Judgment — ECLI:EU:C:1998:138
Date: 1998-03-26
Language of the case: Greek
Court formation: Fifth Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Agriculture and Fisheries;Tobacco
Concepts: Raw tobacco
Procedure: Reference for a preliminary ruling
Origin: Greece

Summary of the J u d g m e n t 
1. Agriculture — Common organisation of the markets — Raw tobacco — System of maximum 
guaranteed quantities — General reduction in intervention prices and the premium granted 
to purchasers where quantities are exceeded — Whether compatible with the objectives of the 
common agricultural policy — Infringement of the principles of proportionality or non­
discrimination — No infringement 
(EC Treaty, Art. 39; Council Regulation No 1114/88) 
I - 1333 
SUMMARY — CASE C-324/96 
2. Agriculture — Common organisation of the markets — Raw tobacco — System of maximum 
guaranteed quantities — 1989 harvest quantities fixed for certain varieties after they had 
been planted — Infringement of the principle of the protection of legitimate expectations — 
No infringement — Retroactive effect required by the objective to be achieved — Determina­
tion, for the harvest in question, of actual production as well as the resulting prices and pre­
mium — Whether lawful 
(Council Regulations Nos 1114/88 and 1252/89; Commission Regulation No 2046/90) 
3. Agriculture — Common organisation of the markets — Raw tobacco — System of maximum 
guaranteed quantities — Principle of fixing by varieties each year for the harvest in the fol­
lowing year — Application without retroactive effect — Entry into force of the corresponding 
regulation after that of the regulation allocating the maximum guaranteed quantities for the 
harvest in course — Whether lawful 
(Council Regulations Nos 1251/89 and 1252/89) 
4. Agriculture — Common organisation of the markets — Raw tobacco — System of maximum 
guaranteed quantities — Excess production — Repayment of the amounts corresponding to 
the reduction in prices and premium — Obligation devolving on the processor — Renegotia­
tion of the sales price with producers — Option provided by the standard cultivation contract 
(Council Regulation No 727/70, Art. 4(5); Commission Regulation No 4263/88, annex) 
1. In so far as it fixes overall maximum 
guaranteed quantities and provides for a 
general reduction in intervention prices 
and premiums for purchasers if those 
quantities are exceeded, irrespective of the 
production volume of each producer and 
without distinguishing between the dif­
ferent tobacco varieties, Regulation 
N o 1114/88 amending Regulation 
No 727/70 on the common organisation 
of the market in raw tobacco is not 
incompatible with the objectives of the 
common agricultural policy and does not 
infringe the principle of proportionality 
or that of non-discrimination. 
With regard to the various objectives of 
the common agricultural policy set out in 
Article 39 of the Treaty, •which may prove 
to be contradictory, the Community 
institutions must secure a permanent har­
monisation between those objectives and, 
where necessary, allow any one of them 
temporary priority in order to satisfy the 
demands of the economic factors or con­
ditions in view of which their decisions 
are made, on condition, however, that 
such harmonisation does not have the 
effect of rendering impossible the realisa­
tion of the other objectives. Pursuing the 
sole objective of ensuring a fair standard 
of living for producers and processors of 
raw tobacco, in particular by increasing 
their individual earnings, 'would involve a 
serious risk of rendering impossible, in a 
market characterised by excess produc­
tion, the realisation of the objective of 
stabilising the market in raw tobacco pur­
sued through the introduction of the sys­
tem of maximum guaranteed quantities 
by Regulation No 1114/88, in accordance 
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PETRIDI v SIMOU AND OTHERS 
with one of the objectives of the common 
agricultural policy set out in Article 39. 
So far as the principle of proportionality 
is concerned, the Council, in adopting 
Regulation N o 1114/88, acted in compli­
ance with that principle inasmuch as it 
did not choose a measure which was 
manifestly inappropriate having regard to 
the objective pursued, and also in accord­
ance with the need to effect the appropri­
ate adjustments by degrees prescribed by 
Article 39(2)(b) of the Treaty. When it 
adopted that regulation, the Council was 
entitled to consider, without making any 
manifest error of assessment, that the sys­
tem of maximum guaranteed quantities 
was less onerous for tobacco growers 
than an individual quota system, the mere 
fact that this system proved insufficiendy 
effective not being enough to justify the 
conclusion that the regulation was 
invalid. 
With regard, finally, to the principle of 
non-discrimination, this does not pre­
clude a Community regulation which 
introduces a system of guarantee thresh­
olds for the entire Community market 
involving a reduction in the production 
aid of all the producers concerned, even 
if the exceeding of those thresholds was 
not due to an increase in their produc­
tion. In such a system, all Community 
producers must together bear equally the 
consequences of the decisions which the 
Community institutions are led to adopt 
in order to respond to the risk of an 
imbalance which may arise on the market 
between production and outlets. 
2. In so far as it established the maximum 
quantities for the Mavra and Tsebelia 
varieties harvested in 1989 but came into 
force only on 11 May 1989, Regulation 
N o 1252/89, allocating for each variety or 
group of varieties of tobacco the overall 
maximum guaranteed quantity fixed by 
Regulation N o 1114/88 for the 1989 har­
vest throughout the Community, does 
not infringe the principle of the protec­
tion of legitimate expectations, and it was 
necessary for it to have retroactive effect 
in order for it to achieve its objective. 
In the first place, even though investment 
programming by the traders concerned 
was no longer possible when the regu­
lation entered into force and overproduc­
tion of the varieties concerned could no 
longer be avoided, the fixing of the quan­
tities in question was not unforeseeable 
for those traders, who must have antici­
pated, in view of the fact that the regu­
lation forms part of a corpus of measures, 
in force since 1988, designed to limit 
tobacco production in the Community, 
that the quantity for the two varieties in 
question would be further reduced for 
the 1989 harvest. 
I - 1335 
SUMMARY — CASE C-324/96 
Second, the objectives pursued by Regu­
lation N o 1114/88, which consisted in 
limiting, for the various harvests, Com­
munity tobacco production to a given 
quantity and in discouraging production 
of varieties, such as Mavra and Tsebelia, 
which were difficult to dispose of, made it 
necessary to fix, even retroactively, a 
maximum guaranteed quantity for the 
1989 harvest of those varieties. 
Furthermore, and in so far as Regulation 
N o 1252/89 is not invalid, the Commis­
sion could reasonably determine, in 
Regulation N o 2046/90, the exact amount 
of the prices and premiums received by 
the producers on the basis of whether or 
not the quantities by varieties fixed by 
Regulation N o 1252/89 had been 
exceeded and consequently reduce the 
prices and premium for the 1989 harvest 
of the varieties concerned. 
3. It follows from the provisions of Regu­
lation N o 1251/89, under which the 
maximum guaranteed quantities for each 
of the varieties or groups of varieties of 
tobacco produced in the Community are 
fixed each year for the harvest in the fol­
lowing year, that, according to the legisla­
ture, the principle of fixing those quanti­
ties one year before the harvest was to be 
applied only prospectively, and for the 
first time in the 1990 harvest. The Coun­
cil thus did not retroactively apply Regu­
lation N o 1251/89, with the result that, 
by fixing the entry into force of that 
regulation at a date later than that of 
the entry into force of Regulation 
N o 1252/89 fixing the maximum quanti­
ties for the 1989 harvest, it did not exceed 
the broad discretion which it enjoys in 
matters relating to the common agricul­
tural policy or give improper reasons for 
its choice. 
4. In the context of the common organisa­
tion of the market in raw tobacco, estab­
lished by Regulation N o 727/70, it is the 
processing undertaking which is required 
to repay, in so far as it receives them, the 
amounts corresponding to the reduction 
in the intervention prices and the pre­
mium granted to producers decided on 
pursuant to Article 4(5) of that regu­
lation, as amended by Regulations 
Nos 1114/88 and 1251/89, in the event 
that the maximum guaranteed quantities 
are exceeded for the relevant varieties of 
tobacco produced in the Community. In 
such a case, however, the second para­
graph of clause 8 of the standard cultiva­
tion contract set out in the annex to 
Regulation N o 4263/88 allows the con­
tract price to be renegotiated between the 
processing undertaking and the tobacco 
producers in line 'with the reduction in 
the prices and premium, such renegotia­
tion being consistent with the fact that, in 
a system of maximum guaranteed quanti­
ties, all Community producers must 
together bear equally the consequences of 
the decisions which the Community 
institutions are led to adopt in order to 
respond to the risk of an imbalance which 
may arise on the market between produc­
tion and outlets. 
I -1336