Judgment of the Court of 12 July 1977. - Hoffmann's Stärkefabriken AG v Hauptzollamt Bielefeld. - Reference for a preliminary ruling: Finanzgericht Münster - Germany. - Case 2-77.



European Court reports 1977 Page 01375

Greek special edition Page 00411

Portuguese special edition Page 00487



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

1 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - CEREALS - MAIZE STARCH - PRODUCTION REFUND - CALCULATION - SUPPLY PRICE OF BASIC PRODUCT - MODIFICATION - GENERAL POWER OF COUNCIL - FREE EXERCISE

( REGULATION NO 371/67 OF THE COUNCIL , ARTICLE 2 ; REGULATION NO 1132/74 OF THE COUNCIL , ARTICLE 7 ; REGULATION NO 120/67 OF THE COUNCIL , ARTICLE 11 ( 3 ), 26 )

2 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - AGRICULTURAL PRICES ( PRINCIPLE OF ANNUAL FIXING ) - ADJUSTMENTS

3 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - MAIZE STARCH AND POTATO STARCH - PRODUCTION REFUND - CALCULATION - SUPPLY PRICE OF BASIC PRODUCTS - JUSTIFICATION

( REGULATION NO 321/75 OF THE COUNCIL , ARTICLE 1 )

Summary

1 . IT CANNOT BE CONCEDED THAT WHEN THE COUNCIL ADOPTED THE SPECIFIC PROVISION IN ARTICLE 2 OF REGULATION NO 371/67 AND ARTICLE 7 OF REGULATION NO 1132/74 , IT INTENDED TO RESTRICT THE EXERCISE OF A GENERAL POWER WHICH IT HAD EXPRESSLY CONFERRED ON ITSELF BY ARTICLES 11 ( 3 ) AND 26 OF REGULATION NO 120/67 AND WHICH IT REQUIRED TO EXERCISE FREELY FOR THE PROPER ADMINISTRATION OF THE RELEVANT ORGANIZATION OF THE MARKET .

2 . WHILST THE ANNUAL FIXING OF AGRICULTURAL PRICES INDEED CONSTITUTES A BASIC ECONOMIC FEATURE OF THE COMMON AGRICULTURAL POLICY AS IT IS AT PRESENT IMPLEMENTED SUCH FIXING NEITHER IMPLIES THAT THOSE PRICES CANNOT BE CHANGED IN ANY CIRCUMSTANCES NOR , IN CONSEQUENCE , DOES IT PROHIBIT THE COUNCIL FROM ADJUSTING THEM IN THE COURSE OF THE MARKETING YEAR , WHEN SUCH ADJUSTMENTS ARE JUSTIFIED .

3 . THERE ARE OBJECTIVE GROUNDS FOR THE DIFFERENCE BETWEEN THE TREATMENT ACCORDED POTATO STARCH PRODUCERS AND THAT ACCORDED MAIZE STARCH PRODUCERS IN THE MATTER OF THE CALCULATION OF THE PRODUCTION REFUND FOLLOWING A CHANGE IN THE SUPPLY PRICE OF THE BASIC PRODUCT SO THAT THE TRANSITIONAL MEASURE ENACTED BY ARTICLE 1 OF REGULATION NO 231/75 IN CONNEXION WITH THE PRODUCTION REFUND FOR POTATO STARCH DOES NOT CONSTITUTE DISCRIMINATION AGAINST MAIZE STARCH PRODUCERS .

Parties

IN CASE 2/77

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE FINANZGERICHT MUNSTER FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN

HOFFMANN ' S STARKEFABRIKEN AG , BAD SALZUFLEN , GERMANY ,

AND

HAUPTZOLLAMT BIELEFELD ,

Subject of the case

ON THE VALIDITY OF ARTICLE 1 ( 1 ) OF REGULATION ( EEC ) NO 3113/74 OF THE COUNCIL OF 9 DECEMBER 1974 OJ L 332 OF 12 . 12 . 1974 , P . 1 ) AND ON THE INTERPRETATION OF THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE EEC TREATY AND OF ARTICLE 1 OF REGULATION NO 231/75 OF THE COMMISSION OF 30 JANUARY 1975 OJ L 24 OF 31 . 1 . 1975 , P . 42 ),

Grounds

1 BY AN ORDER OF 20 DECEMBER 1976 WHICH REACHED THE COURT REGISTRY ON 4 JANUARY 1977 THE FINANZGERICHT MUNSTER REFERRED TO THE COURT , PURSUANT TO ARTICLE 177 OF THE EEC TREATY , TWO QUESTIONS , THE FIRST OF WHICH RELATES TO THE VALIDITY OF ARTICLE 1 ( 1 ) OF REGULATION NO 3113/74 OF THE COUNCIL OF 9 DECEMBER 1974 ( OJ L 332 OF 12 . 12 . 1974 ) AMENDING REGULATION NO 1132/74 ON PRODUCTION REFUNDS IN THE CEREALS AND RICE SECTORS , AND THE SECOND , REFERRED AS AN ALTERNATIVE , CONCERNS THE INTERPRETATION OF THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE EEC TREATY IN RELATION TO THE METHODS OF CALCULATING THE PRODUCTION REFUND ON POTATO STARCH AND MAIZE STARCH .

THOSE QUESTIONS WERE REFERRED IN THE COURSE OF A DISPUTE BETWEEN THE PLAINTIFF IN THE MAIN ACTION , THE HOFFMANN ' S STARKEFABRIKEN UNDERTAKING , AND THE HAUPTZOLLAMT , BIELEFELD CONCERNING THE AMOUNT PAYABLE BY WAY OF PRODUCTION REFUND TO THE PLAINTIFF IN RESPECT OF MAIZE INTENDED FOR THE MANUFACTURE OF STARCH .

2 ARTICLE 11 OF REGULATION NO 120 OF THE COUNCIL OF 13 JUNE 1967 ON THE COMMON ORGANIZATION OF THE MARKET IN CEREALS ( OJ ENGLISH SPECIAL EDITION 1967 , P . 33 ), AS AMENDED WITH EFFECT FROM 1 AUGUST 1974 BY ARTICLE 5 OF REGULATION NO 1125/74 OF THE COUNCIL OF 29 APRIL 1974 ( OJ 128 OF 10 . 5 . 1974 , P . 12 ), PROVIDES THAT A PRODUCTION REFUND SHALL BE GRANTED :

' ( A ) FOR MAIZE AND COMMON WHEAT USED IN THE COMMUNITY FOR THE MANUFACTURE OF STARCH ;

( B ) FOR POTATO STARCH ;

( C ) FOR MAIZE GROATS AND MEAL ( GRITZ ) USED IN THE COMMUNITY FOR THE MANUFACTURE OF GLUCOSE BY DIRECT HYDROLYSIS ;

( D ) FOR MAIZE USED IN THE COMMUNITY BY THE MAIZE INDUSTRY FOR THE MANUFACTURE OF MAIZE GROATS AND MEAL ( GRITZ ) USED IN THE COMMUNITY BREWING INDUSTRY FOR THE PRODUCTION OF BEER . '

ACCORDING TO THE TENTH RECITAL IN THE PREAMBLE TO REGULATION NO 120/67 THE GRANTING OF THAT REFUND WAS , WITH REGARD TO MAIZE INTENDED FOR THE MANUFACTURE OF STARCH , JUSTIFIED BY THE CIRCUMSTANCE THAT ' BECAUSE OF THE SPECIAL SITUATION ON THE MARKET IN STARCHES AND , IN PARTICULAR , THE NEED FOR THAT INDUSTRY TO KEEP PRICES COMPETITIVE WITH THOSE FOR SUBSTITUTE PRODUCTS , IT IS NECESSARY TO ENSURE BY MEANS OF A PRODUCTION REFUND THAT THE BASIC PRODUCTS USED BY THE INDUSTRY ARE MADE AVAILABLE TO IT AT A LOWER PRICE THAN THAT WHICH WOULD RESULT FROM APPLYING THE SYSTEM OF LEVIES AND COMMON PRICES ' .

ACCORDING TO THE SAME RECITAL : ' FOR SIMILAR REASONS AND BECAUSE OF THE INTERCHANGEABILITY OF STARCHES WITH QUELLMEHL AND MAIZE GROATS AND MEAL , PRODUCTION REFUNDS SHOULD ALSO BE GRANTED IN RESPECT OF THE LATTER PRODUCTS ' .

PURSUANT TO ARTICLE 11 ( 3 ) OF THE SAID REGULATION THE COUNCIL , ACTING IN ACCORDANCE WITH THE VOTING PROCEDURE LAID DOWN IN ARTICLE 43 ( 2 ) OF THE TREATY ON A PROPOSAL FROM THE COMMISSION , SHALL ADOPT RULES FOR THE APPLICATION OF THIS ARTICLE AND FIX THE AMOUNT OF THE PRODUCTION REFUND .

3 PURSUANT TO ARTICLE 11 ( 3 ), ARTICLE 1 OF REGULATION NO 371/67 OF THE COUNCIL OF 25 JULY 1967 FIXING PRODUCTION REFUNDS ON STARCHES AND QUELLMEHL , LAID DOWN THAT THE PRODUCTION REFUND ON MAIZE FOR THE MANUFACTURE OF STARCH SHOULD BE EQUAL TO THE DIFFERENCE PER 100 KG BETWEEN THE THRESHOLD PRICE OF MAIZE AND A ' SUPPLY PRICE ' , A FIXED SUM OF 68 U.A . PER METRIC TON CORRESPONDING TO THE PRICE AT WHICH IT WAS CONSIDERED DESIRABLE AND USUAL FOR MANUFACTURERS OF MAIZE STARCH TO ACQUIRE MAIZE , TAKING ACCOUNT OF THEIR COMPETITIVE POSITION WITH REGARD , ON THE ONE HAND , TO PRODUCERS OF SYNTHETIC STARCHES AND , ON THE OTHER HAND , TO PRODUCERS OF POTATO STARCH .

ACCORDING TO ARTICLE 2 OF THE SAME REGULATION IF THE PRICES OF THE BASIC PRODUCTS MENTIONED IN ARTICLE 1 , WHICH INCLUDE MAIZE , ' SHOW APPRECIABLE AND PERSISTENT VARIATIONS ' IN RELATION TO THE SUPPLY PRICE THE AMOUNT OF THE LATTER MAY BE ALTERED BY THE COUNCIL , ACTING IN ACCORDANCE WITH THE VOTING PROCEDURE LAID DOWN IN ARTICLE 43 ( 2 ) OF THE TREATY ON A PROPOSAL FROM THE COMMISSION .

REGULATION NO 371/67 WAS REPEALED AND REPLACED BY REGULATION NO 1132/74 OF THE COUNCIL OF 29 APRIL 1974 , ARTICLE 7 OF WHICH REPEATS ARTICLE 2 REFERRED TO ABOVE .

IT IS CLEAR FROM THESE CONSIDERATIONS THAT THE ESSENTIAL OBJECTIVE OF THE SYSTEM IN QUESTION WAS TO ALLOW STARCH MANUFACTURERS , IN ORDER TO ENSURE THAT THEY REMAINED COMPETITIVE , TO PURCHASE THEIR RAW MATERIALS AT A PRICE NEARER TO PRICES ON THE WORLD MARKET THAN THE PRICE OBTAINED SIMPLY BY APPLYING THE THRESHOLD PRICE .

4 AFTER THE 1974/1975 MARKETING YEAR THE COUNCIL , OR THE COMMISSION IN IMPLEMENTATION OF A REGULATION OF THE COUNCIL , SUCCESSIVELY INCREASED THE SUPPLY PRICE , BRINGING IT TO 82 U.A . PER METRIC TON IN AUGUST 1974 BY REGULATION NO 1132/74 ( OJ L 128 OF 10 MAY 1974 ), TO 87.45 U.A . PER METRIC TON IN OCTOBER 1974 BY REGULATION NO 2518/74 ( OJ L 270 OF 5 OCTOBER 1974 ) AND TO 103.10 U.A . PER METRIC TON FROM 1 APRIL 1975 BY THE REGULATION THE VALIDITY OF WHICH IS CALLED IN QUESTION , WHILST ALSO REDUCING THE AMOUNT OF THE REFUND , EXCEPT IN THE SECOND INSTANCE , WHERE THE INCREASE IN THE SUPPLY PRICE WAS MATCHED BY A LIKE INCREASE IN THE THRESHOLD PRICE .

THE PLAINTIFF IN THE MAIN ACTION DISPUTED THE LEGALITY OF THE LAST REDUCTION AND CLAIMED FROM THE HAUPTZOLLAMT BIELEFELD PAYMENT OF A REFUND CALCULATED ON THE BASIS OF THE SUPPLY PRICE AS PREVIOUSLY FIXED .

I - THE VALIDITY OF ARTICLE 1 ( 1 ) OF REGULATION NO 3113/74 OF THE COUNCIL OF 9 DECEMBER 1974

5 THE FIRST QUESTION ASKS WHETHER : ' ARTICLE 1 ( 1 ) OF REGULATION NO 3113/74 OF THE COUNCIL IS INVALID OR INAPPLICABLE

( A ) BECAUSE THE REQUIREMENTS OF ARTICLE 7 OF REGULATION NO 1132/74 OF THE COUNCIL OF 29 APRIL 1974 ( OJ L 128 OF 10 . 5 . 1974 , P . 24 ) ARE NOT FULFILLED ;

( B ) BECAUSE ARTICLE 11 OF REGULATION NO 120/67 OF THE COUNCIL OF 13 JUNE 1967 ( OJ ENGLISH SPECIAL EDITION 1967 , P . 33 ) HAS BEEN INFRINGED ;

( C ) BECAUSE OF THE VIOLATION OF THE PRINCIPLE , ESTABLISHED IN REGULATION NO 120/67 , THAT AGRICULTURAL PRICES SHALL NOT BE CHANGED DURING THE MARKETING YEAR . '

6 AS TO ( A )

THE PLAINTIFF IN THE MAIN ACTION MAINTAINS THAT THE CONDITION OF AN APPRECIABLE AND PERSISTENT VARIATION IN THE PRICE OF MAIZE ON THE WORLD MARKET , IN PARTICULAR AN INCREASE IN RELATION TO THE SUPPLY PRICE , WAS NOT FULFILLED IN DECEMBER 1974 WHEN THE COUNCIL , BY MEANS OF THE CONTESTED REGULATION , INCREASED THE SUPPLY PRICE TO 103.10 U.A . PER METRIC TON .

ON THE CONTRARY , IT IS CLEAR FROM THE FIGURES PRODUCED THAT WORLD PRICES REMAINED STABLE IN RELATION TO THOSE PREVAILING AT THE DATE OF THE PREVIOUS FIXING OF THE SUPPLY PRICE AT 87.45 U.A . PER METRIC TON BY REGULATION NO 2518/74 OF 4 OCTOBER 1974 , AND INDEED THAT THEY SUBSEQUENTLY SHOWED A TENDENCY TO FALL WHICH WAS ALREADY DISCERNIBLE , OR AT ANY RATE FORESEEABLE , IN DECEMBER 1974 .

7 AFTER THE BEGINNING OF 1973 AND UNTIL THE BEGINNING OF NOVEMBER 1974 WORLD PRICES , OF MAIZE ROSE CONSTANTLY , AND THE FIGURES PRODUCED BY THE PLAINTIFF IN THE MAIN ACTION SHOW THAT THEY INCREASED FROM USDOLLARS 87.20 TO USDOLLARS 167.25 AND SUBSEQUENTLY FELL GRADUALLY TO USDOLLARS 124.80 IN JUNE 1975 AND THEN ROSE AGAIN TO USDOLLARS 141 IN AUGUST 1975 , RETURNING TO USDOLLARS 120 IN JANUARY 1976 .

ON 9 DECEMBER 1974 , THE DATE OF THE CONTESTED REGULATION , THE WORLD PRICE WAS STILL AT USDOLLARS 161 .

DURING THIS ENTIRE PERIOD THE INCREASE IN WORLD PRICES WAS SUCH THAT AT CERTAIN TIMES , IN PARTICULAR FROM JANUARY TO THE END OF MAY 1974 , AND FROM AUGUST TO OCTOBER 1974 , WORLD PRICES WERE HIGHER THAN THE THRESHOLD PRICE .

DESPITE THIS SITUATION , WHICH MEANT THAT MANUFACTURERS OF MAIZE STARCH IN THE COMMON MARKET DID NOT HAVE TO OBTAIN SUPPLIES AT PRICES ABOVE THOSE ON THE WORLD MARKET , PAYMENT OF THE PRODUCTION REFUND CONTINUED .

THIS CIRCUMSTANCE SHOWS THAT THE LEVEL OF WORLD PRICES FOR MAIZE WAS NOT THE ONLY CRITERION FOR FIXING THE SUPPLY PRICE .

THIS IS ALSO CONFIRMED BY THE FACT THAT IN ANY CASE THE REFUND ONLY COMPENSATED FOR PART OF THE DIFFERENCE BETWEEN THE THRESHOLD PRICE AND THE WORLD PRICE SINCE THE LATTER WAS LOWER THAN THE FORMER .

THIS FINDING IS COMPLETELY IN ACCORDANCE WITH WHAT IS TO BE INFERRED FROM CONSIDERATION OF THE TENTH RECITAL IN THE PREAMBLE TO REGULATION NO 120/67 IN ACCORDANCE WITH WHICH THE SUPPLY PRICE ( THE DIFFERENCE BETWEEN THE LATTER PRICE AND THE THRESHOLD PRICE DETERMINES THE AMOUNT OF THE REFUND ) REQUIRED TO BE FIXED , TAKING ACCOUNT OF ALL THE FACTORS WHICH DETERMINE THE COMPETITIVE POSITION OF STARCH MANUFACTURERS IN RELATION TO PRODUCERS OF SYNTHETIC SUBSTITUTES ON THE ONE HAND AND MANUFACTURERS OF POTATO STARCH ON THE OTHER .

8 IT IS CLEAR FROM THOSE CONSIDERATIONS THAT THE APPRECIABLE AND PERSISTENT VARIATIONS IN THE PRICE OF BASIC PRODUCTS REFERRED TO IN ARTICLE 2 OF REGULATION NO 371/67 , WHICH WAS REPLACED BY ARTICLE 7 OF REGULATION NO 1132/74 , DO NOT CONSTITUTE THE SOLE LEGAL BASIS FOR AN ALTERATION OF THE SUPPLY PRICE AND THAT ALTERATIONS OF THE SUPPLY PRICE BASED ON OTHER REASONS ARE JUSTIFIED IN LAW BY ARTICLE 11 ( 3 ) OF REGULATION NO 120/67 .

IN ADDITION IT MUST BE EMPHASIZED THAT THE SPECIFIC ALTERATION OF THE SUPPLY PRICE REFERRED TO IN ARTICLE 2 OF REGULATION NO 371/67 AND ARTICLE 7 OF REGULATION NO 1132/74 AND THE MORE GENERAL ALTERATION REFERRED TO IN ARTICLE 11 ( 3 ) OF REGULATION NO 120/67 , MUST BE ENACTED IN ACCORDANCE WITH STRICTLY IDENTICAL PROCEDURES , SINCE IN BOTH THOSE INSTANCES THE COUNCIL ACTS IN ACCORDANCE WITH THE VOTING PROCEDURE LAID DOWN IN ARTICLE 43 ( 2 ) OF THE TREATY ON A PROPOSAL FROM THE COMMISSION , SO THAT THE RELEVANT PROVISION IN REGULATIONS NOS 371/67 AND 1132/74 IN FACT ONLY CONSTITUTES A SPECIFIC APPLICATION OF A MORE GENERAL POWER WHICH THE COUNCIL ALREADY POSSESSED UNDER ARTICLES 11 ( 3 ) AND 26 OF REGULATION NO 120/67 .

IT CANNOT BE CONCEDED THAT , WHEN THE COUNCIL ADOPTED THE SPECIFIC PROVISION IN THE ABOVEMENTIONED ARTICLES 2 AND 7 , IT INTENDED TO RESTRICT THE EXERCISE OF A GENERAL POWER WHICH IT HAD EXPRESSLY CONFERRED UPON ITSELF AND WHICH IT REQUIRED TO EXERCISE FREELY FOR THE PROPER ADMINISTRATION OF THE RELEVANT ORGANIZATION OF THE MARKET .

9 FURTHERMORE THE TWO EARLIER ALTERATIONS IN THE SUPPLY PRICE WERE NOT ADOPTED BECAUSE OF THE EXISTENCE OF APPRECIABLE AND PERSISTENT VARIATIONS IN THE PRICE OF MAIZE ON THE WORLD MARKET IN RELATION TO THE SUPPLY PRICE BUT , IN THE FIRST CASE ( REGULATION NO 1132/74 OF THE COUNCIL OF 29 APRIL 1974 ), IN VIEW OF ' A PRECISE ASSESSMENT OF THE SITUATION RESULTING FROM THE LEVEL OF COMMON PRICES AND FROM THE COMPETITION BETWEEN , ON THE ONE HAND , MAIZE STARCH , RICE STARCH , POTATO STARCH AND , ON THE OTHER , THE SUBSTITUTE CHEMICAL PRODUCTS . . . ' , AND , IN THE SECOND CASE BY THE COMMISSION ( REGULATION NO 2518/74 OF 4 OCTOBER 1974 , OJ L 270/1 OF 5 . 10 . 1974 ) IN IMPLEMENTATION OF REGULATION NO 2496/74 OF THE COUNCIL OF 2 . 10 . 1974 RAISING FROM 7 OCTOBER 1974 ALL PRICES APPLICABLE IN THE AGRICULTURAL SECTOR FOR THE 1974/1975 MARKETING YEAR .

10 NEVERTHELESS THE PLAINTIFF IN THE MAIN ACTION CLAIMS THAT IN THE FIRST RECITAL IN THE PREAMBLE TO THE CONTESTED MEASURE , REGULATION NO 3113/74 , THE COUNCIL HAS REFERRED TO ARTICLE 7 OF REGULATION NO 1132/74 BY ITS RELIANCE , IN ORDER TO JUSTIFY INCREASING THE SUPPLY PRICE TO 103.10 U.A . PER METRIC TON , ON THE CIRCUMSTANCE THAT : ' . . . PRICES OF THESE PRODUCTS ( INTER ALIA MAIZE ) HAVE BECOME VERY HIGH ' AND ' ARE LIKELY TO REMAIN SO ' .

THE COUNCIL HAD THUS BY ADOPTING THE CONTESTED REGULATION PLAINLY INDICATED ON 9 DECEMBER 1974 THAT IT INTENDED ON THIS OCCASION TO SUBORDINATE THE EXERCISE OF ITS POWER TO THE FULFILMENT OF THE PRECISE CONDITION LAID DOWN IN THE ABOVEMENTIONED ARTICLE 7 , WHILST IT IS CLEAR FROM THE EVIDENCE SUBMITTED THAT WORLD PRICES OF MAIZE HAD ALREADY BEGUN TO FALL SO THAT IT CANNOT BE MAINTAINED THAT THERE WERE APPRECIABLE AND PERSISTENT VARIATIONS , BUT MERELY SHORT-TERM VARIATIONS WHICH DID NOT JUSTIFY ADJUSTING THE SUPPLY PRICE .

11 WORLD PRICES OF MAIZE , WHICH FROM 1967 TO THE END OF 1972 HAD NEVER REACHED USDOLLARS 87.20 , VARIED BETWEEN JULY 1973 AND JULY 1975 AS FOLLOWS , ACCORDING TO THE INFORMATION SUPPLIED BY THE PLAINTIFF IN THE MAIN ACTION :

DATE WORLD PRICE IN US DOLLARS

1 OCTOBER 1973 124.00

1 JANUARY 1974 136.50

1 APRIL 1974 141.25

1 JULY 1974 139.25

1 OCTOBER 1974 164.50

1 JANUARY 1975 156.00

1 APRIL 1975 138.30

1 JULY 1975 130.25

ACCORDINGLY , AT THE DATE WHEN THE CONTESTED REGULATION WAS ADOPTED , PRICES WERE STILL AT USDOLLARS 161 AND AT USDOLLARS 156 ON 1 JANUARY 1975 .

WHEN THE COUNCIL ASSERTED THAT PRICES REMAINED VERY HIGH , AND THAT , IN RELATION TO THE PERIOD BEFORE 1 JANUARY 1973 , THERE WAS AN APPRECIABLE AND PERSISTENT VARIATION IN WORLD PRICES , IT DID NOT EXCEED THE MARGIN OF DISCRETION WHICH IT POSSESSES IN THIS SPHERE .

IT IS TRUE THAT A SIMILAR VARIATION CANNOT BE FOUND AT THE DATE OF THE PREVIOUS FIXING OF THE SUPPLY PRICE AT 87.45 U.A . PER METRIC TON ON 7 OCTOBER 1974 BUT THIS CIRCUMSTANCE ONLY ARISES BECAUSE THE COUNCIL WISHED PROGRESSIVELY TO ADAPT THE SUPPLY PRICE TO THE NORMAL SITUATION AND DID SO BY DEGREES .

12 IF WORLD PRICES REMAINED AT SUCH A HIGH LEVEL THIS WOULD INEVITABLY HAVE AFFECTED THE FIXING OF THE SUPPLY PRICE SINCE THIS LEVEL DID AWAY WITH ALL JUSTIFICATION FOR THE REFUND IN THAT THE REFUND WAS INTENDED TO COMPENSATE FOR THE HANDICAP ENTAILED FOR MAIZE-STARCH PRODUCERS BY THE FACT THAT THEIR RAW MATERIAL WAS UNOBTAINABLE AT PRICES APPROACHING THOSE ON THE WORLD MARKET .

THE RETENTION OF THE REFUND WAS JUSTIFIED ONLY TO THE EXTENT THAT , TAKING ACCOUNT OF THE GENERAL INCREASE IN WORLD PRICES , IN PARTICULAR IN THE PRICE OF RAW MATERIALS FOR COMPETING PRODUCTS , THE REFUND REMAINED NECESSARY TO ENSURE BALANCED COMPETITION BETWEEN MAIZE STARCH , SYNTHETIC STARCH AND POTATO STARCH .

IN THE FIRST RECITAL IN THE PREAMBLE TO REGULATION NO 3113/74 THE COUNCIL SUFFICIENTLY , ALBEIT SUCCINCTLY , GAVE AS ITS REASON FOR REDUCING THE REFUND IN RELATION TO THIS SECOND FACTOR IN ITS FIXING THAT ' THE MAINTENANCE OF THE AMOUNTS SPECIFIED IN THE SAID ARTICLES 1 , 4 AND 5 AT THEIR PRESENT LEVELS COULD LEAD TO THE GRANTING OF A PRODUCTION REFUND THE SIZE OF WHICH IS NO LONGER ECONOMICALLY JUSTIFIED AND THE FINANCIAL BURDEN OF WHICH COULD BECOME EXCESSIVE ' .

AT NO POINT WAS IT CLAIMED , STILL LESS PROVED , THAT THE REDUCTION IN THE REFUND JEOPARDIZED THE COMPETITIVE SITUATION OF MAIZE-STARCH PRODUCERS , VIS-A-VIS PRODUCERS OF SYNTHETIC STARCH OR POTATO STARCH .

13 AS TO ( B )

THE FIRST QUESTION FURTHER ASKS WHETHER IN THE CONTESTED REGULATION THE COUNCIL INFRINGED ARTICLE 11 OF BASIC REGULATION NO 120/67 BY REDUCING , WITH THE AIM OF PROGRESSIVELY ABOLISHING IT , A REFUND TO WHICH MAIZE-STARCH MANUFACTURERS WERE ENTITLED .

14 IN ACCORDANCE WITH ARTICLE 40 OF THE TREATY COMMON ORGANIZATIONS OF THE MARKET CAN ONLY INCLUDE THE ALLOCATION OF AIDS FOR PRODUCTION IN SO FAR AS SUCH AIDS ARE NECESSARY TO ATTAIN THE OBJECTIVES SET OUT IN ARTICLE 39 .

THE ALLOCATION OF COMMUNITY FINANCIAL RESOURCES FOR AIDS WHICH HAVE CEASED TO BE NECESSARY AS DEFINED ABOVE CONSTITUTES AN INFRINGEMENT OF ARTICLE 40 .

ALTHOUGH THE WORDING OF ARTICLE 11 OF REGULATION NO 120/67 , IN THE VERSION IN FORCE AT THE TIME , DOES NOT APPEAR TO MAKE THE GRANTING OF THE REFUND OPTIONAL , IT NEVERTHELESS CONFERS UPON THE COUNCIL POWER TO APPRAISE THE AMOUNT OF THE REFUND IN THE LIGHT OF THE OBJECTIVES OF COMMON INTEREST LISTED IN ARTICLE 39 OF THE TREATY .

15 AS TO ( C )

THE FIRST QUESTION FINALLY ASKS WHETHER THE VALIDITY OF ARTICLE 1 ( 1 ) OF REGULATION NO 3113/74 IS AFFECTED BECAUSE IT VIOLATES THE PRINCIPLE THAT AGRICULTURAL PRICES SHALL NOT BE CHANGED IN THE COURSE OF THE SAME MARKETING YEAR .

16 WHILST THE ANNUAL FIXING OF AGRICULTURAL PRICES INDEED CONSTITUTES A BASIC ECONOMIC FEATURE OF THE COMMON AGRICULTURAL POLICY AS IT IS AT PRESENT IMPLEMENTED SUCH FIXING IMPLIES NEITHER THAT THOSE PRICES CANNOT BE CHANGED IN ANY CIRCUMSTANCES NOR , IN CONSEQUENCE , DOES IT PROHIBIT THE COUNCIL FROM ADJUSTING THEM IN THE COURSE OF THE MARKETING YEAR , WHEN SUCH ADJUSTMENTS ARE JUSTIFIED .

FURTHERMORE , WHILST THE FIXING OF THE LEVEL OF THE ' SUPPLY PRICE ' IS PARTLY LINKED TO THE LEVEL OF AGRICULTURAL PRICES IT IS ALSO DETERMINED BY THE COMPETITIVE SITUATION REFERRED TO IN THE TENTH RECITAL IN THE PREAMBLE TO REGULATION NO 120/67 AND ALTERATIONS IN THIS SITUATION ARE NOT LINKED TO THE TERMS OF THE AGRICULTURAL MARKETING YEARS .

FINALLY , IN ORDER TO PROVIDE TRADERS WITH SUFFICIENT TIME TO ADAPT TO THE NEW SITUATION REGULATION NO 3113/74 , ALTHOUGH ADOPTED ON 9 DECEMBER 1974 , PROVIDES IN THE SECOND PARAGRAPH OF ARTICLE 3 THAT IT SHALL ONLY APPLY ON 1 APRIL 1975 .

SINCE THE PRODUCTION REFUND WAS PAID AND THE AMOUNT THEREOF CALCULATED PURSUANT TO ARTICLE 2 ( 1 ) AND ( 3 ) OF REGULATION NO 2012/74 OF THE COMMISSION OF 30 JULY 1974 ( OJ L 209/44 OF 31 . 7 . 1974 ) AT THE TIME WHEN THE PERSON ENTITLED TO THE REFUND FURNISHED PROOF THAT THE BASIC PRODUCT IN QUESTION HAD BEEN PLACED UNDER SUPERVISION BY THE AUTHORITIES APPOINTED BY THE MEMBER STATES , THE TRADERS CONCERNED WERE FREE TO ARRANGE THEIR PURCHASES OF MAIZE DURING THE FIRST QUARTER OF 1975 SO THAT THEIR PRODUCTION QUALIFIED IN LARGE MEASURE IN THE COURSE OF THE FOLLOWING MONTHS FOR AN UNREDUCED REFUND .

17 FOR ALL THOSE REASONS THE REPLY MUST BE THAT CONSIDERATION OF THE FIRST QUESTION HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF ARTICLE 1 ( 1 ) OF REGULATION NO 3113/74 .

II - THE INTERPRETATION OF THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE EEC TREATY AND OF REGULATION NO 1132/74

18 THE NATIONAL COURT THEN ASKS : ' IF QUESTION 1 IS ANSWERED IN THE NEGATIVE MUST THE PROHIBITION ON DISCRIMINATION IN THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE EEC TREATY AND THE REQUIREMENT LAID DOWN IN REGULATION NO 1132/74 THAT THE PRODUCTION REFUNDS ON POTATO STARCH AND MAIZE STARCH SHALL BE THE SAME BE INTERPRETED AS MEANING THAT , BY ANALOGY WITH THE METHOD OF CALCULATION OF THE PRODUCTION REFUND ON POTATO STARCH UNDER ARTICLE 1 OF REGULATION NO 231/75 OF THE COMMISSION OF 30 JANUARY 1975 ( OJ L 24/42 OF 31 . 2 . 1975 ), ARTICLE 1 ( 1 ) OF REGULATION NO 3113/74 SHALL NOT BE TAKEN INTO ACCOUNT IN THE CALCULATION OF THE PRODUCTION REFUND ON MAIZE STARCH?

'

19 IN ACCORDANCE WITH THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE TREATY , THE COMMON ORGANIZATIONS OF THE MARKET MUST EXCLUDE ANY DISCRIMINATION BETWEEN PRODUCERS OR CONSUMERS WITHIN THE COMMUNITY .

HAVING REGARD TO THE COMPETITIVE SITUATION OF MAIZE-STARCH PRODUCERS AND POTATO-STARCH PRODUCERS , ARTICLE 2 OF REGULATION NO 1132/74 PROVIDES THAT THE PRODUCTION REFUND PER 100 KG OF POTATO STARCH SHALL BE EQUAL TO THE AVERAGE AMOUNT OF THE REFUND GRANTED DURING THE SAME MARKETING YEAR PER 161 KG OF MAIZE FOR STARCH MANUFACTURE .

THE INCREASE IN THE SUPPLY PRICE FROM 1 APRIL 1975 AND THE SUBSEQUENT REDUCTION OF THE PRODUCTION REFUND IN FAVOUR OF MAIZE STARCH PRODUCERS PURSUANT TO ARTICLE 1 OF REGULATION NO 3113/74 WOULD , IF THE ABOVEMENTIONED ARTICLE 2 HAD BEEN APPLIED AUTOMATICALLY , HAVE BEEN REFLECTED IN THE SAME PROPORTIONS UNTIL 31 JULY 1975 IN THE AMOUNT OF THE REFUND GRANTED TO POTATO-STARCH PRODUCERS .

20 NEVERTHELESS , UNLIKE THE REFUND FOR MAIZE-STARCH PRODUCERS , THE REFUND PURSUANT TO ARTICLE 3 OF REGULATION NO 1132/74 IS ONLY PAID TO POTATO-STARCH MANUFACTURERS WHEN THEY FURNISH PROOF THAT THE PRODUCER HAS BEEN PAID THE AMOUNT OF THE REFUND .

THE REFUNDS GRANTED BEFORE 31 JANUARY 1975 TO POTATO-STARCH MANUFACTURERS AND PASSED ON THROUGH THEM TO POTATO PRODUCERS , WERE CALCULATED ON THE AVERAGE OF REFUNDS THEN PAID TO MAIZE-STARCH PRODUCERS WHICH WAS DERIVED FROM THE DIFFERENCE BETWEEN THE SUPPLY PRICE OF 82.00 U.A . PER METRIC TON , AND SUBSEQUENTLY OF 87.45 U.A . PER METRIC TON , AND THE SUCCESSIVE THRESHOLD PRICES FOR MAIZE FIXED IN ADVANCE FOR THE ENTIRE 1974/1975 MARKETING YEAR .

BECAUSE OF THIS METHOD OF CALCULATION BASED ON AN ANNUAL AVERAGE DETERMINED IN ADVANCE THE ALTERATION FROM 1 APRIL 1975 OF THE SUPPLY PRICE WAS REFLECTED IN REFUNDS ALREADY PAID BEFORE 31 JANUARY 1975 TO POTATO-STARCH MANUFACTURERS AND ALREADY PASSED ON BY THEM TO FARMERS WHICH COULD HAVE RESULTED IN THE RECOVERY OF THE AMOUNT ALREADY PAID TO THE LATTER .

IN ORDER TO AVOID THIS EFFECT , WHICH IS CAPABLE OF AFFECTING MANY TRANSACTIONS ALREADY COMPLETED , THE COMMISSION , WHICH WAS SO AUTHORIZED BY THE COUNCIL , ADOPTED THE NECESSARY TRANSITIONAL MEASURES , PROVIDING IN ARTICLE 1 OF REGULATION NO 231/75 OF 30 JANUARY 1975 THAT : ' THE CHANGE WITH EFFECT FROM 1 APRIL 1975 OF THE AMOUNT SPECIFIED IN THE FIRST SUBPARAGRAPH OF ARTICLE 1 ( 1 ) OF REGULATION ( EEC ) NO 1132/74 SHALL NOT BE TAKEN INTO ACCOUNT IN THE CALCULATION OF REFUNDS UNDER ARTICLE 2 OF THAT REGULATION ACCORDED BEFORE THE DATE OF ENTRY INTO FORCE OF THIS REGULATION ' .

21 THERE ARE THUS OBJECTIVE GROUNDS FOR THE DIFFERENCE BETWEEN THE TREATMENT ACCORDED POTATO-STARCH PRODUCERS AND THAT ACCORDED MAIZE-STARCH PRODUCERS SO THAT THE TRANSITIONAL MEASURE ENACTED IN CONNEXION WITH THE PRODUCTION REFUND FOR POTATO STARCH DOES NOT CONSTITUTE A DISCRIMINATION AGAINST MAIZE-STARCH PRODUCERS .

A REPLY TO THIS EFFECT MUST BE GIVEN TO THE SECOND QUESTION .

Decision on costs

COSTS

22 THE COSTS INCURRED BY THE COUNCIL AND BY THE COMMISSION OF THE EUROPEAN COMMUNITIES WHICH SUBMITTED OBSERVATIONS TO THE COURT ARE NOT RECOVERABLE .

AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF 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

IN ANSWER TO THE QUESTIONS SUBMITTED TO IT BY THE FINANZGERICHT MUNSTER , BY AN ORDER OF 20 DECEMBER 1976 , HEREBY , RULES :

( 1 ) CONSIDERATION OF THE FIRST QUESTION HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF ARTICLE 1 ( 1 ) OF REGULATION NO 3113/74 .

( 2 ) THERE ARE OBJECTIVE GROUNDS FOR THE DIFFERENCE BETWEEN THE TREATMENT ACCORDED POTATO-STARCH PRODUCERS AND THAT ACCORDED MAIZE-STARCH PRODUCERS SO THAT THE TRANSITIONAL MEASURE ENACTED IN CONNEXION WITH THE PRODUCTION REFUND FOR POTATO STARCH DOES NOT CONSTITUTE A DISCRIMINATION AGAINST MAIZE-STARCH PRODUCERS .