C-236/02

SLOB

OPINION OF ADVOCATE GENERAL JACOBS delivered on 18 September 2003 1

1. In this case, the College van Beroep voor Legal framework het bedrijfsleven (Administrative court for trade and industry), of the Netherlands, asks for the Court's assistance in interpre- ting Article 7(1)(f) of Regulation (EEC) No 536/93 of 9 March 1993 laying down detailed rules on the application of the additional levy on milk and milk prod- 3. In 1984, the Community introduced a ucts. 2 system of milk quotas in order to reduce production surpluses in the market for milk and milk products. Under that system, each Member State is allocated a quota (known as the guaranteed total quantity) which is in turn divided amongst the milk producers active within its territory, each of whom is assigned a maximum amount of milk (known as the individual reference quan- tity) which he may sell in a given year. If a producer exceeds his individual reference quantity, an additional levy must be paid on the excess sales.

things, 'the checks permitting verification (f) producers with reference quantities for of proper collection of the levy'. 4 direct sales shall keep available to the competent authority of the Member State for at least three years stock accounts by 12-month period with details of the quantities, per month and per product, of milk and/or milk 5. Article 4(1) of the regulation, in so far as products sold directly for consump- is relevant, provided as follows: tion... together with registers of live- stock held on holdings and used for milk production, in accordance with Article 4(1) of Council Directive 92/102/EEC, [ 5 ] and supporting docu- ments enabling such stock accounts to 'In the case of direct sales, at the end of be verified. each period referred to in Article 1 of Regulation (EEC) N o 3950/92, the pro- ducer shall make a declaration summaris- ing by product the quantities of milk and/or other milk products sold directly for con- sumption...'

2. ...

6. The relevant provisions of Article 7 of the regulation provided as follows:

3. Member States shall physically verify the accuracy of the accounting with regard to ' 1 . Member States shall take all the verifi- the quantities of milk and milk equivalent cation measures necessary to ensure pay- marketed and, to that end, shall check milk ment of the levy on quantities of milk and transport during collection at farms and milk equivalent marketed in excess of any shall, in particular, check: of the quantities referred to in Article 3 of Regulation (EEC) N o 3950/92. To that end:

(a) ...

4 — The second recital of the preamble to the regulation. 5 — OJ 1992 L 355, p. 32.

7. The Netherlands national law relating to The facts and the question referred additional levies was at the material time partly contained in the Regeling Superheff- ing 1993 (hereinafter the 'Superlevy Regu- lation'). 6 By Article 31(1), a producer selling milk or milk equivalent directly for consumption must keep records in accord- 9. M r Slob (described by the referring ance with the provisions of Article 7 of the court, and hereinafter referred to, as the regulation and 'with the rules adopted by 'appellant') is a milk producer in the the Products Board'. Should a producer fail Netherlands, who was in possession, for to keep such records adequately or at all, the 1996/97 marketing year, of an individ- Article 31(2) empowers the Products Board ual reference quantity for the direct sale of to determine the quantity of milk delivered milk. In May 1997, he made a report to the for sale of its own initiative. defendant, the Productschap Zuivel (Milk Products Board), setting out the amount of milk equivalent which he claimed to have sold directly for consumption on the basis of which the defendant informed him that he was not liable to pay any additional levy. 8. At the material time, the rules adopted by the Products Board, as referred to in Article 31 of the Superlevy Regulation, were contained in the Zuivelverordening 1994, Uitvoering regeling superheffing (1994 Milk Products Regulation, Imple- mentation of the Superlevy Regulation, 10. Following a subsequent inspection of hereinafter referred to as 'the Milk Prod- the appellant's farm, it emerged that the ucts Regulation'). 7 Article 11(1) required a quantity of milk produced, calculated on producer 'to keep records of everything the basis of the size of his dairy herd, regarding his business or holding in such a exceeded the quantity of milk products manner as to enable the production, stock which he claimed in his report to have sold. He explained that he had processed the excess milk into butter in order to obtain 6 — Staatscourant (Government Gazette) 1993, p. 60. buttermilk for use in the manufacture of 7 — PBO-blad 1994, p. 26. cheese. He claimed to have destroyed the

butter itself immediately after production. 13. The appellant appealed to the referring He had kept stock accounts relating to the court, arguing that Article 7(1)(f) did not cheese thus produced but had made no oblige him to maintain records about the record of either the production or the production or destruction of butter not destruction of the butter. offered for direct sale, and that in so far as national law purported to impose a more extensive reporting requirement, it con- flicted with Community law and was there- fore invalid. In the absence of any obli- gation to keep records relating to the destruction of butter, the defendant could not base its conclusion that the butter in question had been sold on the lack of such records. 11. In October 1999, acting pursuant to Article 31(2) of the Superlevy Regulation, the defendant reached its own deter- mination of the quantity of milk or milk equivalent delivered by the appellant for the 1996/97 marketing year, and held on that basis that the appellant was liable to 14. In its order for reference, the referring pay an additional levy. court notes that the obligation imposed upon the appellant by Article 4(1) of the regulation is clearly limited to reporting quantities of milk and/or milk products sold. However, it considers it to be con- ceivable that the obligation to maintain stock accounts under Article 7(1)(f) might extend further to include the data at issue in the main proceedings. It has therefore stayed the proceedings before it and has 12. In April 2000, after hearing the appel- referred the following question to the lant's objections, the defendant substan- Court: tially confirmed its initial determination. It held that, for the period at issue, the appellant had failed to keep a 'correct and complete record... of the production, stock and delivery of milk and milk products, as prescribed by Article 7 of [the regulation] in conjunction with Article 31(1) of [the 'Can it be inferred from Article 7(1)(f) of Superlevy Regulation and] Article 11 of the Regulation (EEC) N o 536/93 that the 1994 Milk Products Regulation'. Given producer is obliged to maintain accounts that 'no documents have been submitted recording, among other things, the avail- on the basis of which it can be assumed that ability, production, storage, use, processing the quantity of butter concerned was not and destruction of milk and/or milk prod- delivered', the appellant was liable to pay ucts on his holding, such "stock accounts" an additional levy in respect of the milk also being required to contain declarations unaccounted for in his original report. of the quantity per month and per product

18. It notes first that Article 7(1)(f) not only requires producers to account for milk products actually sold, but also makes r e f e r e n c e to t h e i r o b l i g a t i o n u n d e r Article 4(1) of Council Directive 92/102 to maintain a register of their livestock. The Assessment two obligations are juxtaposed, it is argued, because they allow a comparison to be made between a producer's declared level of sales and his potential level of produc- 16. In addition to the observations before tion. the Court which are addressed to the question referred, the Commission and the Netherlands Government made sub- missions at the hearing on the issue whether a Member State is competent to enact legislation imposing reporting obli- gations on milk producers within its terri- tory going beyond those specified by Article 7(1)(f) of the regulation. In my view, it would not be appropriate to 19. However, in the view of the Nether- consider that issue in the context of the lands Government, such a comparison present case. It is for the referring court to would not assist in verifying that all sales determine the questions of Community law were properly declared unless producers which require an answer in order for it to were also required to explain what has dispose of the proceedings before it. More- become of any milk or milk equivalent over, the manner in which the issue was which has been produced but not sold. raised for the first time at the hearing was Article 7(1)(f) expressly requires producers not such as to give the appellant or other to maintain 'supporting documents potential parties an adequate opportunity enabling... stock accounts to be verified'. to address it. I therefore propose to confine Given that stock accounts must clearly be my analysis to an interpretation of the capable of verification, they must therefore scope of Article 7(1)(f), as required by the include all the information needed to bal- question referred. ance production against sales.

24. I am not, in any event, persuaded that an extensive interpretation of Article 7(1)(f) is necessary in order for Member States to fulfil the verification tasks assigned to them under Article 7 of the regulation. The 2 1 . I am not convinced by the submissions introductory paragraph of Article 7(1) of the Netherlands Government regarding requires and empowers Member States to the interpretation of 'stock accounts' as take all the verification measures necessary that term appears in Article 7(1)(f). to ensure proper payment of the additional levy. Similarly, under Article 7(3) Member States are obliged to verify the accuracy of stock accounts and in order to do so may make checks at the premises of producers. Those provisions are to my mind likely to prove sufficient to enable the competent authority of a Member State to investigate any discrepancy between the productive potential of a producer's holding and the quantities of milk and/or milk products recorded by that producer as having been sold. Following such investigations, the 22. As the Commission and the appellant competent authority may reach such con- submit, Article 7(1)(f) on its face appears to clusions as are appropriate from the evi- require a producer to maintain stock dence uncovered thereby. To my mind, accounts relating only to the sale of milk however, no inference can be drawn from and/or milk products and not to their the producer's failure to supply records availability, production, storage, use, pro- which he was not under any explicit cessing or destruction. obligation to maintain.