C-16/79

prices for national products are — empower the authorities in the frozen, are impelled to give pre- Member State concerned to delay ference to the latter products. beyond reasonable limits — and in 2. In sectors covered by a common practice necessarily do so delay — organization of the market, and a the passing on of increases in the fortiori when that organization is prices of imported products, based on a common price system, Member States can no longer take action, through national provisions constitute a measure having an effect adopted unilaterally, affecting the equivalent to a quantitative restriction machinery of price formation as on imports, which is prohibited by established under the common organi- Article 30 of the EEC Treaty, to the zation. However, the provisions of a extent to which they make the Community agricultural regulation marketing of products imported from which comprise a price system another Member State either applicable at the production and impossible or more difficult than that wholesale stages of the products of national products or have the effect covered by the rules of the market of favouring the marketing of concerned leave Member States free national products to the detriment of — without prejudice to other imported products. Such national provisions of the Treaty — to take rules are, moreover, incompatible unilateral measures relating to price with the common organization of the formation at the retail and market, which has been established consumption stages, on condition that for cereals by Regulation No 120/67 they do not jeopardize the aims or of the Council, in so far as they apply functioning of the common organi- to the prices of products covered by zation of the market in question, in that regulation at the production and particular its price system. wholesale stages. Furthermore, they 3. National rules which are incompatible with that organi- — impose on all producers and zation if, in the opinion of the importers the obligation to give at national court, by applying at sub- least two months' notice of any sequent stages of the distribution price increases which they intend process, they jeopardize the objectives to apply on the national market, and functioning of that common and which organization.

JOSEPH DANIS

Gerard Ingelbrecht (Case 18/79)

Walther Van de Ryse (Case 19/79)

Robrecht Huys (Case 20/79)

on the interpretation of the Community provisions relating to the free movement of goods with a view to a decision on the compatibility with those provisions of a national system for notification of price increases of products,

THE COURT

JUDGMENT OF 6. 11. 1979 — JOINED CASES 16 TO 20/79

Article 4 (1) and (2) provides further fixed, the undertaking may apply the that: increase as notified or a lesser increase."

"(1) The date of notification of an By virtue of the ministerial order of increase from which the period of 20 April 1972 (Belgisch Staatsblad of two months referred to in Article 1 25 April 1972) only undertakings with an of this order begins to run shall be annual turnover above a certain amount

accordance with the preceding not expired, the period shall be extended to four months as from the date of paragraph." notification."

Lastly, Article 5 provides that: In pursuance of Article 12 of that order, infringements of the system referred to "The Minister for Economic Affairs, above are investigated, confirmed, prose- after consulting the Price Control cuted and punished in accordance with Commission, may inform the under- the provisions of Chapters II and III of taking making the notification, before the Decree-Law of 22 January 1945 on the expiry of the period laid down in the repression of infringements of the Article 1 of this order, that the increase rules relating to the procurement of notified cannot be applied totally or supplies for the country, as amended and partially for a maximum period of six supplemented by the Law of 30 July months. At the expiry of the period 1971 on the regulation of the economy

JOSEPH DANIS

and prices (Belgisch Staatsblad of 31 on measures having an effect equivalent August 1971). to quantitative restrictions on imports also covers the rules contained in the 2. The defendants in the main Ministerial Order of 22 December 1971

proceedings, Joseph Danis, Edward which imposes on all producers and Depré, Gerard Ingelbrecht, Walther Van importers the obligation to give at least de Ryse and Robrecht Huys, producers two month's notice of any price increases of or traders in animal feeding-stuffs, which they intend to apply on the proceeded between 1 September 1972 Belgian market to any products, raw and 4 April 1973 to increase their sale materials, foodstuffs and merchandise prices on successive occasions without and to any services in so far as such notifying the Minister for Economic rules: Affairs in accordance with the ministerial order of 22 December 1971, as sub- (a) do not differentiate between im- sequently amended. ported and domestic products;

view inter alia that the Belgian rules in Registry on 2 February 1979. dispute did not infringe Article 30 of the In accordance with Article 20 of the EEC Treaty since they were applicable in Protocol on the Statute of the Court of an identical manner to both imported products and national products, the Hof Justice of the EEC written observations van Beroep, Ghent, convicted the five were lodged by the defendants in the defendants in judgments of 22 June main proceedings, represented by L. 1978. Simont and G. Horsmans, of the Brussels Bar, by the Belgian Government, The persons concerned appealed against represented by W. Collins, Director at those judgements to the Hof van the Ministry for Foreign Affairs, acting Cassatie of Belgium, which, by as Agent, by the Government of the judgments of 9 January 1979, decided to United Kingdom, represented by A. D. stay the proceedings and, in accordance Preston of the Treasury Solicitor's with Article 177 of the EEC Treaty, Office, acting as Agent, and by the refer the following question in each case Commission of the European Com- to the Court of Justice for a preliminary munities, represented by its legal adviser, ruling: R. Wägenbaur, acting as Agent, assisted "Must Article 30 of the Treaty be by A. Haagsma, a member of the interpreted to mean that the prohibition Commission's Legal Department.

JUDGMENT OF 6. 11. 1979 — JOINED CASES 16 TO 20/79

On hearing the report of the Judge- cease the importation of the products in Rapporteur and the views of the question. Advocate General the Court decided to

The increasing production costs have been maintained at a constant percentage II — Written observations sub- owing to the fact that productivity in the mitted in pursuance of sector concerned has never ceased to Article 20 of the Protocol rise. on the Statute of the Court of Justice It follows that the size of the profit margin depends directly and exclusively on the price of the raw materials. The defendants in the main proceedings first of all explain in great detail the Since August 1972 the prices of raw system for the notification of price materials for compound feeding-stuffs increases as required by Belgian law. for cattle have fluctuated severely, above all in the direction of sudden price rises. The practical consequence of the system is that the price of the product to which As the Belgian manufacturers are only a the notification relates remains in any small group, they have no opportunity to case frozen until the end of the waiting exert any effect on price trends or to period. The factors requiring the protect themselves against increases by producer or importer to decide upon a long-term contracts. Nor are they in a price increase can be passed on by the position to bridge the gap during the actual application of a price increase waiting period by building up stocks for only after the waiting period. at least two months: the rotation of

stocks is usually more rapid and the There is thus a price freeze which, building up of bigger stocks would during that period, prevents the passing require considerable investments which on of the immediate pressure of the price are beyond the means of the parties increases of imported products. This concerned.

In the event of a sudden increase in the The price of raw materials from abroad might become higher by reason of an price of imported raw materials the increase in specific import costs Belgian producer-importer is obliged to work at a loss since he cannot (transport, insurance, port charges and so on) without the price of Belgian raw immediately pass the increase on in the materials going up at the same time. In sale price of his products. He must that case too, the system of the therefore turn to similar Belgian raw notification of price rises would make it materials or stop trading or else go impossible to pass the increase on in the bankrupt. In any event the importation price of the product for at least two of raw materials from abroad is gravely months. affected. If the person concerned wishes to continue importing the only practicable solution is to build up at any cost stocks capable of sufficing for the From this point of view therefore the entire period during which a price Belgian rules ought to come within the increase which has been notified cannot definition of Article 2 (3) (d) of take effect. However, on the one hand Commission Directive No 70/50 which

few undertakings have the opportunity to mentions, amongst the measures having act in that way and on the other such a an effect equivalent to quantitative solution would not mean that the restrictions on exports those which measure which made it necessary was no "preclude any increase in the price of the longer a measure hindering imports. imported product corresponding to the

The Government of the United Kingdom This double discrimination is calculated states that in its observations it wishes to to restrict imports and to make the sale deal with a problem which it considers of imported products more difficult than very important, namely the extent to those of national products, if not which Member States should be able to impossible. take unilateral action to combat inflation

provided that such action does not conflict with their obligations under the The Belgian Government remarks that, Treaty. according to the case-law of the Court, a national price system applicable without distinction to national and imported In the British Government's view the products is not in general a measure struggle against inflation requires the having an effect equivalent to a adoption of a variety of measures which quantitative restriction on imports unless may include a requirement for price it contains specific features which may increases to be notified in advance. hinder intra-Community trade.

The system for notifying price increases Such requirements not only benefit the which is laid down in Belgium, on Member States concerned but also the one hand, makes no distinction promote the fundamental objectives of according to the origin of products and, the Community, in particular those set on the other hand, contains no specific out in Article 2 of the Treaty ("a feature in the sense indicated above. harmonious development of economic

JOSEPH DANIS

activities, a continuous and balanced only where the circumstances relating to expansion, an increase in stability, an imported and domestic products are accelerated raising of the standard of different in a material respect. living and closer relations between the States belonging to it").

As regards point (a) it takes the view that the rules in question cannot be regarded With reference to point (b) of the as incompatible with Community law in question the British Government notes so far as they do not differentiate that the power to delay the passing on of between imported and domestic increased costs is a part of measures to products. On the contrary, the general combat inflation and to be of value must, rule in this respect would require that no within reasonable limits, relate also to discrimination should be made, increases in costs arising by reason of differences in treatment being justifiable increases in the price of imported

JUDGMENT OF 6. 11. 1979 — JOINED CASES 16 TO 20/79

Nevertheless, consideration should be given to the question whether such a III — Oral procedure system might not be justified having regard to the Treaty. Such consideration must naturally take into account very Oral submissions were presented during strict criteria in view of the fact that the hearing on 12 July 1979 by the what is in question is a derogation from defendants in the main proceedings, the fundamental principle of the free represented by Mr Horsmans and Mr Verbiest, of the Brussels Bar, and movement of goods. the Commission of the European Communities, represented by its Legal Adviser, R. Wägenbaur, acting as Agent, First of all it may be noted that the assisted by A. Haagsma, of the system in question, which is traditional in Commission's Legal Department. Belgium, is part of a series of measures of an economic nature the purpose of which is to guarantee price stability. It is true that it involves constraints and

effects which are to the disadvantage of The Advocate General delivered his the traders concerned but which are opinion at the sitting on 20 September intrinsic to the system and do not go 1979.

JOSEPH DANIS

Decision

2 The Ministerial Order of 22 December 1971 provides in Article 1 (1) that "Producers and importers shall notify the Minister for Economic Affairs ... of any price increases which they intend to apply on the Belgian market to any products, raw materials, foodstuffs and merchandise and to any services at the latest two months before such increases take effect". By virtue of Article 4 of the same order the period of two months is suspended if the appropriate authorities find that the notification of increase does not contain all the required information. In that case the waiting period commences from the date on which the additional information is received. Finally, Article 5 provides that the Minister for Economic Affairs may inform the undertaking making the notification, before the expiry of the waiting period, "that the increase notified cannot be applied totally or partially for a maximum period of six months ...".

3 The accused in the main proceedings have claimed, inter alia, that the duty of notification laid down by the ministerial order in question amounts to a measure having an effect equivalent to a quantitative restriction, and therefore prohibited under Article 30 of the EEC Treaty, because of the period imposed with regard to notification and the power given to the relevant authorities to delay partially or wholly the application of the price increase.

JUDGMENT OF 6. 11. 1979 — JOINED CASES 16 TO 20/79

4 In order to enable it to reach a decision on this point the Hof van Cassatie of Belgium has referred the following question to the Court of Justice, in each case, for a preliminary ruling:

JOSEPH DANIS

7 Whilst rules imposing a price freeze which are applicable equally to national products and to imported products do not amount in themselves to a measure having an effect equivalent to a quantitative restriction, they may in fact produce such an effect when prices are at such a level that the marketing of imported products becomes either impossible or more difficult than the marketing of national products. That is especially the case where national rules, while preventing the increased prices of imported products from being passed on in sale prices, freeze prices at a level so low that — taking into account the general situation of imported products in relation to that of national products — traders wishing to import the products in question into the Member State concerned can do so only at a loss, or, having regard to the level at which prices for national products are frozen, are impelled to give preference to the latter products.

JUDGMENT OF 6. 11. 1979 — JOINED CASES 16 TO 20/79

9 In the present case it appears from the file that the product in relation to which a question concerning the interpretation of Community law has been raised by the national court is cattle feed having, according to the infor- mation supplied by the accused in the main proceedings in the course of the present proceedings, a high cereal content. Having regard to its composition, that product is therefore an animal feeding-stuff within the meaning of Article 1 (d) of Regulation No 120/67 of the Council of 13 June 1967 on the common organization of the market in cereals (Official Journal, English Special Edition 1967 p. 33) and therefore falls within the provisions of that common organization. As the Court has already declared (judgment of 23 January 1975 in Galli, Case 31/74 [1975] ECR 47), the common organi- zation of the market in cereals established under Regulation No 120/67 is designed to achieve a single market in cereals within the Community, subject to common administration, and for that purpose it provides for a system of rules and a framework of organization wherein a central place is held by a "price system" applicable at the production and wholesale stages. A national system of price control which applies to products subject to such a common organization of the market and includes a price freeze at both production and wholesale stages encroaches on an area covered by that organization and is thereby incompatible with that organization if, in the opinion of the national court, by applying to prices at subsequent stages of the distribution process, it jeopardizes the objectives and functioning of that organization.

in answer to the question referred to it by the Hof van Cassatie of Belgium by judgments dated 9 January 1979, hereby rules that:

A national system of price control, such as that referred to by the national court, constitutes a measure having an effect equivalent to a quantitative restriction on imports, which is prohibited by Article 30 of the EEC Treaty, to the extent to which it makes the marketing of products imported from another Member State either impossible or more difficult than that of national products or has the effect of favouring the marketing of national products to the detriment of imported products. Such national rules are, moreover, incompatible with the common organization of the market, which has been established for cereals by Regulåtion No 120/67 of the Council of 13 June 1967, in so far as they apply to the prices of products covered by that regulation at the production and wholesale stages. Furthermore, they are incompatible with that organization if, in the opinion of the national court, by

OPINION OF MR MAYRAS — JOINED CASES 16 TO 20/79

applying at subsequent stages of the distribution process, they jeopardize the objectives and functioning of that common organization.

Kutscher O'Keeffe Touffait

Mertens de Wilmars Pescatore Mackenzie Stuart Bosco

proceedings initiated by the Belgian Openbaar Ministerie [Public Prosecutor's Unlike the Grosoli case on which the

Office] against certain manufacturers of Court delivered its judgment on 12 July compound feeding-stuffs, all established last, and which concerned price controls in West Flanders, who are accused of in relation to beef and veal at the retail

having infringed Articles 1 and 12 of the stage, and the Buijs case (5/79) on which Ministerial Order of 22 December 1971 the Court will shortly deliver its requiring notification of price increases, judgment and which concerns the by having on three occasions introduced freezing of prices of milk feed for calves price increases in the course of 1973 at the production and wholesale stages, without first informing the Minister for these cases concern a compulsory system Economic Affairs. In each of those cases, of notification of price increases.

1 — Translated from the French.