JUDGMENT OF THE GENERAL COURT (Sixth Chamber)

29 June 2017 ([\*](#Footnote*))

(EAGF and EAFRD — Expenditure excluded from financing — Fruit and vegetables — Error of law — Article 3(1) and 3(3) of Regulation (EC) No 1433/2003 — Article 52(1) and 52(2) of Regulation (EC) No 1580/2007 — Principle of legality — Legal certainty — Equal treatment — Principle of non-discrimination — Obligation to state reasons)

In Case T‐27/16,

**United Kingdom of Great Britain and Northern Ireland,** represented by J. Kraehling and G. Brown, acting as Agents, and by S. Lee and M. Gray, Barristers,

applicant,

v

**European Commission,** represented by A. Sauka and K. Skelly, acting as Agents,

defendant,

APPLICATION pursuant to Article 263 TFEU seeking the partial annulment of Commission Implementing Decision (EU) 2015/2098of 13 November 2015 excluding from European Union financing certain expenditure incurred by the Member States under the European Agricultural Guarantee Fund (EAGF) and under the European Agricultural Fund for Rural Development (EAFRD) (OJ 2015 L 303, p. 35), by which the Commission, in particular, applied to the period of 2008 to 2012 a financial correction in the amount of EUR 1 849 194.86 following the exclusion of certain expenditure relating to the operational programmes of fruit and vegetable producer organisations of the United Kingdom for the years 2008 and 2009 as a result of weaknesses in the system of key controls of those programmes,

THE GENERAL COURT (Sixth Chamber),

composed of G. Berardis, President, S. Papasavvas (Rapporteur) and O. Spineanu-Matei, Judges,

Registrar: S. Spyropoulos, Administrator,

having regard to the written part of the procedure and further to the hearing on 23 March 2017,

gives the following

**Judgment**

**Background to the dispute**

1        By a communication of 16 February 2010, to which the United Kingdom of Great Britain and Northern Ireland replied by letter of 18 May 2010, the European Commission, in accordance with Article 11(1) of Commission Regulation (EC) No 885/2006 of 21 June 2006 laying down detailed rules for the application of Council Regulation (EC) No 1290/2005 as regards the accreditation of paying agencies and other bodies and the clearance of the accounts of the EAGF and of the EAFRD (OJ 2006 L 171, p. 90), then in force, informed the United Kingdom that, following an audit mission carried out in November 2009 in several fruit and vegetable producer organisations, it took the view that certain expenditure charged to the European Agricultural Guarantee Fund (EAGF) and to the European Agricultural Fund for Rural Development (EAFRD) had not been effected in compliance with EU rules. As a result, the Commission asked the United Kingdom to inform it of the corrective measures which would be taken to ensure future compliance with those rules.

2        On 9 September 2010, a bilateral meeting was held, at the invitation of the Commission, between the parties in accordance with Article 11(1) of Regulation No 885/2006.

3        By letter of 14 August 2013, in accordance with Article 11(1) of Regulation No 885/2006, the Commission informed the United Kingdom that it was maintaining its position that the implementation of the EU aid system for fruit and vegetables and that of the regimes for recognition and control of operational programmes in the United Kingdom did not comply with EU rules with respect to the years 2008 to 2012. It also informed the United Kingdom that, as a result, it intended to exclude from EU financing certain expenditure made under EAGF and EAFRD with regard to the period 2008-2012 totalling EUR 56 590 753.69 (EUR 54 825 783.65 net).

4        By letter of 11 October 2013, in accordance with Article 16(1) of Regulation No 885/2006, the United Kingdom requested conciliation and the Conciliation Body published its report on 21 March 2014.

5        On 1 June 2015, the Commission sent the United Kingdom a letter of conformity clearance within the meaning of Article 11 of Regulation No 885/2006, in which it informed the United Kingdom that it was maintaining the position set out in the letter of 14 August 2013, subject to certain adjustments, and that it intended, consequently, to exclude from EU financing a net amount of EUR 34 016 051.19. In particular, the Commission stated that a flat-rate correction in the amount of EUR 1 849 194.86 would be applied as a result of the weakness identified in the system of key controls for operational programmes, which had resulted in a systematic overestimation of the value of marketed production (‘the VMP’) of a producer organisation by including the production of producers joining that organisation irrespective of whether they were previously members of another producer organisation. The Commission took the view that, since the ceiling for EU financial assistance granted to producer organisations which set up an operational fund was calculated on the basis of the VMP, that practice was likely to have led to substantial losses to the EAGF.

6        On 13 November 2015, the Commission adopted Commission Implementing Decision (EU) 2015/2098 excluding from European Union financing certain expenditure incurred by the Member States under the EAGF and under the EAFRD (OJ 2015 L 303, p. 35) (‘the contested decision’), by which, in particular, it applied a financial correction in the amount of EUR 1 849 194.86 following the exclusion of certain expenditure relating to the operational programmes of fruit and vegetable producer organisations of the United Kingdom for the years 2008 to 2009 as a result of weaknesses in the system of key controls for those programmes.

**Procedure and forms of order sought**

7        The United Kingdom brought the present action by application lodged at the Court Registry on 25 January 2016.

8        By letter registered at the Court Registry on 23 September 2016, the United Kingdom requested a hearing.

9        Following a change in the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the Sixth Chamber and the present case was therefore also assigned to that Chamber.

10      On a proposal from the Judge-Rapporteur, the Court (Sixth Chamber) decided to open the oral part of the procedure and, in the context of the measures of organisation of procedure adopted pursuant to Article 89(3) of the Rules of Procedure of the General Court, put questions to the parties for a written reply. The parties complied with that request within the time allowed.

11      The parties presented oral argument and answered the questions put to them by the Court at the hearing on 23 March 2017.

12      The United Kingdom claims that the Court should:

–        annul the contested decision in so far as it excludes from EU financing certain expenditure incurred under the EAGF and the EAFRD amounting to EUR 1 849 194.86;

–        order the Commission to pay the costs.

13      The Commission contends that the Court should:

–        dismiss the action;

–        order the United Kingdom to pay the costs.

**Law**

14      The United Kingdom puts forward two pleas in law in support of the action. The first plea alleges an error of law in respect of the interpretation of Article 3(1) and 3(3) of Commission Regulation (EC) No 1433/2003 of 11 August 2003 laying down detailed rules for the application of Council Regulation (EC) No 2200/96 as regards operational funds, operational programmes and financial assistance (OJ 2003 L 203, p. 25) and of Article 52(1) and 52(2) of Commission Regulation (EC) No 1580/2007 of 21 December 2007 laying down implementing rules of Council Regulations (EC) No 2200/96, (EC) No 2201/96 and (EC) No 1182/2007 in the fruit and vegetable sector (OJ 2007 L 350, p. 1). The second plea is divided, in essence, into two parts alleging, first, a breach of the obligation to state reasons, and infringement of the principles of legal certainty and legality and, second, an infringement of the principles of equal treatment and non-discrimination.

15      Having regard to the fact that the first part of the second plea, alleging a breach of the obligation to state reasons, and infringement of the principles of legality and of legal certainty, seeks, in essence, to call into question the form of the contested decision, the Court considers it expedient to address that part first.

*Legal framework*

*Regulations No 2200/96 and No 1182/2007*

16      Recital 7 of Council Regulation (EC) No 2200/96 of 28 October 1996 on the common organisation of the market in fruit and vegetables (OJ 1996 L 297, p. 1) stated that producer organisations were the basic elements in the common market organisation, the decentralised operation of which they ensured at their level.

17      The first subparagraph of Article 15(1) of Regulation No 2200/96 provided that EU financial assistance was to be granted to producer organisations setting up an operational fund. The second subparagraph of that paragraph provided that that fund was to be maintained by financial contributions levied on member producers, on the basis of the quantities or value of fruit and vegetables actually marketed, and by the financial assistance referred to in the first subparagraph. Article 15(5) provided that that assistance, first, was to be equal to the amount of the financial contributions indicated in paragraph 1 as actually paid but was, save for exceptions, limited to 50% of the actual expenditure incurred by the operational fund and, second, was, subject to certain conditions, capped at 4.1% of the VMP of each producer organisation.

18      Regulation No 2200/96 was amended by Council Regulation (EC) No 1182/2007 of 26 September 2007 laying down specific rules as regards the fruit and vegetable sector, amending Directives 2001/112/EC and 2001/113/EC and Regulations (EEC) No 827/68, No 2200/96, (EC) No 2201/96, (EC) No 2826/2000, (EC) No 1782/2003 and (EC) No 318/2006 and repealing Regulation (EC) No 2202/96 (OJ 2007 L 273, p. 1), in force from 1 January 2008. Regulation No 2200/96 was repealed by Council Regulation (EC) No 361/2008 of 14 April 2008 amending Regulation (EC) No 1234/2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (OJ 2008 L 121, p. 1) with effect from 1 July 2008.

19      Article 8 of Regulation No 1182/2007 reproduced, in essence, the provisions of Regulation No 2200/96 relating to operational funds and Article 10 of the regulation reproduced the provisions of Regulation No 2200/96 relating to EU financial assistance.

*Regulations No 1433/2003 and No 1580/2007*

20      Article 4(1) of Regulation No 1433/2003 provided that the ceiling for EU assistance was to be calculated each year on the basis of the VMP during a 12-month reference period to be determined by Member States. Article 4(2) and (3) of that regulation stated that the VMP of a producer organisation amounted to marketed production during a reference period which was to be determined, first, according to the year of the operational programme and, second, according to a period which varied depending on the producer organisation in question.

21      Article 3(1) of Regulation No 1433/2003 provided, in essence, that, for the purposes of the application of that regulation, the VMP was to be based on the production of members of producer organisations, in accordance with paragraphs 2 to 6. Paragraph 3 of that article added that the production was to include the production of members who join or leave the producer organisation and that the Member States were to determine the conditions to avoid duplicate counting.

22      Article 3(5) of Regulation No 1433/2003 provided that the production was to be disposed of in accordance with the first and second subparagraphs of Article 11(1)(c)(3) of Regulation No 2200/96, according to which the rules of association of a producer organisation were to require its producer members to market their entire production concerned through that organisation save for exceptions authorised by the producer organisation and implemented in compliance with the terms and conditions which it laid down.

23      Regulation No 1433/2003 was repealed by Regulation No 1580/2007 with effect from 1 January 2008.

24      Article 52(1), (2) and (5) and Article 53(1) to (3) of Regulation No 1580/2007 reproduced, in essence, the provisions of Article 3(1), (3) and (5) and those of Article 4(1) to (3) of Regulation No 1433/2003, as set out above.

*The first part of the second plea, alleging breach of the obligation to state reasons and infringement of the principles of legal certainty and legality*

25      The United Kingdom invokes a breach of the obligation to state reasons and infringement of the principles of legal certainty and legality. It claims in this regard that the position as set out by the Commission in the contested decision lacks clarity. In particular, it criticises the Commission for not having made explicit in that decision whether its position consisted in excluding from the calculation of the VMP solely the production of new members which were not previously members of a producer organisation. The United Kingdom adds that the Commission did not justify its interpretation of the relevant provisions, which is not supported by those provisions or by any related provision.

26      The Commission disputes the United Kingdom’s arguments.

27      In that connection, first, it must be borne in mind that the obligation to state reasons is an essential procedural requirement, as distinct from the question whether the reasons given are correct, which goes to the substantive legality of the contested measure. According to settled case-law, the statement of reasons required by Article 296 TFEU must be adapted to the nature of the measure in question and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to make the persons concerned aware of the reasons for the measure and to enable the Court to exercise its power of review (see judgment of 29 April 2004, *Netherlands* v *Commission*, C‐159/01, EU:C:2004:246, paragraph 65 and the case-law cited).

28      In the particular context of the drawing-up of decisions relating to the clearance of accounts in respect of expenditure financed by the EAGF, the statement of reasons for a decision refusing to charge to it part of the declared expenditure must be regarded as sufficient if the Member State to which the decision was addressed was closely involved in the process by which it came about and was aware of the reasons why the Commission took the view that it should not charge the sum in dispute to the EAGF (see judgment of 11 November 2015, *Greece* v *Commission*, T‐550/13, not published, EU:T:2015:835, paragraph 85 and the case-law cited).

29      Second, it should be noted that the principle of legal certainty requires that rules of EU law be clear and precise in order that interested parties can ascertain their position in situations and legal relationships governed by EU law (see judgment of 30 April 2014, *Dunamenti Erőmű* v *Commission*, T‐179/09, not published, EU:T:2014:236, paragraph 101 and the case-law cited).

30      It must be held that, in the present case, the United Kingdom was closely involved in the procedure described in paragraphs 1 to 6 above. For instance, on 16 February 2010 the Commission sent a letter to the United Kingdom, to which the latter replied on 18 May of that year. The Commission then invited the United Kingdom to a bilateral meeting, which was held on 9 September 2010, at which the issue of the VMP was discussed. In that regard, it appears from the conclusions of that meeting, dated 28 February 2011, that, at that time, the Commission reminded the United Kingdom of the relevant applicable provisions and requested it to clarify its position consisting in the inclusion, in the VMP of a producer organisation, of the marketed production of all producers which had joined that producer organisation.

31      In response to those conclusions, the United Kingdom stated clearly in a letter of 10 June 2011 that, contrary to what the Commission services suggested, Article 52(2) of Regulation No 1580/2007 did not limit the production capable of being included in the calculation of the VMP of a producer organisation solely to that of producers which were already members of a producer organisation. That statement shows that the United Kingdom had understood the Commission’s position. In addition, in the letter of 14 August 2013, in which it informed the United Kingdom that it was considering imposing a financial correction on the United Kingdom, the Commission reiterated its position by stating that the systematic inclusion of the production of a new member in the VMP, irrespective of whether or not that member had previously been a member of a producer organisation, was not in conformity with Article 52(2) of Regulation No 1580/2007. The United Kingdom then requested conciliation, by letter of 11 October 2013, in which, once again, it referred to the Commission’s position that the production of a new member which did not belong to a producer organisation should not have been taken into account in the calculation of the VMP. In the response to the request for conciliation, the Commission stated that it was maintaining the position set out in the letter of 14 August 2013. That position was last set out in the letter of conformity clearance of 1 June 2015.

32      First, it follows from all of the foregoing considerations set out in paragraphs 30 and 31 above that the United Kingdom was closely involved in the process under which the contested decision was drawn up and that it was aware of the reasons why the Commission took the view that the disputed amount should not be charged to the EAGF. Second, it must be held that the Commission’s position had been set out, throughout that procedure, in a sufficiently clear and precise fashion as regards the requirements of the case-law cited in paragraph 29 above and that it is evident from the documents in the case file that that position had been understood by the United Kingdom.

33      In those circumstances, the United Kingdom cannot rely on a breach of the obligation to state reasons in the contested decision. Nor can it plead any infringement of the principle of legal certainty, since it is clear from the foregoing considerations that the relevant rules of EU law were clear and precise, as required by the case-law set out in paragraph 29 above. Furthermore, the United Kingdom has not put forward any separate argument in support of the head of claim alleging an infringement of the principle of legality, with the result that that head of claim must be rejected on the same grounds as those set out in connection with the other heads of claim.

34      The first part of the second plea must therefore be rejected.

*The first plea, alleging an error of law in the interpretation of Article 3(1) and 3(3) of Regulation No 1433/2003 and of Article 52(1) and 52(2) of Regulation No 1580/2007*

35      The United Kingdom submits that the Commission ignored the wording used in Regulations No 1433/2003 and No 1580/2007, from which, according to the United Kingdom, it is clear that the VMP of a producer organisation is to include the production of all members which join that organisation. It adds that its interpretation is supported by the objectives, purposes and context of the provisions in question. From this it concludes that the Commission erred in law in giving a different interpretation to those provisions.

36      The Commission disputes the United Kingdom’s arguments.

37      In this regard, it should be noted that, according to settled case-law, when the wording of secondary EU law is open to more than one interpretation, preference must, if possible, be given to the interpretation which renders the provision consistent with the Treaty (see judgment of 25 February 2015, *Poland* v *Commission*, T‐257/13, not published, EU:T:2015:111, paragraph 37 and the case-law cited).

38      Furthermore, according to settled case-law, in interpreting a provision of EU law, it is necessary to consider not only its wording but also the context in which it occurs and the objectives of the rules of which it forms part (see judgment of 12 June 2015, *Health Food Manufacturers’ Association and Others* v *Commission*, T‐296/12, EU:T:2015:375, paragraph 61 and the case-law cited).

39      In addition, it should be noted that, where the textual and historical interpretations of a regulation, and in particular of one of its provisions, do not allow its precise scope to be assessed, the legislation in question must be interpreted by reference to both its purpose and its general structure (see judgment of 12 June 2015, *Health Food Manufacturers’ Association and Others* v *Commission*, T‐296/12, EU:T:2015:375, paragraph 62 and the case-law cited).

40      Lastly, an implementing regulation must, if possible, be given an interpretation that is consistent with the basic regulation (see judgment of 19 July 2012, *Pie Optiek*, C‐376/11, EU:C:2012:502, paragraph 34 and the case-law cited).

41      In the present case, the Court notes, first of all, that the contested decision applied a financial correction in the amount of EUR 1 849 194.86 for the years 2008 to 2012 following the exclusion of certain expenditure relating to the operational programmes of fruit and vegetable producer organisations of the United Kingdom for the years 2008 and 2009 on the ground that the United Kingdom had taken into account, in the calculation of the VMP of those organisations, the production of members joining a producer organisation irrespective of whether they were previously members of another producer organisation.

42      The issue before the Court is therefore whether, for the purpose of calculating the VMP of a producer organisation, it was appropriate to take into account the production of all its new members irrespective of whether they were previously members of another producer organisation. The ceiling for financial assistance granted by the European Union to a producer organisation depended on whether that was the case.

43      As regards, in the first place, the tenor of the relevant provisions, it must be held that, as the United Kingdom maintains, Article 3(3) of Regulation No 1433/2003 and Article 52(2) of Regulation No 1580/2007 did not draw any distinction between the production of new members which previously belonged to a producer organisation and the production of the other members. However, the second sentences of those two paragraphs stated that the Member States were to determine the conditions to avoid duplicate counting. As appears from the United Kingdom’s own written submissions, the risk of duplicate counting of the production of a new member could arise only if that new member had belonged, previously, to another producer organisation wishing also to include the production of that member in the calculation of its VMP. Therefore, the fact that Regulations No 1433/2003 and No 1580/2007 included such provisions designed to prevent the risk of duplicate counting may be construed as an initial indication of how the provisions at issue should be interpreted.

44      As regards, in the second place, the context of the relevant provisions, it appeared, first, from Article 3(5) of Regulation No 1433/2003 that, in order to serve as the basis for the calculation of the VMP, the production must have been disposed of in accordance with the first and second subparagraphs of Article 11(1)(c)(3) of Regulation No 2200/96, subject, in certain circumstances, to the first and second indents of Article 11(1)(c). Similarly, Article 52(5) of Regulation No 1580/2007 provided that only the production of the members of the producer organisation marketed by the producer organisation itself or under the conditions set out in Article 3(3)(b) and (c) of Regulation No 1182/2007 was to be counted in the calculation of the VMP.

45      It follows from those provisions that, in order to be taken into account in the calculation of the VMP, production must have been marketed by the producer organisation itself or, at least, in compliance with the terms and conditions which it laid down. The production of a new member of a producer organisation which was not previously a member of another producer organisation could not have been marketed through such an organisation or in compliance with the terms and conditions that it laid down and, therefore, could not be taken into account in the calculation of the VMP under the provisions cited. In that regard, it must be held that the provisions mentioned in paragraph 44 above did not draw any distinction between the production of new members and that of other members. Therefore, contrary to what the United Kingdom submits, those provisions concerned the production of all the members of a producer organisation.

46      Second, it was stated in Article 4(1) of Regulation No 1433/2003 and in Article 53(1) of Regulation No 1580/2007 that the ceiling on EU aid was to be calculated each year on the basis of the VMP during a 12-month reference period to be determined by the Member States. Article 4(2) and (3) of Regulation No 1433/2003 and Article 53(2) and (3) of Regulation No 1580/2007 set out what that reference period was. Thus, it followed from those provisions that the VMP of a producer organisation was equivalent to the marketed production during a reference period which was determined, first, according to the year of the operational programme and, second, according to a period which varied depending on the producer organisation in question with regard to Regulation No 1433/2003 and the accounting period of the producer organisation with regard to Regulation No 1580/2007.

47      It follows from those provisions that the production to be taken into account in the calculation of the VMP had to have been marketed during a producer organisation-specific reference period and prior to the year in which the operational programme was implemented.

48      In those circumstances, it follows from paragraphs 44 to 46 above that the production of a new member of a producer organisation which was not previously a member of an organisation of that kind could not have been marketed during the reference period by a producer organisation or in compliance with the terms and conditions that it laid down in so far as such a period was necessarily prior to the date of accession.

49      As regards, in the third place, the objectives of the legislation at issue, it appeared from recital 6 of Regulation No 2200/96 that these consisted in, inter alia, expanding on environmental concerns, including cultivation practices, the management of waste materials and the destruction of products withdrawn from the market, in particular as regards the protection of water quality, the maintenance of biodiversity and the upkeep of the countryside.

50      In order to address those objectives, producer organisations were created in particular with the aim, as provided for in Article 11 of Regulation No 2200/96, of ensuring that production was planned and adjusted to demand, particularly in terms of quality and quantity, and of promoting the use of cultivation practices, production techniques and environmentally sound waste-management practices in particular to protect the quality of water, soil and landscape and to preserve or encourage biodiversity.

51      Thus, in order to be recognised by a Member State, a producer organisation was under an obligation to adopt rules of association which required its producer members, in particular, to apply the rules adopted by the organisation relating to production reporting, production itself, marketing and protection of the environment.

52      Accordingly, the production of the members of one producer organisation met the objectives set by the legislation at issue whereas the production of other producers did not offer the same guarantees.

53      Consequently, the fact of taking into account, in the calculation of the VMP, only the production of new members which were already members of a producer organisation made it possible to ensure compliance with the objectives of the legislation of which the provisions at issue formed part, including those set out in paragraphs 49 and 50 above.

54      In those circumstances, it follows from the context and objectives of the relevant provisions and, to a lesser degree, from their tenor that only the production of new members which had previously been members of another producer organisation could be taken into account in the calculation of the VMP of a producer organisation.

55      In addition, contrary to what the United Kingdom claims, the production which serves as the basis for the calculation of the VMP is concerned not solely with a measurement of value, but with a combination of a measurement of value, the quality of the production and the status of the producer.

56      That conclusion is not called into question by the other arguments put forward by the United Kingdom.

57      First, the United Kingdom asserts that the provisions relating to insufficient historical data, namely Article 4(5) of Regulation No 1433/2003 and Article 53(5) of Regulation No 1580/2007, showed that there was no reason in principle to object to taking account of a value of production other than that which was marketed by the producer organisation itself.

58      In that regard, it is important to state that those provisions laid down that, where recently recognised producer organisations had insufficient historical data on marketed production, the VMP could be considered to correspond to the value of marketable production provided by the producer organisation for the purposes of recognition.

59      However, it must be held that Article 4(5) of Regulation No 1433/2003 and Article 53(5) of Regulation No 1580/2007 concerned solely those situations in which a recently recognised producer organisation had insufficient historical data on marketed production. Those provisions therefore governed a particular situation and cannot be used in the interpretation of provisions, that is to say Article 3(3) of Regulation No 1433/2003 and Article 52(2) of Regulation No 1580/2007, which addressed a different situation. Such an argument is therefore irrelevant to the present case.

60      Second, the fact that Article 51(5) of Commission Implementing Regulation (EU) No 543/2011 of 7 June 2011 laying down detailed rules for the application of Council Regulation (EC) No 1234/2007 in respect of the fruit and vegetables and processed fruit and vegetables sectors (OJ 2011 L 157, p. 1) confirmed the interpretation advocated by the United Kingdom is irrelevant to the present case since that regulation is not applicable *ratione temporis* to the facts of the case, as the parties themselves recognise.

61      In any event, it must be held that, according to Article 51(5) of Regulation No 543/2011, the VMP of new members of a producer organisation which joined a producer organisation for the first time could have been deemed to correspond to the value of their marketable production. However, suffice it to point out that the fact that that regulation expressly mentioned that situation may also be interpreted as an intention to amend the method for determining the VMP in respect of the regulations at issue in the present case. In that case, that article could not be used to support the interpretation given by the United Kingdom to the regulations at issue, which themselves did not expressly provide for the case of new members of a producer organisation which joined a producer organisation for the first time. That argument must therefore be rejected.

62      Third, the United Kingdom adds that its interpretation of Article 3(1) and 3(3) of Regulation No 1433/2003 and of Article 52(1) and 52(2) of Regulation 1580/2007 is supported by the objectives of the legislation of which they formed part. In that regard, it maintains that the objective of that legislation consisted in encouraging, first, growers to join producer organisations, and, second, to encourage producer organisations to accept new members. It infers from that proposition that the provisions relating to the VMP must not be construed in a restrictive manner, as such a construction would reduce not only the amount of aid available to those new members within producer organisations but also the financial encouragement for producer organisations as regards the adoption of operational programmes.

63      In that regard, suffice it to note that, for the reasons set out in paragraphs 50 to 53 above, the fact of taking into account, in the calculation of the VMP, only the production of new members which were already members of a producer organisation allowed for compliance with the objectives of the legislation of which the provisions at issue formed part.

64      In any event, as indeed the Commission notes, the interpretation which it accepted does not deter producers from joining producer organisations or deter the latter from accepting new members. It should be noted that EU financial assistance was paid to the operational fund created by a producer organisation which was a fund to which all members of the producer organisation were required to contribute. That fund was used to finance the operational programme of the producer organisation, which was a programme benefiting all members of the organisation. In that context, the EU financial assistance was directly related to the expenditure actually incurred for the implementation of the operational programme.

65      It follows from the foregoing that, in the case where a producer organisation welcomed a new member which was not a member of a producer organisation, the producer organisation immediately received the financial contribution of that new member and the latter benefited from the advantages of a producer organisation, namely, inter alia, those resulting from a stronger negotiating position due to the concentration of supply and those inherent in the implementation of the operational programme financed by the organisation. Moreover, as the Commission states, only the ceiling of the aid was determined by the VMP, since the amount of the VMP was calculated on the basis of the financial contributions of the members of the producer organisation and of the actual expenditure incurred by the operational fund as stated in paragraph 17 above. In those circumstances, the fact that the production of a new member which did not previously belong to another producer organisation was not taken into account in the VMP of the producer organisation which it joined could not have deterred the producer from joining the producer organisation and could not have deterred that organisation from welcoming a new producer. That argument must therefore be rejected.

66      Fourth, it should be noted that the United Kingdom maintains that the context of the relevant provisions reinforced its interpretation in so far as it was left to the discretion of the Member States to determine the detailed rules relating to the production of new members. However, it must be held that the definition of the VMP had not been left to the discretion of the Member States and was provided for in the regulations at issue. Such an argument is therefore irrelevant.

67      It follows from all of the foregoing that the first plea must be rejected.

*The second part of the second plea, alleging infringement of the principles of equal treatment and of non-discrimination*

68      The United Kingdom claims that the approach of the Commission consisting in drawing a distinction between new members which were already members of a producer organisation and those which were not and, therefore, between producers organisations themselves, infringes the principles of equal treatment and of non-discrimination.

69      The Commission disputes the United Kingdom’s arguments.

70      In that regard, it should be noted that, according to settled case-law, the principles of equal treatment and of non-discrimination require that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified (see judgment of 11 July 2006, *Franz Egenberger*, C‐313/04, EU:C:2006:454, paragraph 33 and the case-law cited). For that purpose, account must be taken of the principles and objectives of the field to which the measure in question relates (see judgment of 16 December 2008, *Arcelor Atlantique et Lorraine and Others*, C‐127/07, EU:C:2008:728, paragraph 26 and the case-law cited).

71      In the present case, it must be held that, depending on whether they were or were not already members of a producer organisation, the new members of a producer organisation were not in the same situation.

72      As has been stated in paragraph 51 above, in order to be recognised by a Member State, a producer organisation was required to adopt rules of association which required its producer members, in particular, to apply the rules adopted by the producer organisation relating to production reporting, production itself, marketing and protection of the environment. Those members were also bound, subject to exceptions determined by the producer organisation, to sell the entirety of their relevant production through that organisation, to provide the information requested by the producer organisation for statistical purposes, in particular on growing areas, quantities cropped, yields and direct sales or to pay the financial contributions provided for in its rules of association for the establishment and replenishment of the operational fund.

73      As has been stated in paragraphs 50 and 51 above, compliance with those requirements allowed producer organisations to meet the objectives which had been set for them.

74      It must be held, however, that such obligations were not imposed on producers which were not members of a producer organisation.

75      Consequently, new members which had already belonged to a producer organisation were not in the same situation as producers which had never been members. Likewise, and on the same grounds, producer organisations which welcomed new members which had never been members of a producer organisation were not in the same situation as those whose new members had previously belonged to such organisations.

76      In addition, the United Kingdom submits that the Commission’s interpretation leads to a difference in treatment between newly recognised producer organisations and other producer organisations.

77      In that regard, it should be noted that Article 4(5) of Regulation No 1433/2003 and Article 53(5) of Regulation No 1580/2007 provided that, in cases where recently recognised producer organisations had insufficient historical data on marketed production, the VMP was considered to be the value of marketable production provided by the producer organisation for the purposes of recognition. Article 53(5) of Regulation No 1580/2007 stated that this was to be calculated as the average value of the marketed production for the previous three years of all producers which were members of the producer organisation when the application for recognition was submitted.

78      In the present case, it must be held that pre-existing producer organisations and newly recognised producer organisations with insufficient historical data on marketed production were not in the same situation in so far as the former had sufficient data relating to marketed production. In any event, a difference in treatment consisting in treating newly recognised producer organisations more favourably was objectively justified, within the meaning of the case-law cited in paragraph 70 above, by the desire to encourage the creation of new producer organisations.

79      It follows that, since the situations mentioned in paragraphs 71 to 78 above are not comparable, the Commission cannot be criticised on the ground that it infringed the principles of equal treatment and non-discrimination.

80      It follows from all of the foregoing that the second part of the second plea must be rejected, and that the action must be dismissed in its entirety.

**Costs**

81      Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the United Kingdom has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Commission.

On those grounds,

THE GENERAL COURT (Sixth Chamber)

hereby:

1.      **Dismisses the action;**

2.      **Orders the United Kingdom of Great Britain and Northern Ireland to pay the costs.**

| | | |
| --- | --- | --- |
| Berardis | Papasavvas | Spineanu-Matei |

Delivered in open court in Luxembourg on 29 June 2017.

| | | |
| --- | --- | --- |
| E. Coulon | | G. Berardis |

| | | |
| --- | --- | --- |
| Registrar | | President |

---

[\*](#Footref*)      Language of the case: English.