T-117/95

JUDGMENT OF 30. 1. 1997 — CASE T-117/95

J U D G M E N T O F T H E C O U R T O F FIRST INSTANCE (Fifth Chamber) 30 January 1997 *

In Case T-117/95,

N . C o r m a n SA, a company governed by Belgian law, established in Goé- Limbourg (Belgium), represented by Lucette Defalque, of the Brussels Bar, with an address for service in Luxembourg at the office of Fiduciaire Myson SARL, 1 Rue Glesener,

applicant,

v

T H E C O U R T O F FIRST INSTANCE O F T H E E U R O P E A N C O M M U N I T I E S (Fifth Chamber),

composed of: R. Garcia-Valdecasas, President, J. Azizi and M. Jaeger, Judges,

Registrar: J. Palacio, Administrator,

having regard to the written procedure and further to the hearing on 5 November 1996,

gives the following

Judgment

'Subject to the conditions laid down hereinafter, butter bought in pursuant to Article 6(1) of Regulation (EEC) N o 804/68 and taken into storage before a date to be determined shall be sold and special aid shall be granted for the use of butter and concentrated butter as referred to in the second paragraph.

Only the following may qualify for aid:

(a) butter which, in the Member State of manufacture, meets the definition and grading requirements laid down in Article l(3)(b) of Regulation (EEC) N o 985/68 and the packaging of which is marked accordingly;

(b) concentrated butter produced from butter or cream at an establishment approved in accordance with Article 10 and meeting the specifications laid down in Annex IV.'

4 When Regulation N o 570/88 came into force, Article 1 of Council Regulation (EEC) N o 985/68 of 15 July 1968 laying down general rules for intervention on the market in butter and cream (OJ, English Special Edition 1968 (I), p. 256), as amended by Council Regulation (EEC) N o 2714/72 of 19 December 1972 (OJ, English Special Edition 1972 (28-30 December), p. 15) and Council Regulation (EEC) N o 1897/87 of 2 July 1987 (OJ 1987 L 182, p. 35), was worded as follows:

'(1) Intervention agencies shall buy in only such butter as:

(3) Until the date referred to in paragraph 2, the butter referred to in paragraph 1 :

(a) must have the following composition and characteristics:

(aa) — a minimum butterfat content, by weight, of 82%,

— a minimum water content, by weight, of 16%,

— be manufactured from sour cream;

or

graded "beurre marque de contrôle", as regards Belgian butter;

(...)'.

5 Article 9 of Regulation N o 570/88 also provided that it was possible for aid to be granted 'if the concentrated butter or the butter, to which tracers have or have not been added, is incorporated at an intermediate stage in products other than the final products and in an establishment other than that of final processing'. It sub- jected that aid to various conditions concerning, inter alia, approval of the estab- lishment of intermediate processing and the requirement that the packaged product should be marked 'intermediate product'.

6 Regulation N o 570/88 was amended by Commission Regulation (EEC) N o 1813/93 of 7 July 1993 (OJ 1993 L 166, p. 16) which entered into force on 1 August 1993. The second recital in the preamble to this regulation noted that the concept of intermediate products had been interpreted differently in some Member States, making it necessary to lay down criteria to allow those products to be iden- tified in an objective and transparent manner.

7 Accordingly, Regulation N o 1813/93 inserted into Article 9 of Regulation N o 570/88 the requirement that the intermediate products themselves must be approved, approval being subject to the obligation to show that incorporation into those intermediate products is justified for the manufacture of the final products.

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9 The purpose of that new article is to define which products made from concen- trated butter may be regarded as intermediate products and as eligible for the aid provided for by Regulation N o 570/88 in respect of those products.

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10 Article 1 of Commission Regulation (EEC) N o 2443/93 of 2 September 1993 (OJ 1993 L 224, p. 8), applicable as from 1 August 1993, amended Regulation N o 570/88 in the following terms:

'The introductory phrase to the second paragraph of Article 1 of Regulation (EEC) N o 570/88 ("Only the following may qualify for aid:") is replaced by the following:

"Notwithstanding Article 9a(a), only the following may qualify for aid:".'

13 As a result of that amendment, the new Article 1(a) of Regulation N o 570/88 pro- vides:

'(a) [B]utter produced directly and exclusively from pasteurized cream and which, in the manufacturing Member State, satisfies the conditions laid down in Article 6(2) of Regulation (EEC) N o 804/68 and the requirements of the national quality class listed in Annex II to Regulation (EC) N o 454/95 and the packaging of which is marked accordingly.'

1 4 Commission Regulation (EC) N o 454/95 of 28 February 1995 laying down detailed rules for intervention on the market in butter and cream, referred to in the last-mentioned provision, replaced in part Regulation N o 985/68, which was repealed as from 1 March 1995 by Council Regulation (EC) N o 2807/94 of 14 November 1994, amending Regulation (EEC) N o 804/68 on the common organi- zation of the market in milk and milk products (OJ 1994 L 298, p. 1). As regards Belgian butter, Annex II thereto lists: 'beurre de laiterie; qualité extra; melker- ijboter; extra kwaliteit'.

The facts

15 The applicant, a company governed by Belgian law, forms part of a French dairy group. Since 1959 it has been developing technical butter-making processes. Its work in that field has enabled it since 1987 to manufacture its first 'technical butter'.

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21 According to the applicant, tracers have certain disadvantages linked to their taste and smell. For that reason, since 1 August 1993, the date on which Article 9a imposing the requirement of adding tracers to the products concerned — including the applicant's technical butter — was inserted into Regulation N o 570/88, the applicant has endeavoured to seek from the Belgian authorities recognition of its technical butter as 'beurre marque de contrôle', so as to be able to carry on mar- keting its products under Regulation N o 570/88 and to qualify for the aid pro- vided for by Article 1(a).

22 In 1990 and 1991, the French customs authorities informed the Commission that a Belgian company — the applicant — had brought into France butter with a but- terfat content of 82% reconstituted out of concentrated butter and that it was claiming in respect of that product the aid provided for intermediate products within the meaning of Article 9 of Regulation N o 570/88. They asked the Com- mission to inform them whether such butter could possibly be regarded as an intermediate product within the meaning of that provision.

23 After a negative response at first, the Commission faxed a request for information to the Belgian Ministry of Agriculture on 10 June 1991, stating that in its view reconstituted butter was not eligible for aid under Regulation N o 570/88 but that it was awaiting the result of its enquiry.

24 By fax of 1 July 1991, the Belgian Ministry of Agriculture informed the Commis- sion that the Belgian supervisory authorities considered that the product in ques- tion was to be regarded as an intermediate product in accordance with Article 9 of Regulation N o 570/88. To that fax it annexed a description of the manufacturing process and the product's specifications. This described the product as 'an inter- mediate product with a butterfat content of 82%, specially adapted for the multi- layered pastry industry (small pastry cakes and flaky pastries) for cakes and bis- cuits etc.'. It was obtained after several stages including physical fractionation and

From the terms of that fax we understand that the product in question may be considered to be an intermediate product and that, so long as the rules of the Member State of production so permit, there is nothing to prevent that product (in this case recomposed butter) from being designated as butter (the Royal Decree of 6 May 1988, in particular Article 1, includes butter obtained by recomposition within the definition of butter).

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However, it does not qualify for classification in one of the categories referred to in Article l(3)(b) of Regulation (EEC) N o 985/68, that is to say, as regards Bel- gium, "beurre marque de contrôle", and consequently it cannot inter alia be bought in or be the subject of a private storage contract.

27 O n 28 February 1994, despite the statement contained in that fax, the technical butter manufactured by the applicant was classified by the Belgian authorities as 'beurre marque de contrôle' in the category 'beurre de laiterie: qualité extra'. Accordingly, the applicant's technical butter, which had hitherto qualified for the aid under Article 9a of Regulation N o 570/88, began to receive Community aid under Article 1 of Regulation N o 570/88, although there had not been any amend- ment of the applicable Community rules or any change in the product involved.

28 According to Article 2 of Regulation N o 570/88, the aid is to be granted by means of a standing invitation to tender organized by the intervention agency of each Member State.

32 The parties presented oral argument and replied to the Court's questions at the hearing in open court on 5 November 1996.

33 The applicant claims that the Court should:

— annul Article 1(4) of the contested regulation;

— order the defendant to pay the costs.

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CORMAN v COMMISSION

Arguments of the parties

36 The Commission maintains that the action is inadmissible in that the applicant has no legal interest in bringing proceedings.

37 According to the Commission, Article 1(a) of Regulation N o 570/88, as amended by Article 1 (4) of the contested regulation, merely confirms the previous situation in which butter, in order to qualify for aid, must be produced from cream. In accordance with the system applicable before the disputed amendment, butter, as one of the primary products referred to in Article 1 of Regulation N o 570/88, had, 'in the Member State of manufacture [to meet] the definition and grading require- ments laid down in Article l(3)(b) of Regulation (EEC) N o 985/68' and its

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packaging 'marked accordingly'. That provision of Regulation N o 985/68 requires Belgian butter to be of the kind graded 'beurre marque de contrôle'. However, in accordance with Article 1 of Regulation N o 570/88, the butter must in addition correspond to a certain definition of butter. That definition is set out in Article l(3)(a) of Regulation N o 985/68, which requires butter to be made of cream, either sweet or sour.

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CORMAN v COMMISSION

That view was supported by the fact that one and the same product cannot, under one and the same regulation, be regarded as both a primary and an intermediate product. In those circumstances, a Member State, bound by Community law as regards the exclusion of recomposed butter from Article 1(a) of Regulation N o 570/88, cannot, merely by unilaterally conferring a certain grade, make such butter eligible for the aid referred to in that provision, and exempt it from the require- ment that it should be traced, as laid down in Article 9a of that regulation.

41 In order to permit products receiving aid to be easily identified, and to combat fraud, the addition of tracers gives products a particular taste or colour. Neverthe- less, Regulation N o 570/88 gives traders a fairly wide choice, since it requires two tracers to be chosen from three chemical and five organoleptic tracers. In practice, tracing ought not to pose any problems, since in the case of cream, which is a highly sensitive product, producers and consumers appear to accept tracing. The designation 'intermediate product' should not cause problems either for an under- taking whose principal customers, according to its own statements, are specialist firms. They assess the product in terms of its own technical characteristics and are not in any way deterred by the designation complained of.

42 According to the Commission, even on the assumption that the other conditions are satisfied as far as concerns the applicant, the contested act is only a confirma- tory measure and an action to annul it is inadmissible (see Joined Cases 166/86 and 220/86 Irish Cement v Commission [1988] ECR 6473, paragraph 16).

44 Nor, in the Commission's view, does the applicant have an individual interest. The contested provision is a rule of entirely general application and excludes (or rather, confirms the exclusion of) any trader who does not satisfy the objective condi- tions, in particular that of producing butter directly and exclusively from cream. It points out that while the applicant, a large dairy firm at national level, may be the only trader manufacturing the specific product BITA, it is far from being the only undertaking to manufacture recomposed butter on the Community market. In the circumstances of the case, the measure applies to any trader who does not use fresh cream and it is perfectly suited to the purpose of the act, which is to encourage a rapid turnover of stocks and at the same time to take measures to combat fraud. That is why, by contrast with the situation which gave rise to Case C-309/89 Codorniu v Council [1994] ECR I-1853, invoked by the applicant, the latter may not rely on the existence of an individual right of which it has been deprived by the Commission.

45 In reply to the applicant's argument that, unlike its competitors, it was not in a position to secure a systematic supply of milk or cream, the Commission observes that the applicant has not furnished proof of its allegedly special situation. The defendant concedes that an undertaking which is not involved in the collection of milk must by definition be dependent on the fluctuating state of the market, at least in respect of the quantities it is unable to obtain from within its own group. Prudent traders would endeavour to guard against that situation by means of long- term contracts and would diversify their sources of supply.

48 According to the applicant, the new conditions laid down for aid for butter intended for use in the manufacture of pastry products are definitely not confirma- tory of an earlier measure, as ever since the common organization of the market in milk was established, the system of buying-in for public storage has always been different from the system of Community aid for the use of butter in various sec- tors, in particular in the manufacture of pastry and other foodstuffs. The purpose of public storage is to preserve the quality of the butter by providing excellent

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storage conditions. By contrast, the purpose of the regulations concerning the disposal of butter is to promote possible outlets for butter and, in the case of butter used in the manufacture of pastry products, to compete with vegetable oils.

49 The Community rules do not contain a single definition of butter according to which it must be made directly and exclusively from cream. For example, the defi- nition of butter for export appearing in the Combined Nomenclature is different from that relied on by the Commission. Accordingly, it is necessary to look for the definition of butter which applies in this case, in the specific context of butter for use in the manufacture of pastry products, ice-cream and other foodstuffs, that is to say in the context of Regulation N o 570/88 which, before the amendment intro- duced by the contested regulation, merely required butter to meet the definition and the grading requirements laid down in Article l(3)(b) of Regulation N o 985/68 in the Member State of manufacture.

52 The applicant acknowledges that recomposed butter can also be regarded as an intermediate product within the meaning of Article 9a of Regulation N o 570/88, but it points out that under the Community rules intermediate products must be traced and its product has to be called an 'intermediate product'. In its view, Article 9a ought also to authorize a non-traced version of recomposed butter and the use of the designation 'butter', although it would be easier and clearer simply to authorize the product under Article 1 of that regulation. It claims that tracing always leaves a characteristic taste or colour, for which reason it is not popular with customers. Both tracing and the designation 'intermediate product' have caused the applicant to lose numerous customers, major industrial manufacturers who have since turned to competitors producing butter by the traditional churning method or to those producing margarine. Finally, the designation 'intermediate product' has adverse effects on exports from the Community of goods which incorporate the applicant's product.

53 The applicant considers that it is directly concerned by the contested measure since no implementing measure is required and the act entered into force on 1 March 1995.

54 It also considers itself to be individually concerned by the contested measure. There are a number of features which distinguish the applicant from its competi- tors. It is the only undertaking in the European Union to process butterfat without being tied in any way to a dairy. That leads to a significant result in the circumstances of this case, namely the practical impossibility of obtaining enough cream to supply its factory plant, given that its annual production requires

56 The applicant draws attention to another specific feature. It is the only undertak- ing in the European Union which operates almost exclusively and primarily in the butterfat sector, whereas that is a secondary activity for its competitors. Conse- quently, it is the only undertaking in the European Union to have invested heavily in research and development, enabling it to discover a secret process for fractionat- ing, recomposing and standardizing butter. As a result of that discovery, it invested in production lines in order that they could process butter (which requires safety measures in processing on account of bacteriological risks) and produce a perfectly standardized 'technical' butter with a fat content of 82%. The product is manufac- tured from a mixture of which 65% is butter of the highest quality and 35% is cream. The applicant states that it would be impossible to operate its plant with just one of the two ingredients. Moreover, using cream alone does not make it pos- sible to obtain standardized butter since the consistency of cream cannot be con- trolled and varies from season to season. Furthermore, cream can be kept for a short time only whereas the object of the kind of production in which the appli- cant is engaged is precisely to regulate the butter market which undergoes seasonal variations in terms of both quantity and quality, whilst household consumption is linear. That regulation of the market requires storage periods which can be con- templated only for butter and not for cream.

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60 The applicant concludes that those highly specific circumstances differentiate it from all other traders in the same sector with respect to the contested provision, for which reason its application is admissible, particularly in the light of recent decisions of the Court of Justice (Codorniu v Council, cited above, paragraph 19), according to which even if the contested provision is, by nature and by virtue of its scope, of a legislative nature in that it applies to the traders concerned in gen- eral, that does not prevent it from being of individual concern to some of them.

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Findings of the Court

61 First of all it is necessary to consider the technical question of the definition of the applicant's product in the light of Regulation N o 570/88.

62 According to the description given by the applicant, the product in issue consists of 82% butterfat, 16% water and 2% fat-free dried milk extract. The raw materials used — 65% butter and 35% cream — are first concentrated and the pure fat so obtained, that is to say the concentrated butter, then undergoes fractionating and recomposition in order to yield BITA. Accordingly, the applicant's product is a product which has a butterfat content of at least 82% and is manufactured exclus- ively from concentrated butter.

67 In addition, the requirement introduced by Regulation N o 1813/93 that the prod- ucts referred to in Article 9a should be traced is not in any way affected by the regulation in dispute. The applicant cannot therefore challenge that requirement in this action.

68 The same holds for the designation 'intermediate product', which is merely a con- sequence of the fact that the product described in Article 9a is one of the 'inter- mediate products referred to in Article 9', which Regulation N o 570/88 has required to be marked 'intermediate product' since it entered into force.

69 The fact remains that the applicant's product, BITA, is a product referred to in Article 9a, and not a product referred to in Article 1, of Regulation N o 570/88. Since the regulation at issue amended only Article 1, it does not concern the inter- mediate product manufactured by the applicant.

70 That conclusion is not invalidated by the applicant's argument that the grade con- ferred by the Belgian authorities has the effect of bringing its product within the scope of Article 1 of Regulation N o 570/88. In response to a question from the Court at the hearing, the applicant has acknowledged that the composition of the product had undergone absolutely no change, but that the reason for the Belgian grading was the amendment of the Belgian technical regulation concerning butter and the opinion which emerged from the discussions that led to the adoption of Regulation N o 2991/94, which contains a much wider definition of butter than that in Regulation N o 570/88. The fact that an intermediate product may be

74 Prior to the amendment made by the contested regulation, the product referred to in that article was butter which met the definition and grading requirements laid down in Article l(3)(b) of Regulation N o 985/68 in the Member State of manu- facture.

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75 Although Article 1(a) of Regulation N o 570/88 thus makes express reference only to Article 1(3)(b) of Regulation N o 985/68 on the grading of butter, it requires that the product should meet a certain 'definition' as well.

76 It should be borne in mind that Article 1(1 )(b) of Regulation N o 985/68 provides:

'Intervention agencies shall buy in only such butter as:

'definition' to which it does refer is that laid down in Article 1(3)(a) of Regulation N o 985/68.

79 That definition refers to technical conditions for the production and composition of butter. In particular, it refers to the production of butter from cream, either sweet or sour.

80 Accordingly, the term 'butter' used in Article 1(a) of Regulation N o 570/88 has a precise meaning as regards the technical characteristics of butter eligible for the grant of aid under that article, characteristics which the applicant's product does not possess since it has always been manufactured from butter (65%) and from cream (35%).

84 The application must therefore be dismissed as inadmissible, without there being any need to accede to the applicant's request for the production of documents or to consider further the other arguments put forward by the applicant and the Commission.

Costs

85 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the applicant has been unsuccessful, and the Commission has applied for costs, the applicant must be ordered to pay the costs.

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O n those grounds,

H. Jung R. Garcia-Valdecasas

Registrar President

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