1.

With regard to the question whether in a case in which the successful tenderer does not himself manufacture processed products within the meaning of Article 6 (1) (c) it is sufficient for the release of the processing deposit for it to be proved that the concentrated butter has been resold subject to the appropriate requirements as to processing or whether even in this case it depends on whether the processed products in fact comply with the requirements of Article 6 (1) (c), that is, have particular characteristics and have been manufactured within the period laid down, it seems to me, and let me say this immediately, that only the second interpretation is correct. The wording of the relevant provisions indicates this. Article 18 (2) of Regulation No 1259/72 as amended by Regulation No 1237/73 provides that in a case such as the present where all the processing operations have been carried out in the selling Member State the processing deposit shall be released where the successful tenderer has furnished proof by the production of documents drawn up by the selling Member State that the conditions referred to in Article 6 of the regulation have been met. Article 6 (1) speaks of the obligation of the successful tenderer to cause the butter purchased to be processed into concentrated butter and in the course thereof to have certain ingredients incorporated. It further mentions the obligation of the successful tenderer to have the concentrated butter processed only into certain specified products, namely fine bakers' wares, edible ices and powder for the preparation of edible ices, and in conclusion clearly lays down that the processing must be concluded within a period which is now six months from taking over. From this it follows that the term ‘conditions’ within the meaning of Article 18 involves the processing actually being done within the relevant time-limit. This is covered by the supervision by the Member State mentioned in the provision and the same must be attested by the certificates which it has to draw up. As the Commission has demonstrated, the correctness of this interpretation is moreover supported by the clearly apparent meaning and purpose of the regulation. As we have seen, it is intended to relieve the butter market by reducing the butter mountain. It is necessary therefore that the butter released should be processed for the purposes provided for, that is, that it should not come on to the normal butter market where it would necessarily lead to increased intervention. It is also apparent that the said time-limit must be respected. First this ensures that only such quantity is purchased as the tenderer in fact can process. In this way as many purchasers as possible have access to the goods and the laying-up of speculative stocks is prevented. Secondly the time-limit is important because it enables the outcome of the measure to be checked within a period which may be easily reviewed and this permits the action to be directed precisely and any necessary corrective measures made. In this way also the necessary checks can be made within a reasonable time and the administrative burden on the Member States kept within limits. This cannot be met by referring, as the plaintiffs have done, to the recitals in the preamble to Regulation No 1259/72 where it is stated: ‘Whereas a system of supervision should be set up to ensure that the butter is not diverted from its destination’; and where it continues: ‘Whereas this supervision must operate from the time the butter is removed from storage until it is processed’. It is apparent to me that such a brief and not very precise reference in the recitals to a regulation cannot have the same weight in interpretation as arguments to be derived from the body of the regulation and from its meaning and purpose. The words quoted are certainly no authority for saying that the regulation is concerned with supervising only the first stage of processing and that the further fate of the concentrated butter obtained from the butter, that is, the attainment of the actual purpose of the measure, can be disregarded. In the same way Article 6 (1) (e) of Regulation No 1259/72, where it is stated that the successful tenderer has ‘to lay down that, for any subsequent resale of this product’ (namely the butter purchased or the concentrated butter) ‘the same requirements as those referred to under (c) and (d) shall form part of the contract of sale’, is no authority against the interpretation advocated by the Commission and the Bundesanstalt. Of course it must be admitted that if this interpretation of the regulation is accepted the question may well be asked whether this provision does not appear superfluous, so that it would be possible to assume that on the resale of the goods it is sufficient to pass on the obligation to process and there is no responsibility for the carrying out of the processing. Against this however it may be said that such a release of the purchaser from his obligations is obviously not compatible with the said meaning and purpose of the regulation. There would not then be sufficient guarantee that the processing would actually take place and there would be all kinds of scope for frustration of the regulation by the intervention of further purchasers. This again could be dealt with only if the intervention agency concerned with the sale had the possibility of taking action against the subsequent purchasers. This however is not provided for. It is apparent from the structure of the regulation that the successful tenderer is the sole party to the contract with the intervention agency and that according to Article 10 (5) of Regulation No 1259/72 rights and obligations arising out of the invitation to tender are not transferable. Obviously this course was adopted to save the intervention agency from having to proceed, in order to achieve the objective of the regulation, against numerous processors on a very uncertain legal basis. Article 6 (1) (e) must therefore properly be understood as intending to strengthen the hand of the intervention agency, since the successful tenderer cannot object that he is not in a position to insist on maintenance of the obligations, and also that it is intended to improve the position of the successful tenderer who can hold any purchaser liable for the forfeiture of the processing deposit. It would be mistaken on the other hand to read this provision as meaning that on the resale of the butter it would be sufficient for the release of the processing deposit to show that the processing obligation has been passed on by contract to the purchaser. Accordingly it can be said in answer to the first question that under Article 6 of Regulation No 1259/72 the successful tenderer has the obligation to have the butter processed in the manner specified and within the period specified. Since, no matter whether the successful tenderer does the processing himself or resells, this is the decisive condition for the grant of the reduced price, only when it is fulfilled can the processing deposit, which is the difference between the normal market price and the price tendered, be released.