Judgment of the Court of 21 May 1987. - Walter Rau Lebensmittelwerke and others v Bundesanstalt für landwirtschaftliche Marktordnung. - References for a preliminary ruling: Verwaltungsgericht Frankfurt am Main - Germany. - Preliminary ruling on validity - "Berlin butter". - Joined cases 133 to 136/85.



European Court reports 1987 Page 02289



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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1 . APPLICATION FOR ANNULMENT - NATURAL OR LEGAL PERSONS - CHALLENGE TO THE LEGALITY OF A COMMUNITY MEASURE - POSSIBILITY OF BRINGING A DIRECT ACTION BEFORE THE COURT - ACTION BEFORE A NATIONAL COURT DIRECTED AGAINST NATIONAL IMPLEMENTING MEASURES AND BASED ON THE ILLEGALITY OF THE COMMUNITY MEASURE - CONCURRENT EXISTENCE

( EEC TREATY, ART . 173, SECOND PARAGRAPH )

2 . AGRICULTURE - COMMON AGRICULTURAL POLICY - CHANGE IN THE COUNCIL' S POLICY WITH REGARD TO THE MANAGEMENT OF A COMMON ORGANIZATION OF THE MARKET - VESTED RIGHT OF TRADERS TO THE MAINTENANCE OF PREVIOUS ADVANTAGES - NONE - FUNDAMENTAL RIGHTS - FREEDOM TO PURSUE A TRADE OR PROFESSION - BREACH - NONE

3 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - MILK AND MILK PRODUCTS - COMMISSION DECISION ON MEASURES FOR THE PROMOTION OF SALES OF BUTTER ON THE WEST BERLIN MARKET - AIM - STABILIZATION OF THE MARKETS - AUTHORIZATION CONFERRED BY THE COUNCIL - OBSERVANCE - PRINCIPLE OF PROPORTIONALITY - BREACH - NONE

( EEC TREATY, ART . 39*(1)*(C ); COUNCIL REGULATION NO 1079/77, ART . 4 )

4 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - MILK AND MILK PRODUCTS - AUTHORIZATION CONFERRED ON THE COMMISSION TO ADOPT MEASURES FOR THE EXPANSION OF THE MARKET IN MILK PRODUCTS AND FOR THE DISPOSAL OF SURPLUSES - ARTICLE 4 OF COUNCIL REGULATION NO 1079/77 - LEGALITY

( COUNCIL REGULATION NO 1079/77, ART . 4 )

Summary

1 . THE POSSIBILITY OF BRINGING A DIRECT ACTION UNDER THE SECOND PARAGRAPH OF ARTICLE 173 OF THE EEC TREATY AGAINST A DECISION ADOPTED BY A COMMUNITY INSTITUTION DOES NOT PRECLUDE THE POSSIBILITY OF BRINGING AN ACTION IN A NATIONAL COURT AGAINST A MEASURE ADOPTED BY A NATIONAL AUTHORITY FOR THE IMPLEMENTATION OF THAT DECISION ON THE GROUND THAT THE LATTER DECISION IS UNLAWFUL .

2 . AN UNDERTAKING CANNOT CLAIM A VESTED RIGHT TO THE MAINTENANCE OF AN ADVANTAGE WHICH IT OBTAINED FROM AN ORGANIZATION OF THE MARKET IN THE FORM IN WHICH IT EXISTED AT A GIVEN TIME . THAT PRINCIPLE ALSO APPLIES TO UNDERTAKINGS WHICH ARE NOT COVERED BY THE ORGANIZATION OF THE MARKET IN QUESTION . THE MARGARINE PRODUCERS CANNOT, IN THE EVENT OF A CHANGE IN THE COUNCIL' S POLICY ON THE PRICE OF BUTTER, RELY ON A BREACH OF THE PRINCIPLE OF FREEDOM TO PURSUE A TRADE OR PROFESSION, THE PRINCIPLE OF GENERAL FREEDOM TO PURSUE ANY LAWFUL ACTIVITY OR THE PRINCIPLE OF FREEDOM OF COMPETITION IN SUPPORT OF THE CONTENTION THAT A CHANGE OF THAT KIND INFRINGES THEIR FUNDAMENTAL RIGHTS .

A FORTIORI THE COMMISSION' S DECISION, ADOPTED ON THE BASIS OF THE COUNCIL' S AUTHORIZATION, TO CONDUCT A PILOT SCHEME, LIMITED IN SCOPE AND IN TIME, DESIGNED TO PROVIDE INFORMATION CONCERNING THE MARKET' S RESPONSE TO A FALL IN THE PRICE OF BUTTER AND INVOLVING THE IMPLEMENTATION OF MEASURES FOR THE PROMOTION OF SALES OF BUTTER ON THE WEST BERLIN MARKET, CANNOT CONSTITUTE AN INFRINGEMENT OF THAT KIND .

3 . THE COMMISSION' S DECISION OF 25 FEBRUARY 1985 ADDRESSED TO THE GOVERNMENT OF THE FEDERAL REPUBLIC OF GERMANY ON MEASURES FOR THE PROMOTION OF SALES OF BUTTER ON THE WEST BERLIN MARKET IS COVERED BY THE AUTHORIZATION CONFERRED BY ARTICLE 4 OF COUNCIL REGULATION NO 1079/77 TO ADOPT MEASURES FOR THE EXPANSION OF MARKETS IN MILK PRODUCTS WITHIN THE COMMUNITY AND FOR THE SEARCH FOR NEW OUTLETS, AND THUS PURSUES THE AIM OF STABILIZING THE MARKETS WHICH IS REFERRED TO IN ARTICLE 39*(1)*(C ) OF THE TREATY .

MOREOVER, THAT DECISION HAS NOT CONTRAVENED THE PRINCIPLE OF PROPORTIONALITY SINCE IT WAS POSSIBLE TO CONDUCT A SCIENTIFIC SURVEY OF THE MARKET' S RESPONSE TO THE FALL IN THE PRICE OF BUTTER, WHICH THAT DECISION WAS DESIGNED TO PERMIT, IN SATISFACTORY CONDITIONS, PARTICULARLY FINANCIAL CONDITIONS, AND THE SURVEY HAS YIELDED USEFUL INFORMATION .

4 . EVEN THOUGH THE AUTHORIZATION WHICH IT CONFERS ON THE COMMISSION TO ADOPT MEASURES FOR THE EXPANSION OF THE MARKET IN MILK PRODUCTS AND FOR THE DISPOSAL OF SURPLUSES IS WORDED IN BROAD TERMS, ARTICLE 4 OF COUNCIL REGULATION NO 1079/77 SATISFIES THE REQUIREMENTS OF THE PRINCIPLE OF LEGALITY, IN VIEW OF THE FACT THAT, IN THE FIRST PLACE, THE IMPLEMENTING POWERS WHICH THE COUNCIL IS ENTITLED TO CONFER ON THE COMMISSION MAY, IN THE SPHERE OF THE COMMON AGRICULTURAL POLICY, INVOLVE WIDE POWERS OF DISCRETION AND ACTION, AND SECONDLY THE NATURE OF THE MEASURES TO BE ADOPTED IN ORDER TO ACHIEVE THE OBJECTIVES PURSUED COULD NOT BE DETERMINED IN ADVANCE .

Parties

IN JOINED CASES 133 TO 136/85

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE VERWALTUNGSGERICHT (( ADMINISTRATIVE COURT )) FRANKFURT AM MAIN FOR A PRELIMINARY RULING IN THE PROCEEDINGS PENDING BEFORE THAT COURT BETWEEN

1 . WALTER RAU LEBENSMITTELWERKE, A COMPANY INCORPORATED UNDER GERMAN LAW, HAVING ITS REGISTERED OFFICE IN HILTER,

2 . HEINRICH HAMKER LEBENSMITTELWERKE GMBH & CO . KG, A COMPANY INCORPORATED UNDER GERMAN LAW, HAVING ITS REGISTERED OFFICE IN BAD ESSEN-LINTORF,

3 . WESTFAELISCHES MARGARINEWERK WILHELM LINDEMANN KG, A COMPANY INCORPORATED UNDER GERMAN LAW, HAVING ITS REGISTERED OFFICE IN BUENDE,

4 . UNION DEUTSCHE LEBENSMITTELWERKE GMBH, A COMPANY INCORPORATED UNDER GERMAN LAW, HAVING ITS REGISTERED OFFICE IN HAMBURG,

PLAINTIFFS,

AND

BUNDESANSTALT FUER LANDWIRTSCHAFTLICHE MARKTORDNUNG (( FEDERAL OFFICE FOR THE ORGANIZATION OF AGRICULTURAL MARKETS )), A BODY GOVERNED BY PUBLIC LAW, 40 ADICKES ALLEE, FRANKFURT AM MAIN,

DEFENDANT,

ON THE VALIDITY OF THE COMMISSION' S DECISION OF 25 FEBRUARY 1985 ( COM*(85)*276 FINAL ) ON MEASURES FOR THE PROMOTION OF SALES OF BUTTER ON THE WEST BERLIN MARKET AND ON THE INTERPRETATION AND VALIDITY OF ARTICLE 4 OF COUNCIL REGULATION ( EEC ) NO 1079/77 OF 17 MAY 1977 ON A CO-RESPONSIBILITY LEVY AND ON MEASURES FOR EXPANDING THE MARKETS IN MILK AND MILK PRODUCTS ( OFFICIAL JOURNAL 1977, L*131, P.*6 ),

THE COURT

COMPOSED OF : LORD MACKENZIE STUART, PRESIDENT, Y . GALMOT, C . KAKOURIS AND F . SCHOCKWEILER ( PRESIDENTS OF CHAMBERS ), T . KOOPMANS, U . EVERLING, R . JOLIET, J . C . MOITINHO DE ALMEIDA AND G . C . RODRIGUEZ IGLESIAS, JUDGES,

ADVOCATE GENERAL : C . O . LENZ

REGISTRAR : K . RIECHENBERG, ACTING AS ADMINISTRATOR

AFTER CONSIDERING THE OBSERVATIONS SUBMITTED ON BEHALF OF :

THE PLAINTIFFS IN THE MAIN PROCEEDINGS, BY J . GUENDISCH, RECHTSANWALT IN HAMBURG;

THE COUNCIL OF THE EUROPEAN COMMUNITIES, BY A . SACCHETTINI, ACTING AS AGENT,

THE COMMISSION OF THE EUROPEAN COMMUNITIES, BY P . KARPENSTEIN, A MEMBER OF ITS LEGAL DEPARTMENT, ACTING AS AGENT,

HAVING REGARD TO THE REPORT FOR THE HEARING AS SUPPLEMENTED FURTHER TO THE HEARING ON 4 JUNE 1986,

AFTER HEARING THE OPINION OF THE ADVOCATE GENERAL DELIVERED AT THE SITTING ON 5 DECEMBER 1986,

GIVES THE FOLLOWING

JUDGMENT

Grounds

1 BY FOUR ORDERS OF 15 APRIL 1985, THE VERWALTUNGSGERICHT FRANKFURT AM MAIN REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A NUMBER OF QUESTIONS CONCERNING THE CO-EXISTENCE OF LEGAL REMEDIES AVAILABLE UNDER NATIONAL LAW AND COMMUNITY LAW, THE VALIDITY OF A DECISION WHICH THE COMMISSION ADDRESSED ON 25 FEBRUARY 1985 TO THE FEDERAL REPUBLIC OF GERMANY ON MEASURES FOR THE PROMOTION OF SALES OF BUTTER ON THE WEST BERLIN MARKET, AND THE INTERPRETATION AND VALIDITY OF COUNCIL REGULATION ( EEC ) NO 1079/77 OF 17 MAY 1977 ON A CO-RESPONSIBILITY LEVY AND ON MEASURES FOR EXPANDING THE MARKETS IN MILK AND MILK PRODUCTS .

2 THOSE QUESTIONS AROSE IN FOUR SETS OF PROCEEDINGS INSTITUTED ON 28 MARCH 1985 BY MARGARINE PRODUCERS IN THE GERMAN ADMINISTRATIVE COURTS IN ORDER TO RESTRAIN THE BUNDESANSTALT FUER LANDWIRTSCHAFTLICHE MARKTORDNUNG (( FEDERAL OFFICE FOR THE ORGANIZATION OF AGRICULTURAL MARKETS, HEREINAFTER REFERRED TO AS "THE FEDERAL OFFICE ")) FROM IMPLEMENTING IN THE FUTURE MEASURES SUCH AS THOSE PROVIDED FOR IN THE AFORESAID DECISION .

3 THE DECISION WAS ADOPTED BY THE COMMISSION ON THE BASIS OF ARTICLE 4 OF COUNCIL REGULATION NO 1079/77, WHICH AUTHORIZES IT TO ADOPT MEASURES TO EXPAND THE MARKETS FOR MILK PRODUCTS .

4 IN ORDER TO STUDY THE MANNER IN WHICH CONSUMERS REACT TO A FALL IN THE PRICE OF BUTTER, THE COMMISSION PROVIDED IN THAT DECISION FOR THE ORGANIZATION, ON THE WEST BERLIN MARKET AND FOR THE PERIOD FROM 15 APRIL 1985 TO 30 JUNE 1985, OF AN OPERATION TO PROMOTE SALES OF BUTTER, THE MARGINAL COST AND EFFECTIVENESS OF WHICH WERE TO BE ASSESSED BY AN INDEPENDENT RESEARCH INSTITUTE . NINE HUNDRED TONNES OF BUTTER FROM PUBLIC STOCKS WERE TO BE PACKAGED IN PACKETS OF 250 GRAMS, EACH STAMPED WITH THE WORDS "FREE EEC BUTTER ". THOSE PACKETS WERE SUBSEQUENTLY TO BE MARKETED IN A PACKAGE ALSO CONTAINING ONE PACKET OF OPEN-MARKET BUTTER OF THE SAME WEIGHT, AND THE PRICE OF THE PACKETS THUS SOLD TOGETHER WAS NOT TO EXCEED THE PRICE CHARGEABLE FOR 250 GRAMS OF OPEN-MARKET BUTTER DURING THE MARKETING PERIOD . TO THAT END, THE FEDERAL OFFICE WAS TO MAKE AVAILABLE FREE OF CHARGE 900 TONNES OF BUTTER FROM PUBLIC STOCKS TO CERTAIN COMMERCIAL UNDERTAKINGS WHICH IT WAS TO SELECT AND WHICH WERE TO PLEDGE THEMSELVES BY CONTRACT TO PACKAGE THE BUTTER COVERED BY THE OPERATION AND TO SELL IT THROUGH RETAIL OUTLETS .

5 THE PLAINTIFFS IN THE MAIN PROCEEDINGS, WHO SUPPLY A SUBSTANTIAL PROPORTION OF THE MARGARINE SOLD ON THE WEST BERLIN MARKET, CONSIDERED THAT THE OPERATION IN QUESTION WAS LIKELY TO RESULT IN A SHARP DECREASE IN SALES OF MARGARINE, AS BUTTER AND MARGARINE ARE PRODUCTS THAT ARE RELATIVELY EASY TO SUBSTITUTE FOR ONE ANOTHER . IN ORDER TO PREVENT THE OPERATION FROM BEING SET IN MOTION, THEY EACH INSTITUTED INTERLOCUTORY PROCEEDINGS BEFORE THE VERWALTUNGSGERICHT FRANKFURT AM MAIN IN WHICH THEY SOUGHT AN INJUNCTION RESTRAINING THE FEDERAL OFFICE FROM CARRYING OUT THE CONTESTED OPERATION . BY ORDERS OF 20 MARCH 1985, THE VERWALTUNGSGERICHT UPHELD THE APPLICANTS' CLAIMS . WHEN THE APPEAL LODGED BY THE FEDERAL OFFICE CAME BEFORE IT, THE HESSISCHER VERWALTUNGSGERICHTSHOF (( HIGHER ADMINISTRATIVE COURT, HESSEN )) CONCLUDED THAT THE DISPUTES FELL WITHIN THE JURISDICTION OF THE CIVIL COURTS AS THE FEDERAL OFFICE WAS IMPLEMENTING ONLY MEASURES GOVERNED BY PRIVATE LAW IN ORDER TO CARRY OUT THE OPERATION, AND IT THEREFORE QUASHED THOSE ORDERS BY JUDGMENTS OF 11 APRIL 1985 . THE OPERATION WAS SUBSEQUENTLY CARRIED OUT AS FROM 6 MAY 1985 .

6 IN THE ACTIONS WHICH WERE INSTITUTED BEFORE IT ON 28 MARCH 1985, THE VERWALTUNGSGERICHT REFERRED TO THE COURT, BY ORDERS OF 15 APRIL 1985, EIGHT QUESTIONS FOR A PRELIMINARY RULING .

7 THE FIRST AND SECOND QUESTIONS RELATE TO THE EXISTENCE OF LEGAL REMEDIES AVAILABLE CONCURRENTLY UNDER NATIONAL LAW AND COMMUNITY LAW . THE THIRD QUESTION RELATES TO THE PROTECTION WHICH CERTAIN GENERAL PRINCIPLES OF COMMUNITY LAW CONFER ON UNDERTAKINGS AGAINST DISADVANTAGES RESULTING FROM COMMUNITY MEASURES WHICH IMPROVE THE COMPETITIVE POSITION OF THEIR COMPETITORS . THE FOURTH QUESTION RELATES TO THE COMPATIBILITY OF THE DECISION OF 25 FEBRUARY 1985 WITH THE AIMS OF ARTICLE 39 OF THE EEC TREATY . IN THE FIFTH QUESTION, THE NATIONAL COURT SEEKS TO ASCERTAIN IN WHAT MANNER THE GENERAL PRINCIPLES REFERRED TO IN THE THIRD QUESTION MAY BE RESTRICTED . IN THE SIXTH QUESTION, THE NATIONAL COURT ASKS WHETHER ARTICLE 4 OF COUNCIL REGULATION NO 1079/77 COVERS THE DECISION OF 25 FEBRUARY 1985 . THE SEVENTH QUESTION IS DESIGNED TO ASCERTAIN WHETHER ARTICLE 4 OF THAT REGULATION IS SUFFICIENTLY SPECIFIC . FINALLY, THE EIGHTH QUESTION RELATES TO THE COMPATIBILITY OF THE DECISION OF 25 FEBRUARY 1985 WITH THE PRINCIPLE OF PROPORTIONALITY .

8 REFERENCE IS MADE TO THE REPORT FOR THE HEARING FOR THE FACTS OF THE CASE, THE FULL TEXT OF THE QUESTIONS AND THE OBSERVATIONS SUBMITTED UNDER ARTICLE 20 OF THE PROTOCOL ON THE STATUTE OF THE COURT OF JUSTICE OF THE EEC .

QUESTIONS 1 AND 2

9 IN ITS FIRST QUESTION, THE VERWALTUNGSGERICHT ASKS IN SUBSTANCE WHETHER ARTICLE 183 OF THE EEC TREATY IS TO BE INTERPRETED AS MEANING THAT THE POSSIBILITY OF BRINGING A DIRECT ACTION UNDER THE SECOND PARAGRAPH OF ARTICLE 173 OF THE EEC TREATY AGAINST A DECISION ADOPTED BY A COMMUNITY INSTITUTION PRECLUDES, OWING TO THE ABSENCE OF ANY INTEREST IN INSTITUTING PROCEEDINGS, THE POSSIBILITY OF BRINGING AN ACTION IN A NATIONAL COURT AGAINST A MEASURE ADOPTED BY A NATIONAL AUTHORITY FOR THE IMPLEMENTATION OF THAT DECISION, ON THE GROUND THAT THE LATTER DECISION IS UNLAWFUL .

10 IT MUST BE REMEMBERED THAT, ACCORDING TO ARTICLE 183 OF THE EEC TREATY, THE NATIONAL COURTS OR TRIBUNALS ARE TO HAVE JURISDICTION IN DISPUTES TO WHICH THE COMMUNITY IS A PARTY, WITH THE EXCEPTION OF THOSE IN RESPECT OF WHICH EXCLUSIVE JURISDICTION IS CONFERRED ON THE COURT OF JUSTICE . SINCE THE DISPUTE IN THE MAIN PROCEEDINGS, AS THE NATIONAL COURT HAS ITSELF POINTED OUT IN ITS ORDER FOR REFERENCE, PITS THE MARGARINE PRODUCERS NOT AGAINST THE COMMUNITY BUT AGAINST THE COMPETENT GERMAN INTERVENTION AGENCY, ARTICLE 183 IS NOT RELEVANT TO THE PROBLEM RAISED IN THE FIRST QUESTION .

11 IT MUST BE EMPHASIZED THAT THERE IS NOTHING IN COMMUNITY LAW TO PREVENT AN ACTION FROM BEING BROUGHT BEFORE A NATIONAL COURT AGAINST A MEASURE IMPLEMENTING A DECISION ADOPTED BY A COMMUNITY INSTITUTION WHERE THE CONDITIONS LAID DOWN BY NATIONAL LAW ARE SATISFIED . WHEN SUCH AN ACTION IS BROUGHT, IF THE OUTCOME OF THE DISPUTE DEPENDS ON THE VALIDITY OF THAT DECISION THE NATIONAL COURT MAY SUBMIT QUESTIONS TO THE COURT OF JUSTICE BY WAY OF A REFERENCE FOR A PRELIMINARY RULING, WITHOUT THERE BEING ANY NEED TO ASCERTAIN WHETHER OR NOT THE PLAINTIFF IN THE MAIN PROCEEDINGS HAS THE POSSIBILITY OF CHALLENGING THE DECISION DIRECTLY BEFORE THE COURT .

12 THE ANSWER TO THE FIRST QUESTION MUST THEREFORE BE THAT THE POSSIBILITY OF BRINGING A DIRECT ACTION UNDER THE SECOND PARAGRAPH OF ARTICLE 173 OF THE EEC TREATY AGAINST A DECISION ADOPTED BY A COMMUNITY INSTITUTION DOES NOT PRECLUDE THE POSSIBILITY OF BRINGING AN ACTION IN A NATIONAL COURT AGAINST A MEASURE ADOPTED BY A NATIONAL AUTHORITY FOR THE IMPLEMENTATION OF THAT DECISION ON THE GROUND THAT THE LATTER DECISION IS UNLAWFUL .

13 IN ITS SECOND QUESTION, THE VERWALTUNGSGERICHT ASKS WHETHER AN ACTION FOR ANNULMENT BROUGHT BEFORE THE COURT BY THE PLAINTIFFS IN THE MAIN PROCEEDINGS AGAINST A DECISION SUCH AS THAT OF 25 FEBRUARY 1985 IS ADMISSIBLE .

14 AS THE VERWALTUNGSGERICHT ASKED THAT QUESTION ONLY IN THE EVENT OF THE FIRST QUESTION BEING ANSWERED IN THE AFFIRMATIVE, THE SECOND QUESTION IS DEVOID OF PURPOSE .

QUESTIONS 3 AND 5

15 IN ITS THIRD QUESTION, THE VERWALTUNGSGERICHT ASKS IN SUBSTANCE WHETHER COMMUNITY MEASURES WHICH HAVE THE EFFECT OF IMPROVING THE POSITION OF CERTAIN UNDERTAKINGS AND THEREBY PLACE THEIR COMPETITORS AT A DISADVANTAGE ARE CONTRARY TO THE GENERAL PRINCIPLES OF COMMUNITY LAW, AND IN PARTICULAR TO THE PRINCIPLE OF FREEDOM TO PURSUE A TRADE OR PROFESSION, THE PRINCIPLE OF GENERAL FREEDOM TO PURSUE ANY LAWFUL ACTIVITY AND THE PRINCIPLE OF FREEDOM OF COMPETITION .

16 IT MUST BE EMPHASIZED THAT THIS QUESTION CANNOT BE CONSIDERED IN SUCH GENERAL TERMS BUT MUST BE SET IN THE CONTEXT OF THE MAIN PROCEEDINGS . MORE SPECIFICALLY, IT IS NECESSARY TO ASCERTAIN WHETHER A DECISION SUCH AS THAT WHEREBY ON 25 FEBRUARY 1985 THE COMMISSION ORDERED THE CONTESTED OPERATION TO BE CARRIED OUT IS CONTRARY TO THE AFORESAID PRINCIPLES INASMUCH AS IT HAS THE EFFECT OF IMPROVING THE POSITION OF BUTTER PRODUCERS AND THEREBY PLACES MARGARINE PRODUCERS AT A DISADVANTAGE .

17 IN THAT REGARD, IT SHOULD BE NOTED THAT THE OPERATION PROVIDED FOR BY THE DECISION OF 25 FEBRUARY 1985 WAS TO BE FOLLOWED BY A SURVEY ON THE MARGINAL COST AND EFFECTIVENESS OF THE PRICE REDUCTION PUT INTO EFFECT . THE MARGINAL COST IS THE FINANCIAL BURDEN BORNE BY THE COMMUNITY AS A RESULT OF THE SALE OF EACH ADDITIONAL PACKET OF OPEN-MARKET BUTTER . THE EFFECTIVENESS OF THE OPERATION IS THE INCREASE IN CONSUMPTION OF OPEN-MARKET BUTTER RESULTING FROM THE PRICE REDUCTION PUT INTO EFFECT . THEREFORE THE PURPOSE OF THE CONTESTED OPERATION WAS TO DETERMINE THE EXTENT TO WHICH THE PRICE OF BUTTER HAD TO BE REDUCED IN ORDER TO OBTAIN BOTH THE GREATEST POSSIBLE INCREASE IN TOTAL CONSUMPTION AND THE MAXIMUM REDUCTION IN THE COST OF THE INTERVENTION SYSTEM .

18 IF THE COUNCIL HAD DECIDED, IN THE LIGHT OF THE RESULTS OF THE OPERATION, TO REDUCE THE INTERVENTION PRICE OF BUTTER, THE MARGARINE PRODUCERS WOULD HAVE BEEN UNABLE TO COMPLAIN THAT THEIR FUNDAMENTAL RIGHTS HAD BEEN INFRINGED . AS THE COURT HELD IN ITS JUDGMENT OF 27 SEPTEMBER 1979 IN CASE 230/78 ERIDANIA (( 1979 )) ECR 2749, AN UNDERTAKING CANNOT CLAIM A VESTED RIGHT TO THE MAINTENANCE OF AN ADVANTAGE WHICH IT OBTAINED FROM AN ORGANIZATION OF THE MARKET IN THE FORM IN WHICH IT EXISTED AT A GIVEN TIME . THAT PRINCIPLE ALSO APPLIES TO UNDERTAKINGS WHICH ARE NOT COVERED BY THE ORGANIZATION OF THE MARKET IN QUESTION . SINCE A CHANGE IN THE COUNCIL' S POLICY ON PRICES DOES NOT CONSTITUTE INTERFERENCE WITH THE FUNDAMENTAL RIGHTS RELIED UPON, THE SAME HOLDS TRUE A FORTIORI IN THE CASE OF A DECISION TO CONDUCT A PILOT SCHEME IN ORDER TO ASCERTAIN WHAT THE COUNCIL' S POLICY SHOULD BE . ACCORDINGLY, IT WOULD SERVE NO PURPOSE TO ASCERTAIN WHETHER, AS THE NATIONAL COURT STATES, A DECISION DIRECTING SUCH AN OPERATION TO BE CARRIED OUT HAS THE EFFECT OF FAVOURING BUTTER PRODUCERS .

19 ACCORDINGLY, THE ANSWER TO THE THIRD QUESTION MUST BE THAT A DECISION SUCH AS THAT WHEREBY, ON 25 FEBRUARY 1985, THE COMMISSION DIRECTED THE CONTESTED OPERATION TO BE CARRIED OUT DOES NOT CONFLICT WITH THE PRINCIPLE OF FREEDOM TO PURSUE A TRADE OR PROFESSION, THE PRINCIPLE OF GENERAL FREEDOM TO PURSUE ANY LAWFUL ACTIVITY OR THE PRINCIPLE OF FREEDOM OF COMPETITION .

20 IN ITS FIFTH QUESTION THE VERWALTUNGSGERICHT ASKS WHETHER RESTRICTIONS ON THE GENERAL PRINCIPLES REFERRED TO IN THE THIRD QUESTION CAN ONLY BE IMPOSED BY A COUNCIL REGULATION OR AUTHORIZED BY THE COUNCIL .

21 IN THE LIGHT OF THE ANSWER GIVEN TO THE THIRD QUESTION, THE FIFTH QUESTION IS DEVOID OF PURPOSE .

QUESTION 6

22 IN ITS SIXTH QUESTION, THE NATIONAL COURT SEEKS TO ASCERTAIN WHETHER THE DECISION OF 25 FEBRUARY 1985 IS COVERED BY THE AUTHORIZATION CONFERRED ON THE COMMISSION BY ARTICLE 4 OF COUNCIL REGULATION NO 1079/77 .

23 IT SHOULD BE NOTED THAT ARTICLE 4*(2 ) OF THAT REGULATION AUTHORIZES THE COMMISSION TO ADOPT MEASURES CONCERNING THE EXPANSION OF MARKETS FOR MILK PRODUCTS WITHIN THE COMMUNITY AND THE SEARCH FOR NEW OUTLETS .

24 IT MUST BE BORNE IN MIND THAT THE AIM OF THE OPERATION IN QUESTION WAS TO DETERMINE THE EXTENT TO WHICH THE PRICE OF BUTTER HAD TO BE REDUCED IN ORDER TO OBTAIN BOTH THE GREATEST POSSIBLE INCREASE IN TOTAL CONSUMPTION AND THE MAXIMUM REDUCTION IN THE COST OF THE INTERVENTION SYSTEM . THE OPERATION WAS THUS CONCERNED WITH THE MEANS OF EXPANDING THE MARKET FOR BUTTER WITHIN THE COMMUNITY AND INVOLVED AT THE SAME TIME A SEARCH FOR NEW OUTLETS . CONSEQUENTLY, IT FELL WITHIN THE SCOPE OF THE TASK ENTRUSTED BY THE COUNCIL TO THE COMMISSION .

25 THE ANSWER TO THE SIXTH QUESTION MUST THEREFORE BE THAT THE DECISION OF 25 FEBRUARY 1985 IS COVERED BY THE AUTHORIZATION CONFERRED ON THE COMMISSION BY ARTICLE 4 OF COUNCIL REGULATION NO 1079/77 .

QUESTION 4

26 TAKING THE VIEW THAT THE COUNCIL IS EMPOWERED ONLY TO ACHIEVE THE OBJECTIVES OF THE TREATY AND THAT IT MAY CONFER POWERS ON THE COMMISSION ONLY FOR THE IMPLEMENTATION OF THE RULES WHICH IT HAS LAID DOWN FOR THAT PURPOSE, THE NATIONAL COURT ASKS, IN ITS FOURTH QUESTION, WHETHER THE DECISION OF 25 FEBRUARY 1985 PURSUES ONE OF THE AIMS SET OUT IN ARTICLE 39 OF THE EEC TREATY . THE NATIONAL COURT EXPRESSES SERIOUS DOUBTS IN THAT RESPECT .

27 IN THAT REGARD, IT MUST BE BORNE IN MIND THAT COUNCIL REGULATION NO 1079/77 SEEKS TO RESTORE A BETTER BALANCE BETWEEN SUPPLY AND DEMAND FOR MILK PRODUCTS, AND DEMAND FOR THOSE PRODUCTS, AND THEREFORE TENDS TO STABILIZE THE MARKET IN THOSE PRODUCTS . AS THE DECISION OF 25 FEBRUARY 1985 IS COVERED BY THAT REGULATION, AS IS CLEAR FROM THE ANSWER GIVEN TO THE SIXTH QUESTION, THE DECISION PURSUES THE AIM OF STABILIZING THE MARKETS, WHICH IS REFERRED TO IN ARTICLE 39*(1)*(C ) OF THE EEC TREATY .

28 THE ANSWER TO THE FOURTH QUESTION MUST THEREFORE BE THAT THE DECISION OF 25 FEBRUARY 1985 PURSUES THE AIM OF STABILIZING THE MARKETS, WHICH IS REFERRED TO IN ARTICLE 39*(1)*(C ) OF THE EEC TREATY .

QUESTION 7

29 IN ITS SEVENTH QUESTION, THE VERWALTUNGSGERICHT ASKS WHETHER ARTICLE 4 OF COUNCIL REGULATION NO 1079/77 ACCORDS WITH THE PRINCIPLE RESULTING FROM CONSTITUTIONAL REQUIREMENTS THAT THERE MUST BE A SUFFICIENT DEGREE OF LEGISLATIVE PRECISION . ACCORDING TO THE VERWALTUNGSGERICHT, THE REQUIREMENT THAT THE ENABLING BASIS MUST BE SUFFICIENTLY PRECISE STEMS FROM THE PRINCIPLE OF LEGALITY WHICH FORMS PART OF COMMUNITY LAW . THAT PRINCIPLE REQUIRES AN ENABLING BASIS TO BE DEFINED WITH PRECISION SO AS TO RENDER ACTION ON THE PART OF THE PUBLIC AUTHORITIES FORESEEABLE . IF THE ANSWER TO THE SIXTH QUESTION IS THAT ARTICLE 4 OF COUNCIL REGULATION NO 1079/77 COVERS MEASURES SUCH AS THOSE PRESCRIBED BY THE DECISION OF 25 FEBRUARY 1985, THE VERWALTUNGSGERICHT CONSIDERS THAT THE ENABLING BASIS WOULD GIVE THE COMMISSION SUCH A BROAD DISCRETION THAT IT WOULD NO LONGER BE POSSIBLE TO ASCERTAIN WHAT USE THE COMMISSION WOULD MAKE OF IT . ACCORDINGLY THE SEVENTH QUESTION SEEKS IN SUBSTANCE TO ASCERTAIN WHETHER ARTICLE 4 OF COUNCIL REGULATION NO 1079/77 SATISFIES THE REQUIREMENT RESULTING FROM THE PRINCIPLE OF LEGALITY THAT THERE MUST BE A SUFFICIENT DEGREE OF LEGISLATIVE PRECISION .

30 IT IS CLEAR FROM THE PREAMBLE TO COUNCIL REGULATION NO 1079/77 THAT THAT REGULATION WAS ADOPTED IN ORDER TO DEAL WITH THE STRUCTURAL SURPLUSES WHICH CHARACTERIZE THE MARKET IN MILK AND MILK PRODUCTS . THE AIM PURSUED WAS GRADUALLY TO RESTORE EQUILIBRIUM BETWEEN PRODUCTION AND MARKET REQUIREMENTS AND TO REDUCE THE HEAVY COSTS INCURRED BY THE COMMUNITY AS A RESULT OF THE LARGE SURPLUSES WHICH EXIST . THOSE ARE THE CIRCUMSTANCES IN WHICH THE COUNCIL ENTRUSTED THE COMMISSION WITH THE TASK OF ADOPTING MEASURES TO EXPAND THE MARKET FOR MILK PRODUCTS AND TO DISPOSE OF SURPLUSES .

31 THE VERY NATURE OF THE MATTER MADE IT NECESSARY TO WORD THE ENABLING BASIS IN BROAD TERMS . BEFORE ADOPTING THE MEASURES FOR WHICH IT HAD BEEN GIVEN RESPONSIBILITY, THE COMMISSION FIRST HAD TO DETERMINE WHICH MEASURES WOULD BE LIKELY TO HELP ACHIEVE THE AIMS PURSUED . IN THOSE CIRCUMSTANCES IT WAS IMPOSSIBLE FOR THE COUNCIL TO GIVE A PRECISE DEFINITION OF THOSE MEASURES . MOREOVER, IT MUST BE POINTED OUT THAT IN ITS JUDGMENT OF 30 OCTOBER 1975 IN CASE 23/75 REY SODA (( 1975 )) ECR 1279, THE COURT ACKNOWLEDGED THAT THE IMPLEMENTING POWERS WHICH THE COUNCIL IS ENTITLED TO CONFER ON THE COMMISSION MAY, IN THE SPHERE OF THE COMMON AGRICULTURAL POLICY, INVOLVE WIDE POWERS OF DISCRETION AND ACTION .

32 THE ANSWER TO THE SEVENTH QUESTION MUST THEREFORE BE THAT ARTICLE 4 OF COUNCIL REGULATION NO 1079/77 SATISFIES THE REQUIREMENTS OF THE PRINCIPLE OF LEGALITY .

QUESTION 8

33 IN ITS EIGHTH QUESTION THE NATIONAL COURT ASKS WHETHER THE DECISION OF 25 FEBRUARY 1985 IS COMPATIBLE WITH THE PRINCIPLE OF PROPORTIONALITY IN SO FAR AS THE EXPANSION OF THE MARKETS OR THE SEARCH FOR NEW OUTLETS MAY BE ACHIEVED BY ACTION WHICH HAS LESS IMPACT ON THE WORKINGS OF THE MARKET .

34 BY WAY OF EXPLANATION, THE NATIONAL COURT STATES THAT RULES WHICH INTERFERE WITH THE FUNDAMENTAL RIGHT TO EXERCISE A TRADE OR PROFESSION ARE JUSTIFIED ONLY IF THEY ARE DICTATED BY OBJECTIVES IN THE GENERAL INTEREST WHICH ARE OF SUCH OVERRIDING IMPORTANCE THAT THEY DESERVE TO TAKE PRECEDENCE OVER THAT FUNDAMENTAL RIGHT . THE NATIONAL COURT CONSIDERS THAT THAT IS NOT THE CASE IN THIS INSTANCE . IF, ON THE ONE HAND, THE PURPOSE OF THE OPERATION WAS TO REDUCE PUBLIC STOCKS BY 900 TONNES OF BUTTER, IT COULD HAVE BEEN ACHIEVED BY MEASURES WHICH HAD A LESS SERIOUS EFFECT ON THE POSITION OF COMPETITORS PROTECTED BY FUNDAMENTAL RIGHTS . THUS THE 900 TONNES OF BUTTER COULD HAVE BEEN DISTRIBUTED OVER A LONGER PERIOD OR OVER A WIDER AREA . IF, ON THE OTHER HAND, THE PURPOSE OF THE OPERATION WAS THE SEARCH FOR NEW OUTLETS, THE NATIONAL COURT DOUBTS WHETHER THE OPERATION IS CAPABLE OF YIELDING USEFUL RESULTS . A MEASURE WHICH IS SUCH AS TO INTERFERE WITH FUNDAMENTAL RIGHTS BUT NOT SUCH AS TO HELP ACHIEVE THE AIM PURSUED CAN NEVER BE JUSTIFIED BY OVERRIDING CONSIDERATIONS PERTAINING TO THE GENERAL INTEREST .

35 IT FOLLOWS FROM THOSE CONSIDERATIONS THAT THE QUESTION RAISED BY THE NATIONAL COURT WAS, MORE PRECISELY, WHETHER THE PRINCIPLE OF PROPORTIONALITY HAD BEEN CONTRAVENED ON THE GROUND THAT THE AIM OF REDUCING PUBLIC STOCKS BY 900 TONNES OF BUTTER WAS ATTAINABLE BY METHODS WHICH HAD A SERIOUS EFFECT ON THE POSITION OF COMPETITORS AND THAT IT WAS DOUBTFUL WHETHER A TEST MARKET SUCH AS WEST BERLIN WAS CAPABLE OF YIELDING USEFUL RESULTS .

36 IT MUST BE REMEMBERED IN THE FIRST PLACE THAT, AS THE COURT STATED IN REPLY TO THE THIRD QUESTION, THE OPERATION DID NOT HAVE AS ITS PURPOSE TO REDUCE INTERVENTION STOCKS BY 900 TONNES OF BUTTER AND DID NOT CONFLICT WITH THE PRINCIPLE OF FREEDOM TO PURSUE A TRADE OR PROFESSION, THE PRINCIPLE OF GENERAL FREEDOM TO PURSUE ANY LAWFUL ACTIVITY AND THE PRINCIPLE OF FREEDOM OF COMPETITION .

37 NEXT, IT MUST BE EMPHASIZED THAT THE OPERATION CONSTITUTED, AS IT WAS INTENDED TO, THE BASIS OF A SCIENTIFIC SURVEY FROM WHICH THE COMMISSION WAS ABLE TO DERIVE USEFUL INFORMATION . FURTHERMORE, THE COMMISSION CHOSE THE WEST BERLIN MARKET BECAUSE OF ITS ISOLATED GEOGRAPHICAL LOCATION AND THE POSSIBILITY OF CARRYING OUT THERE, IN VIEW OF ITS LIMITED SIZE, AN OPERATION AT RELATIVELY LOW COST . IN SO DOING, THE COMMISSION WOULD NOT APPEAR TO HAVE EXCEEDED THE DISCRETION CONFERRED UPON IT BY THE COUNCIL IN ARTICLE 4 OF REGULATION NO 1079/77 .

38 ACCORDINGLY, THE ANSWER TO THE EIGHTH QUESTION MUST BE THAT CONSIDERATION OF THE DECISION OF 25 FEBRUARY 1985 HAS NOT DISCLOSED ANY EVIDENCE OF A BREACH OF THE PRINCIPLE OF PROPORTIONALITY .

Decision on costs

COSTS

39 THE COSTS INCURRED BY THE COUNCIL AND THE COMMISSION, WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT, ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE, IN SO FAR AS THE PLAINTIFFS IN THE MAIN PROCEEDINGS ARE CONCERNED, IN THE NATURE OF A STEP IN THE PROCEEDINGS 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 REFERRED TO IT BY THE VERWALTUNGSGERICHT FRANKFURT AM MAIN BY ORDERS OF 15 APRIL 1985, HEREBY RULES :

( 1 ) THE POSSIBILITY OF BRINGING A DIRECT ACTION UNDER THE SECOND PARAGRAPH OF ARTICLE 173 OF THE EEC TREATY AGAINST A DECISION ADOPTED BY A COMMUNITY INSTITUTION DOES NOT PRECLUDE THE POSSIBILITY OF BRINGING AN ACTION IN A NATIONAL COURT AGAINST A MEASURE ADOPTED BY A NATIONAL AUTHORITY FOR THE IMPLEMENTATION OF THAT DECISION ON THE GROUND THAT THE LATTER DECISION IS UNLAWFUL .

( 2 ) A DECISION SUCH AS THAT WHEREBY, ON 25 FEBRUARY 1985, THE COMMISSION DIRECTED THE CONTESTED OPERATION TO BE CARRIED OUT DOES NOT CONFLICT WITH THE PRINCIPLE OF FREEDOM TO PURSUE A TRADE OR PROFESSION, THE PRINCIPLE OF GENERAL FREEDOM TO PURSUE ANY LAWFUL ACTIVITY OR THE PRINCIPLE OF FREEDOM OF COMPETITION .

( 3 ) THE DECISION OF 25 FEBRUARY 1985 IS COVERED BY THE AUTHORIZATION CONFERRED ON THE COMMISSION BY ARTICLE 4 OF COUNCIL REGULATION NO 1079/77 .

( 4 ) THE DECISION OF 25 FEBRUARY 1985 PURSUES THE AIM OF STABILIZING THE MARKETS, WHICH IS REFERRED TO IN ARTICLE 39*(1)*(C ) OF THE EEC TREATY .

( 5 ) ARTICLE 4 OF COUNCIL REGULATION NO 1079/77 SATISFIES THE REQUIREMENTS OF THE PRINCIPLE OF LEGALITY .

( 6 ) CONSIDERATION OF THE DECISION OF 25 FEBRUARY 1985 HAS NOT DISCLOSED ANY EVIDENCE OF A BREACH OF THE PRINCIPLE OF PROPORTIONALITY .