C-56/94

SCAC v ASSOCIAZIONE DEI PRODUTTORI ORTOFRUTTICOLI

OPINION OF ADVOCATE GENERAL DÁMASO RUIZ-JARABO COLOMER delivered on 6 Aprii 1995 *

1. In the present case the Tribunale di products' processed by SCAC during the Piacenza has referred to the Court of Justice, 1990/91 and 1991/92 marketing years. pursuant to Article 177 of the EC Treaty, a question concerning the interpretation and, if appropriate, the validity of Article 1 of Council Regulation (EEC) 668/93 of 17 March 1993 on the introduction of a limit to the granting of production aid for pro- cessed tomato products. 1

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OPINION OF MR DÁMASO RUIZ-JARABO COLOMER — CASE C-56/94

Circular for the preparation of 'other prod- products' under the abovementioned ucts'. The refusal to deliver the remaining transfer of 25% carried out during the 622 400 kg of tomatoes was based on the fact preceding marketing year, and involving a that there was uncertainty as to the price corresponding decrease in the percentage guarantee for them in the light of the Com- quotas of fresh tomatoes (intended for munity legislation. 'concentrate' or 'other products') allo- cated to the other processing undertak- ings?

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SCAC v ASSOCIAZIONE DEI PRODUTTORI ORTOFRUTTICOLI

N o 668/93 which leads it to question the lower. In addition, provision is made for the validity of that provision on the ground that grant of export refunds to enable Commu- it may infringe Article 40(3) of the EEC nity products to have access to world mar- Treaty, it is necessary to set out the legisla- kets. tive context of the provision at issue.

Community legislation 7. With regard to trade within the Commu- nity, the common market organization sets up a system based on fixing a minimum price payable by processors to producers which is determined taking into account the basic prices for fruit and vegetables for consump- tion as fresh and the need to maintain a suf- 5. The basic measure in this area is Council ficient balance between the various uses for Regulation (EEC) N o 426/86 of 24 February fresh products. Since that minimum price is 1986 on the common organization of the high and would make Community products market in products processed from fruit and uncompetitive, Article 2 of Regulation N o vegetables. 2 This common market organiza- 426/86 establishes a system of production aid tion aims to ensure Community preference which permits undertakings to manufacture for certain products processed from fruit and products processed from fruit and vegetables vegetables which are of particular impor- at a price lower than that which would result tance in the Mediterranean regions of the from the payment of a remunerative price to Community, as producer prices are consider- producers of the fresh products. ably higher than those of non-member coun- tries.

8. The provisions concerning production aid 1 185 000 tonnes for 'tinned whole peeled in the basic regulation on the common mar- tomatoes' and 453 998 tonnes for 'other ket organization were amplified by Commis- tomato products'. sion Regulation (EEC) N o 1558/91 of 7 June 1991 laying down detailed rules for the application of the system of production aid for products processed from fruit and vege- tables. 3 This measure regulates mainly the administrative procedure applying to pro- duction aids, in which emphasis is placed o n the need for tomato processors to conclude a 'preliminary contract' with producers before planting begins and, later, a 'processing con- Article 1(2) of Regulation N o 668/93 pro- tract' which must give the particulars of both vides that each Member State must divide its parties, the quantities of fresh tomatoes pur- quota 'between the processing undertakings chased, the schedule for deliveries and the in proportion to the average quantities actu- price paid, as well as the finished products t o ally produced by each of them during the be obtained from the fresh tomatoes. three marketing years preceding the market- ing year for which the aid is fixed'. However, in order to make this rigid system of allocat- ing fresh tomato quotas to undertakings by reference to the processed product somewhat more flexible, the final subparagraph of Arti- cle 1(2) of Regulation N o 668/93 provides as follows:

— a transfer of up to 5% of the quantities of other tomato products, expressed in quantities of fresh tomatoes, to the quan- tities allocated for concentrate'. 11. According to the plaintiff in the main action, the transfer system favours undertak- ings producing peeled tomatoes to the disad- vantage of those producing tomato concen- trate or other products. In the plaintiff's opinion, if an undertaking transfers 25% of its quantity of 'peeled tomatoes' to 'tomato Question 1 concentrate' or 'other products', the transfer will affect the following marketing years in such a way that the undertaking will retain the same quantity of peeled tomatoes increased by a quantity of tomato concen- trate or other products proportional to the quantities of fresh tomatoes actually pro- cessed into concentrate or into other prod- ucts, including the quantities transferred. 10. The first question from the Tribunale di Consequently, SCAC contends that produc- Piacenza refers to the proper interpretation ers of peeled tomatoes will retain their quo- of Anicie 1(2) of Regulation N o 668/93, tas of peeled tomatoes and can progressively which requires each Member State to divide gain quotas of concentrate and other prod- between the processing undertakings the ucts at the expense of undertakings process- quota of fresh tomatoes allocated to it by ing those two types of product, whose quo- that regulation which are eligible for produc- tas will be progressively reduced. tion aid. In addition, that provision allows undertakings, after obtaining authorization from the competent authorities of the Mem- ber State, to make a transfer of fresh toma- toes between the quantities forming its quota. However, the possibilities of transfer of quantities are limited in that an undertak- ing may transfer up to 2 5 % of its 'whole 12. This interpretation of the transfer peeled tomatoes' to 'tomato concentrate' and machinery provided for in Article 1(2) of 'other products', and 5% of 'tomato concen- Regulation N o 668/93, which the national trate' to 'other products' and vice versa. But court has taken as a basis for the reference, no transfers of quantities are permitted from must be rejected.

Firstly, it is technically possible to make produced by each of them'. This means that transfers of quantities only from 'peeled if an undertaking transfers within its quota tomatoes' to 'tomato concentrate' or 'other 25% of the quantity for 'peeled tomatoes' to products', and not vice versa. Fresh tomatoes the other two quantities, in the following used for producing tinned peeled tomatoes marketing year its quantity of peeled toma- must be of good quality and in a perfect state toes will depend on those actually produced of preservation, so that they are also suitable and it will not retain the quantity for the for making tomato concentrate and other previous year. An undertaking cannot keep products. However, tomatoes used for the intact the quantity from which it has made a transfer and, at the same time, increase the production of concentrate and other prod- quantity to which the transfer is made. As ucts may be of lower quality and do not the Commission points out in its observa- need to be in a perfect state of preservation, tions, the quota system does not entail the so that they cannot be used for processing creation of acquired rights in favour of any into peeled tomatoes. Thus the possibility of undertaking. transferring quantities from 'peeled toma- toes' to the other two serves to introduce a degree of flexibility into the rigid quota sys- tem of the common market organization so as to enable undertakings buying high- quality tomatoes which subsequently deteri- orate for some reason to use them for tomato concentrate or other products. To Finally, the average quantities of processed this end Article 6(5) of Regulation N o tomato products actually produced by each 1558/91 provides that, when tomatoes have undertaking during the three preceding mar- deteriorated after being taken over by pro- keting years, which is the criterion to be cessors, the competent authorities may allow used by the Member States for allocating the latter to use the tomatoes for processing quotas to undertakings, comprise an under- taking's total production, both that which into a product different from that stipulated qualified for production aid and that which in the processing contract. did not. All undertakings are free to produce the quantity of processed tomato products which they deem appropriate, but produc- tion aid will be paid only for those covered by the relevant quantities within its quota. Nevertheless, production in excess of the quota is also taken into account by the Member State for the purpose of dividing the quota among undertakings.

16. The limitation of production aid for pro- 14. As the reply to the first question is in the cessed tomato products by means of a quota negative, it is not in principle strictly neces- system is entirely compatible with Article sary to reply to the second question from the 40(3) of the Treaty, as was the system of Tribunale di Piacenza. However, I think it guarantee thresholds previously applied as a may be useful for the national court, when means of stabilizing production in this com- determining the main action, to know mon market organization, 7 because both whether Article 1(2) of Regulation N o seek to maintain a balance between supply 668/93, as interpreted above, results in any and demand, which is one of the objectives kind of discrimination which would render it of the common agricultural policy as laid incompatible with Article 40(3) of the EEC down by Article 39(l)(c) of the Treaty. Treaty.

15. In this connection the Court has consis- 17. The machinery for transfers between the tently held that the principle of non- different quantities within the quotas discrimination between producers or con- sumers within the Community laid down by Anicie 40(3) of the Treaty is a specific expression, within the ambit of agricultural 5 — See Joined Cases C-267/88 and C-285/88 Wuidart [1990] ECR 1-435; Case C-311/90 Hierl ECR 1-2061; and Case policy, of the general principle of equal treat- C-309/89 Codomiu v Council ECR 1-1853. ment which is one of the fundamental prin- 6 — See Hierl, paragraph 19, and Case 179/84 Bozzetti E C R 2301. ciples of Community law. This principle 7 — See Case C-27/90 SITPA ECR 1-133.

A r t i c l e 1(2) of C o u n c i l R e g u l a t i o n ( E E C ) N o 668/93 of 17 M a r c h 1993 o n t h e i n t r o d u c t i o n of a limit t o t h e granting of p r o d u c t i o n aid for processed t o m a t o p r o d u c t s m u s t b e i n t e r p r e t e d as meaning t h a t transfers of fresh t o m a t o e s b y p r o - cessing u n d e r t a k i n g s f r o m the q u o t a f o r peeled t o m a t o e s t o t h e q u o t a s for c o n c e n - t r a t e o r o t h e r p r o d u c t s d o n o t affect t h e following m a r k e t i n g year in such a w a y t h a t t h o s e u n d e r t a k i n g s k e e p intact their q u o t a for peeled t o m a t o e s and at the same t i m e increase t h e i r q u o t a s for concentrate o r o t h e r p r o d u c t s in p r o p o r t i o n t o t h e transfers effected.

T h e p r e s e n t case has revealed n o factor of s u c h a k i n d as t o affect the validity of A r t i c l e 1(2) of R e g u l a t i o n N o 668/93.

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