C-167/88

The special intervention measure provided Germany: 1 000 000 tonnes for in Regulation No 400/86 is based primarily on Article 8(2) of Regulation No 2727/75 of the Council on the common organization of the market in cereals, as France: 200 000 tonnes amended by Council Regulation No 1143/76.

United Kingdom: 50 000 tonnes The measure is also based on Commission Regulation No 1629/77 laying down detailed rules of application for special intervention measures to support the devel­ Italy: 50 000 tonnes opment of the market in common wheat of

* Original language: Italian.

ASSOCIATION GÉNÉRALE DES PRODUCTEURS DE BLÉ ET AUTRES CÉRÉALES v ONIC

breadmaking quality, adopted pursuant to The Association générale des producteurs Article8(4) of Regulation No 2727/75. de blé (general association of wheat and Article 2 of Regulation No 1629/77 other cereal producers) (hereinafter referred provides that the measures in question are to as 'the Association') brought an action to be decided upon in the light of the against that decision before the Conseil following criteria: d'État, which, since it considered that the lawfulness of the contested measure necess­ arily depended on the validity of the Community regulation which it applied, 'the situation and the prospects regarding decided to stay proceedings and refer the the availabilities of cereals on the following question to the Court for a Community market, preliminary ruling:

'Are Commission Regulation No 400/86 of the import prospects for cereals and the 21 February 1986, Council Regulation No exportprospects for common wheat, 2727/75 of 29 October 1975, Council Regulation No 1146/76 of 17 May 1976 and Commission Regulation No 1629/77 of 20 July 1977 contrary to the provisions of the trend in the price quotations of common Articles 7, 40(3) and 190 of the EEC wheat of breadmaking quality at the most Treaty?' representative centres in the Community'.

(a) The Commission's alleged lack of powers 'Where necessitated by the situation on the Community market in common wheat of breadmaking quality, special intervention measures may be adopted in respect of this cereal with a view to supporting the devel­ 3. The plaintiff in the main proceedings, the opment of the market therein in relation to Association, alleges that Regulation No the reference price 2727/75, as amended by Regulation No 1143/76, does not permit the Commission to adopt special intervention measures whose effects vary according to region. The eighth recital, mentioned above, is in In support of that argument, it refers to the similar terms: difference between the terms of the first and second paragraphs of Article 8 of the abovementioned regulation. Article 8(1) provides as follows: '. . . it should also be possible to take special intervention measures for common wheat of breadmaking quality where there is a risk that market prices no longer develop 'To avoid substantial purchases having to be normally in relation to the level of the made in certain regions of the Community reference price'. under Article 7(1), it may be decided that the intervention agencies take particular intervention measures.' According to the Association, those provisions show that the Council gave the Commission power to adopt measures with different effect in different regions only in The nature and purpose of such measures the case of particular intervention measures. are set out in the eighth recital in the In the case of special measures, on the other preamble to Regulation No 1143/76, which hand, in respect of which the regulation reads as follows: does not expressly provide for regional differences, such differences must be regarded as implicitly prohibited. In other words, the Association's argument is based '. . . in certain regions of the Community, on the assumption that when it was particular circumstances may temporarily intended in the regulation in question to cause market prices to follow a trend other authorize the Commission to adopt different than in the rest of the Community; ... to measures for different regions, that was avoid large-scale intervention in such done expressly. Conversely, where the regu­ regions, it should be possible to take, by lation makes no provision for them, regional way of prevention, particular intervention differences must be regarded as prohibited: measures to relieve their markets for a given ubi lex tacuit noluit. period'.

2727/75 is silent on the matter, the In the light of those decisions, I think that adoption of special intervention measures the literal interpretation put forward by the comes within the scope of the implementing Association, which leads to a restrictive powers conferred by the Council on the interpretation of the implementing powers Commission. conferred on the Commission by Article 8(2), is not consistent with the grant of potentially wide powers, the principle underlying the division of executive powers in the context of the agricultural policy, which corresponds to the clear need to In that regard I should state first that I do ensure flexible and effective management of not regard the argument based on a literal the common market organization. interpretation as being of decisive importance if account is taken of the fact that particular measures are of their very nature specific as to place. It is thus under­ standable that in regard to such measures the provision should refer to situations That is all the more true since, on a correct which may arise in certain areas of the view of the situation, this case is not so Community, not for the specific purpose of much concerned with deciding whether the defining the territorial limits on the exercise Commission has a specific power (for of the Commission's powers but simply in example, as in Rau, the power to carry out order to describe the measure under direct sales at reduced prices of butter held discussion. That can be seen clearly from in intervention stocks) as with verifying Article 8(1), read in the light of the eighth whether the Commission may decide, on the recital in the preamble to the regulation. basis of an assessment of economic circum­ stances, on the most appropriate way of exercising a power which has undoubtedly been granted to it (in this case, that of adopting a special intervention measure). On the other hand, as the Court has consis­ tently held (see, most recently, the judgment of 11 March 1987 in Joined Cases 279, 280, 285 and 286/84 Ran v Commission [1987] ECR 1069, at paragraph 14): In this case, therefore, I do not believe that any decisive factor indicating that the Commission did not have the power to adopt special intervention measures with varying effects according to region can be 'the concept of implementation must be inferred from the mere fact that the terms of given a wide interpretation. Since only the Article 8(2) of the regulation do not contain Commission is in a position to keep track of a specific authorization to do so. On the agricultural market trends and to act contrary, since the measure is silent on that quickly when necessary, the Council may point it must be considered, in accordance confer on it wide powers of discretion and with the decisions of the Court mentioned action in that sphere, and when it does so above, that in the absence of an express the limits of those powers must be restriction the measure itself does not determined in the light of the essential prohibit a special measure involving general aims of the market organization'. geographical differentiation.

In fact, it may be observed that a special purchase into intervention, limited in In that connection it must be emphasized quantity and unequally divided among the that Regulation No 1143/76, amending Member States, amounts essentially to Regulation No 2727/75, completed the support and, therefore, to a distribution of reform of the common organization of the additional income which does not market in cereals by setting up a system correspond in equal measure to the characterized by: production of each Member State. That is what happened in this case, where the quantity of common wheat of breadmaking quality accepted under the special measure the abolition of regional differences in the in the Federal Republic of Germany was intervention price for common wheat; 1 — The reference price plays a double proiective role. On the one hand, it is the basis (higher than that used for other cereals) for the calculation of the target price and, therefore, for the determination of the level of external the unification of the intervention price for protection; on the other, it is a parameter in relation to which possible support measures (special intervention cereals in the entire Community; measures) may be adjusted.

ASSOCIATION GENERALE DES PRODUCTEURS DE BLE ET AUTRES CEREALES v ONIC

significantly higher than that purchased in objective has been attained and prices have the other Member States, particularly returned to the desired level (taking account France, although its total production of of the reference price), the normal patterns cereals was at that time approximately three of trade will correct the imbalance between times that of Germany. surplus areas and deficit areas in accordance with the mechanisms of the single market.

It must be pointed out first of all that, as can be seen from the foregoing consider­ ations, the Council regulation which confers Consequently, when a special measure on the Commission the power to adopt consists in the possibility of buying limited special intervention measures is Regulation quantities into intervention, apportionment No 2727/75 (in particular Article 8). of the total quota in a manner varying according to regional requirements (obviously on the basis of objective criteria) is an appropriate way of attaining the objective of supporting the single The sole issue is the validity of that regu­ Community reference price. Once such an lation as a basic measure.

OPINION OF MR TESAURO —CASE 167/88

(c) The discriminatory character of Regulation 7. It can be seen from the observations No 400/86 made in section (a) above that the possibility of adopting special intervention measures varying from region to region is objectively 8. The Association argues that the measures justified by the need to restrict the measure contained in Regulation No 400/86 are itself to what is strictly necessary, having discriminatory inasmuch as the significant regard to the situation on the various difference in the quantities of common markets, and to support the price of wheat of breadmaking quality which could common wheat of breadmaking quality in be bought under the special intervention relation to the single reference price. scheme in the various Member States, in particular in France and in the Federal Republic of Germany, is not justified on any objective ground. Moreover, in the judgment of 1 July 1974 in Case 11 /74 Union des minotiers de la Champagne v France [1974] ECR 877, the Court recognized that the system of In that regard it should be pointed out that regional prices for cereals applied before the according to the settled case-law of the reform of 1975 was not discriminatory Court (see, most recently, Rau, cited above, inasmuch as it was based on objective and the judgment of 17 June 1987 in Joined criteria. That system provided for the fixing Cases 424 and 425/85 Frico v Voedselvoor- of intervention prices for each area of zienings In- en Verkoopbureau [1987] ECR production, which led to stable differences 2755) the prohibition of discrimination in the prices themselves from one region to expressed in the second subparagraph of another. It was therefore a system in which Article 40(3) of the EEC Treaty, as a

In this case, the Commission argued that the difference of treatment in question was In this case, the essential factor which the based on consideration of the following Commission took into account in adopting factors: the measure at issue was the difference in the price index between the German market and the French market. It is common ground that that difference was small but it from September 1985 to January 1986 the is nevertheless a fact which demonstrates the relationship between the market price and existence of slightly stronger demand on the the intervention price in France was French market. Furthermore, the Court has approximately 1% higher than the same no evidence indicating that the Commission relationship in Germany; overestimated that difference in ap­ portioning the special intervention quotas between the two countries. It can be seen from earlier practice that in one case, in in the same period, French exports showed 1980, 2 in regard to a price difference of a particularly favourable trend; approximately the same order of importance, the Commission adopted a measure analogous to that at issue here in dividing proportionally between the two in January 1986 the French authorities countries the quantities covered by the indicated their intention to dispose of part special intervention measure. On the other of the stocks held by the intervention hand, in 1983, 3at a time when the French agency. price was 1% above the German price, the special intervention quota granted to France was none the less higher than that granted to Germany, which seems to be in contrast with the assessment made in this case. Those facts were not contested. However, the Association considers that their importance was overestimated, which led to the adoption of a measure which did not reflect the requirements of the market and However, it cannot be denied that those placed French producers at a disadvantage. measures were adopted in different economic contexts, which may explain the fact that the solutions adopted are not perfectly uniform from one case to the next. 9. It should be noted that the Commission, Furthermore, that does not permit the acting within the scope of implementing inference that in the case now before the powers granted to it, has wide discretion in Court the data concerning prices were assessing facts and circumstances. The Court obviously cannot substitute its own 2 — See Commission Decision 80/533/PEC of 14 Mas 1980. OJ 1980, L 138. p 11 assessment for that of the Commission. 9 3 — See Commission Regulation No 1428/83 of 2 June 1 83, However, it can and must, in the exercise of OJ 1983, L 145, p 26

In this case, as has been seen, it does not appear that the Commission was wrong in 10. It is true that following the adoption of its assessment of market trends before the Regulation No 400/86 German prices rose adoption of the regulation. Furthermore, the further while French prices declined steadily subsequent developments could well have to a level below the intervention price. been influenced by new circumstances which Moreover, the proportion of wheat in arose and were difficult to analyse in respect of which the benefit of the special advance. Under those circumstances, I intervention measure was sought and consider that the trend in prices and the obtained in the Federal Republic, approxi­ conduct of traders in France in the months mately 97 %, was much higher than that in following February 1986 give rise to some France, where only 11.7% of the wheat doubt as to the appropriateness of the offered was accepted. measures but do not make it possible to conclude that at the time at which they were adopted the Commission had made a manifestly wrong assessment.

We are of course dealing with factors related to the effect of the measure, which therefore emerged only subsequently but are not for that reason without value or signif­ icance. In fact, they are factors in the nature I therefore conclude that there is sufficient of forecasts and subject as such to a margin objective justification for the difference of of uncertainty, but which the Commission treatment provided for in Regulation No could not reasonably exclude from its own 400/86 and that it is therefore not assessments, particularly since in this case it unlawfully discriminatory. was specifically required to take account of them, especially with regard to price trends, under the clear provisions of Article 2 of Regulation No 1629/77.

I shall merely refer to the judgment of 22 level of prices and marketing possibilities) of January 1986 in Case 250/84 Eridania v which account was taken and which Cassa Conguaglio Zucchero [1986] ECR 117 justified the fixing of a maximum quantity and, more recently, the judgment of 7 July to be bought into intervention in each 1988 in Case 55/87 Moksel v Bundesanstalt Member State. für landwirtschaftliche Marktordnung [1988] ECR 3845. 5 Moreover, those two aspects (prices and marketing possibilities) are essentially those In this case, the Statement of the reasons on on which the application to the Court for which the measure is based is certainly judicial review is based. succinct, although more precise than that to be found in measures with a similar content (see, in particular, Commission Decision Consequently, even if further details might 80/533/EEC, cited above). have been desirable, precisely in order to avoid confusion as to the way in which the However, it is clear that Regulation No Commission had exercised its powers, it 400/86 was adopted on the basis of a set of none the less appears to me that the regulations which set out the purpose of statement of the reasons on which the special measures and, in particular, the measure at issue is based is adequate, having criteria on which their application depends. regard to its nature, and fulfils the requirements of making the persons Regulation No 400/86, as well as referring concerned aware of the scope of the expressly to the regulations on which it is measures and their justification and enabling based (see the first and second recitals in the the Court subsequently to exercise its preamble), also indicates the factors (the powers of judicial review.