C-351/92

GRAFF v HAUPTZOLLAMT KÖLN-RHEINAU

J U D G M E N T O F T H E C O U R T (Fifth Chamber) 14 July 1994 *

In Case C-351/92,

R E F E R E N C E to the Court under Article 177 of the E E C Treaty by the Finan- zgericht Düsseldorf (Federal Republic of Germany) for a preliminary ruling in the proceedings pending before that court between

Manfred Graff

and

JUDGMENT OF 14. 7. 1994 — CASE C-351/92

Advocate General: W. Van Gerven, Registrar: H . A. Rühi, Principal Administrator,

after considering the written observations submitted on behalf of:

— Manfred Graff, by Ernst Handschumacher, Gerda Blume, Johannes Handschu- macher and Regina Möhring, of the Düsseldorf Bar,

— the Council of the European Union, by Arthur Bräutigam, Legal Adviser, act- ing as Agent,

— the Commission of the European Communities, by Dirk Booß, Legal Adviser, acting as Agent,

Judgment

1 By order of 21 August 1992, received at the Court on 9 September 1992, the Finanzgericht (Finance Court) Düsseldorf referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation and validity of the system of charging an additional levy on milk, as set out in Council Regulation N o 856/84 of 31 March 1984 amending Regulation N o 804/68 on the common organization of the market in milk and milk products (OJ 1984 L 90, p. 10)and in Council Regulation N o 857/84 of 31 March 1984 adopting general rules for the application of the levy referred to in Article 5c of Regulation N o 804/68 in the milk and milk products sector (OJ 1984 L 90, p. 13).

2 That question was raised in proceedings between Mr Graff, a milk producer estab- lished in Germany near the Belgian frontier, and the Hauptzollamt Köln-Rheinau concerning the taking into account of a quantity of milk produced on a holding situated in Belgium for the purpose of calculating the reference quantity to be allo- cated by the German authorities.

3 In order to curb the production of milk and milk products in the Community, Regulation N o 856/84 inserted Article 5c in Regulation N o 804/68; Article 5c(l) provides that, during five consecutive periods of 12 months beginning on 1 April 1984, an additional levy is to be payable by producers (formula A) or pur- chasers (formula B) of cow's milk who exceed a given reference quantity.

4 According to Article 5c(3),

'The sum of the reference quantities ... may not exceed a guaranteed total quantity equal to the sum of quantities of milk delivered to undertakings treating or pro-

7 It appears from the order for reference that Mr Graff delivers the milk he produces on his German holding to the Milchversorgung Rheinland e. G. (hereinafter 'Rhei- nland'), a Germany dairy cooperative.

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s At the end of 1981, he subleased a holding which was situated in Belgium from his mother, who held the head lease, and which belonged to his grandparents. The 91 869 litres of milk produced on that holding in 1981 was delivered to the Walhorn Eupener Genossenschaftsmolkerei, a cooperative in Walhorn (Belgium). That figure constituted an increase of 70 000 kg over production for the previous year. In 1982, however, the quantity of milk fell to 8 000 litres and, in 1983, the holding ceased to produce milk altogether.

9 In 1984 Rheinland allocated to Mr Graff for 1984/85 a reference quantity of 368 900 kg. That quantity was calculated on the basis of the quantities of milk delivered in 1981 and 1983, equivalent to 405 305 kg and 398 796 kg respectively. The first of those quantities included the quantity of milk produced on the Ger- man holding — 335 305 kg — increased by 70 000 kg, representing the increase in production recorded on the Belgian holding in 1981.

io Following audits of Rheinland carried out at the end of the 1980s, it transpired that Mr Graff's German holding had produced only 335 305 kg of milk in 1981. After refusing to take into account the 70 000 kg produced in Belgium for the pur- poses of the deduction to be made under the M G V O , the Hauptzollamt revoked the initial reference quantity and replaced it as from 2 April 1984 with a reference quantity of 349 000 kg. The claimant disputes that retroactive reduction of 19 900 kg.

n By that question, the national court asks essentially whether the principle of equal- ity and the second subparagraph of Article 40(3) of the EEC Treaty prevent a Member State from refusing to take into account, in fixing the reference quantities of a producer established within its territory, of the quantities of milk produced on a holding situated in another Member State and accordingly granting him a lower reference quantity.

u According to the second subparagraph of Article 40(3) of the EEC Treaty, the common organization of agricultural markets to be established as part of the Com- mon Agricultural Policy 'shall exclude any discrimination between producers or consumers within the Community'.

is It is settled case-law that the prohibition of discrimination laid down in that pro- vision is merely a specific enunciation of the general principle of equality which is one of the fundamental principles of Community law (see the judgments in Case

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C-177/90 Kühn [1992] ECR 1-35, paragraph 18, and in Case C-98/91 Herbrink [1994] ECR 1-223, paragraph 27); that principle precludes comparable situations from being treated in a different manner unless the difference in treatment is objec- tively justified (see the judgments in Joined Cases 201/85 and 202/85 Klenscb [1986] ECR 3477, paragraph 9, and in Joined Cases C-267/88 to C-285/88 Wuidart [1990] ECR 1-435, paragraph 13).

over a holding situated within national territory. In the latter case, the deduction from the reference quantity is reduced on account of the fact that the producer who has taken over another holding has to add to his own production that of the latter holding, which is not the case where the holding taken over is situated in another Member State.

20 Where comparable situations are treated differently, it is necessary to ascertain whether that difference of treatment on account of the location of the second hold- ing is objectively justified in connection with the system of reference quantities.

2i So far as concerns that system, the fifth recital in the preamble to Regulation N o 856/84 states that the guaranteed total quantity laid down for the Community has been distributed among the Member States on the basis of deliveries on their territory during the 1981 calendar year. Since the total quantity so allocated to each Member State limits milk production in that State, the sum of the reference quan- tities allocated individually to producers must not exceed that limit. It is important to note that, under Article 5 of Regulation N o 857/84, even additional reference quantities may be granted only within that limit.

22 In distributing the guaranteed total quantities amongst individual producers, cer- tain States took as a basis the quantities of milk produced by each producer in 1981 while others, such as Germany and Belgium, took the quantities of milk produced by each producer in 1983, as they were authorized to do by Article 2(2) of Regulation N o 857/84. Those two States accordingly applied an abatement rate to those quantities so as to ensure that, notwithstanding the increase in production between 1981 and 1983, their sum would not exceed the guaranteed total quantity.

27 That conclusion is not gainsaid by the judgment in Joined Cases C-90/90 and C-91/90 Neu [1991] ECR 1-3617. That case was concerned with a reduction in the individual reference quantity allocated under formula v on account of a change

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of dairy by the members in circumstances, unlike those of the present case, in which all the traders resided in the same Member State. Hence the need to ensure observance of the guaranteed total quantity of the Member State concerned was not at issue.

28 In the light of the foregoing, there would not appear to be any need to consider the argument deduced by the Commission from the difficulties of verification that would arise if account were taken, in calculating the reference quantity, of the quantities of milk produced in other Member States.

29 For those reasons, the answer to the question submitted must be that failure to take account, in determining a reference quantity, of the milk production from a holding taken over and worked together with a holding situated in another Mem- ber State is not contrary to the principle of equal treatment and the second sub- paragraph of Article 40(3) of the EEC Treaty, if it is only the fact that the holding taken over and worked with the other holding is situated in another Member State which precludes account being taken of it, as would otherwise be the case under national law, resulting in the grant of a higher reference quantity.

T H E C O U R T (Fifth Chamber),

in answer to the question referred to it by the Finanzgericht Düsseldorf, by order of 21 August 1992, hereby rules:

Failure to take account, in determining a reference quantity, of the milk pro- duction from a holding taken over and worked together with a holding situ- ated in another Member State is not contrary to the principle of equal treat- ment and the second subparagraph of Article 40(3) of the EEC Treaty, if it is only the fact that the holding taken over and worked with the other holding is situated in another Member State which precludes account being taken of it, as would otherwise be the case under national law, resulting in the grant of a higher reference quantity.

Moitinho de Almeida Edward Joliét

Rodríguez Iglesias Zuleeg

Delivered in open court in Luxembourg on 14 July 1994.