C-47/83

JUDGMENT OF 28. 3. 1984 — JOINED CASES 47 AND 48/83

However, if free trade is restricted by the from its duty to take the necessary steps, differences between the national rules or using its powers under Article 155 of the the absence of measures for ensuring Treaty, to ensure that the products appropriate quality control leads to covered by the organization of the economic disturbances in the market market can move freely within the Com­ sector in question, the Council's failure munity under conditions consistent with to act cannot discharge the Commission the aims of that organization.

In Joined Cases 47 and 48 / 83

REFERENCE to the Court under Article 177 of the EEC Treaty by the College van Beroep voor het Bedrijfsleven [administrative court of last instance in matters of trade and industry ] for a preliminary ruling in the administrative appeal proceedings against a disciplinary measure brought before that court by

PLUIMVEESLACHTERIJ MIDDEN-NEDERLAND BV, a private company with limited liability, which has its registered office in Harderwijk ( Case 47 / 83 ),

and by PLUIMVEESLACHTERIJ C . VAN MIERT BV, a private company with limited liability, which has its registered office in Breukelen (Case 48 / 83 ),

JUDGMENT

Facts and Issues

The facts of the case, the course of — measures to facilitate the recording the procedure and the observations of market price trends. submitted pursuant to Article 20 of the Protocol on the Statute of the Court of General rules concerning these measures Justice of the EEC may be summarized shall be adopted in accordance with the as follows: procedure laid down in Article 43 (2) of the Treaty.

I — Facts and written procedure 2. Marketing standards:

JUDGMENT OF 28. 3. 1984 — JOINED CASES 47 AND 48/83

and Industry Board for Poultry, herein­ On 18 March and 6 April 1982 after referred to as "the Board"] and respectively, the two companies appealed approved by the relevant Government to the College against the penalties authorities; with effect from 23 De­ imposed upon them by the Tuchtgerecht. cember 1982 that regulation was re­ placed by the Verordening Kwaliteits­ eisen en Etikettering [Regulation on Holding that, in order to rule upon those quality standards and labelling] of 20 appeals, it was necessary to decide January 1982. whether Article 2 of Regulation No 2777/75 had left intact the Member States' power to lay down national The 1966 regulation contains detailed quality standards for slaughtered poultry, provisions on the classification, presen­ the College decided, pursuant to Article tation, packaging and transport of slaugh­ 177 of the EEC Treaty, by judgments tered poultry. Disciplinary sanctions may delivered on 22 March 1983, to suspend be imposed on' undertakings that infringe the proceedings in the two cases until the those rules by the Tuchtgerecht voor de Court of Justice had given a preliminary Pluimveehandel en -industrie [Disciplin­ ruling on the following question: ary Tribunal for the Poultry Trade and Industry, hereinafter referred to as the "Tuchtgerecht"] pursuant to the Ver­ ordening Tuchtrechtspraak [Regulation "Must Article 2 of Regulation (EEC) No on jurisdiction in disciplinary matters] 2777/75 be interpreted as meaning that laid down by the Board. Appeals against national provisions not based on Com­ decisions of the Tuchtgerecht lie to munity law which lay down requirements the College van Beroep voor het as to quality for slaughtered poultry and Bedrijfsleven [hereinafter referred to as are enforceable by means of disciplinary "the College"]. measures are incompatible with it?"

open the oral procedure without any Kwaliteitseisen Pluimvee en geslacht preparatory inquiiy. However, it invited Gevogelte [Regulation on quality the Commission and the Board to answer standards for poultry and slaughtered certain questions in writing and they did birds] and also by certain provisions so within the period specified. relating to preservation laid down by the Produktschap voor Pluimvee en Eieren [Poultry and Eggs Production Board] on By two orders of 19 October 1983, the 27 May 1959. Court, pursuant to Article 95 (1) and (2) of the Rules of Procedure, assigned Cases 47/83 and 48/83 to the Fourth The Produktschap voor Pluimvee en Chamber. Eieren laid down quality standards for inter alia slaughtered poultry in the Verordening Kwaliteitseisen en Aandui­ By an order of 16 November 1983, the dingsvoorschriften geslacht Pluimvee, Court (Fourth Chamber) joined Cases Wild en geslachte Konijnen [Regulation 47/83 and 48/83 for the purpose of the on quality standards and marking procedure and of its judgment pursuant provisions for slaughtered poultry, game to Article 43 of the Rules of Procedure. and rabbits] of 25 August 1982; that regulation also implemented the EEC directive on labelling. For the retail trade it forms the counterpart of the new regu­ lation of the Board to which it refers. II — Written observations sub­ mitted to the Court The Board points out that account must also be taken of the veterinary pro­ visions implementing Council Directive The Board, in a general survey of the 71 / 118 / EEC of 15 February 1971 on relevant Netherlands rules, states that the health problems affecting the trade in 1966 regulation (Verordening Kwaliteits­ fresh poultrymeat (Official Journal, eisen) was applicable to undertakings English Special Edition 1971 (I), p. 106), which traded in poultry or carried on laid down by the Netherlands Ministry the business of a commission agent oí­ of Agriculture and Fisheries and some of an intermediary in the poultry sector the general provisions of the Algemeen or which engaged in the industrial Besluit (Warenwet) [General Decree processing of, in particular, poultry. That (Law on Goods)] of 11 July 1949 on regulation has since been replaced by hygiene standards. the Verordening Kwaliteitseisen en Etikettering, which has broadly the same structure and which, for the products Turning specifically to the question concerned, implements Council Directive referred to the Court for a preliminary 79 / 112 / EEC of 18 December 1978 on ruling, and with regard to the objectives the approximation of the laws of the of Regulation No 2777/75, the Board Member States relating to the labelling, quotes the third recital in the preamble presentation and advertising of food­ to the regulation: "in the poultrymeat stuffs for sale to the ultimate consumer sector, in order to stabilize markets and (Official Journal L 33, 8. 2. 1979, p. 1). to ensure a fair standard of living for the agricultural community concerned, provision should be made for measures The Board explains that the retail trade to facilitate the adjustment of supply to is governed by the Verordening market requirements."

Regarding the question of the powers of The first consequence of that reasoning the Member States, the Board points out is that national rules are contrary to a that the disputes in the main action show common organization of a market if they the present proceedings concern the contravene one of the provisions of the maintenance of existing national rules common organization which already rather than the adoption of new governs the matter adequately. provisions. The Verordening Kwaliteits­ eisen was adopted in 1966 and therefore antedates any organization of the market The second consequence is that there is a at Community level. The measures conflict with the common organization if provided for by Article 2 of Regulation the national rules have recourse to No 2777/75 seek to facilitate the an instrument that the Community adjustment of supply to market legislature deliberately chose not to use requirements, in order to attain the on the basis of a given economic policy. objectives set out in Article 39 of the Treaty. The Council has so far adopted only one measure implementing Article The mere existence of a common organiz­ 2, namely Regulation No 2967/76, ation of the market in poultrymeat does various proposals from the Commission not prevent Member States from taking having come to nought. The organiz­ measures in an area in which Community ation of the market in poultrymeat is rules have not yet been adopted. The aimed at promoting sales by means of a absence of Community provisions on policy on quality standards; but, despite quality standards is not the result of the fact that in the express terms of deliberate economic choice since the Article 2 (2) of Regulation No 2777/75 Commission and the Council have stated

The Board states that since their As for the content of the disputed objective was the protection of con­ national measures, the Board points sumers and of fair trade, the disputed out that they are provisions relating to national rules should be regarded as the processed state of the slaughtered reasonable; they arc, moreover, as close poultry, to the processing itself, to as possible to the proposals made by the grading by quality, to weight, to Commission at the time. The Board packaging and to transport. concludes that the national rules concerned are lawful in view of the fact that the Council has fulfilled only a very Article 8 requires poultry to be graded small part of its task under Article 2 of and marked according to its processed Regulation No 2777/75; those rules do state and thus contributes to the not detract from the proper functioning transparency of the market. of the common organization of the market. The Board therefore proposes that the following answer be given to the The seventh paragraph of Article 9, question submitted by the College van prohibiting the injection of water, is Beroep: necessary to ensure fair trade and to protect the interests of consumers. For as long as and inasmuch as the Community has not fulfilled all its tasks Grading into categories, instituted by and duties under Article 2 (1) and (2) of Article 10, also encourages fair trade Regulation No 2777/75 on the common and is a guarantee of quality for the organization of the market in poul-

JUDGMENT OF 28. 3. 1984 — JOINED CASES 47 AND 48/83

The Commission recalls that the If those indications are not sufficient, the preambles to Regulation No 2777/75 Commission suggests adopting the and Regulation No 123/67 both contain reasoning followed by the Court in its identical recitals on the purposes of the judgment of 30 October 1974 (Case common agricultural policy with regard 190/73, Officier van Justitie v. J. W.J. to Article 2 of each regulation, which is Van Haaster[1974] ECR 1123); thus, for couched in substantially the same terms, the purposes of the present case, in the setting out the need to be able to take absence of express provisions as to the measures to facilitate the adjustment of compatibility of the national rules in supply to market requirements in the question with the organization of the poultry sector. market set up by Regulation No 2777/75, it is necessary to seek the solution to the question from the In a judgment of 18 May 1977 (Case national court in the light of the objects 111/76 Officier van Justitie v Beert van and the purposes of the regulation within den Hazel [1977] ECR 901), relating to the , framework of the principles laid Regulation No 123/67, the Court ruled down by the Treaty. that certain national measures were incompatible with Community rules; the Court stated that Member States are In that context the Commission draws under an obligation to refrain from attention to the following points : taking any measure which might undermine or create exceptions to the common organization of the market and In the poultrymeat sector, Regulation made action by trade and joint-trade No 2777/75 established an organization organizations subject to the express of the market characterized by a system condition that Community measures are of quality standards and of rules concerned. The Court further stated that governing trade; uncoordinated action by trade or joint- trade organizations in the various Article 11 of the Regulation seeks to Member States is of such a nature as to eliminate all obstacles to free trading cause discrimination between producers transactions within the Community; and consumers and to distort trade between the Member States. Article 19 states that the provisions of Articles 92 and 93 of the Treaty are The Commission submits that the very applicable, in principle, to trade in the existence of Article 2 in Regulation No products concerned; 2777/75, its wording, the fact that it was taken from Regulation No 123/67, and the first recital of the preamble to Regu­ Apart from rules relating to the lation No 2967/76, which refers to marketing of the products, the organiz­ the aims of the marketing standards ation of the market also includes various provided for in Article 2 of Regulation provisions applicable to. the production No 2777/75 and states that the special stage, in particular Article 2 (1);

The case-law of the Court (sec the Van den Hazel case cited above) recognized To that end, Article 2 envisages a series that the absence of all measures of of Community measures on the intro­ intervention from the regulation on the duction of common quality standards common organization of the market and other measures to encourage action in poultrymeat is justified by the within the trade with a view to im­ consideration that such measures would proving the quality of products and of not be desirable on the market in eggs the organization of production; and poultrymeat since the volume of production is to be adjusted to demand not by means of the intervention mechanisms but by market forces; the Even if the quality standards are aimed Court recognized that the absence of only at the distribution of the products, such measures does not stem from an they none the less have repercussions omission or from an intention to leave restricting the level of production; measures of this nature to the appraisal of the Member States but is rather the consequence of a considered choice of economic policy of relying essentially on It follows from the general scheme of the market forces to attain the desired regulation that, for intra-Community balance; trade, the organization of the market is based on the freedom to enter into commercial transactions in conditions of fair competition by virtue of It also follows from that case-law that improvement in the quality of the national provisions which establish products; quality standards and which are not based on Community law are excluded by the regulation: such measures might derogate from or adversely affect the Such a system excludes any national organization of the market and might rules capable of hindering intra-Com­ endanger the fulfilment of its aims and munity trade, whether directly or proper functioning; any interference by indirectly, actually or potentially; a Member State with the market mechanism creates the risk of preventing the common organization of the market from working properly. It follows from the case-law of the Court (in particular from the judgment of 29 November 1978 in Case 83/78 {Pigs Marketing Board v Redmond [197'8] ECR Thus, the Commission submits, the 2347) that the common organization of existence of national rules on quality the market in poultrymeat is also based standards not based on Community law on the concept of an open market, to might prejudice the achievement of the which every producer has free access and objective of establishing quality standards the functioning of which is regulated at Community level. Moreover it leads to

Article 2 (2) of Regulation No 2777/75 Taking account of the principles set out may be interpreted as meaning that the in the EEC Treaty, Regulation No Community legislature has reserved the 2777/75, and in particular Article 2 power not only to adopt marketing thereof, must be interpreted as meaning standards for slaughtered poultry but that national measures laying down also to decide whether they must be quality standards for poultrymeat which adopted for other products and to are not based on Community law are prescribe them; the absence of standards incompatible with the aforementioned for products other than slaughtered provisions. poultry may amount to a decision that there shall be no standards, Community or national.

Ill — Replies to the questions put by the Court

On a narrower interpretation, the Community may have reserved itself The following replies were given to the exclusive power only in respect of the questions put by the Court: mandatory marketing standards for slaughtered poultry whilst the Member States may in principle remain competent (a) The Commission points out that the to enact legislation governing the other Community legislature has recognized products, so long as the Community has

PLUIMVEESLACHTERIJEN MIDDEN-NEDERLAND AND VAN MIERT

In prescribing quality standards the In previous decisions the Court has held Netherlands regulation has two aims: to that a Member State may not apply such

JUDGMENT OF 28. 3. 1984 — JOINED CASES 47 AND 48/83

rules to products imported from another lation is applicable to products imported Member State in which they are lawfully from other Member States and therefore marketed unless there are overriding has the same effect on trade as a requirements of the public interest quantitative restriction without this being relating to consumer protection or fair justifiable by requirements of the public trading. In such cases the Member State interest. The application of the system to into which the products are imported domestic products is not incompatible may apply such measures as are strictly with the common organization since the necessary and least restrictive in their provisions laid down do not preclude effect. any type of presentation.

PLUIMVEESLACHTERIJEN MIDDEN-NEDERLAND AND VAN MIERT

imports; since the regulation is also IV — Oral procedure inapplicable to imports destined for certain categories of undertaking, in At the sitting on 30 November 1983 the practice it affects only a relatively small Bedrijfschap voor de Pluimveehandel en proportion of imports, namely, whole -industrie, represented by E. Grabandt, chicks or chick portions distributed of the Bar of The Hague, and the through wholesale channels. The ag­ Commission, represented by its Legal gregate practical effect of the regulation Adviser, R. C. Fischer, presented oral on imports is very small. In the last few argument and replied to questions put by years the Netherlands general inspection the Court. service has only twice, in very ex­ The Advocate General delivered her ceptional cases, taken action on poultry opinion at the sitting on 1 February imports. 1984.

Decision

1 By two orders dated 22 March 1983, which were received at the Court on 25 March 1983, the College van Beroep voor het Bedrijfsleven [administrative court of last instance in matters of trade and industry] referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question, which is identical in both cases, on the interpretation of Article 2 of Regulation (EEC) No 2777/75 of the Council of 29 October 1975 on the common organization of the market in poultrymeat (Official Journal 1975, L 282, p. 77).

2 The question was referred in order to enable the College van Beroep to assess whether the Verordening Kwaliteitseisen [regulation on quality standards] of 24 February 1966 adopted by the Bedrijfschap voor de Pluim­ veehandel in -industrie [Trade and Industry Board for Poultry, hereinafter referred to as "the Board"]. The Netherlands regulation contains detailed provisions regarding the classification, presentation, packaging and transport of slaughtered poultry. In the event of infringement it provides for disciplinary sanctions in the form of fines which are imposed by the Board's disciplinary tribunal (Tuchtgerecht). Appeals from such decisions lie to the College van Beroep voor het Bedrijfsleven.

The facts and history of the case

6 According to the documents before the Court, the two poultry-slaughtering undertakings Midden-Nederland BV and C. van Miert BV, appearing as the appellants in the main actions were fined by the Tuchtgerecht in 1982 after inspections revealed various infringements of the provisions of the Verordening Kwaliteitseisen consisting in particular of the marketing of products which were not fresh, the incomplete cleaning of poultry carcases and the presence of dirt, bruises and broken bones. The undertakings appealed from those decisions to the College van Beroep.

PLUIMVEESLACHTERIJEN MIDDEN-NEDERLAND AND VAN MIERT

7 According to the orders for reference, that court asked the parties to state their views on the question "whether the provisions of Article 2 of Regu­ lation No 2777/75 have left intact the power to lay down national quality standards for slaughtered poultry". After hearing their views, the College van Beroep referred the following question to the Court in both cases:

"Must Article 2 of Regulation (EEC) No 2777/75 be interpreted as meaning that national provisions not based on Community law which lay down requirements as to quality for slaughtered poultry and are enforceable by means of disciplinary measures are incompatible with it?"

8 The appellants in the main actions did not submit observations to the Court. Written and oral observations were, however, submitted by the Board and the Commission.

i2 In its written observations the Commission argues that in Article 2 of Regu­ lation No 2777/75 the Community legislature expressed its intention to "occupy the ground" regarding the matters governed by the organization of the market and that Member States may therefore no longer legislate on those matters. In its opinion, the maintenance of national quality standards disturbs the functioning of the market organization and makes the sub­ sequent introduction of Community quality standards more difficult.

i6 Before the question raised by the College van Beroep is examined it should be observed that it is apparent from the documents before the Court and more particularly the orders for reference that the question to be resolved in these proceedings does not concern health control measures. This question was not raised by the national court and could not therefore be considered by the parties. The arguments advanced by the Board in this regard must therefore be disregarded.

i7 In order to answer the question raised by the College van Beroep it should first be recalled that the common organization of the market in poultrymeat, as at present laid down in Regulation No 2777/75, is based on a set of measures designed to stabilize the market and ensure fair prices without resort to intervention measures of the kind provided for in other agricultural markets. According to Article 2, supply is to be adjusted to market requirements by means of a set of measures designed to promote better organization of production, processing and marketing, to improve quality and to facilitate the establishment of market forecasts and the recording of price trends.

is To this end Article 2 (1) provides that the Council may in accordance with the procedure laid down in Article 43 (2) of the Treaty adopt measures to improve the quality of the products covered by the market organization.

i9 According to Article 2 (2), marketing standards are to be adopted by the Council, acting by a qualified majority on a proposal from the Commission. They must be adopted for the products specified in Article 1 ( 1 ) (b), that is to say, for dead poultry and edible poultry-offal, and may be adopted for the other products to which the market organization applies. It is stated that

PLUIMVEESLACHTERIJEN MIDDEN-NEDERLAND AND VAN MIERT

24 However, in view of the risk, rightly mentioned by the Commission, that the consolidation of unilateral and possibly different national rules may have the effect, owing to continuing inaction on the part of Community authorities, of creating obstacles to trade, it is important to draw attention to certain conditions which must be taken into account in appraising such rules.

25 In the first place it should be borne in mind that, as the Court held in its judgment of 23 January 1975 in Case 51/74 (Van der Hulst v JProduktscbap voor Siergewassen, [1975] ECR 79) and of 18 May 1977 in Case 111/76 (Officier van Justitie v Van den Hazel, [1977] ECR 901), provisions adopted or maintained by Member States in the circumstances described above are permissible only if they are compatible with the principles of the common organization of the market.

26 It may be observed, as the Commission has acknowledged, that in principle measures of the kind provided for by the rules applied by the Board with respect to quality and marketing standards are unobjectionable with regard to the requirements of the common organization of the market in poul­ trym e at.

ir Secondly, it must be emphasized that the application of national quality and marketing standards must not restrict the freedom to import poultrymeat lawfully produced and marketed in other Member States in accordance with the quality and marketing standards in force there.

2s Finally, if free trade is restricted by the differences between the national rules or the absence of measures for ensuring appropriate quality control leads to economic disturbances in the market sector in question, the Council's failure to act cannot discharge the Commission from its duty to take the necessary steps, using its powers under Article 155 of the Treaty, to ensure that the products covered by the organization of the market can move freely within the Community under conditions consistent with the aims of that organiz­ ation.

THE COURT (Fourth Chamber),

in answer to the question submitted to it by the College van Beroep voor het Bedrijfsleven by orders of 22 March 1983, hereby rules:

Article 2 of Regulation (EEC) No 2777/75 of the Council of 29 October 1975 on the common organization of the market in poultrymeat must be interpreted as meaning that, in a situation characterized by the absence of the implementing measures provided for by that regulation, national

PLUIMVEESLACHTERIJEN MIDDEN-NEDERLAND AND VAN MIERT

provisions laying down marketing and quality standards for slaughtered poultry and enforceable by disciplinary measures are compatible with it, provided that they are compatible with the aim of the common organiz- ation of the market and applied in such a way that imports of poultrymeat lawfully produced and marketed in accordance with the marketing and quality standards in force in the other Member States are not restricted.

Koopmans Bahlmann Pescatore O'Keeffe Bosco