C-372/88

In order to carry out those tasks of market management the United Kingdom legis­ lation conferred on the MMBs a number of fundamental prerogatives. In the first place, they have an exclusive right to purchase In that connection, it was stated in a milk produced in the United Kingdom. The declaration annexed to the Accession Treaty milk so purchased is subsequently resold at that Regulation No 804/68 ' — the basic differing prices according to the commercial regulation governing the milk and milk- use to which it is put: in this way, a higher products sector — did not affect the price is charged for milk intended for freedom of a producer organization 'by its human consumption while lower prices are own decisions to consign milk wherever it charged for milk used for processing into 1 — Regulation (EEC) No 804/68 of the Council of 27 June * Original language: Italian. 1968 (OJ, English Special Edition 1968 (I), p. 176)

I- 1363

OPINION OF MR TESAURO — CASE C-372/88

chooses in order to get the best return for subject under the United Kingdom legis­ its members, to pool its financial returns and lation. to remunerate its members as it wishes'.

Accordingly, Article 1 of the regulation, which amends Article 25 of Regulation No 804/68, confirms that the MMBs are 6. In that regard, I consider it appropriate compatible with the Community system and, to point out that according to previous in particular, authorizes the grant to the decisions of the Court, 'the need for a MMBs of the exclusive right to buy all the uniform interpretation of Community regu­ milk produced in the area in question and lations necessitates that [the passage in of the right to equalize the prices paid to question] should not be considered in producers, irrespective of the use for which isolation, but that, in cases of doubt, it the milk purchased for them is intended. should be interpreted and applied in the light of the versions existing in the 4 other ... languages'. Furthermore, Com­ munity provisions must be interpreted by 4. In the light of those particulars it is now reference to the purpose and general scheme possible to analyse the questions submitted 5 of the rules of which they form a part. by the national court. The questions are concerned essentially with two points: the scope, rattorte materiae, of the MMBs' purchasing monopoly and the legality, from 7. Having said that, it must be admitted the point of view of Community law, of a that, in itself, the phrase 'without number of contributions and related penalties to which milk producers are 4 — See the judgment of 5 December 1967 in Case 19/67 Bestuur o'er Sociale Verzekeringsbank v Van der Vecht [1967] ECR 345, and the judgment of 12 July 1979 in Case 9/79 2 — Declarations on liquids milk, pigmeat and eggs annexed to Worsdörfer, née Koschniske v Raad van Arbeid [1979] the Treaty of Accession; see Documents concerning the ECR 2717. accessions to the European Communities, p. 106. 5 — See the judgment of 27 October 1977 in Case 30/77 3 — Council Regulation (EEC) No 1421/78 of 20 June 1978 Regina v Bouchereau [1977] ECR 1999, in particular ( OJ1978 , L 171, p. 12). paragraph 14.

In the German version, the phrase 'without Secondly, in the versions other than the processing' is rendered by the words 'in English the expression used in Article unverarbeitetem Zustand', which indicate 25(l)(a) of Regulation No 804/68 is, when fairly clearly that the milk must not have adopted in other provisions, consistently been subjected to processing operations, utilized to distinguish unprocessed milk from that is to say it must not have been processed products. This is the case with converted into a product which is a Article 7(l)(a) and Article 10(2)(b) of Regu­ different commodity, and not that the milk lation No 1422/78. This means that the must not have undergone mere treatment, expression in question is used unambiguously such as, precisely, pasteurization. in all the language versions except the English to denote precisely milk which is marketed in the form of milk and, on the other hand, does not cover milk which has been made into other milk products. The other language versions utilize more general expressions which to a greater or lesser extent could refer both to unpro­ cessed milk and to simply untreated milk. 10. This outcome, which has been arrived at on the basis of a literal and systematic 6 — Council Regulation ( EEC EEC)) No 1422/78 of 20 June 1978 1422/ interpretation of the relevant legislation, is 1978,, L 171 (OJ 1978 171,, p 14). 14). borne out by the logic underlying Article EEC)) 7 — Commission Regulation ( EEC No 1565/79 of 25 July 1565/ 1979,, L 188 1979 (OJ 1979 188,, p 29). 29). 25(l)(a) of Regulation No 804/68.

13. In conclusion, it seems to me that both 11. But if this is the economic justification the wording and the purpose of the legis­ for recognizing the MMBs' monopoly, it lation suggest that the MMBs' exclusive follows that that exclusive right must be able right of purchase applies to liquid milk to be exercised in relation to any type of which may be used as such for human milk which may be marketed for human consumption, and therefore includes both consumption, irrespective as to whether the unpasteurized milk and milk which has been milk has or has not been pasteurized or pasteurized or subjected to other preser­ subjected to other preservation treatment. In vation treatments which are not such as to other words, the MMBs' monopoly applies change its commercial characteristics. to liquid milk in so far as it may be intended for human consumption (to which milk the higher administered price applies) and cannot be restricted on account of particular treatments which have no effect on that intended use. Moreover, as has rightly been pointed out on the basis of an a contrario 14. Now that I have answered the first argument, if that interpretation were not question in the negative, I must consider the accepted it would be relatively easy for any other questions put by the national court. milk producer to evade the MMBs' Those questions are concerned with the exclusive right by subjecting the milk itself compatibility with Community law of a to preservation treatment and then selling it number of contributions required of milk directly for human consumption, in order to producers under the MMB system and of take advantage of the higher administered the remedies and penalties prescribed for price. failure to pay those contributions.

15. I would make it clear straight away, in contributions) with Community law which answer specifically to the third question put the defendant in the main proceedings is by the national court, that the legality of the contesting. It maintains that the regulations contributions in question must be assessed in do not expressly authorize the MMBs to the light of their characteristics and nature, levy such contributions and that, in any regardless of the marketing stage (wholesale event, the contributions are unlawful or retail) at which the producers liable to inasmuch as they do not represent the value pay the contributions operate. of any services provided but constitute a charge which serves the MMBs' policy of administered prices and is specifically designed to neutralize competition from producers who can sell directly onto the 16. According to the order of the national milk market. court, the contributions in question are of various types. First of all there are the 'capital contributions', which are payable annually by all producers and are calculated by reference to the total quantity of milk 18. That argument does not seem to me to sold (these contributions have not been be well founded. In that regard I would levied since 31 March 1986). On top of point out in the first place that, in declaring these, there are other contributions, the that the MMBs are substantially compatible 'producer-processor contributions' (PP with the structure and objectives of the contributions) and 'producer-retailer contri­ common agricultural policy, Regulation No butions' (PR contributions), which have the 1421/78 recognizes that 'the Milk special feature that they are not due from all Marketing Boards have certain prerogatives producers alike, but only from those who, to ensure that they operate effectively ... in by agreement with the MMB, are released principle the exclusive right to purchase in respect of a specific quantity and for a milk from producers established in their specific period of time from the obligation area'. to deliver their milk to the MMB. Conse­ quently, under an agreement, those producers are permitted to make direct sales on the market; the contributions which they have to pay are calculated so as to make up That monopoly, which is authorized in the difference between the higher price general terms, is subject to only three which they succeed in obtaining by selling exceptions: the two exceptions provided for directly on the market and the lower inter­ in subparagraphs (a) and (b) of Article 7(1) mediate price which they would otherwise of Regulation No 1422/78 and that set out be paid by the MMB. In other words, the in Article 8 of that regulation. In addition to function of those contributions is to place those exceptions, which, moreover, are on an equal footing, on the one hand, clearly defined, there is the case, which is producers who sell milk to the MMBs and also provided for in Article 7 of Regulation producers contractually authorized to make No 1422/78, where the exclusive right is direct sales and, on the other hand, suspended by virtue of an agreement purchasers from the MMBs and those who between a producer and the MMB. have purchased directly from producers.

23. Whether a possible deregulation of that market is or is not desirable depends on the point of view which each person is entitled to hold with regard to such dirigiste organ­ 20. Certainly, it cannot be ruled out, izations. Naturally, it must not be over­ although it seems to me to be somewhat looked that the differing prices practised by academic, that the imposition of absolutely the MMBs cannot be equated simplistically unjustified conditions might be deemed to any embodiment of market power; they unlawful inter alia in the light of the limits are part of a much more complex system, which under Article 25(3)(a) of Regulation and must be assessed in that context, in so No 804/68 the MMBs are required to far as they can, inter alia, equalize the observe in exercising their rights. incomes of milk producers. Consequently, whilst that policy may in some cases not serve the interest of some operators who wish to have greater independence, it does nevertheless constitute a fairly certain economic guarantee for milk producers as a class, taken as a whole, and a means of 21. But this does not seem to me to be the trying to impose on the relevant case here, since it is not contested that the market — which, as a whole, continues to contributions in question are designed to be beset by notorious structural diffi­ prevent operators who sell to and purchase culties — a somewhat more regular trend. from the MMBs from being placed in a worse position that those producers who are authorized, exceptionally, to operate on the market directly, that is to say without, as is normally the case, going through the MMBs. In other words, it seems clear to me that in levying the contributions at issue the MMBs kept within the limits and the aims 24. But, apart from those general consider­ of the exclusive right which they have under ations, there remains from a strictly legal the Community legislation. point of view one single factor which seems

25. I therefore consider that the PP contri­ 27. Finally, as regards the remedies and butions and the PR contributions are penalties laid down by the United Kingdom compatible with Community law in so far as legislation, there does not seem to be any they are consistent with the actual exercise reason for doubting their legality, since they of those rights. are intended to secure compliance with obli­ gations compatible with Community law, 26. As for the capital contributions, it seems provided that those remedies and penalties to me that, contrary to the defendant's do not entail consequences which are contentions, they are intended to finance disproportionate to the aims which they are activities which fall within the functions intended to achieve. It is for the national which the MMBs were set up to carry out. court to ascertain whether in fact they are In principle I do not consider it possible to proportionate to those aims, without contest the fact that the MMBs' commercial prejudice to the possibility of its requesting activity, albeit carried out through a the Court for a ruling on that matter.

28. I therefore consider that the Court should answer the national court's questions as follows:

'(1) The exclusive right of purchase enjoyed by the MMBs under Article 25 ( l )( a ) of Regulation No 804 / 86 , as amended by Regulation No 1421 / 78 , applies to liquid milk which is capable of being marketed for human consumption in that form and therefore includes milk which has been pasteurized or subjected to other preservation treatments which are not such as to change its commercial characteristics.