C-77/88

2. The facts of the case are not set out in the order for reference, but it appears that the plaintiff, Stute Nahrungsmittelwerke GmbH & Co. KG ('Stute'), bought the cherries in July 1983 from the company Whereas, to this end, a system of Rudolf Bargstedt, Hamburg, Obsterzeuger­ production aid should be introduced organisation GmbH ('Bargstedt') for enabling the products in question to be processing into cherries preserved in syrup. manufactured at a price lower than that which would result from the payment of a remunerative price to producers of the fresh products; whereas this system should be linked to a system of contracts providing 3. The relevant basic Regulation in this both for regular supplies to the processing case is Council Regulation (EEC) No industries and a minimum price to be paid 516/77 of 14 March 1977 on the common by processors to producers'. organization of the market in products processed from fruit and vegetables (Official Journal 1977, L 73, p. 1). That Regulation was amended by Council Regulation (EEC) No 1152/78 of 30 May 1978 (Official Journal 1978, L 144, p. 1) which introduced a system of production aid for certain products processed from fruit and 4. The substantive provisions governing the vegetables. The reasons for the introduction system of production aid were contained in of that system are explained in the preamble Article 2 of Regulation No 1152/78, which to the Regulation as follows: added new Articles 3a, 3b and 3c to the

* Original language. English

OPINION OF MR JACOBS — CASE 77/88

'The system referred to in paragraph 1 shall be based on contracts binding, within the Community, producers or recognized groups or associations thereof and processors or legally constituted groups or 7. It appears that the defendant in the main associations thereof. These contracts, proceedings, in the form of the Bundesamt concluded for a minimum period to be für Ernährung und Forstwirtschaft (Federal determined, must specify the quantities of Office for Food and Forestry), refused raw material to which they relate, the Stute's application for production aid in schedule for deliveries to processors and the respect of the transaction with Bargstedt on price to be paid to producers. On their the ground that, while the other conditions conclusion, the contracts shall be forwarded laid down by Regulation No 516/77 as to the bodies designated by the Member amended were satisfied, Bargstedt could not States concerned, which shall be responsible be regarded as a recognized group of for supervising the execution of the producers for the purpose of those contracts.' conditions. In the view of the Bundesamt, Bargstedt was controlled by Mr Rudolf Bargstedt, the main shareholder, who was a wholesaler and not a producer of fruit and vegetables. At the material time, Mr Bargstedt held 68 votes out of a total of 103 under the company's statutes. Article 3a(3) prescribed the method for calculating the minimum price for deliveries made under such contracts.

8. Stute contended, on the other hand, that Bargstedt had been recognized by the Free Hanseatic City of Hamburg, which was a 5. Article 3b prescribed the method by competent authority for that purpose, as a which the amount of the aid was to be producers' organization for intervention calculated. Article 3c laid down the purposes under Council Regulation (EEC) procedure for the adoption of detailed rules No 1035/72 of 18 May 1972 on the for the application of Articles 3a and 3b, common organization of the market in fruit including the fixing of the amount of the and vegetables (Official Journal, English aid and the minimum price. Special Edition 1972 (II), p. 437). Stute also

9. In the light of those contentions the (3) Is compliance with those minimum Frankfurt Administrative Court referred the requirements a condition of entitlement following questions to this Court for a to aid if all other conditions in respect preliminary ruling: of such aid are satisfied, in particular if the competent authority has recognized the producers' association? To that extent does a question of legitimate expectation arise between the producers' association and its '(1) What minimum requirements must be customers?' satisfied by a recognized producers' group within the meaning of Article 3a(2) of Council Regulation (EEC) No 516/77 of 14 March 1977, Article 3a(1) of [that Regulation as amended by] Council Regulation (EEC) 10. Argument has been advanced by Stute, No 988/84 of 31 March 1984, and by the Government of the Federal Republic Article 3(1) of Council Regulation of Germany, by the Greek Government and (EEC) No 426/86 of 24 February by the Commission, not only on the inter­ 1986? pretation of Articles 3a, 3b and 3c of the basic Regulation as amended but also on a substantial number of other Regulations dealing with the definition of producers' organizations and related notions in a With regard to those minimum variety of different contexts. Particular requirements, does a producers' group attention has been paid to Regulation No as referred to in Article 3a of Regu­ 1035/72, Title II of which is concerned with lation No 516/77 fall within the defi­ producers' organizations. Article 13 of the nition of Article 13 of Regulation No Regulation defines the term as follows: 1035/72 or that of Article 4 of Regu­ lation No 1360/78?

11. Article 3a(2) of Regulation No 516/77 is not concerned with producers' organiz­ ations in that sense at all. It does not refer to producers' organizations, but to and which requires the producer members: 1 'producers or recognized groups or associ­ ations thereof'. The purpose of introducing a system of production aid into the basic Regulation on products processed from fruit and vegetables was solely to enable producers of those products to buy the fruit (i) to sell their total output of the product and vegetables in question from Community or products by reason of which they producers whose prices would, in the have become members through the absence of production aid, be undercut by organization; the organization may, imports from third countries. That remained however, waive this requirement in the case when the basic Regulation was respect of certain quantities; further amended by Council Regulation (EEC) No 988/84 (Official Journal 1984, L 103, p. 11), also cited in the questions referred, Article 3a repeating in substance the same term 'producers or recognized (ii) to apply, with regard to production and producers' groups or associations thereof'. marketing, rules which have been Council Regulation (EEC) No 426/86 adopted by the producers' organization (Official Journal 1986, L 49, p. 1) repealed with a view to improving product and replaced Regulation No 516/77 as the quality and adapting the volume of basic Regulation on the common organ­ supply to market requirements.' ization of the market in products processed from fruit and vegetables. Title I governs 1 — The English Special Edition text is slightly defective at this production aid and Article 3(1) again uses point, and I nave corrected it to follow the French and the same words. The essential requirement German texts.

under those provisions is that the products (ii) groups established for the conclusion of should have been processed from fruit and contracts as referred to in the vegetables which were harvested in the abovementioned Article 3; such groups Community, and which were bought under shall be recognized by the Member contracts between the producers and the State concerned provided that their processors. There is accordingly, in my members are not part of producers' view, no particular requirement which has organizations recognized pursuant to to be satisfied by a producer or recognized Article 13 of Regulation (EEC) group or association of producers in order No 1035/72 and undertake not to have for the conditions laid down by those any of their production taken over by provisions to be satisfied. Consequently, I other groups.' take the view that the provisions of other regulations concerned with producers' organizations and the like are of no assistance in this case. The only material requirement is that the vendor is a producer But there was no similar definition of the or a group or association of producers, term 'producers or recognized groups or terms which in my view are to be associations thereof' in the earlier legis­ understood in their ordinary meaning. lation, and the existence of a particular defi­ nition for a different product at a later date, no doubt taking account of the particular circumstances of the market in that product at that time, serves in my view only to confirm that the terms as used in the earlier 12. It is true that a link between the legislation should be understood in their notions of producers' organization and ordinary meaning. group or association of producers does appear in later legislation. In the case of aid for processed tomato products, Article 1 of Commission Regulation (EEC) No 722/88 of 18 March 1988 (Official Journal 1988, 13. The reference to 'recognized' groups L 74, p. 49) defines the term 'producers' or associations may have caused confusion group' as follows: because of the requirement of recognition in relation to producers' organizations. Article 2 of Council Regulation (EEC) No 3284/83 of 14 November 1983 (Official Journal 1983, L 325, p. 1) amended Article 13 of Regulation No 1035/72 by 'For the purpose of applying Article 3(1 a) of adding to the conditions mentioned above Regulation (EEC) No 426/86, "producers' the requirement that the producers' organ­ group" means: ization must be 'recognized by the Member State concerned' and by providing that such recognition is to be granted if there is sufficient evidence as regards the duration and effectiveness of the organization's activi­ ties. According to the preamble to that (i) producers' organizations established and Regulation, the purpose of the amendment recognized in accordance with was to ensure that producers' organizations Article 13 of Regulation (EEC) comply with the conditions laid down and No 1035/72; that the period in respect of which aid is

14. Similarly, I do not think, that direct assistance can be derived from Council Regulation (EEC) No 1360/78 of 19 June 1978 on producer groups and associations thereof (Official Journal 1978, L 166, p. 1) which is cited in the questions referred but which applies only in certain areas of the Community not including the Federal Republic of Germany, namely Belgium, 16. In my view, therefore, the true Italy and certain regions of France, and question at issue in this case is the straight­ applies only to certain products, no forward question whether a company such products processed from fruit and as Bargstedt should be regarded as a vegetables being covered except in Italy. producer or as a group or association of Article 5 of that Regulation provides that producers for the purposes of Article 3a of producers' groups are to consist of, in Regulation No 516/77, and reference to the particular, individual producers. By provisions of other legislation is immaterial. Article 5(2): 'The Member States concerned In my view, the minimum requirements may, when their national provisions so which a recognized group or association of provide, recognize producer groups which producers must satisfy under Article 3a do also include persons other than those not exclude the participation in such a covered by paragraph 1. In such cases the group or association of a person who is not groups' statutes must ensure that the a producer, provided that it is composed members covered by paragraph 1 retain principally of producers and that they control over the groups and any decisions control the activities of the group or associ­ the latter may take.' Article 5(3) provides ation concerned. In the absence of proof that associations shall consist of recognized that those requirements are satisfied, a body producer groups and shall pursue the same in which a wholesaler has the majority objectives as those groups, but on a larger shareholding cannot be regarded as a scale. The purposes of that Regulation were producer or as a group or association of again wholly different, it being intended to producers within the meaning of those remedy severe structural deficiencies in the provisions. For the reasons already given, supply of certain agricultural products in the fact that the body has been recognized certain regions, the market being supplied as a producers' organization for the by a very large number of small and insuffi­ purposes of other Community legislation is ciently organized holdings. irrelevant.

(1) The minimum requirements which a recognized group or association of producers must satisfy under Article 3a of Regulation No 516 / 77 entail that it should be composed principally of producers and that they should control the activities of the group or association concerned ; and the provisions of Article 13 of Regulation No 1035 / 72 and Article 4 of Regulation No 1360/78 are irrelevant.

(2) Those minimum requirements do not exclude the participation in such a group or association of a person who is not a producer , provided that it is composed principally of producers and that they control the activities of the group or association concerned. In the absence of proof that those requirements are satisfied, a body in which a wholesaler has the majority shareholding cannot be regarded as a producer or as a group or association of producers within the meaning of those provisions.

OPINION OF MR JACOBS — CASE 77/88

(3) Where a body does not satisfy the minimum requirements for constituting a group or association of producers for the purposes of Article 3a of Regulation No 516/77, the fact that the body has been recognized as a producers' organ­ ization for the purposes of other Community legislation does not render that body a group or association of producers for the purposes of Article 3a of Regulation No 516/77. In that respect no question of legitimate expectation arises under Community law.