45 u.a. per metric ton by Regulation No 2518/74 of 4 October 1974, and indeed that they subsequently showed a tendency to fall which was already discernible, or at any rate foreseeable, in December 1974.
7 After the beginning of 1973 and until the beginning of November 1974 world prices, of maize rose constantly, and the figures produced by the plaintiff in the main action show that they increased from US$87·20 to US$167·25 and subsequently fell gradually to US$124·80 in June 1975 and then rose again to US$141 in August 1975, returning to US$120 in January 1976.
On 9 December 1974, the date of the contested regulation, the world price was still at US$161.
HOFFMANN'S STÄRKEFABRIKEN v HAUPTZOLLAMT BIELEFELD
During this entire period the increase in world prices was such that at certain times, in particular from January to the end of May 1974, and from August to October 1974, world prices were higher than the threshold price.
Despite this situation, which meant that manufacturers of maize starch in the Common Market did not have to obtain supplies at prices above those on the world market, payment of the production refund continued.
This circumstance shows that the level of world prices for maize was not the only criterion for fixing the supply price.
This is also confirmed by the fact that in any case the refund only compensated for part of the difference between the threshold price and the world price since the latter was lower than the former.
This finding is completely in accordance with what is to be inferred from consideration of the tenth recital in the preamble to Regulation No 120/67 in accordance with which the supply price (the difference between the latter price and the threshold price determines the amount of the refund) required to be fixed, taking account of all the factors which determine the competitive position of starch manufacturers in relation to producers of synthetic substitutes on the one hand and manufacturers of potato starch on the other.
8 It is clear from those considerations that the appreciable and persistent variations in the price of basic products referred to in Article 2 of Regulation No 371/67, which was replaced by Article 7 of Regulation No 1132/74, do not constitute the sole legal basis for an alteration of the supply price and that alterations of the supply price based on other reasons are justified in law by Article 11 (3) of Regulation No 120/67.
In addition it must be emphasized that the specific alteration of the supply price referred to in Article 2 of Regulation No 371/67 and Article 7 of Regulation No 1132/74 and the more general alteration referred to in Article 11 (3) of Regulation No 120/67, must be enacted in accordance with strictly identical procedures, since in both those instances the Council acts in accordance with the voting procedure laid down in Article 43 (2) of the Treaty on a proposal from the Commission, so that the relevant provision in Regulations Nos 371/67 and 1132/74 in fact only constitutes a specific application of a more general power which the Council already possessed under Articles 11 (3) and 26 of Regulation No 120/67.
JUDGMENT OF 12. 7. 1977 — CASE 2/77
It cannot be conceded that, when the Council adopted the specific provision in the abovementioned Articles 2 and 7, it intended to restrict the exercise of a general power which it had expressly conferred upon itself and which it required to exercise freely for the proper administration of the relevant organization of the market.
9 Furthermore the two earlier alterations in the supply price were not adopted because of the existence of appreciable and persistent variations in the price of maize on the world market in relation to the supply price but, in the first case (Regulation No 1132/74 of the Council of 29 April 1974), in view of 'a precise assessment of the situation resulting from the level of common prices and from the competition between, on the one hand, maize starch, rice starch, potato starch and, on the other, the substitute chemical products ...', and, in the second case by the Commission (Regulation No 2518/74 of 4 October 1974, OJ L 270/1 of 5. 10. 1974) in implementation of Regulation No 2496/74 of the Council of 2. 10. 1974 raising from 7 October 1974 all prices applicable in the agricultural sector for the 1974/1975 marketing year.
10 Nevertheless the plaintiff in the main action claims that in the first recital in the preamble to the contested measure, Regulation No 3113/74, the Council has referred to Article 7 of Regulation No 1132/74 by its reliance, in order to justify increasing the supply price to 103.10 u.a. per metric ton, on the circumstance that: '... prices of these products [inter alia maize] have become very high' and 'are likely to remain so'.
The Council had thus by adopting the contested regulation plainly indicated on 9 December 1974 that it intended on this occasion to subordinate the
exercise of its power to the fulfilment of the precise condition laid down in the abovementioned Article 7, whilst it is clear from the evidence submitted that world prices of maize had already begun to fall so that it cannot be maintained that there were appreciable and persistent variations, but merely short-term variations which did not justify adjusting the supply price.
11 World prices of maize, which from 1967 to the end of 1972 had never reached US$87·20, varied between July 1973 and July 1975 as follows, according to the information supplied by the plaintiff in the main action:
HOFFMANN'S STÄRKEFABRIKEN v HAUPTZOLLAMT BIELEFELD
Date World price in US dollars 1 October 1973 124·00
1 January 1974 136-50 1 April 1974 141·25 1 July 1974 139·25 1 October 1974 164·50
1 January 1975 156·00 1 April 1975 138·30 1 July 1975 130·25
Accordingly, at the date when the contested regulation was adopted, prices were still at US$161 and at US$156 on 1 January 1975.
When the Council asserted that prices remained very high, and that, in relation to the period before 1 January 1973, there was an appreciable and persistent variation in world prices, it did not exceed the margin of discretion which it possesses in this sphere.
It is true that a similar variation cannot be found at the date of the previous fixing of the supply price at 87·45 u.a. per metric ton on 7 October 1974 but this circumstance only arises because the Council wished progressively to adapt the supply price to the normal situation and did so by degrees.
12 If world prices remained at such a high level this would inevitably have affected the fixing of the supply price since this level did away with all justification for the refund in that the refund was intended to compensate for the handicap entailed for maize-starch producers by the fact that their raw material was unobtainable at prices approaching those on the world market.
The retention of the refund was justified only to the extent that, taking account of the general increase in world prices, in particular in the price of raw materials for competing products, the refund remained necessary to ensure balanced competition between maize starch, synthetic starch and potato starch.
In the first recital in the preamble to Regulation No 3113/74 the Council sufficiently, albeit succinctly, gave as its reason for reducing the refund in relation to this second factor in its fixing that 'the maintenance of the amounts specified in the said Articles 1, 4 and 5 at their present levels could lead to the granting of a production refund the size of which is no longer economically justified and the financial burden of which could become excessive'.
JUDGMENT OF 12. 7. 1977 — CASE 2/77
At no point was it claimed, still less proved, that the reduction in the refund jeopardized the competitive situation of maize-starch producers, vis-à-vis producers of synthetic starch or potato starch.
13 As to (b)
The first question further asks whether in the contested regulation the Council infringed Article 11 of basic Regulation No 120/67 by reducing, with the aim of progressively abolishing it, a refund to which maize-starch manufacturers were entitled.
14 In accordance with Article 40 of the Treaty common organizations of the market can only include the allocation of aids for production in so far as such aids are necessary to attain the objectives set out in Article 39.
The allocation of Community financial resources for aids which have ceased to be necessary as defined above constitutes an infringement of Article 40.
Although the wording of Article 11 of Regulation No 120/67, in the version in force at the time, does not appear to make the granting of the refund optional, it nevertheless confers upon the Council power to appraise the amount of the refund in the light of the objectives of common interest listed in Article 39 of the Treaty.
15 As to (c)
The first question finally asks whether the validity of Article 1 (1) of Regulation No 3113/74 is affected because it violates the principle that agricultural prices shall not be changed in the course of the same marketing year.
16 Whilst the annual fixing of agricultural prices indeed constitutes a basic economic feature of the common agricultural policy as it is at present implemented such fixing implies neither that those prices cannot be changed in any circumstances nor, in consequence, does it prohibit the Council from adjusting them in the course of the marketing year, when such adjustments are justified.
HOFFMANN'S STÄRKEFABRIKEN v HAUPTZOLLAMT BIELEFELD
Furthermore, whilst the fixing of the level of the 'supply price' is partly linked to the level of agricultural prices it is also determined by the competitive situation referred to in the tenth recital in the preamble to Regulation No 120/67 and alterations in this situation are not linked to the terms of the agricultural marketing years.
Finally, in order to provide traders with sufficient time to adapt to the new situation Regulation No 3113/74, although adopted on 9 December 1974, provides in the second paragraph of Article 3 that it shall only apply on 1 April 1975.
Since the production refund was paid and the amount thereof calculated pursuant to Article 2 (1) and (3) of Regulation No 2012/74 of the Commission of 30 July 1974 (OJ L 209/44 of 31. 7. 1974) at the time when the person entitled to the refund furnished proof that the basic product in question had been placed under supervision by the authorities appointed by the Member States, the traders concerned were free to arrange their purchases of maize during the first quarter of 1975 so that their production qualified in large measure in the course of the following months for an unreduced refund.
17 For all those reasons the reply must be that consideration of the first question has disclosed no factor of such a kind as to affect the validity of Article 1 (1) of Regulation No 3113/74.
II — The interpretation of the second subparagraph of Article 40 (3) of the EEC Treaty and of Regulation No 1132/74
18 The national court then asks: 'If Question 1 is answered in the negative must the prohibition on discrimination in the second subparagraph of Article 40 (3) of the EEC Treaty and the requirement laid down in Regulation No 1132/74 that the production refunds on potato starch and maize starch shall be the same be interpreted as meaning that, by analogy with the method of calculation of the production refund on potato starch under Article 1 of Regulation No 231/75 of the Commission of 30 January 1975 (OJ L 24/42 of 31. 2. 1975), Article 1 (1) of Regulation No 3113/74 shall not be taken into account in the calculation of the production refund on maize starch?'
19 In accordance with the second subparagraph of Article 40 (3) of the Treaty, the common organizations of the market must exclude any discrimination between producers or consumers within the Community.
JUDGMENT OF 12. 7. 1977 — CASE 2/77
Having regard to the competitive situation of maize-starch producers and potato-starch producers, Article 2 of Regulation No 1132/74 provides that the production refund per 100 kg of potato starch shall be equal to the average amount of the refund granted during the same marketing year per 161 kg of maize for starch manufacture.
The increase in the supply price from 1 April 1975 and the subsequent reduction of the production refund in favour of maize starch producers pursuant to Article 1 of Regulation No 3113/74 would, if the abovementioned Article 2 had been applied automatically, have been reflected in the same proportions until 31 July 1975 in the amount of the refund granted to potato-starch producers.
20 Nevertheless, unlike the refund for maize-starch producers, the refund pursuant to Article 3 of Regulation No 1132/74 is only paid to potato-starch manufacturers when they furnish proof that the producer has been paid the amount of the refund.
The refunds granted before 31 January 1975 to potato-starch manufacturers and passed on through them to potato producers, were calculated on the average of refunds then paid to maize-starch producers which was derived from the difference between the supply price of 82·00 u.a. per metric ton, and subsequently of 87·45 u.a. per metric ton, and the successive threshold prices for maize fixed in advance for the entire 1974/1975 marketing year.
Because of this method of calculation based on an annual average determined in advance the alteration from 1 April 1975 of the supply price was reflected in refunds already paid before 31 January 1975 to potato-starch manufacturers and already passed on by them to farmers which could have resulted in the recovery of the amount already paid to the latter.
In order to avoid this effect, which is capable of affecting many transactions already completed, the Commission, which was so authorized by the Council, adopted the necessary transitional measures, providing in Article 1 of Regulation No 231/75 of 30 January 1975 that: 'The change with effect from 1 April 1975 of the amount specified in the first subparagraph of Article 1 (1) of Regulation (EEC) No 1132/74 shall not be taken into account in the calculation of refunds under Article 2 of that regulation accorded before the date of entry into force of this regulation'.
21 There are thus objective grounds for the difference between the treatment accorded potato-starch producers and that accorded maize-starch producers so that the transitional measure enacted in connexion with the production
HOFFMANN'S STÄRKEFABRIKEN v HAUPTZOLLAMT BIELEFELD
refund for potato starch does not constitute a discrimination against maize-starch producers.
A reply to this effect must be given to the second question.
Costs
22 The costs incurred by the Council and by the Commission of the European Communities which submitted observations to the Court are not recoverable.
As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.
On those grounds,
THE COURT
in answer to the questions submitted to it by the Finanzgericht Munster, by an order of 20 December 1976, hereby, rules:
(1) Consideration of the first question has disclosed no factor of such a kind as to affect the validity of Article 1 (1) of Regulation No 3113/74.
(2) There are objective grounds for the difference between the treatment accorded potato-starch producers and that accorded maize-starch producers so that the transitional measure enacted in connexion with the production refund for potato starch does not constitute a discrimination against maize-starch producers.
Kutscher Donner Pescatore Mertens de Wilmars Sørensen
Mackenzie Stuart O'Keeffe Bosco Touffait
Delivered in open court in Luxembourg on 12 July 1977.
A. Van Houtte H. Kutscher
Registrar President