C-14/01

NIEMANN

O P I N I O N OF ADVOCATE GENERAL LÉGER delivered on 27 June 2002 1

1. This reference from the Verwaltungs- regulation of prices, aids for the production gericht (Administrative Court) Hannover and marketing of the various products, (Germany) for a preliminary ruling asks the storage and carryover arrangements and Court to assess the validity of Regulation common machinery for stabilising imports (EC) No 2799/1999 2and its annexes by or exports. reference to Article 11(1) of Regulation (EC) No 1255/1999 3 and Article 34(2), second subparagraph, EC, and to general principles of law including, in particular, the principle of the protection of legitimate The common organisation shall be limited expectations. to pursuit of the objectives set out in Article 33 and shall exclude any discrimi- nation between producers or consumers within the Community.

Legal context

2. Under Article 34(2) EC:

3. Regulations Nos 1255/1999 and 2799/1999 also form part of the legal context. 'The common organisation established in accordance with paragraph 1 may include all measures required to attain the objec- tives set out in Article 33, in particular

6. Article 15 of the same regulation pro- vides as follows:

For the purposes of this article, buttermilk and buttermilk powder shall be regarded as skimmed milk and skimmed-milk powder.

'The following shall be adopted in accord- ance with the procedure laid down in Article 42: [ 5 ]

2. Aid amounts shall be fixed taking into account the following factors:

(a) the detailed rules for the application of this chapter and, in particular, the conditions under which the aids set out therein may be granted, — the intervention price for skimmed- milk powder, 5 — Article 42 describes the procedure to be followed and the respective roles of the Commission and the committee responsible for delivering an opinion to ensure the appli- 4 — Fourth recital. cation of Regulation No 1255/1999.

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7. Regulation No 2799/1999 deals more specifically with the system of aid for skimmed milk and skimmed-milk powder intended for processing and use as animal 10. In the 11th recital, the Commission feed. states its opinion that the aid measure for skimmed milk provided for by Regulation (EEC) No 1105/68 7should be abolished for the following reasons. First, the Com- mission considers that the grant of aid for skimmed milk gives rise to many problems, 8. This regulation lays down detailed rules particularly in relation to checks on bene- for applying Regulation No 1255/1999 ficiaries. Second, the aid scheme has now with regard to the grant of aid for skimmed only a marginal impact on the balance of milk and skimmed-milk powder intended the market in milk products because of the for animal feed.6 sharp fall in the production of skimmed milk. Finally, the market in skimmed milk will continue to be supported by the aid 6 — Article 1(a) of Regulation No 2799/1999 states that the regulation lays down detailed rules for applying Regulation No 1255/1999 as regards 'the grant of aid for skimmed milk, skimmed-milk powder, buttermilk and buttermilk 7 — Regulation (EEC) No 1105/68 of the Commission of 27 July powder intended for use as animal feed under Article 11 of 1968 on detailed rules for granting aid for skimmed milk for that regulation'. use as feed (OJ, English Special Edition 1968 (II), p. 379).

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OPINION OF MR LÉGER — CASE C-14/01

granted when skimmed milk is incorpor- The application related to January 2000 ated into compound feedingstuffs. and concered, for the period in question, 6 695 kg of skimmed milk. The total aid claimed was DEM 759.47.

NIEMANN

because Regulation No 1255/1999 The question referred for a preliminary provided for aid for both skimmed- ruling milk powder and skimmed milk;

18. Consequently the national court decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

— the sudden abolition of subsidies was contrary to the principle of the pro- tection of legitimate expectations. As Regulation No 2799/1999 was pub- 'Does Regulation (EC) No 2799/1999 in lished only 31 December 1999, pro- conjunction with its annexes contravene: ducers had no time to adjust to it.

(a) Article 11(1) of Regulation (EC) No 1255/1999,

16. By decision of 22 February 2000, the appeal against the decision of 13 January 2000 was dismissed by the Bezirksregie- rung Hannover, which stated that it was (b) the second subparagraph of Arti- bound to apply Regulation No 2799/1999. cle 34(2) EC, and

Assessment both liquid milk and milk powder. By abolishing aid for skimmed milk and liquid buttermilk in Regulation No 2799/1999, the Commission modified the scope of that market organisation and thereby contra- vened Regulation No 1255/1999. 19. The national court's question asks, first, whether the Commission exceeded the inherent limits on its power of imple- mentation when giving effect to Regulation No 1255/1999 by deciding to abolish aid for skimmed milk and liquid buttermilk intended for feeding animals, secondly, 21. The Commission contends that the whether that abolition of such aid infringes regulation empowers it to subsidise milk the principle of non-discrmination and, intended for animal feed, provided that it is thirdly, whether that abolition is contrary in the form of milk powder or is part of a to the general principles of law and the mixture or compound feedingstuff. The principle of the protection of legitimate Commission considers that the Council expectations. has power to lay down the essential rules in the matter of agricultural policy, but that it, the Commission, is responsible for determining the detailed rules of appli- cation. The power delegated to the Com- mission must therefore be interpreted broadly.

The Commission's power of implemen- tation when giving effect to Regulation No 1255/1999

the extent of the Commission's implement- 25. In the light of this case-law, I consider ing powers regarding the common agricul- that the Commission did not exceed the tural policy, reference must be made to the inherent limits on the exercise of its power context of the EC Treaty, in which of implementation when giving effect to Article 211 EC 10 must be placed, and from Regulation No 1255/1999. which it follows that the concept of imple- mentation must be given a wide interpre- tation. Since only the Commission is in a position to keep track of agricultural mar- ket trends and to act quickly when necess- ary, the Council may confer on it wide powers of discretion in that sphere and when it does so, the limits of those powers 26. The reason is, as the Commission must be determined in the light of the correctly notes, that Article 11(1) of that essential general aims of the market organi- regulation provides that aid is to be granted sation. 11 for skimmed milk and skimmed-milk powder intended for use as feedingstuffs only subject to certain conditions. 13

2 7 . M o r e o v e r , as the Commission explained at the public hearing the Council 24. In this connection, it must be observed empowered it to prescribe the conditions to that the Court distinguishes between essen- which the grant of aid for skimmed milk tial rules, which are the Council's preserve, and skimmed-milk powder is subject. and those which, being merely of an implementing nature, may be delegated to the Commission. Only provisions intended to give concrete shape to the fundamental guidelines of Community policy must be classified as essential rules. 12

29. This analysis of Articles 8 and 9 of 32. I would point out that the Court has Regulation No 2799/1999 shows that the observed that the Community institutions Commission intended to modify the con- enjoy wide discretion in the area of the ditions for granting aid to skimmed milk by common agricultural policy corresponding making them more restrictive. to the responsibilities given to them by the EC Treaty. 14 In cases involving such a discretion, the Community Court must restrict itself to considering whether the exercise of that discretion is vitiated by a manifest error or constitutes a misuse of power or whether the Community institu- tions clearly exceeded the bounds of their 30. Similarly, the regulation seems to indi- discretion. 15 cate that only skimmed milk previously processed into compound feedingstuffs or into skimmed-milk powder qualifies for the aid provided for by Regulation No 1255/1999.

34. Regulation No 1255/1999 expressly 36. In those circumstances, it does not seem provides that the amount of aid is to be unreasonable for the Commission to have calculated taking account of a number of made the grant of aid conditional upon economic factors relating to the milk skimmed milk for animal feed being pro- market. These are to include, under the cessed beforehand into compound feeding- second indent of Article 11(2), 'develop- stuffs or milk powder. ment of the supply situation as regards skimmed milk and skimmed-milk powder and developments in the use thereof as feed'. However, the Commission considers that the use of skimmed milk in the liquid state for animal feed has dwindled in market terms. 16 There is no justification 37. For my part, therefore, I consider that for continuing assistance to the skimmed the Commission did not exceed the milk market. inherent limits on the exercise of its power of implementation. I consider that the exclusion of skimmed milk which is not processed into compound feedingstuffs or milk powder from the system of aid laid down by Regulation No 1255/1999 does not amount to modifying the scope of the Regulation.

skimmed-milk powder differently from 42. However, there are two objective dif- liquid skimmed milk. 18 It considers that ferences which seem to justify treating them there is no fundamental difference between differently. First, skimmed milk is more skimmed milk and skimmed-milk powder perishable than milk powder. Con- used for feeding animals because skimmed- sequently, skimmed milk cannot be pre- milk powder is nothing other than served in the same way as milk powder. skimmed milk in dried form. 19 According Secondly, skimmed milk is not subject to to Niemann, the Commission has infringed the same checks as milk powder. As the the principle of non-discrimination. Commission correctly observes, because liquid skimmed milk is perishable it must be checked at relatively close intervals in dairies and by the veal farmers who use that type of milk. 21 As a result, the cost of these checks is much higher than that of checks on milk powder.

40. The Court has consistently held that the prohibition of discrimination is merely a specific expression of the general prin- ciple of equal treatment, which requires that comparable situations not be treated differently and different situations not be treated alike unless such different treatment is objectively justified. 20 43. The Commission explains the differ- ence in treatment on the ground that the skimmed-milk market has constantly dim- inished in recent years and the continuance of aid entails a high cost which is difficult to justify.

41. In the present case, skimmed milk and skimmed-milk powder are certainly two comparable products.

46. In those circumstances I conclude that Regulation No 2799/1999 is valid with reference to Article 34(2) EC.

49. I do not agree.

Infringement of the principle of the pro- tection of legitimate expectations 50. The Court has consistently held that the principle of the protection of legitimate expectations may be invoked as against Community rules only to the extent that the Community itself has previously cre- 47. In the order for reference the national ated a situation which could give rise to a court refers to the general principles of legitimate expectation. 22 Community law and the principle of the protection of legitimate expectations in particular. I find that, in the actual grounds 22 — Case C-177/90 Kühn [19921 ECR I-35, paragraphs 13 and of the order for reference, there are rea- 14; Case C-63/93 Duff and Others [1996] ECR I-569, paragraph 20; Case C-22/94 Irish Farmers Association and soned arguments concerning only the valid- Others [1997] ECR I-1809, paragraph 19; Case C-107/97 ity of Regulation No 2799/1999 in the light Rombi and Arkopharma [2000] ECR I-3367, paragraph 67; and Case C-179/00 Weidacher [2002) ECR I-501, of the principle of the protection of legit- paragraph 31.

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OPINION OF MR LÉGER — CASE C-14/01

51. In the sphere of the common organi- subsidised volume of skimmed milk on the sation of the markets, whose purpose internal market). 25 involves constant adjustments to meet changes in the economic situation, econ- omic agents cannot legitimately expect that they will not be subject to restrictions arising out of future rules of market or structural policy.

Conclusion

57. Consequently, I propose that the Court reply as follows:

Examination of the question referred has revealed nothing capable of affecting the validity of Commission Regulation (EC) No 2799/1999 of 17 December 1999 laying down detailed rules for applying Regulation (EC) No 1255/1999 as regards the grant of aid for skimmed milk and skimmed-milk powder intended for animal feed and the sale of such skimmed-milk powder.

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