3.

When a question arises on the principle of proportionality and the observance thereof the object which the measure seeks to attain must first be ascertained, as the applicants rightly submit, in order to establish whether the means which are used to ensure its attainment are excessive or not. Even though the preamble to Regulation No 1259/72 refers in connection with the lodging of the security merely to the processing of the butter and not to the processing within a specified period, it seems clear to me not only that it is concerned with achieving the relevant aim, that is, to relieve pressure on the butter market definitively, but also that observance of the processing time-limit represents an essential element of the system; the meaning and the purpose of the provision and its general structure make that clear. In that respect I refer to my Opinion in Joined Cases 99 and 100/76, from which I do not wish to depart in the present proceedings. The processing periods provided for are principally designed to ensure that only such quantity is purchased as the tenderer can in fact process or have processed. In that way as many of the interested parties as possible have access to the products, and therefore effective competition exists, while the laying-up of speculative stocks in anticipation of price increases in the market of competing fats by a few who are in a strong financial position is prevented. In addition the processing time-limits enable checks to be made within a convenient period so that they may be easily reviewed and any necessary adjustments made. A further not insignificant consideration is that the processing periods help to keep within the limits the administrative burden imposed on national authorities by the necessity of carrying out such checks. It is thus established that the fixing of time-limits for processing is clearly linked with certain fundamental aspects of market organization policy, in particular the need to ensure that the processing is carried out under the same conditions as those under which the price was fixed by the Commission. In that respect it must be noted that the sale price is based both on the market price of butter, which is subject to variations according to the volume of stocks, and on the price of those fats with which the processor is competing; that price is similarly subject to variations according to the state of the world market. It follows that in principle, if the abovementioned requirement is to be enforced, effective penalties must be imposed. In the absence of other grounds, importance may be attached to the observance of the processing periods because they facilitate administrative tasks. However, it does not seem appropriate to apply to the penalties imposed in that connection the principle expressed in the judgment in Case 122/78, ( 3 ) according to which a time-limit which was said to have been imposed merely in the interests of administrative efficiency, namely the time-limit for the production of proof that the obligation to import had been fulfilled, may not be enforced by means of severe penalties. a consideration which is of much greater importance in this case — whether the penalties imposed in order to achieve one aim are appropriate in comparison with the penalties which are provided to ensure the attainment of another more important goal. In that case the disputed provision was intended, on the one hand, to ensure that the obligation to import was fulfilled during the period of validity of a licence and, on the other, to ensure that the proof was furnished, merely for information purposes, within a specified period. As a result it was established that to apply exactly the same penalty for infringements of widely differing gravity was incompatible with the principle of proportionality. The failure to furnish proof of importation within a specified period appeared to warrant only a penalty which was more suited to the practical consequences of the infringement and which imposed on the importer a significantly lighter penalty than that which applied for the nonperformance of the main obligation. However (and here I agree with the applicant), another aspect of that judgment may be noted. It shows that in connection with the principle of proportionality, it is necessary to establish not only whether the means employed to attain an end are appropriate, but also — In the present case it may safely be stated that the essential purpose of the provision on the sale of intervention butter at reduced prices is the processing of that product because that relieves the pressure of the butter market. The observance of a fixed time-limit for the processing would not seem to carry the same weight as regards the achievement of that aim. In that respect it is not necessarily significant that the processing periods may vary considerably. The Commission might argue that the variations result from the necessary initial process of trial and error and from the need to extend the period in order to increase the incentive to buy because of the quantity of stocks. It should be noted, moreover, that the provisions of Regulation No 262/79 introduced an intermediate period for the first processing operation. It is also significant in that respect, however, that Regulation No 232/75 provided for an additional period of grace for the processing, during which only a much smaller part of the security is forfeit and that the period was extended in Regulation No 262/79. On the other hand, it is undeniable that the uniform penalty has very different effects according to which obligation is not discharged. Where the processing itself is not clone at all, and the butter is brought on to the market, all that must be paid in principle is the difference between the sale price and the market price, in the form of security. That is not really a disadvantage if the statements in the judgment in Joined Cases 99 and 100/76, are to be followed; there it is said that the forfeiture of the security cannot be regarded as being in the nature of a penalty, because in fact only the market price for butter must be paid. It is possible that a case may arise where the minimum price together with the security amounts to a sum which is higher than the intervention price and therefore the market price, but it may be assumed that the resulting disadvantage would be comparatively small. On the other hand, when the processing is completed after the expiry of the prescribed period, the forfeiture of the whole security undoubtedly produces different, more serious consequences. As the applicant has rightly pointed out, the payment of the market price for the butter under such circumstances places a considerable burden on the purchaser, because after the processing has been completed the value of the goods is considerably diminished and because, it must also be acknowledged, where such processed butter is used for the manufacture of the products listed in the provision — ice-cream and pastry products — it is not possible to absorb such a cost factor since those products are generally manufactured by the addition of other, cheaper fats, on the value of which the minimum selling price of butter is based. In view of that circumstance, it is clear that there is an evident disproportion between the penalty which is imposed when the processing is not done at all and that which applies where the processing is in fact completed but the processing time-limit has not been observed. It must also be conceded that in practice the state of affairs must frequently frustrate the primary purpose of the provision — the relief of pressure on the butter market — as, in situations where there is a risk of exceeding the processing period, the difference between the penalties encourages purchasers not to complete the processing at all and to resell the butter as unprocessed butter. Consequently, there are in fact grounds on which the regulations cited in the question submitted by the national court may be held to be invalid in so far as they provide for the forfeiture of the whole processing security even where the processing is completed after the expiry of the prescribed period.