C-433/92

FRICK AND MURR

OPINION OF MR ADVOCATE GENERAL DARMON delivered on 24 February 1994 *

Mr President, 3. The questions referred to the Court for Members of the Court, a preliminary ruling by the Bundesverwal­ tungsgericht concern the interpretation of some of those conditions.

1. The two joint cases before the Court con­ cern the interpretation of three Commission regulations for granting private storage aid for beef and veal. 4. The provisions at the centre of the dispute are as follows:

(e) to allow the intervention agency at any time to check fulfilment of the obligations undertaken.'

2. For the purposes of this Regula­ tions, 100 kilograms of unboned meat (2) Article 4 of Regulation No 2471/77 (car­ shall be equal to 70 kilograms of cases, half-carcases and compensated boned meat. quarters) provides for the possibility of boning and cutting the meat and states:

'

'

3. For the purposes of this Regula­ (4) Article 4(4) and (5) of Regulation tion, 100 kilograms of the unboned No 2471/77 and Article 4(3) of Regula­ meat shall be equivalent to: tion No 1405/78 provide that if the quan­ tity stored is less than 85% of quantity of (a) 77 kilograms of boned meat in the unboned meat for which the contract was case of cutting and boning the total concluded, no aid is granted and, where quantity for which the contract is that quantity is equal to or greater than concluded, or in the case of cutting that percentage, the amount of the aid is and boning the same number of proportionately reduced. fore-and hindquarters;

(b) 70 kilograms of boned meat in the case of cutting and boning all the forequarters. 5. The facts giving rise to the dispute in the main proceedings occurred in the context of the application of those provisions. Let me ' recall them briefly.

7. The BALM arrives at that conclusion by 10. Murr maintains that storage of the meat applying to the 3 220.8 kg removed from may begin before the conclusion of the con­ storage the 'actual' yield of 74.93% obtained tract and that, in the present case, the BALM upon boning, which gives an amount had the opportunity of monitoring the stor­ of 4 298 kg before boning. Although the lat­ age operation as efficiently as after that con­ ter quantity is deducted from that originally clusion, since it had been advised by tele­ stored — 29 571 kg — there remains only phone of Murr's intention — to which it had the boned meat from the 25 273 kg of boned not objected — to cut and bone the quantity meat, that is to say a percentage below the of meat under consideration on the same day threshold of 85% of the quantity for which that it had received Murr's application for the contract was concluded required by the aid. Furthermore, Murr considers, as does regulation concerned. Frick, that it is the method of calculation which appears in the regulation (100 kg of unboned meat corresponds here to 70 kg of boned meat) which must be applied in order to ascertain whether or not the threshold of 85% has been met.

8. Frick contests before the national court and before the Court of Justice the applica­ tion of that 'actual' yield and claims that it is the 'notional' yield rate of 70% (100 kg of unboned meat corresponds to 70 kg of 11. It is on the question of the conversion boned meat) provided for in the regulation key — the actual rate or the 'notional' rate which must be applied: in the present case, — to be applied in order to calculate the the threshold of 85% necessary to obtain aid minimum quantity to be placed in storage in would be attained if that aid did not have to order to become entitled to aid, in whole or be withdrawn but merely reduced. in part, that the question in the first case and,

19. Although that regulation gives no clearer indication than Regulation No 1071/68 about the beginning of entry into store, those provisions nevertheless provide strong indi­ 15. According to Article 3(2)(b) and (c), the cations of it. contract is to impose on the storer the obli­ gation of advising the competent interven­ tion agency of the day and place of storage and the nature and quantity of the products to be stored and to forward to it 'without delay' the supporting documents for the 20. The first is given in Article 5(1) of Regu­ storage operations. It follows that entry into lation No 1071/68 which provides that 'the store must normally take place after the con­ amount of aid shall be fixed per unit of tract has been concluded. weight ascertained on entry into store and

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before freezing'. Entry into store is therefore 24. In other words, must that obligation be placed after weighing and before freezing. described as a primary obligation, infringe­ ment of which may entail loss of entitlement to the aid, or merely as a secondary obliga­ tion which does not justify such a penalty?

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OPINION OF MR DARMON — JOINED CASES C-433/92 AND C-434/92

the second place, whether they are necessary had taken place regularly, that is to say, after for its achievement'. 8 the storage contract had been concluded?

27. The purpose of the aids is above all to encourage storage. However, storage must be 31. The Bundesverwaltungsgericht proposes, carried out while observing certain appropri­ in such a case, 'a different view of the prob­ ate conditions which ensure its efficiency and 9 lem' raised by the present case in its fourth to enable the intervention agency to carry question, an approach shared by the Com­ out its checks. If that is not the case, then the mission and by Murr and to which I find it objective of the regulations cannot be difficult not to subscribe. attained.

28. Those conditions, in particular obser­ vance of the obligation — the importance of 32. BALM had been informed by telephone which I have pointed out — to begin to take — a practice usually followed in these mat­ into store only after the conclusion of the ters by its local office — of Murr's intention storage contract, must, consequently, be clas­ to begin taking into store early a certain sified as primary obligations infringement quantity of meat and that it had not whereof justifies in principle the loss of enti­ expressed any reservations in that respect. tlement to aid for the quantity of meat con­ cerned.

33. If that 'early storage' did not affect the 29. Let me say again: in view of the forego­ possibility for BALM to carry out supervi­ ing, that penalty seems to me to be appropri­ sion, which is a matter entirely for the ate and necessary for the attainment of the national court to decide, it should be consid­ essential aims of the regulation in question ered that the storer has not lost his entitle­ which are to encourage storage while pre­ ment to aid for the disputed quantity. venting irregularities and fraud.

36. Let me point out that the problem con­ cerns the conversion key to be referred to where the meat is cut and boned. If the 40. Therefore, where a quantity of boned Court adopts the solution suggested by the meat is removed irregularly from storage or undertakings and opts for the standard rate stored under irregular conditions, so that, in provided for in the aforementioned regula­ both cases, it cannot be taken into account tions, entitlement to the contested aids will before an aid is granted, the conversion key be ensured in any event. If, on the other expressly provided for in the provisions of hand, the Court agrees with BALM and the the regulations concerned should be applied Commission and considers that only the rather than any actual rate to which they 'actual' rate should be applied, that entitle­ make no reference. ment will be refused, for certain in the case of Frick, and with the aforementioned reser­ vations in the case of Murr.

41. It seems reasonable to me that a matter as technical as the storing of beef should be the subject of clear provisions. Whilst there 37. In my opinion, the first solution must be is indeed a clear indication concerning the accepted in view both of the wording of the standard rate in Regulations No 2471/77 provisions themselves and of the lack of legal and 1405/78 (100 kg of unboned meat basis in support of the second. equal 77 or 70 kg of boned meat, as the case may be), that is not so as regards the actual rate, which, in the Commission's view, is the 10 — Ibid., first paragraph of II(1). one to be applied.

44. Furthermore, the absence of any legal basis for the solution proposed by the Com­ mission, which says that it is the actual rate which should be applied, strengthens my opinion. 47. I do not share that point of view.

45. Just as there is no express provision in the regulations concerning an actual conver­ sion key, it is not possible, in my view, to strain their terms in order to arrive at an interpretation to support the Commission's position. 48. The obligation on all traders to store all the meat resulting from the boning operation corresponds indeed to one of the main aims of the aforementioned regulations which is 11 — Judgment of 15 December 1987 (Case 332/85 Germany v Commission [1987] ECR 5143, paragraph 23). to ensure storage of an amount of beef which

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is as large as possible and to avoid fraud. It 52. That actual rate results from the boning is not at all incompatible with the existence of the whole of the meat taken into store, of standard-rate conversion keys intended to that is to say, all the portions together. In determine clearly and in advance the condi­ that sense, it concerns an average actual rate tions for the allocation of aid. resulting form the entire boning operation.

49. Those conversion keys cannot have as their sole purpose, contrary to the Commis­ sion's argument, to establish a minimum yield rate to be applied to boning operations. 53. Consequently to apply that average They constitute one of the essential elements actual rate to a small quantity of meat — the of the regulations since entitlement to aid is amount removed from store early or stored subject to their application. irregularly — consisting only of certain por­ tions, would be inappropriate because that rate is actual only by reference to the yield obtained upon boning of the of the whole of the meat taken into store.

(2) the activity with which the process of storing within the meaning of that pro­ vision begins is the placing of the goods in the cold storage room before any freezing takes place;

(3) the requirement that the meat should not be taken into store until after the contract has been concluded constitutes a primary obligation, infringement of which entails in principle loss of entitlement to aid for the quantity of meat concerned;

(4) none the less, entitlement to aid is not lost where the private storer notifies the local office of the intervention agency by telephone of its intention to take the aforementioned quantity into store early, the local office expresses no reserva­ tions, and that operation does not affect the possibility of effective supervision by that agency of compliance by the private storer with his obligations;

(5) in order to calculate, in the case of boned meat, the quantity of meat to take into consideration as regards entitlement to aid for storage, reference should be made to the standard rates provided for in Article 4(3) of Commission Regu­ lation (EEC) No 2471/77 of 8 November 1977 on the granting at a standard rate fixed in advance of private storage aid in respect of beef carcases, half car­ cases and compensated quarters and Article 4(2) of Commission Regulation (EEC) No 1405/78 of 22 June 1978 on the granting at a standard rate fixed in advance of private storage aid for beef forequarters.

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