CELEX: 61999CJ0056
Beef and veal
Premium for early marketing of calves
Grant thereof dependent on average carcase weight of calves slaughtered in each Member State during 1995
Validity under Article 40(3) of the EC Treaty (now, following amendment, Article 34(2) EC

Grounds
1 By judgment dated 9 December 1998, received at the Court on 19 February 1999, the Tribunal Administratif, Paris (Paris Administrative Court) referred to the Court under Article 177 of the EC Treaty (now Article 234 EC) a question for a preliminary ruling on the validity, under Article 40(3) of the EC Treaty (now, after amendment, Article 34(2) EC), of Article 4i(2) of Regulation (EEC) No 805/68 of the Council on the common organisation of the market in beef and veal (OJ, English Special Edition 1968 (I), p. 187), as amended by Council Regulation (EC) No 2222/96 of 18 November 1996 (OJ 1996 L 296, p. 50) and Article 50(1) of Commission Regulation (EEC) No 3886/92 of 23 December 1992 laying down detailed rules for the application of the premium schemes provided for in Regulation No 805/68 and repealing Regulations (EEC) No 1244/82 and (EEC) No 714/89 (OJ 1992 L 391, p. 20), as amended by Commission Regulation (EC) No 2311/96 of 2 December 1996 (OJ 1996 L 313, p. 9).
2 That question was raised in proceedings between Gascogne Limousin Viandes SA (hereinafter Gascogne) and the Office National Interprofessionnel des Viandes de l'Élevage et de l'Aviculture (National Interdisciplinary Office for Meat, Livestock and Poultry Rearing, hereinafter Ofival) concerning the latter's rejection of applications by Gascogne for early-marketing premium for calves under Regulation No 2222/96.
Community legislation
3 In order to help to restore balance to the market in beef and veal, which had been seriously disturbed, mainly as a result of consumer fears concerning bovine spongiform encephalopathy (BSE), the Council adopted Regulation No 2222/96. That regulation enacts a number of measures designed to bring production more closely into line with consumption (see, in that connection, first recital in the preamble to Regulation No 2222/96).
4 Taking the view, more specifically, that improvement of the market in beef and veal required a reduction in the number of finished animals offered on the market with greater encouragement for withdrawal and/or marketing of young, light animals (see, in that connection, eighth recital in the preamble to Regulation No 2222/96), the Council, on the one hand, amended the rules governing processing premium in respect of young male calves originating in the Community which are withdrawn from production before they are over 10 days old or, under certain conditions, 20 days old, as contained in Article 4i(1) of Regulation No 805/68, as amended by Regulation No 2222/96 and, on the other, introduced in Article 4i(2) thereof a premium for early marketing of calves.
5 Under the latter provision:
[M]ember States may, until 30 November 1998, grant an early marketing premium for calves. The premium shall be granted on the slaughter, in a Member State, of each calf:
- of a weight of not more than the average slaughter weight of calves in the Member State concerned, less 15%. The average slaughter weight per Member State shall be that deriving from Eurostat statistics for 1995 or any other official published statistical information for that year accepted by the Commission,
- held, immediately before slaughter, in the Member State of slaughter for a period to be determined.
6 Under Article 4i(3) of Regulation No 805/68, as amended by Regulation No 2222/96:
[D]uring the period 1 December 1996 to 30 November 1998, each Member State must apply at least one of the two schemes referred to in paragraphs 1 and 2.
7 Article 4i(5) and (6) further provides:
5. In accordance with the procedure laid down in Article 27, the Commission:
- shall adopt detailed rules for the application of this Article,
- shall determine the maximum calf slaughter weights referred to in paragraph 2 which are applicable in each Member State,
- shall set the processing premium at a level or, where appropriate, levels enabling a sufficient number of calves to be withdrawn from production in line with market requirements,
- shall set the early marketing premium at a level enabling a sufficient number of calves to be slaughtered in line with market requirements,
- may, at the request of a Member State, authorise the early marketing premium to be applied on a differentiated regional basis within a Member State, provided that the animals have been held immediately before slaughter in the slaughter area for a period to be determined,
- may suspend the granting of either or both of the premiums referred to in this Article.
6. The Commission shall check, six months after the entry into force of the schemes referred to in this Article, whether such schemes have achieved satisfactory results.
Should this not be the case, the Commission shall submit an appropriate proposal to the Council, on which the Council, acting by a qualified majority, shall decide taking into account, in particular, the distribution of adjustment efforts between the Member States and possible distortions to trade.
8 The reasons for the adoption of the foregoing provisions are given in the ninth, tenth and eleventh recitals in the preamble to Regulation No 2222/96 as follows:
Whereas the introduction of an early marketing premium for calves may also help to restore some balance to the market; whereas, in order to ensure that such a premium is properly geared to the production conditions in the Member States it is necessary to define the eligibility of calves in the Member States in terms of the statistically-determined average carcase weight of calves slaughtered in each Member State; whereas such an average weight may vary within a given Member State; whereas it is necessary therefore to make provision for the Commission to authorize regionalised application of the premium; whereas, in order to avoid deflections of trade, a retention period is necessary; whereas, for the same reasons as in the case of the processing premium, setting the amount of the premium should be the Commission's responsibility [in order to ensure that, depending on the case, the amount or amounts of premium may be adapted to the requirements of the scheme];
Whereas production and consumer expectations vary considerably between Member States; whereas they should therefore be given a choice between the processing premium and the early marketing premium, but must be required to implement one or the other during the period 1 December 1996 to 30 November 1998;
Whereas after six months a check should be carried out on the early marketing scheme for calves and the processing premium scheme and on whether such schemes have been correctly implemented, with regard in particular to the effect achieved compared with the objective of reducing by about 1 000 000 the number of calves entering red meat production, to the distribution of adjustment efforts between the Member States and to possible distortions to trade.
9 The French Republic availed itself of its right under Article 4i(3) of Regulation No 805/68, as amended by Regulation No 2222/96, to opt for the grant of both premiums.
10 On the basis, in particular, of Article 4i(5) of Regulation No 805/68, as amended by Regulation No 2222/96, the Commission adopted Regulation No 2311/96 in which it laid down the conditions for the grant of early marketing premium for calves and replaced Article 50 of Regulation No 3886/92 by the following provision:
1. A Member State may grant the early marketing premium for veal calves (hereinafter called "premium") only in respect of animals slaughtered on its territory and having a carcase weight no greater than the weight referred to in Annex IV.
(...)
11 Annex IV to Regulation No 3886/92, as amended, which determines the maximum carcase weight of veal calves in the Member States under Article 50(1) is in the following form:
(in kilograms)
>lt>0
12 Under Article 50(3) of Regulation No 3886/92, as amended by Regulation No 2311/96,
[T]he premium to be paid is fixed at:
- ECU 65 per animal slaughtered in December 1996 and January 1997,
- ECU 60 per animal slaughtered after January 1997.
13 It is clear from the seventh recital in the preamble to Regulation No 2311/96 that the Commission sought to fix the amount of the premium at a level which took particular account of both the loss of income associated with the sale of a lighter carcase and the economy associated with a shorter production period, but that it seemed to it appropriate, in order to take account of certain foreseeable disturbances on the veal market at the beginning of the scheme, that higher premiums should be granted as a transitional measure.
14 Subsequently, Article 50 of Regulation No 3886/92, as amended by Regulation No 2311/96, has been amended on several occasions.
15 Thus, Commission Regulation (EC) No 18/97 of 8 January 1997 (OJ 1997 L 5, p. 17) replaced the maximum carcase weight of 103 kilograms provided for in the case of the Federal Republic of Germany at Annex IV to Regulation No 3886/92, as amended by Regulation No 2311/96, by the weight of 112 kilograms. It is apparent from the third recital in the preamble to Regulation No 18/97 that, as it was entitled to do under Article 4i(2), first indent, of Regulation No 805/68, as amended by Regulation No 2222/96, Germany presented figures other than those published by Eurostat for calculating maximum carcase weight of eligible veal calves and that, after verification of those statistics, the Commission was able to accept them.
16 Furthermore, Commission Regulation (EC) No 200/97 of 31 January 1997 amending Regulation No 3886/92 (OJ 1997 L 31, p. 62) added a second subparagraph to Article 50(3) of Regulation No 3886/92, as amended by Regulation No 2311/96, worded as follows:
[H]owever, the two amounts of premium referred to in the first subparagraph are increased:
(a) for animals slaughtered between 20 January and 30 June 1997, by ECU 10 per carcase weighing 110 kilograms or less and by ECU 5 per carcase weighing more than 110 kilograms but no more than 120 kilograms;
(b) for animals slaughtered between 1 July and 31 December 1997, ECU 5 per carcase weighing 110 kilograms or less and by ECU 2,5 per carcase weighing more than 110 kilograms but no more than 120 kilograms.
17 It is apparent from the first recital in the preamble to Regulation No 200/97 that with those increases the Commission wished to take account of the fact that, owing to the maximum weights laid down in Annex IV to Regulation No 3886/92, as amended by Regulation No 2311/96, a substantial proportion of Community veal production had thenceforth to be sold at a weight below 120 kilograms and that, owing to this unusual presentation of the veal product on the market, temporary difficulties could be anticipated leading to relatively higher costs of disposal for such light carcases.
18 Under the first subparagraph of Article 50a(1) of Regulation No 3886/92, as amended by Regulation No 2311/96:
[A]ny application for a premium shall be lodged with the competent authority of the Member State concerned no later than three weeks following the day of slaughter.
Regulation No 18/97 added a sentence to the first subparagraph of Article 50a(1) worded as follows:
[H]owever, applications for animals slaughtered before 25 December 1996 may be submitted until 15 January 1997 inclusive.
The dispute in the main proceedings and the question referred to the Court for a preliminary ruling
19 Gascogne is a company incorporated under French law engaged in the production of fresh veal.
20 By application dated 26 June 1997 Gascogne applied to the Tribunal Administratif, Paris, for the annulment of decisions by Ofival refusing to grant it early-marketing premium for calves under Regulation No 2222/96. It appears from the file in the main proceedings and the written observations of the French Government that those refusals are dated 14 May and 11 and 20 June 1997 and that they are based on the consideration that the weight of the calves for which premium was applied for was in excess of 108 kg.
21 In support of its action Gascogne essentially claimed that the rules applicable to the premium infringed the principle of non-discrimination laid down in Article 40(3) of the Treaty since, in its submission, they have the effect of favouring the marketing on the Community market of calves slaughtered in Member States able to invoke a high national reference figure in regard to average carcase weight.
22 Taking the view that the resolution of the dispute before it was dependent on ascertaining whether the above provisions of Article 40 of the Treaty of 25 March 1957 preclude the adoption of aid measures benefiting products differently according to criteria established at national level, where those products may be marketed in all of the Member States of the Community, the Tribunal Administratif, Paris, decided to stay proceedings until the Court had given a preliminary ruling on the question thus formulated.
Admissibility
23 The Commission calls in question the admissibility of the question submitted on the ground that the order for reference indicates neither the dates nor the grounds of the decisions refusing the applications for premium made by Gascogne and gives no indication of the dates on which the calves were slaughtered and the applications made, which are none the less matters of considerable importance in view of the series of amendments made to the applicable legislation.
24 The Commission also points out that, in accordance with settled case-law (see order in Case C-307/95 Max Mara [1995] ECR I-5083, paragraph 7), the information provided and the questions raised in orders for reference must not only enable the Court to give helpful answers but must also give the Governments of the Member States and other interested parties the opportunity to submit observations pursuant to Article 20 of the EC Statute of the Court of Justice. Since only the order for reference is notified to the parties concerned under that provision, the Commission questions whether the fact that the dates on which the applications by Gascogne were made and the grounds on which they were rejected by Ofival may be gleaned from the file forwarded by the national court is sufficient to render the question submitted admissible.
25 It must be pointed out that, as has consistently been held, the need to provide an interpretation of Community law which will be of use to the national court makes it necessary that the national court define the factual and legislative context of the questions it is asking or, at the very least, explain the factual circumstances on which those questions are based (see, in particular, judgments in Joined Cases C-320/90 to C-322/90 Telemarsicabruzzo and Others [1993] ECR I-393, paragraph 6 and Case C-67/96 Albany [1999] ECR I-5751, paragraph 39).
26 It must be observed that, in the present case, the order for reference not only cites Article 40(3) of the Treaty but also expressly refers, first, to Regulation No 2222/96, mentioning that the latter instrument authorised Member States to grant, until 30 November 1998, an early marketing premium for calves whose slaughter weight was equal to or less than the average slaughter weight of calves in the Member State concerned, less 15%, the average slaughter weight per Member State being that deriving from Eurostat statistics for 1995 or any other officially published statistics for that year accepted by the Commission and, second, to Regulations Nos 2311/96, 18/97 and 200/97 which laid down the detailed rules for the application of the premium scheme.
27 The order for reference goes on to state that the claim for annulment of the decisions by Ofival refusing to grant premium to Gascogne is based on the incompatibility of that scheme with the principle of non-discrimination enshrined in Article 40(3) of the Treaty, since that scheme has the effect of favouring the sale on the Community market of calves slaughtered in Member States which can point to a high national reference figure for average slaughter weight.
28 In those circumstances it must be held that the order for reference contains information which is sufficiently precise and complete to enable the Court to give a useful reply on the question of the validity under Article 40(3) of the Treaty of the principle of determining entitlement to early-marketing premium for calves by reference to the average carcase weight of calves slaughtered in each Member State during 1995, less 15%, as provided for in Article 4i(2) of Regulation No 805/68, as amended by Regulation No 2222/96, and Article 50(1) of Regulation No 3886/92, as amended by Regulation No 2311/96.
29 It is also clear from the observations submitted pursuant to Article 20 of the EC Statute of the Court of Justice by Gascogne, the French Government, the Council and the Commission, that the information contained in the order for reference in fact enabled them effectively to state their views on that question.
30 The fact that the order for reference gives neither the dates on which Gascogne made its applications, nor the dates on which those applications were rejected by Ofival, nor the dates on which the calves were slaughtered, did not prevent those participants in the proceedings from so stating their views and does not prevent the Court from giving a useful reply to the question submitted.
31 First, by expressly referring in the preamble to and the grounds of the order for reference to Regulations Nos 2311/96, 18/97 and 200/97, the national court clearly indicated that, according to its own findings, those regulations are applicable ratione temporis to the various applications made by Gascogne and to the rejection of those applications by Ofival. Furthermore, the information given in the order for reference was supplemented by information in the file forwarded by the national court and the written observations submitted to the Court, which were subsequently reproduced in the Report for the Hearing notified to the Governments of the Member States and the other interested parties with a view to the hearing at which they had the opportunity, if appropriate, of supplementing their observations (see, in that connection, the judgment in Albany, cited above, paragraph 43).
32 Second, the amounts of premium, which, under Article 50(3) of Regulation No 3886/92, as amended by Regulation No 2311/96 and subsequent Commission regulations, are dependent on the date on which the animals were slaughtered, are not as such at issue, with the result that the fact that the relevant slaughter dates in the main proceedings cannot be gleaned from the order for reference or from the file or the parties' observations cannot constitute a sufficient ground for declaring the question submitted to be inadmissible.
33 Accordingly, it is appropriate to reply to the question submitted.
The question submitted for a preliminary ruling
34 Gascogne and the French Government maintain that the early-marketing premium scheme for calves is in breach of the requirements of Article 40(3) of the Treaty, with the result that it is invalid inasmuch as it is discriminatory and distorts competition to the detriment of French producers, particularly in relation to their Netherlands competitors.
35 In that connection Gascogne and the French Government claim that the application of a uniform 15% reduction to the average carcase weight of calves slaughtered in each of the Member States and the differentiation of entitlement to premium according to average carcase weight per Member State mean that, for French producers to be eligible for premium, they must produce carcases of a maximum weight of 108 kg, which does not accord with normal marketing on a French market accustomed to carcases of an average weight of between 120 and 130 kg. French producers thus incur additional costs and suffer a loss on their costs of production, whereas Netherlands producers, who were granted a reference weight of 138 kg, for the purpose of obtaining the premium, benefit from the premium and at the same time bring to the market, particularly in France, carcases answering market expectations.
36 According to Gascogne, such discrimination and distortion is further accentuated by the fact that those reference weights were calculated on the basis of statistics collected by Eurostat from each of the Member States for 1995, although it is commonly accepted that veal carcases are not uniform throughout the Community, since each Member State offers for consumption carcases which differ according to custom and eating or trading habits, there is no common definition of fresh veal and its characteristics and there are no reliable and uniform Community statistics.
37 It is settled case-law that the prohibition of discrimination laid down in Article 40(3) of the Treaty is only a specific expression of the general principle of equality in Community law, which requires that comparable situations must not be treated differently and different situations must not be treated in the same way unless such treatment is objectively justified (judgment in Joined Cases C-296/93 and C-307/93 France and Ireland v Commission [1996] ECR I-795, paragraph 49).
38 With regard to judicial review of the conditions governing implementation of that prohibition, the Community institutions none the less have, in regard to the common agricultural policy, a wide discretion which reflects the responsibilities which the Treaty imposes on them (judgments in Joined Cases C-267/88 to C-285/88 Wuidart and Others [1990] ECR I-435, paragraph 14 and Case C-375/96 Zaninotto [1998] ECR I-6629, paragraph 46).
39 Moreover, it is clear from the first, eighth, ninth, tenth and eleventh recitals in the preamble to Regulation No 2222/96 that the early-marketing premium for calves was introduced in order to help to improve and restore balance to the market for beef and veal which had been seriously disturbed owing to consumer fears concerning BSE. Since, therefore, it seeks to ensure market stability that premium is pursuing one of the objectives of the common agricultural policy laid down in Article 39(1) of the EC Treaty (now Article 33(1) EC).
40 In the context of the pursuit of that objective, all Community producers, regardless of the Member State in which they are based, must together, in a spirit of solidarity and equality, bear the consequences of the decisions which the Community institutions are led to adopt in the exercise of their powers in order to respond to the risk of an imbalance which may arise in the market between production and market outlets (judgments cited above in France and Ireland v Commission, paragraph 50 and Zaninotto, paragraph 47).
41 In light of the foregoing it is clear from the ninth recital in the preamble to Regulation No 2222/96 that it was specifically in order to align the early-marketing premium for calves with production conditions in the Member States that the Council opted in favour of a differentiation of entitlement to premium according to the average carcase weight of calves slaughtered in each Member State, as indicated in the statistical information available.
42 By applying a uniform reduction of 15% to the average weights thus established, the Community institutions required producers in all the Member States to participate equally in the joint effort needed to attain the objective of improving the market in beef and veal by means of a reduction in the number of calves entering red-meat production.
43 It is also important to note, as the Council and Commission have pointed out, that to have opted in favour of a uniform average carcase weight for all Community producers would not have enabled the objective of the premium to be attained, inasmuch as producers established in Member States where carcase weights are traditionally high would hardly have been inclined to make the requisite effort to reduce the carcase weight of their calves in order to receive the premium and producers established in Member States where carcase weights are lower could have received the premium without having to make any effort to reduce carcase weight.
44 Furthermore, the Court has also held that the fact that the adoption of a given measure under a common organisation of the market may affect producers in different ways, depending upon the particular nature of their production or on local conditions, cannot be regarded as discrimination prohibited by Article 40(3) of the Treaty if that measure is determined on the basis of objective rules, formulated to meet the needs of the general common organisation of the market (see, to that effect, judgment in Case 179/84 Bozzetti [1985] ECR 2301, paragraph 34).
45 In that connection, it should also be emphasised that Article 4i(5) of Regulation No 805/68, as amended by Regulation No 2222/96, not only requires the Commission to set the early-marketing premium at a level enabling a sufficient number of calves to be slaughtered in line with market requirements, but also authorises, at the request of a Member State, the early marketing premium to be applied on a differentiated regional basis within a Member State.
46 Furthermore, it is clear from the tenth recital in the preamble to Regulation No 2222/96 that it was in order to take account of the fact that production and consumer expectations vary considerably between Member States that the latter were given a choice by the Community legislature between the processing premium and the early marketing premium and were authorised by it to apply the two premium schemes jointly during the period from 1 December 1996 to 30 November 1998.
47 Finally, in regard to the argument put forward by Gascogne that the alleged discrimination and distortions of competition were exacerbated by the fact that reference weights were calculated on the basis of statistics collected by Eurostat for 1995, without paying heed to the specific features of the markets of the various Member States and to the lack of reliable uniform Community statistics, it should be pointed out that Article 4i(2), first indent, of Regulation No 805/68, as amended by Regulation No 2222/96, allows each Member State to request that statistics other than those published by Eurostat be used for the purpose of determining the reference weight attributed to it. It is apparent from the file, however, that France has not availed itself of this possibility.
48 In light of all the foregoing considerations, it must be concluded that the differentiation of entitlement to early-marketing premium for calves according to the average carcase weight of calves slaughtered in each of the Member States during 1995 and the uniform application of a 15% reduction on the average weights thus determined do not entail discrimination between Community producers prohibited under Article 40(3) of the Treaty.
49 Therefore, the reply should be that consideration of the question submitted has disclosed nothing to affect the validity of Article 4i(2) of Regulation No 805/68, as amended by Regulation No 2222/96, or of Article 50(1) of Regulation No 3886/92, as amended by Regulation No 2311/96.
Decision on costs
Costs
50 The costs incurred by the French Government, the Council and the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.
Operative part
On those grounds,
THE COURT (Sixth Chamber),
in answer to the question referred to it by the Tribunal Administratif, Paris, by judgment of 9 December 1998, hereby rules:
Consideration of the question submitted has disclosed nothing to affect the validity of Article 4i(2) of Regulation (EEC) No 805/68 of the Council of 27 June 1968 on the common organisation of the market in beef and veal, as amended by Council Regulation (EEC) No 2222/96 of 18 November 1996 and Article 50(1) of Commission Regulation (EEC) No 3886/92 of 23 December 1992 laying down detailed rules for the application of the premium schemes provided for in Regulation No 805/68 and repealing Regulations (EEC) No 1244/82 and (EEC) No 714/89, as amended by Commission Regulation (EC) No 2311/96 of 2 December 1996.