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3. Article 23 of Regulation No 805/68, as amended by Regulation No 1261/71, 5pro- vides: 'In order to take account of the restrictions on free circulation which may result from the application of measures for combating the spread of diseases in ani- mals, exceptional measures of support for the market affected by those restrictions may be taken in accordance with the 1 — Original language: English. 2 — Council Directive 90/425/EEC of 26 June 1990 concerning veterinary and zoorechnical checks applicable in intra- Community tradein certain live animals and products with 4 — Regulation (EEC) No 805/68 of the Council of 27 lune a view to the completion of the internal market, OJ 1990 1968 on the common organisation of the market in beef and L 224, p. 29. veal, OJ, English Special Edition 1968(1), p. 187 3 — Commission Regulation (EC) No 717/96 of 19 April 1996 5 — Regulation (EEC) No 1261/71 of the Council of 15 June adopting exceptional support measures for the beef and veal 1971 on exceptional measures to be taken in different market m Belgium, France and the Netherlands, OJ 1996 agricultural sectors arising from health protection problems, L 99, p. 16. OJ, English Special Edition 1971(11), p. 377.

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procedure provided for in Article 27. 6 an epizootic disease, they shall order Those measures may only be taken in so that the animal or consignment of far as, and for as long as, is strictly animals be put in quarantine at the necessary for the support of that market.' nearest quarantine station or slaught- ered and/or destroyed.

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without delay. Under Article 10(4), the derived products from the United Kingdom Commission is required to monitor the to the other Member States. 10 situation and take whatever measures are necessary.

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located in their territory, presented to them serious health concerns then prevalent. On by any producer, which could be proved by 3 April 1996, the Minister for Agriculture, him to have been born in the United Nature Management and Fisheries adopted Kingdom. a decree by virtue of which calves born in the United Kingdom were to be slaughtered 'within a period to be determined by the area director' of the national cattle and meat inspectorate. 11 9. The following paragraphs laid down stringent conditions requiring the animals to be slaughtered and disposed of in such a way as to eliminate any possibility of contamination of products destined for human or animal consumption or use in cosmetic or pharmaceutical products, and subject to permanent supervision and con- trol by the national authorities. 13. The explanatory memorandum to that decree stated: 'the measure entailing the slaughtering of animals is based on Article 8(1)(a) of Directive 90/425/EEC under which the Member States must slaughter and/or destroy animals if, during 10. Article 1(5) provides: 'If the number of a check carried out at the place of desti- animals presented for sale and subsequent nation, the animals are found to come from destruction exceeds the number for which a region contaminated by an epizootic there is capacity to destroy in the Member disease'. State concerned, the competent authority may limit access to this scheme.'

11. Under Article 2, the price to be paid was ECU 2.8 per kilogram live weight, to be cofinanced by the Community at a rate 14. Rules governing the payment of com- of 70%. pensation to the owners of slaughtered calves 12 were also adopted on 3 April. Under those rules as they stood at the material time, compensation was to be ECU 2.8 per kilogram live weight in accordance with Article 2 of Regulation No 717/96. Netherlands legislation

16. The assumption underlying the dispute is that producers normally plan to sell their calves for veal at around the age of six 2. If the answer to the first question is in months and base their economic calcu- the affirmative: does Article 8 of Direc- lations on the weight attained at that age. If tive 90/425/EEC constitute an an imported calf is slaughtered earlier, at a adequate basis for that power? lower weight, the cost price per kilogram (which includes the cost of acquisition and the cost of feeding) will thus be greater since further fattening to normal market- able weight will include only the cost of feeding. If compensation is based on a single rate per kilogram live weight regard- less of the age of slaughter, however, then 3. If the second question is answered in producers whose calves are slaughtered the negative: is there any other basis for earlier may receive proportionally less than that power in Community law?'

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18. Written observations have been sub- interfere with the proper functioning of the mitted by Denkavit, the Netherlands Gov- common organisation. 15 ernment and the Commission, all of whom presented oral argument at the hearing.

20. However, the specific aspect of the first question — whether there must be a Com- munity legislative basis for the Netherlands authorities' competence to determine the date of slaughter of the calves in issue — requires an examination of the legislation Analysis referred to in the second and (implicitly) the third questions. It must be determined whether that legislation regulated the rel- evant matter and/or authorised such national powers and whether the assump- tion of such competence was required by or at least in conformity with the Community measures. Need for a legal basis in Community law

22. A different basis might have been found 24. I do not however agree with Denkavit's in Article 10(1) of the same directive, view that Article 8(1 )(a) concerns only live Denkavit submits, had it not been for the infected animals or animal products from a fact that the fourth subparagraph of that contaminated region, to the exclusion of provision authorises only 'interim protecti- live animals from a contaminated region, ve' measures. 16 Slaughter is however a not proved to be infected. definitive, and not an interim or protective, measure. Even if the rules in issue could be regarded as interim measures, they could only be taken and remain valid pending the adoption of measures by the Commis- sion — in this i n s t a n c e R e g u l a t i o n No 717/96. 25. Whilst a literal reading does go some way to support that view, it also provides evidence for a contrary interpretation. The only measures which the provision specifi- cally authorises — indeed requires — are the quarantining or slaughter and/or destruction of 'the animal or consignment 23. In my view, it is clear that Directive of animals'. There is no indication of any 90/425 delimits the circumstances in which action which may be taken with regard to Member States may without specific Com- products. Thus, although a 'region con- munity authorisation order the slaughter taminated by an epizootic disease' is men- and destruction of live animals imported tioned, on the most literal interpretation no from other Member States. If the circum- measures are authorised with respect to stances referred to in Article 8(1 )(a) are either animals or products coming from present, they are obliged either to place the such a region. Such an interpretation is animals in quarantine or to have them unhelpful and a broader approach is clearly slaughtered. If the circumstances are those called for. of Article 10(1), there is a broader dis- cretion to take interim protective measures on health grounds. In using the powers thus conferred upon them, the Member States

27. First, two separate directives were adopted of which, as the Commission has 29. Nevertheless, the scope of Directive pointed out, Directive 89/662 deals prin- 90/425 is not confined to animals alone; it cipally 19 with animal products and Direc- explicitly covers animal products also, 22 tive 90/425 principally with live animals. and there is no reason to suppose that Second, the provision was extended to products were meant to be excluded from imports which might present a risk because Article 8(1)(a), where they are specifically they came from an area contaminated by mentioned. Nor however can live animals disease, regardless of whether the presence be excluded from that provision. The of the disease could be established in those Commission stated at the hearing that imports. Article 8(1)(a) was intended to be as comprehensive as possible and to cover all possible situations in which it might be necessary to quarantine, or slaughter and destroy, animals or to destroy animal products. I would agree that such a com- prehensive interpretation is the only rea- 28. Articles 7(1)(a) of Directive 89/662 and sonable way to reconcile the rather frag- 8(1)(a) of Directive 90/425 are identical 20 mented literal terms of the provision; in as far as '... or that the products come from other words, it must apply to both products a region contaminated by an epizootic disease, they shall ...'. The former goes on 21 — '... they shall, except as regards animal-health aspects, in the case of products subject to one of the treatments referred to in Article 4 of [Council Directive 80/215/EEC 17 — Proposal for a Council Regulation (EEC) concerning of 22 January 1980 on animal health problems affecting veterinary checks in intra-Community trade with a view intra-Community trade in meat products, OJ 1980 L 47, to the completion of the internal market (COM (88) 383 p. 4], as last amended by [Council Directive 88/660/EEC of final), OJ 1988 C 225, p. 4. 19 December 1988 amending Directive 80/215/EEC on 18 — Cited above in footnote 9. animal health problems affecting intra-Community trade 19 — Or even exclusively, with the possible exception of live in meat products, OJ 1988 L 382, p. 35] order the batch to be destroyed or used in any other way laid down by bivalve molluscs mentioned in Annex B. Community rules.' 20 — Except for the reference to the most recent amendment to Directive 82/894, which had changed between the dates of 22 — The preamble, enacting terms and annexes all refer to both adoption of the two directives. categories.

30. The slaughter and destruction of ani- mals from a contaminated region, even if they show no signs of disease, is clearly a desirable action to authorise in the context of the provision, since there may well be circumstances in which slaughter and destruction are necessary with a view to preventing the spread of a particularly contagious or infectious disease. In the 32. Article 8(1 )(a) of Directive 90/425 thus specific circumstances of the BSE crisis in I consider provided a sufficient general 1996, when the risk was perceived of a legal basis in Community law for the fatal and particularly distressing disease Netherlands authorities to order the being transmitted to humans but there was slaughter and destruction of calves from a great uncertainty as to the precise mode of region contaminated by BSE, and it was transmission among cattle and the duration expressly on that basis that the Netherlands of the incubation period, such measures rules were adopted. seem fully justified. 23

the measure is met — Member States must 36. One problem of interpretation has been be free to decide on that timing, since raised in the context of the regulation, that otherwise their power to order the of the significance to be attached to the slaughter would be severely impaired. term 'presented' in Article 1(1). In Denka- vit's view, that term implies that the pro- ducer must be entitled to choose the moment of presentation, on the basis of both the literal wording — in Dutch, the phrase used is 'voor verkoop... aangebo- den' (literally 'offered for sale') although 34. That being so, it is not necessary to Denkavit also stresses the voluntary consider in detail the fourth subparagraph element which it considers to be inherent of Article 10(1) of the directive. However, in the French 'présenté' or the English two points may be made. On the one hand, 'presented' — and the scheme of the regu- Denkavit is misguided in claiming that lation, in which the fixed rate of compen- slaughter cannot be an 'interim protective' sation is based on prices of carcases measure. Those words need not be con- observed on the market, that is to say strued here with the sense of 'reversible'. fully-fattened carcases. Slaughter of certain animals may be under- taken as a temporary step pending the introduction of other less far-reaching methods of containment. On the other hand, it is true that under Article 10(1) the Member State of destination is auth- orised to take measures only until the Commission has acted — which, in this 37. First of all, I agree with the Commis- case, it did by adopting Regulation sion that Article 1(1) clearly empowers the No 717/96. Member States concerned to choose whether the calves in question are to be purchased, and the fact that they must be presented for that purpose does not pre- clude the imposition of an obligation to present. The national authorities were in any event entitled to impose such an obligation — and a time for compliance therewith — pursuant to Article 8(l)(a) of Regulation No 717/96 Directive 90/425.

purchase price to compensate producers 40. Denkavit also argues that, since the (which is not provided for in that directive amount of compensation was fixed on the and which appears from the scheme of the basis of market prices observed for fully- regulation to constitute market interven- fattened calves, since the price paid under tion). It is true that there was also a the scheme was 'to compensate [producers] public-health aim; however, that aim was for not selling the calves in question' and pursued not by authorising slaughter but by since the 'price per kilogram' system may discouraging evasion through the payment not fully offset loss of earnings where of compensation, without which the order- calves are slaughtered before marketable ing of such large-scale slaughter might well age and weight, Regulation No 717/96 have meant that the origin of some animals must have been intended to apply to calves would be concealed. The principal aim when they reached that stage and not was, as is clear from the preamble and from before. the fact that the regulation was adopted on the basis of Article 23 of Regulation No 805/68, to support a market faced with the need to slaughter large numbers of animals in order to restore public con- fidence.

41. Not only is there nothing in the terms of the regulation to support that view 25 but I do not consider it to be a plausible interpretation of the legislative intention.

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prevent the spread of disease. 26 The of the prohibition of discrimination. If Netherlands Government is further right applied in the way sought by the Nether- to point out that the calves in question had lands authorities, it would lead to a grad- in fact no commercial value at all since they uated discrimination between producers could not have been sold on the market whose calves were of marketable weight whereas, as the Commission has noted, the and those who had just commenced the only market value on which compensation fattening process. It should therefore be could be based was that of carcases since interpreted so as to allow all producers to there is no rate for live animals. Clearly, in fatten their calves to marketable weight those circumstances to allow calves to be before slaughter — or indeed, Denkavit fattened to a certain weight in order to suggested at the hearing, should be declared qualify for greater compensation would be invalid as far as the provision for a single (as the Netherlands Government points rate of compensation is concerned. out) a profligate use of Community funds and (as the Commission stresses) incom- patible with any coherent agricultural pol- icy.

45. The Court has consistently held that the general principle of equality is a fun- damental principle of Community law 43. Thus, in my view there is nothing in the which precludes comparable situations terms of Regulation No 717/96 which from being treated in a different manner, either limits the power of the Netherlands and that different situations must not be authorities to order immediate slaughter or treated in the same way, unless the dif- which confers any right on producers to ference in treatment is objectively justi- fatten their calves before slaughter. fied. 27 Denkavit complains that different situations are being treated in the same way without objective justification.

hopes of selling at the market rate than was 49. In those circumstances, I consider it the case for those who had recently pur- was objectively justifiable to adopt a single chased very young calves; moreover, it rate of compensation for all calves, regard- seems to be agreed that the law of (in this less of the age at which they were to be case) increasing returns meant that the slaughtered. Moreover, where all members investment per kilogram live weight was of a class of producers are in situations less for the former than for the latter, which are comparable within certain whereas the overall investment was greater defined limits, there is not necessarily any for the former. However, those differences breach of the principle of equal treatment were all differences of degree. simply because of an absence of differenti- ation on a case-by-case basis. There will always be differences of degree between individual situations, and these must be accommodated within any particular com- pensation scheme.

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calves had reached marketable age and more or less as planned. Each would thus weight would have received approximately receive compensation broadly commensur- the price he would have obtained on the ate with his situation in terms of the market; his production could then continue production cycle.

Conclusion

5 1 . In the light of all the above considerations, I am of the opinion that the Court should give the following answer to the College van Beroep voor het Bedrijfs- leven:

Article 8(1)(a) of Council Directive 90/425/EEC provided a sufficient basis in Community law for the adoption by the Netherlands authorities of rules requiring the slaughter, at a time to be determined by those authorities, of calves born in the United Kingdom, in the context of the BSE crisis in the months following March 1996. Nothing in that directive or in Commission Regulation (EEC) N o 717/96, which authorises the payment of a flat rate of compensation in respect of that slaughter and on which such measures could also be based, in any way limits the discretion of the national authorities to determine the moment of slaughter in those circumstances.