ECLI:EU:C:1983:164

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DELIVERED ON 9 JUNE 1983 ( 1 )

Mr President,

Members of the Court,

A reference has been made to the Court for a preliminary ruling on the validity of Commission Regulation (EEC) No 2546/80 of 2 October 1980 amending for the eleventh time Regulation (EEC) No 1530/78 laying down rules for the application of the system of aid in respect of certain products processed from fruit and vegetables. That reference to the Court has been made by the First Chamber of the Verwaltungsgericht Frankfurt am Main.

It is necessary to examine the Community regulations of which the contested regulation forms part and then those facts of the case which are relevant to those regulations.

I — I shall distinguish between the regulations of the Council, on the one hand, and those of the Commission, on the other.

A — The regulation of the Council

Regulation No 1152/78 of 30 May 1978 amended Regulation No 516/77 on the common organization of the market in products processed from fruit and vegetables.

(a)

Article 2 of Regulation No 1152/78 added Articles 3a to 3c to Regulation No 516/77.

Article 3a (1) of Regulation No 516/77 introduced a system of production aid, with effect from the beginning of the 1978/79 marketing year, for certain products processed from fruit and vegetables grown in the Community. According to Article 3 a (2), that system is based on contracts binding, within the Community, producers and processors. The contracts are to be forwarded, on their conclusion, to the bodies designated by the Member States concerned, which are to be responsible for supervising the execution of the contracts.

Article 3b (1) of Regulation No 516/77 defines the purpose of the aid, which is to be “so fixed as to make up the difference between the prices of Community products and those of products from nonmember countries”. Article 3b (4) makes payment of the aid subject to the conclusion of contracts in accordance with Article 3a.

Article 3c gives certain responsibilities to the Management Committee for Products Processed from Fruit and Vegetables, which was set up by Regulation No 516/77 for the implementation of the system of aid introduced thereby.

(b)	Article 3 of Regulation No 1152/78 inserts an Annex la in Regulation No 516/77, which lists the products benefiting from the aid.

2.	That annex was amended by Regulation No 1639/79 of 24 July 1979, which extended the benefit of the aid to “cherries preserved in syrup” with effect from the beginning of the 1980/81 marketing year.

B — The regulations of the Commission

Regulation No 1530/78 of 30 June 1978 lays down rules for the application of the system of aid.

Article 1 lays down time-limits for the conclusion of the processing contracts and of supplementary agreements.

For the 1980/81 marketing year contracts could be concluded until 10 July and supplementary agreements could be made until 31 July. ( 2 )

However, owing to unfavourable weather conditions, those periods were extended until 31 July and 15 August respectively. ( 3 )

It should immediately be noted that 31 July is an important date as regards the answer to be given to the question referred to the Court by the Verwaltungsgericht Frankfurt am Main.

Article 2 of Regulation No 1530/78 lays down the rules regarding the forwarding of contracts.

(a)

The original wording of that provision required a copy of each contract and of any supplementary agreement to be forwarded, before the date on which it was to take effect, to the agency designated by the Member State in which the fruit was produced and to the agency of the Member State in which processing was to take place.

It is common ground that the date on which a contract takes effect is the date on which performance of the contract is commenced, that is to say the date of the first delivery of fruit.

(b)	Article 1 of Regulation No 2546/80 of 2 October 1980 added a sentence to Article 2 of Regulation No 1530/78 providing that, for the 1980/81 marketing year, contracts concluded for cherries might be forwarded even after the date on which they took effect, but not later than 31 July 1980.

The reason for that amendment was essentially the lateness of the cherry harvest and consequently the late conclusion of the contracts. The contracts provide, in general, for prompt performance and the processors in question were unable to forward copies of the contracts to the designated agencies before delivery of the fruit.

It should also be noted that Regulation No 2546/80 was adopted on the initiative of the authorities of the Federal Republic of Germany: it was the processors in that country who were principally, if not exclusively, affected by the situation referred to.

Article 2 of Regulation No 2546/80 provides, furthermore, that the regulation was to enter into force on the day of its publication in the Official Journal, which took place the following day, 3 October 1980, and that it was to apply with effect from 12 May 1980.

It therefore had retroactive effect.

By way of summary, contracts in respect of the preservation of sweet cherries during the 1980/81 marketing year could be validly concluded until 31 July (by virtue of the July regulation) but could not be forwarded to the intervention agency any later than the same day (by virtue of the October regulation).

II —

(a)	On 21 July 1980 Meiko, an undertaking, which processes fruit into preserves, entered into contracts with producers of sweet cherries to be preserved in syrup. A supplementary agreement to those contracts was signed on 31 July. In total the transaction involved 17785 kg of cherries.

(b)	The fruit was delivered between 23 and 31 July and Meiko started processing immediately in order to avoid any deterioration in the condition of the goods.

(c)	It notified the relevant authority, the Bundesamt für Ernährung und Forstwirschaft [Federal Office for Food and Forestry], of the contracts and the supplementary agreement on 7 and 19 August 1980 respectively, that is to say after the time-limit of 31 July laid down by Regulation No 2546/80.

III —

Meiko applied for the payment of production aid to the Bundesamt für Ernährung und Forstwirtschaft and the latter refused the application by decision of 6 November 1980. Meiko objected to that refusal but it was confirmed on 17 December 1980.

The latter decision was the subject of an action brought against the Federal Republic of Germany, represented by the aforementioned Bundesamt, before the Verwaltungsgericht Frankfurt am Main.

That court addressed itself to the question whether Article 1 of Regulation Ño 2546/80 is consistent with the principles of proportionality and equal treatment recognized by the Court of Justice as principles of Community law.

Before giving judgment it decided to refer to the Court for a preliminary ruling, pursuant to Article 177 of the Treaty, the question whether that provision offends against those principles in retroactively fixing a time-limit, namely 31 July 1980, by, which the concluded contracts had to be forwarded to the appropriate agency.

I will now consider those two principles.

1. Breach of the principle of proportionality

A —

(a)

The Verwaltungsgericht Frankfurt am Main considers that Regulation No 2546/80 is contrary to the principle of proportionality by virtue of the automatic nature of the time-limit fixed retroactively and by virtue of the fact that the penalty consisting in the refusal of aid is not linked to the conduct of an undertaking.

In fact the principle of proportionality rests on other considerations. The Court has recently held that:

“In order to establish whether a provision of Community law is consonant with the principle of proportionality it is necessary to establish, in the first place, whether the means it employs to achieve its aim correspond to the importance of the aim and, in the second place, whether they are necessary for its achievement”. ( 4 )

(b)

As regards the present case, the purpose of Article 2 of Regulation No 1530/78 is, without doubt, to allow the designated authorities of the Member States to monitor the quality of the fruit before it is processed. Regulation No 2546/80 amended that provision by permitting, for the 1980/81 marketing year, the processing of cherries before the contracts were forwarded. It is therefore contrary to the aim pursued by the former regulation, being a temporary derogation from it.

In those circumstances the question of fixing a time-limit for forwarding the contracts is only of secondary importance, once that date is subsequent to the commencement of the processing of the fruit.

B —

(a)

To a certain extent the Commission seems to have admitted that by implication since, in theory, it could just as easily have set a date after 31 July and since, in choosing that date, it relied on the facts presented to it by the German authorities. It states in that connection that it depends entirely on the information given to it by the Member States, since it is unable to assess for itself the circumstances of traders and to determine the appropriate period to which a time-limit should be extended. It states, moreover, that the German proposal was received favourably by the representatives of all the Member States meeting within the Management Committee for Products Processed from Fruit and Vegetables (meeting of 16 September 1980).

(b)	The Commission maintains that its choice of 31 July was perfectly justified and that the regulation cannot be annulled on the ground of that choice.

C —

(a)

The Commission points out that the supplementary provision which is the subject of dispute did not damage any applicant for aid and that it did not deprive any trader of any right he possessed. On the contrary, Regulation No 2546/80 amended the existing regulation ( 5 ) in such a way as to allow the processors to receive an aid which otherwise would have been refused. It was emphasized at the hearing that when an undertaking receives an aid it is not unfair to require it to forward a copy of the contract to the intervention agency without delay. Applying the principle of proportionality somewhat differently, the Commission's representative considered that it would be going too far to declare a regulation invalid on account of a few latecomers.

In principle, it is possible to accept that reasoning. The criteria laid down by the Court for establishing a breach of the principle of proportionality are much- stricter where the regulations which have not been complied with by traders merely entail the refusal of an application for aid than where they impose a monetary penalty. ( 6 ) However, I do not find that a sufficient answer to the question referred to the Court.

(b)	The Commission and the German Government both maintain that the derogation effected by Regulation No 2546/80 must be limited.

In the view of the Government of the Federal Republic of Germany, the adoption of a later date would have amounted to “calling in question completely the principle that the contracts should be forwarded to the relevant authority before they are put into effect”. ( 7 ) Furthermore, as has been emphasized by the Commission, it was an exceptional provision, so it must remain within the bounds of strict necessity and its effects in time must be limited.

D —

Those arguments are insufficient to explain the choice of 31 July.

(a)

In order to justify its request for a derogation from the rules by means of an extension of time the German Government referred to various facts, such as the delay in fixing the rules concerning minimum prices and the amount of aid for the 1980/81 marketing year, the extension of the aid system to the processing of sweet cherries and the consequent lack of experience of the traders concerned: they were not aware of the condition upon which entitlement to aid depended (“eine Anspruchsvoraussetzung”), namely the forwarding of the contract before it was put into effect. Informed of that problem, the German authorities contacted the Commission to ascertain whether the rule contained in Article 2 of Regulation No 1530/78 really was applicable. Upon receiving a reply in the affirmative from the Commission, they requested, by a telex message of 23 July, that a rule embodying an exception should be adopted, which led to the regulation whose validity is now contested.

(b)

The German Government was also afraid of provoking negative reactions on the part of the other Member States within the Management Committee by suggesting a derogation which, after the extension in July of the time-limit for the conclusion of contracts, would be the second derogation from the system of aid for the processing of sweet cherries in that marketing year. In addition, as 31 July had already been chosen as the date for the extension of the time-limit for the conclusion of contracts, it seemed appropriate to adopt the same date. Moreover, that would give the processors sufficient time to appreciate the importance of the contested rule, because on 2 July it advised them of the principal rules which had to be complied with in relation to aids ( 8 ) and because they maintained constant contact with their trade associations, which were thus in a position to make clear to their members the need to comply with those rules.

Furthermore, owing to the number of contracts forwarded to the Bundesamt (1700 in respect of morello cherries, 432 in respect of sweet cherries) and the need to examine them meticulously, the German authorities were only able to establish that the date fixed in Regulation No 2546/80 had not been complied with by a number of processors after they had sent their telex message of 23 July submitting their proposal for a regulation to the Commission and even after the meeting of the Management Committee on 16 September.

The number of contracts in respect of which the Bundesamt finally established that the time-limit of 31 July had not been complied with was 38 (23 in respect of morello cherries and 15 in respect of sweet cherries). That figure must be set against the 2132 applications which the Bundesamt received for aid in connection with contracts for the processing of those two products and against a mere 207 contracts which were forwarded after the delivery of the cherries to the processors. ( 9 ) Of those 207 contracts, 169 were forwarded before 31 July. ( 10 ) Moreover, if, as the Agent representing the Commission pointed out at the hearing, cases on non-adherence to the time-limit in respect of those products occurred only in Germany, it seems to me, as it did to the Commission, that the Community institutions were very generous in agreeing to adopt a regulation containing a derogation in favour of such a small proportion of the traders involved, as is indicated by the figures referred to.

E —

However, all those facts do not appear to me to dictate the answer to be given to the question referred to the Court by the Verwaltungsgericht Frankfurt am Main. Whilst they may explain why Regulation No 2546/80 was adopted and why the date of 31 July was chosen, they seem to me insufficient to justify such a choice.

The Commission is under a duty to examine a proposal for a regulation made by the Federal Republic of Germany to ensure that the date mentioned in it is consistent with the remainder of the relevant regulations. Regulation No 1964/80 of 24 July permitted traders to conclude processing contracts in respect of cherries (hardfleshed heart cherries and other sweet cherries; morello cherries) until 31 July 1980 in relation to the 1980/81 marketing year. The Commission should have realized that it was a contradiction to permit contracts to be concluded lawfully on 31 July and yet to require that they should be forwarded to the intervention agency on the same day at the latest.

On the one hand, the possibility that contracts would be concluded on the last possible day may have seemed remote to the Commission and, on the other hand, in the particular case of Meiko there was an interval of two weeks between the conclusion and the forwarding of the contract. Those facts do not alter the fact that it was impossible to comply with the time-limit of 31 July.

The Commission should have been aware of that impossibility all the more since the agency to which the contracts had to be forwarded was not necessarily in the same Member State as the processor. In fact, Article 2 of Regulation No 1530/78 ( 11 ) provides that “a copy of each contract... shall be forwarded by the processor or his legally constituted group or association, ..., to the agency designated by the Member State in which the raw materials are produced and to the agency of the Member State in which processing is to take place”.

In those circumstances to fix 31 July as the final date for forwarding to the agencies designated by Article 2 of Regulation No 1530/78 contracts in respect of the processing of sweet cherries for the 1980/81 marketing year amounted to an excessive requirement by comparison, if not with the object of that provision (since, by allowing the contracts to be forwarded after processing had been commenced, the Commission had made it impossible to monitor the raw materials), then at least by comparison with the intention of the Commission to provide a limited derogation. In adopting that date, Commission Regulation No 2546/80 of 2 October therefore infringed the principle of proportionality, which the Court considers to be one of the fundamental principles of Community law.

2. Breach of the principle of equal treatment

Consequently, I submit my opinion on the validity of the regulation in the light of the second principle of Community law mentioned by the Verwaltungsgericht Frankfurt am Main, namely the principle of equal treatment, merely as an alternative.

The Verwaltungsgericht considers that in setting 31 July as the time-limit for forwarding contracts the contested regulation adopted an arbitrary measure which prejudiced Meiko for no objective reason in comparison with those of its competitors who were able, by good fortune, to forward their contracts before 31 July 1980 or who, by reason of the same good fortune, processed the fruit as soon as it had been delivered but before forwarding their contracts prior to 31 July 1980.

The Court had held that the principle of equal treatment, also known as the principle of nondiscrimination, is infringed when, without any objective justification, situations which are identical are treated differently or situations which are different are treated in the same way. ( 12 )

It seems to me, in fact, that it follows from the exposition devoted to the principle of proportionality that there was no objective justification for fixing 31 July 1980 as the time-limit for forwarding the contracts.

Consequently, I consider it to be contrary to the principle of equality to grant aid for the processing of cherries to traders who acted within the period fixed retroactively by Regulation No 2546/80 and to refuse to grant aid to those who exceeded that period slightly.

In conclusion, I propose that the Court should answer the question referred to it for a preliminary ruling by the Verwaltungsgericht Frankfurt am Main by holding that Commission Regulation Nó 2546/80 of 2 October 1980 is invalid on the ground that, by retroactively fixing 31 July 1980 as the final date for forwarding concluded contracts to the designated agency, it infringed the principles of proportionality and equality of treatment.

( 1 ) Translated from the French.

( 2 ) Regulation No 1348/80 of 30 May 1980.

( 3 ) Regulation No 1964/80 of 24 July 1980.

( 4 ) Judgment of. 23 February 1983 in Case 66/82, Frorrmnçais, [1983] ECR 395, at p. 404, para. 8; see also the same view expressed in my opinion delivered on 23 September 1982 in Case 272/82, RU—MI [1982] ECR 4182.

( 5 ) Article'2 of Regulation No 1530/78 in its original version.

( 6 ) Judgment of 26 June 1980 in Case 808/78, Pardini [1980] ECR 2103, especially para. 14, at p. 2119.

( 7 ) Reply to the first question asked by the Court.

( 8 ) Reply to the first question asked by the Court.

( 9 ) That figure of 207 therefore represents the number of cases in which the processors failed to comply with the rule contained in Article 2 of Regulation No 1530/78 in its original form. The figure was given by the German Government in reply to the second question asked by the Court.

( 10 ) Those 169 contracts were therefore saved from invalidity by the special provision enacted by the contested regulation. The figure was given by the German Government in reply to the second question asked by the Court.

( 11 ) In the sole paragraph in the original version, which was not amended by the contested regulation.

( 12 ) Judgment of 25 October 1978 in Case 125/77, Koninklijke Scholten-Honig v Hoofdproduktschap voor Akkerhouwprodukten, [1978] ECR 1991, para. 27, at p. 2003; judgment of 15 December 1982 in Case 5/82, Hauptzollamt Krefeld v Maizena, [1982] ECR 4601, paras 16 and 17, at p. 4614; judgment of 23 February 1983 in Case 8/82 Wagner v Bundesanstalt für landwirtschaftliche Marktordnung [1983] ECR 371, paras 18 and 19, at p. 387.

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