Case C‑2/18
Lietuvos Respublikos Seimo narių grupė
(Request for a preliminary ruling from the Lietuvos Respublikos Konstitucinis Teismas)
Judgment of the Court (Second Chamber), 13 November 2019
(Reference for a preliminary ruling — Common agricultural policy — Common organisation of the markets — Milk and milk products — Regulation (EU) No 1308/2013 — Article 148(4) — Contract for the delivery of raw milk — Free negotiation of price — Combating unfair commercial practices — Prohibition of payment of different prices to producers of raw milk belonging to a group that is formed according to the daily quantity sold, and of a reduction in price without justification)
1.        Agriculture — Common organisation of the markets — Milk and milk products — Contractual relations in that sector — Rules of national law prohibiting the payment of different prices to producers of raw milk belonging to a group that is formed on the basis of the daily quantity sold — Lawfulness — Conditions — Rules appropriate for achieving the objective of combating unfair commercial practices — Observance of the principle of proportionality
(European Parliament and Council Regulation No 1308/2013, Art. 148)
(see paragraphs 30, 35, 45, 49-53, 56, 57, 62, 70, operative part 1)
2.        Agriculture — Common organisation of the markets — Milk and milk products — Contractual relations in that sector — Rules of national law prohibiting buyers of raw milk from reducing without justification the price agreed with producers and making all price reductions of more than 3% subject to authorisation by the competent national authority — Lawfulness — Conditions — Rules appropriate for achieving the objective of combating unfair commercial practices — Observance of the principle of proportionality
(European Parliament and Council Regulation No 1308/2013, Art. 148)
(see paragraphs 72-74, 78, 82, operative part 2)
Résumé
EU law does not preclude national measures to combat unfair practices which have the effect of restricting the process of free negotiation of prices in the raw milk sector
By its judgment of 13 November 2019, Lietuvos Respublikos Seimo narių grupė (C‑2/18), the Court held that Regulation No 1308/2013 establishing a common organisation of the markets in agricultural products (1) does not preclude rules of national law which, in order to combat unfair commercial practices, prohibit buyers of raw milk from paying different purchase prices to producers who must be regarded as belonging to the same group on the basis of the daily quantity of raw milk sold that is of identical composition and quality and delivered via the same method, in so far as those rules are appropriate for ensuring attainment of the objective pursued and do not go beyond what is necessary to achieve that objective. The Court also stated that Member States may, similarly in order to combat unfair commercial practices, adopt rules of national law which prohibit a buyer of raw milk from reducing, without justification, the price agreed with the producer and which make all price reductions of more than 3% subject to authorisation by the competent national authority.
The dispute in the main proceedings forms part of an action brought by a group of Lithuanian parliamentarians for a review of the constitutionality of the Law prohibiting unfair practices by Lithuanian operators when buying and selling raw milk. In addition to the provisions concerning the two prohibitions referred to above, that law provides that sellers of raw milk are to be divided into ten groups that are formed according to the daily quantity of raw milk sold. The law also required the operators concerned to draw up a written contract when purchasing raw milk, as provided for in Article 148(1) of Regulation No 1308/2013. All of those measures were principally intended to combat unfair commercial practices by buyers of raw milk vis-à-vis the party considered to be the weaker party, namely milk producers, in the light of characteristics specific to the sector. The referring court was uncertain whether the two prohibitions referred to above comply with the principle of freedom to negotiate laid down in Article 148(4) of Regulation No 1308/2013.
The Court pointed out, first of all, that, in accordance with Article 4(2)(d) TFEU, the common agricultural policy is a competence shared between the European Union and the Member States, and the Member States therefore have legislative powers which allow them to exercise their competence to the extent to which the European Union has not exercised its competence. Next, the Court stated that the establishment of a common market organisation does not prevent the Member States from applying national rules intended to attain an objective relating to the general interest other than those covered by that common market organisation even if those rules are likely to have an effect on the functioning of the common market in the sector concerned. It stated, in this regard, that by adopting Regulation No 1308/2013 and, in particular, Article 148 thereof, the European Union did not exhaustively exercise its competence in the area of contractual relations between the parties to a contract for the delivery of raw milk and that the references to certain unfair commercial practices in that regulation do not establish that the objective of combating unfair practices is covered by that regulation. In addition, for the Court to interpret that article as prohibiting Member States from adopting any measure to combat unfair practices in the milk sector would run counter to the objective pursued by Regulation No 1308/2013, which is to ensure the viable development of production and a resulting fair standard of living for dairy farmers, in accordance with the objectives of the common agricultural policy, and to the objective of ensuring the maintenance of effective competition in the markets in agricultural products. The Court thus recognised the residual competence of Member States to adopt measures to combat unfair commercial practices which have the effect of restricting the process of free negotiation of prices, even if those measures have an effect on the principle of free negotiation of the price payable for the delivery of raw milk laid down in Article 148 of Regulation No 1308/2013. However, the Court stated that such measures must be proportionate to the objective pursued. In the present case, it held that the Lithuanian rules at issue appear appropriate for preventing the risk that the party considered to be the weaker contracting party — namely milk producers — may be compelled to accept unjustified price reductions and, thus, for combating potential unfair commercial practices, and that, taking into account the objectives of the common agricultural policy and the proper functioning of the common market organisation, those rules do not go beyond what is necessary to achieve the objectives which they pursue, this, however, being a matter for the referring court to determine.
1      Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 (OJ 2013 L 347, p. 671), as amended by Regulation (EU) 2017/2393 of the European Parliament and of the Council of 13 December 2017 (OJ 2017 L 350, p. 15).