OPINION OF ADVOCATE GENERAL

TANCHEV

delivered on 8 June 2017 ( 1 )

Case C‑289/16

Kamin und Grill Shop GmbH

v

Zentrale zur Bekämpfung unlauteren Wettbewerbs Frankfurt am Main eV

(Request for a preliminary ruling from the Bundesgerichtshof (Federal Court of Justice, Germany))

(Request for a preliminary ruling — Agriculture — Organic products — Control system established under Regulation (EC) No 834/2007 — Article 28(2) of Regulation No 834/2007 — Concept of direct sale to the final consumer — Exemption from control system)

1. In the European Union, the total value of the market in organic produce has long exceeded EUR 20 billion, a figure representing approximately 2% of the turnover of the EU food and drink industry and a share that has doubled since 2004. ( 2 ) These figures have been gradually increasing and the dynamic evolution of this market has not ceased. ( 3 ) In order to promote that development for the sake of the protection of the environment, animal welfare and of human health, ( 4 ) the EU, since 1991, has been legislating in the field of organic production, requiring operators to submit to a sophisticated control system.

2. With its request for a preliminary ruling, the German Bundesgerichtshof (Federal Court of Justice) requests an interpretation of Regulation No 834/2007, which, in Article 27, obliges Member States to set up a system of controls and, in Article 28(2), allows them to exempt certain types of retailers from that control system. The question that the referring court asks, in essence, is whether online retailers can also benefit from such an exemption.

3. Article 28(2) of Regulation No 834/2007 is widely considered to be so unclear that, in the course of the ongoing discussion on updating Regulation No 834/2007, the proposal has been made to do away entirely with that possibility of exemption, the critics referring to differing interpretations and practices across the Member States and to increasing difficulties of management, supervision and control. ( 5 )

4. This case provides the Court, which so far has never received a request to interpret Regulation No 834/2007, ( 6 ) the first opportunity to clarify the meaning of Article 28(2) and give the guidance required to handle that exemption clause in a way that ensures legal certainty and uniformity. As I shall show in this Opinion a closer look at the legislative history sheds considerable light on the meaning of the exemption.

I. Legal framework

A. EU Law

5. Article 28 of Regulation No 834/2007 is headed ‘Adherence to the control system’ and provides in its first two subsections: ‘1. Any operator who produces, prepares, stores, or imports from a third country products in the meaning of Article 1(2) or who places such products on the market shall, prior to placing on the market of any products as organic or in conversion to organic: (a) notify his activity to the competent authorities of the Member State where the activity is carried out; (b) submit his undertaking to the control system referred to in Article 27. … 2. Member States may exempt from the application of this Article operators who sell products directly to the final consumer or user provided they do not produce, prepare, store other than in connection with the point of sale or import such products from a third country or have not contracted out such activities to a third party.’

B. National law

6. Under Paragraph 3(2) of the Gesetz zur Durchführung der Rechtsakte der Europäischen Union auf dem Gebiet des ökologischen Landbaus (German Statute implementing the legal instruments of the European Union in the area of organic farming: ‘ÖLG’), operators who supply products within the meaning of Article 1(2) of Regulation No 834/2007 classifying them as ‘organic’ or ‘in conversion to organic’ directly to the final consumer or user are exempt from complying with the obligations of Article 28(1) of Regulation No 834/2007 provided that they do not themselves produce those products or arrange to have them produced, prepare them or arrange to have them prepared, store them or arrange to have them stored, other than in connection with the point of sale, or import them or arrange to have them imported from a third country.

II. The facts in the main proceedings and the question referred for a preliminary ruling

7. The Zentrale zur Bekämpfung unlauteren Wettbewerbs Frankfurt am Main e.V. (the respondent in the appeal before the referring court: ‘Zentrale’) is an association whose mission is to combat unfair competition. Kamin und Grill Shop GmbH (the appellant before the referring court: ‘Grill Shop’) operates a mail order business on the internet for fireplace and barbecue supplies.

8. Grill Shop’s range of products includes various mixtures of spices which were offered for sale in December 2012 under the description ‘Bio-Gewürze’ (‘organic spice’). At that time, Grill Shop was not subject to the control system laid down in Article 27 of Regulation No 834/2007.

9. In a letter described as a ‘warning’, dated 28 December 2012, the Zentrale objected to the offering for sale of the product concerned claiming that this was in breach of Article 28(1) of Regulation No 834/2007, whereby an operator marketing organic products is required to submit his undertaking to a control system, which Grill Shop had not done. The Zentrale asked Grill Shop to give a commitment to cease, breach of which would incur a penalty. Grill Shop complied with this request, without, however, admitting an infringement.

10. By means of the present action the Zentrale is claiming a refund of part of the costs that it had incurred as a result of said warning, i.e. of an amount of EUR 219.35, plus interest.

11. The Landgericht Fulda (Regional Court) dismissed the action, holding that Grill Shop did not have to submit its undertaking to the control system as it sold the product directly to the consumer and therefore was exempted from the control system pursuant to Article 28(2) of Regulation No 834/2007 in conjunction with Paragraph 3(2) ÖLG.

12. The Oberlandesgericht Frankfurt am Main (Higher Regional Court, Frankfurt am Main, Germany) (appellate court) reversed the judgment and granted the remedy sought by the Zentrale, on the ground that Grill Shop’s offer for sale of ‘organic spice’ was in breach of Article 28(1)(b) of Regulation No 834/2007, since its undertaking had not been submitted, as required, to the control system set out in that regulation. The appellate court reasoned that a prerequisite of a ‘direct’ sale under Article 28(2) of Regulation No 834/2007 in combination with Paragraph 3(2) ÖLG is that the sale occurs at the place where the product is stored and both the operator, or his sales personnel, and the consumer are present at the same time. According to this interpretation, neither the online retail trade operated by Grill Shop nor any other type of mail order retail trade in organic products would fall within the exemption in Article 28(2) of Regulation No 834/2007.

13. By an appeal on a point of law before the German Bundesgerichtshof (Federal Court of Justice), for which leave was given by the appellate court, Grill Shop seeks the dismissal of the action. The Zentrale requests that the appeal on a point of law be dismissed, contending that, because of the requirement of physical presence at the place of the sale, e-commerce could never come under the exemption from the control system provided for in Article 28(2) of Regulation No 834/2007.

14. It is in that context that the Bundesgerichtshof (Federal Court of Justice) referred the following question for a preliminary ruling: ‘Is there already a “direct” sale to the final consumer within the meaning of Article 28(2) of Regulation No 834/2007 where the operator or his sales personnel sells the products to the final consumer without the intervention of a third party, or does a “direct” sale additionally require that the sale occurs at the place where the products are stored when both the operator or his sales personnel and the final consumer are present at the same time?’

15. Written observations have been submitted to the Court by the parties to the main proceeding, and the European Commission. No hearing was requested and none was held.

III. Assessment

A. Introduction

16. The provision that the Bundesgerichtshof (Federal Court of Justice) asks the Court to interpret here is an exemption clause concerning the control system contained in Regulation No 834/2007.

17. At the outset, it is interesting to note that the original version of that regulation had previously urged the Member States to set up a control system but initially did not allow any exemption from it.

18. Thus, to find a basis for the interpretation, in this case, it seems appropriate to start with retracing the genesis and legislative history of the provision at issue here and of its legislative context in order to illuminate the legislature’s intention when it introduced that exemption, and thereby contribute to clarification of its purpose. ( 7 ) According to the Court’s settled case-law, in interpreting a provision of EU law, in addition to its context and the aims pursued by the rules of which it is part, it is necessary to consider its wording. ( 8 ) These latter aspects will be analysed after having first taken a closer look at the origin and context of the scope of the regulation’s control system, and the exemption from it.

B. Origin and context

1. The inspection system and its extension

19. The first Community framework for organic farming and food production was set up in 1991 by Regulation No 2092/91. The creation of a Community regime for organic products had two purposes: on the one hand, it was to protect organic farming in so far as it would ensure conditions of fair competition between the producers of products bearing indications referring to organic production and, on the other hand, it was to give the market for organic products a more distinctive profile by ensuring transparency at all stages of production and processing, thereby improving the credibility of such products in the eyes of consumers. ( 9 )

20. The regulation pursued these goals not only by providing rules to be observed when producing (Articles 6 and 7 of Regulation No 2092/91) or labelling (Article 5 of Regulation No 2092/91) organic products, but also by, at the same time, urging the Member States to establish a regular ‘inspection system’ (Articles 8 and 9 of Regulation No 2092/91).

21. Under Article 8(1), Regulation No 2092/91 gave specifications as to who was to be submitted to that inspection system: ‘Any operator who produces, prepares or imports from a third country products as specified in Article 1 for the purpose of marketing them shall (a) notify this activity to the competent Authority of the Member State … ; (b) submit his undertaking to the inspection system referred to in Article 9.’

22. The idea behind this was, as the Council explained in the preamble of Regulation No 2092/91, that ‘all operators at all stages of production and marketing should normally be subject to inspection’ to ensure compliance with the rules on production. ( 10 )

23. After the regulation had entered into force in 1992, tens of thousands of farms converted to organic farming and interest in organic produce on the part of consumers and traders grew. ( 11 ) In those years, there were cases where products bearing indications referring to the organic production method had been placed on the market without being in compliance with the provisions laid down in that regulation. ( 12 ) Moreover, contamination with herbicides occurred during the storage of products from organic farming. ( 13 )

24. It was therefore deemed necessary to reinforce the inspection system and to subject to it all operators throughout the production and the preparation process, ( 14 ) which henceforth comprised ‘the whole production and distribution chain’. ( 15 ) It turned out that the scope of activities that had been subject to inspection so far was not comprehensive enough and had to be enlarged.

25. Consequently, in 2004, Article 8(1) of Regulation No 2092/91 was amended by expressly adding storage and marketing as further activities, so that the new description of operators coming under the inspection system read as follows: ‘any operator who produces, prepares, stores or imports from a third country products as specified in Article 1 with a view to the subsequent marketing thereof, or who markets such products’. ( 16 )

26. In 2007, when the former Article 8(1) of Regulation No 2092/91 was replaced by Article 28(1) of Regulation No 834/2007, some further realignments followed that were of a more editorial nature. ( 17 ) A quite clear cut catalogue of five activities to be submitted to the control system had emerged. These were: producing, preparing, storing, importing from a third country and placing on the market.

27. The last category obviously implements the abovementioned goal to cover the entire distribution chain, thereby giving up the initial legislative focus of EU organic products regulation which used to concentrate on the first stages of the organic production. ( 18 ) The control system henceforth included all traders as well as retailers of any of the different levels of the distribution chain.

28. The target group of this extension of the scope of inspection, to storage and retailing as separate activities, ( 19 ) clearly were wholesalers. ( 20 ) According to the experience gained since the introduction of a Community standard for organic production, their marketing activities had been shown to constitute a risk that justified regular inspection.

29. With respect to smaller retailers, however, severe doubts had been expressed in the course of the legislative discussions, concerning the practical implications and technical feasibility of their inspection; several delegations had pleaded for a step-by-step approach, starting with wholesalers and leaving more time for studying ways and means to extend inspection to further sectors. ( 21 )

2. The exemption and its genesis

30. It was against that background that the exemption clause which the Bundesgerichtshof (Federal Court of Justice) now asks the Court to interpret was drafted.

31. The exemption clause was designed to prevent the burdensome inspection system being imposed on the retail sector. ( 22 ) This is due to the risk-based approach that the regulation takes and to the fact that in some cases it might appear disproportionate to apply notification and inspection requirements to certain types of retail operations. ( 23 ) The Parliament in its Report had highlighted that the inspection system should not be disproportionately onerous for smaller retailers. ( 24 )

32. The draft version of the Proposal that the Commission had presented in January 2003 suggested that Article 8(1), subparagraph 2, should be worded as follows: ‘However, retailers not carrying out any preparation and selling such products directly to the final consumer in sealed packaging are not subject to the inspection system referred to in Article 9.’

33. After comprehensive discussions at the meetings of the Working Party on Foodstuff Quality, the Council presented a compromise text to which, several months later, the Parliament, after adding a sentence on import from third countries, ( 25 ) consented, and which provided: ‘However, retailers not carrying out any preparation and selling such products directly to the final consumer or user, as pre-packaged products, are not subject to the obligations laid down in subparagraph 1.’ ( 26 )

34. Later on, ( 27 ) yet another modification was proposed which finally was enacted as the new text of the second subparagraph of Article 8(1) in Regulation No 392/2004. It read: ‘Member States may exempt from the application of this paragraph operators who sell such products directly to the final consumer or user provided they do not produce, prepare, store other than in connection with the point of sale or import such products from a third country.’ ( 28 ) This compromise wording of the second subparagraph of Article 8(1) of Regulation No 2092/91 as revised by Regulation 392/2004 is still in force today, as it is identical to Article 28(2) of Regulation No 834/2007, ( 29 ) the provision which the Court is asked to interpret in the present case.

35. Comparing the various draft versions and the final text, one can note that the clause gradually evolved from a narrow rule with concrete confines (‘products in sealed packaging’, later: ‘prepackaged products’) to a more abstract one. At the same time, however, the basic structure of the norm as such has persisted, consisting of two elements, which concern (1) the exempted person’s position in the chain of marketing and (2) the contact of that person with the product.

36. As to the first element, it is striking that the requirement of a direct sale to the final consumer has not undergone any change throughout the various versions of the exemption clause that were proposed. The changes that were held necessary as to this first element concerned rather the description of the seller and the buyer, each being replaced by a broader concept: On the side of the seller the term ‘retailer’ was replaced by the term ‘operator’ ( 30 ) and on the buyer’s side ‘final consumer’ by ‘final consumer or user’.

37. The action of ‘selling such products directly’ was, as far as can be seen, not a subject of discussion in the legislative process. It served simply and plainly to exclude wholesalers from the exemption and to make sure that only the last retailer in the chain of marketing was to qualify for the exemption.

38. The second element, however, did undergo several changes. The original draft version referred exclusively to ‘products in sealed packaging’, the next, a bit more relaxed, to ‘prepackaged products’, both under the condition that the retailer did not carry out any preparation. That the product was so defined served as a physical guarantee that the privileged seller did not interfere with the product. The idea was to cover retailers not carrying out any operation on the product. ( 31 ) The situation that the legislature had in mind when it created the exemption was one where the retail operator did not handle the product in such a way as to create risk of influencing that product’s nature or labelling in a way that might interfere with the rules applicable to organic production.

39. When the restriction to ‘products in sealed packaging’ or ‘prepackaged products’ seemed too narrow and the physical barrier of the ‘seal’ or the ‘package’ was given up, there arose the need to find a more abstract description of a situation that would not engender risks that did not exist in the earlier versions. Critics had urged the legislature to clarify, in respect to the retail sector, ‘exactly which activities needed to be covered’. ( 32 )

40. The legislature ultimately chose to replace the positive precondition ‘prepackaged products’ with a negative formulation, enumerating each single category of activity that the retailer was not allowed to do, if he wanted to benefit from the exemption: The operator coming under Article 28(2) of Regulation No 834/2007 is not allowed to produce, prepare or import from a third country. What is left for him is marketing and storing, as these two activities are inherently linked to the business of a retailer and inevitable when selling directly to the final consumer. In order to limit even these activities to what is indispensable for selling a product, a restriction was imposed on the permission to store: The operator may not ‘store [products as covered by Article 1(2) of the regulation] other than in connection with the point of sale’.

41. This restriction guarantees that the retailer is a pure retailer who does not abuse his position as a retailer to evade control for other activities that would otherwise be subject to regular control. If storage takes place within the operations of a retailer who sells directly to the final consumer, this activity should not to go beyond what is necessary to execute the sale.

42. To put the result of the foregoing analysis of the legislative history in a nutshell: An exemption for the last retailer in the chain of distribution can be provided for by the Member States as long as this operator is a mere retailer because his activity as such is typically not as risk-prone ( 33 ) as to warrant submission to the system of regular control of organic products, in the light of the principle of proportionality.

C. Rationale

43. Having retraced the legislative history of the exemption clause to be interpreted here, it has been found that the purpose of that clause was to grant a certain exemption to the last retailer in the chain of distribution, because the risk that he would infringe the rules on organic products was considered to be typically low. This is particularly true as to the traceability of a product at all stages of production, preparation and distribution, which is to be ensured by the control system: ( 34 ) As far as the last retailer in the chain of distribution, who enters into a contract with the consumer, is concerned, issues of traceability are evidently irrelevant.

44. In relation to the question asked by the Bundesgerichtshof (Federal Court of Justice), this would mean that the fact that a product is sold to the final consumer without the intervention of a third party is a sufficient ground to identify the sale as a ‘direct’ sale.

1. Inspection by the consumer himself

45. The Zentrale, however, takes the view that the exemption only applies if the sale additionally occurs at the place where the product is stored and both the operator, or his sales personnel, and the consumer are present at the same time. It bases its view on the reasoning that the rationale for the exemption of the operator who sells the organic product directly to the final consumer was that the consumer would be in a position to inspect the product on his own. ( 35 )

46. In my opinion, this argument is not convincing. It does not correspond to my point above ( 36 ) that the exemption was designed to relieve the seller of the burden of regular control because of disproportionality, in view of the low risk associated with the typical activity of a mere retailer. As Regulation No 834/2007 takes a risk-based approach and thus does not aim at total control, but leaves some leeway, there is no need to shift the control to anybody else. It is not the consumer’s job to offset the remaining risk that persists because of the exemption from regular professional control and that the legislature has consciously tolerated.

47. Moreover, on a practical level, it is not clear how the consumer, who usually does not possess the knowledge of all the particular specifications an organic product has to comply with under Regulation No 834/2007 and under Regulation No 889/2008, would be able successfully to perform such an inspection. ( 37 ) As a general rule, the consumer lacks the expertise for this.

48. Also, the consumer does not have at his disposal the means and instruments to investigate the facts and circumstances that would be needed to undertake a meaningful evaluation of the product. The mere physical presence of the product and of the seller does not provide the buyer with the requisite information, as neither Regulation No 834/2007 nor Regulation No 889/2008 impose any information obligations on the seller vis-à-vis the buyer. Potentially harmful conditions such as contact with other products and chemicals or the appropriateness of storage temperature and light, or any relabeling activities that might have taken place beforehand, are not necessarily visible and ascertainable for a consumer who sees the product only at the moment of the sale and thus has no information on the immediately preceding storage situation.

49. Indeed, Regulation No 834/2007 would be quite inconsistent, on the one hand, to require the Member State’s control authority, when it wants to delegate control tasks to a particular control body, to prove that the control body has the expertise, equipment and infrastructure for this and has a sufficient number of suitable qualified and experienced staff, ( 38 ) and, on the other hand, in some instances, to allow the Member States to entrust this challenging task to the ordinary consumer.

50. Under Regulation No 834/2007, the consumer is not deemed to have any responsibility for control activities. The concept is rather that he can rely on the label and presentation of the product. Recital 22, first sentence, of Regulation No 834/2007 states: ‘It is important to maintain consumer confidence in organic products.’ ( 39 ) If the consumer is supposed to have confidence in the product he does not need to become active and critically analyse the organic nature of the product.

2. Promoting organic products

51. Finally, it is important to note that one of the regulation’s overall goals is to provide conditions under which the organic sector can progress in line with production and market developments. ( 40 ) This aim prohibits unnecessary restrictions on the means and channels of distribution of these products.

52. In the light of this, the present exemption from the control system seems well justified and does not need any further restriction. ( 41 ) Considering that supermarkets and other general retailers with a particularly wide range of products, as well as retailers like the appellant seller of barbecue supplies in the case on hand, might wish to include only a few organic products in their range of products, for which it is not worthwhile to incur the expense and administrative inconvenience of notifying and submitting the undertaking to the organic control system, it seems desirable not to impose a burden on them which could make them abandon the sale of organic products and thus make these products less accessible to the consumer. This would lead to a situation where organic products could only be bought at specialised boutique-style stores and where the organic market would not benefit from the full panoply of marketing channels.

53. As shown above, based on the travaux préparatoires, whether and in how far the remaining risk was to be accepted was the subject of a compromise ( 42 ) and, in view of hesitations and uncertainties as to the inspection of further sectors ( 43 ) was ultimately left to the Member States. They are in the best position to determine, in view of the respective national context, i.e. rules and regulations imposed on the retailers in that State and other conditions prevailing there, whether and inhowfar an exemption would be appropriate in view of proportionality. ( 44 ) The Member State’s discretion and its individual risk assessment should not be hampered by an interpretation imposing additional restrictions.

D. Wording

54. The wording also of Article 28(2) of Regulation No 834/2007 does not provide any indication as to the necessity of the presence of the seller and the buyer or of the product at the place of the sale.

55. In the text, as opposed to what the respondent and the Commission contend, there is no adequate indication that the term ‘sell directly’ requires a link between the sale and a certain location. The second clause of Article 28(2) of Regulation No 834/2007 excludes from the exemption sellers who ‘store [products] other than in connection with the point of sale’. The text does not however say ‘anywhere else other than at the place of sale’. ( 45 )‘Point of sale’ is usually used in a more abstract sense indicating that a sale has been accomplished; it does not necessarily refer to a location but rather refers, in a more general and abstract way, to the interface between seller and buyer. To mark the link, the text uses the word ‘in connection’ and not a local preposition like ‘at’. ( 46 ) Article 28(2) deals with an organisational link, not with a local one. ( 47 ) When and in so far as the operator stores products, that storage needs to be in connection with the sale.

E. Final remarks

56. As to the central question of this case, namely whether online retail can benefit from the exemption or whether it is, as the Commission contends, generally excluded from it, it has to be recalled that the exemption clause was conceived in 2003 when online business was well known and the e-commerce directive ( 48 ) had already entered into force, so that one could expect the legislature to provide for an express exception if it had intended to exclude online sales.

57. The Commission’s contention that the longer the storage the higher is the risk of fraud, firstly, is not compelling and, secondly, would not be a reason for the exclusion of online retailers as these retailers do not necessarily store products longer than high-street retailers; they might even not possess any storage facilities but rather have the products delivered immediately to the consumer by their wholesaler.

58. Finally, environmental protection, which is one of the goals of Regulation No 834/2007, as a general rule, is served quite well through online business. All this clearly militates against excluding online retailers from the scope of Article 28(2) of Regulation No 834/2007.

IV. Conclusion

59. In essence, the Bundesgerichtshof (Federal Court of Justice) seeks to ascertain whether, apart from the direct connection between the operator and the consumer, additional elements of physical presence are needed for a transaction to come under the exemption provided for in Article 28(2) of Council Regulation (EC) No 834/2007 of 28 June 2007 on organic production and labelling of organic products and repealing Regulation (EEC) No 2092/91. Nevertheless, the Bundesgerichtshof (Federal Court of Justice) has limited its question to the interpretation of the concept of ‘direct’ sale. ( 49 )

60. In order to arrive at a useful interpretation, the Court of Justice should, as has been proposed by the Commission, reformulate the question ( 50 ) and extend its scope to all restrictions of Article 28(2) of Regulation No 834/2007.

61. In the light of the foregoing, I propose that the Court answer the question referred by the Bundesgerichtshof (Federal Court of Justice) as follows: The fact that a product is sold to the final consumer without the intervention of a third party is a sufficient ground to identify the sale as a ‘direct’ sale within the meaning of Article 28(2) of Regulation No 834/2007. If, however, the operator who sells products directly to the final consumer is shown to produce, prepare, store other than in connection with the point of sale or import such products from a third country, he cannot qualify for the possibility of exemption under Article 28(2) of Regulation No 834/2007. The expression ‘other than in connection with the point of sale’ does not restrict the storage to the physical location where the sale occurs but requires storage to be ancillary to the sale and not to go beyond what is reasonably required to perform the sale. To come under the exemption, it does not matter whether or where the products are stored by the seller, nor who is present at the place of storage or sale.

( 1 ) Original language: English.

( 2 ) The total value was estimated at around EUR 20 billion in 2011, see Commission Staff Working Document Impact Assessment Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on organic production and labelling of organic products, amending regulation (EU) No XXX/XXX of the European Parliament and of the Council [Official controls Regulation] and repealing Council Regulation (EC) No 834/2007, COM(2014) 180 final, p. 11 with further references. Since 2011 the organic sector has continued to grow at a healthy pace. By far the largest organic market in the EU was Germany with EUR 6.6 billion in 2011, followed by France with EUR 3.8 billion, ibidem.

( 3 ) See Commission Staff Working Document Impact Assessment, cited in footnote 2 above, p. 11. In 2015 the value amounted to EUR 27.1 billion in the EU, see Zahlen, Daten, Fakten. Die Bio-Branche 2017, Bund Ökologische Lebensmittelwirtschaft BÖLW, Berlin, p. 20 et seq.

( 4 ) See in more detail recital 1 of Council Regulation (EC) No 834/2007 of 28 June 2007 on organic production and labelling of organic products and repealing Regulation (EEC) No 2092/91 (OJ 2007 L 189, p. 1) which specifies in sentence 1: ‘Organic production is an overall system of farm management and food production that combines best environmental practices, a high level of biodiversity, the preservation of natural resources, the application of high animal welfare standards and a production method in line with the preference of certain consumers for products produced using natural substances and processes.’

( 5 ) See Proposal for a Regulation of the European Parliament and of the Council on organic production and labelling of organic products, amending regulation (EU) no XXX/XXX of the European Parliament and of the Council [Official controls Regulation] and repealing Council Regulation (EC) No 834/2007, COM(2014) 180 final, Explanatory Memorandum, p. 6.

( 6 ) In the judgment of 5 November 2014, Herbaria Kräuterparadies, C‑137/13, EU:C:2014:2335, the Court decided on the admissibility of additions to an organic beverage which necessitated an interpretation of Article 27(1)(f) of Commission Regulation (EC) No 889/2008 of 5 September 2008 laying down detailed rules for the implementation of Regulation No 834/2007 (OJ 2008 L 250, p. 1); in the course of its reasoning the Court invoked recitals 3, 5, 22 and 25 as well as Articles 6, 19, 21 and 23 of Regulation No 834/2007. Similarly, in its reasoning in the judgment of 4 June 2015, Andechser Molkerei Schietz v Commission, C‑682/13 P, not published, EU:C:2015:356, deciding on an appeal brought against an order of the General Court concerning the validity of Commission Regulation (EU) No 1131/2011 of 11 November 2011 amending Annex II to Regulation (EC) No 1333/2008 of the European Parliament and of the Council with regard to steviol glycosides (OJ 2011 L 295, p. 205), the Court cited the first recital of Regulation No 834/2007. There are five judgments interpreting the predecessor regulations - Council Regulation (EEC) No 2092/91 of 24 June 1991 on organic production of agricultural products and indications referring thereto on agricultural products and foodstuffs (OJ 1991 L 198, p. 1) and Council Regulation (EC) No 392/2004 of 24 February 2004 amending Regulation No 2092/91 (OJ 2004 L 65, p. 1). (judgments of 29 November 2007, Commission v Germany, C‑404/05, EU:C:2007:723; of 29 November 2007, Commission v Austria, C‑393/05, EU:C:2007:722; of 14 July 2005, Commission v Spain, C‑135/03, EU:C:2005:457; of 13 July 1995, Parliament v Commission, C‑156/93, EU:C:1995:238; and of 14 July 2005, Comité Andaluz de Agricultura Ecológica, C‑107/04, EU:C:2005:470), the first two dealing with a question concerning the control system, namely the permanent establishment of private inspection bodies.

( 7 ) Analysing the intention of the European Union legislature is one of the methods used by the Court in order to ascertain the meaning of EU secondary law, see e.g. judgments of 7 December 2010, Pammer and Hotel Alpenhof, C‑585/08 and C‑144/09, EU:C:2010:740, paragraph 71 et seq.; of 15 July 2010, Purrucker, C‑256/09, EU:C:2010:437, paragraph 84 et seq.; and of 27 October 2016, Commission v Germany, C‑220/15, EU:C:2016:815,

( 8 ) See, for example, judgments of 16 July 2015, Lanigan, C‑237/15 PPU, EU:C:2015:474, paragraph 35, and of 13 October 2016, Mikołajczyk, C‑294/15, EU:C:2016:772, paragraph 26.

( 9 ) See recital 5 in connection with recital 3 of Regulation No 2092/91.

( 10 ) See recital 12 of Regulation No 2092/91. Recital 13 of Regulation No 2092/91 specified that ‘all operators producing, preparing, importing or marketing products bearing indications referring to organic production must be subject to a regular inspection system, meeting minimum Community requirements and carried out by designated inspection authorities’.

( 11 ) See e.g. Alberto Alemanno, ‘The European Reform on Organic Farming – Balancing Consumer Preferences and Free Movement Imperatives’, in: EFFL 2009, 406-419, 409.

( 12 ) COM(2003) 14 final, paragraph 3 of the explanatory memorandum of the ‘Proposal for a Council regulation amending Regulation (EEC) No 2092/91 on organic production of agricultural products and indications referring thereto in agricultural products and foodstuffs’ presented by the Commission. This explanation has been incorporated into recital 3 of that proposal and also recital 3 of Regulation No 392/2004.

( 13 ) See footnote 12 above.

( 14 ) See footnote 12 above.

( 15 ) See Council document 8482/03 of 15 April 2003 on the Outcome of Proceedings of the meeting of the Working Party on Foodstuff Quality on 14 April, p. 2, paragraph II(ii).

( 16 ) See Article 1 of Regulation No 392/2004, by which the first subparagraph of Article 8(1) was given that wording. The new description of the scope of the inspection system was applicable from July 2005, see Article 2 of Regulation No 392/2004.

( 17 ) By dropping the words ‘with a view to the subsequent marketing thereof’ and making slight adjustments in the wording, five more clear cut categories of activities emerged, that were subject to the ‘control system’, as the former ‘inspection system’ was from now on called.

( 18 ) This developing awareness becomes clear by looking at the preambles of the different versions: whereas recital 3 of Regulation No 392/2004 still stuck to the wording ‘all operators throughout the production and preparation process’, recital 31 of Regulation No 834/2007 finally explicitly addressed the complete triad: ‘operators at all stages of production, preparation and distribution’. (My emphasis.)

( 19 ) The point that the extension concerns storage and retailing only in so far as these activities were undertaken as separate activities from the ones already encompassed by the former version of Article 8 was stressed by the Commission representative in the discussion at the Working Party on Foodstuff Quality’s meeting of 14 April 2003, see Council document 8482/03, cited in footnote 15 above, p. 2, paragraph II(ii).

( 20 ) See Council document 8482/03, cited in footnote 15 above, p. 2, paragraph II(ii).

( 21 ) See Council document 6999/03 of 2 April 2003 on the Outcome of Proceedings of the meeting of the Working Party on Foodstuff Quality on 28 February 2003, p. 2, paragraph III(ii).

( 22 ) See Council document 6999/03, cited in footnote 21 above.

( 23 ) Recital 3a of the ‘Revised Presidency Compromise text’ of the Proposal for a Council Regulation amending Regulation (EEC) No 2092/91 on organic production of agricultural products and indications referring thereto in agricultural products and foodstuffs, Council Document 16235/03, Annex, of 18 December 2003, outcome of proceedings of the Working Party on Foodstuff Quality (Organic Farming) of 10 December 2003.

( 24 ) See European Parliament, document FINAL A5-0392/2003, Report of 6 November 2003, on the proposal for a Council regulation amending Regulation (EEC) No 2092/91 on organic production of agricultural products and indications referring thereto in agricultural products and foodstuffs (COM(2003) 14 – C5-0021/2003 – 2003/0002(CNS)), Committee on Agriculture and Rural Development, Rapporteur Danielle Auroi, p. 9, justification for proposed Amendment 10.

( 25 ) The draft proposed by the European Parliament added to the sentence proposed by the Council a second sentence reading: ‘Retailers who import pre-packaged products directly from third countries are subject to the provisions of Article 11.’ See, European Parliament, document FINAL A5-0392/2003, cited in footnote 24 above, p. 9, Amendment 10.

( 26 ) Compromise text for the second subparagraph of Article 8(1), prepared by the Presidency in the light of the discussions at the Working Party on 14 April 2003, Council document 8571/03 of 23 April 2003.

( 27 ) Council Document 16235/03, Annex, cited in footnote 23 above.

( 28 ) See Article 1 of Regulation 392/2004 by which the second subparagraph of Article 8(1) was given that wording. The new description of the scope of application of the inspection system was applicable from July 2005, see Article 2 of Regulation No 392/2004.

( 29 ) Apart from linguistic adaptation (‘paragraph’ replaced by ‘Article’ and ‘such products’ by ‘products’) and editorial as well as numerical rearrangement, this clause remained unchanged in 2007, see the text of Article 28(2) of Regulation No 834/2007 above point 5.

( 30 ) Choosing the more general denomination ‘operator’ in Article 28(2) of Regulation No 834/2007 might be due to the fact that this latter term has been defined in Article 2(d) of Regulation No 834/2007 which provides that ‘operator’ means the natural or legal persons responsible for ensuring that the requirements of this Regulation are met within the organic business under their control’. The substitution of ‘retailers’ for ‘operators’ constitutes nothing more than an alignment with the general terminology of the regulation and also with the terminology used in Article 28(1). Recital 32 of Regulation No 834/2007 continues to employ the term ‘retail operators’.

( 31 ) See the wording of the initial drafts of an amended Article 8 of Regulation No 2092/91, presented in points 32 and 33 above.

( 32 ) See Council document 6999/03, cited in footnote 21 above.

( 33 ) Also see e.g. Schmidt, H., and Haccius, M., EG-Verordnung “Ökologischer Landbau”. Eine juristische und agrarfachliche Kommentierung der Verordnung (EG) Nr. 834/2007, Freiburg im Breisgau, 2008, p. 445/446 describing the lower incidence of fraud in this sector, especially concerning prepackaged products which seem to cover a great deal of retail products.

( 34 ) According to Article 27(13) of Regulation No 834/2007, Member States shall ensure that the control system allows for such a traceability of the product.

( 35 ) See also OLG Frankfurt GRUR-RR 2015, 308; LG München WRP 2015, 780.

( 36 ) See points 31 and 42 above.

( 37 ) Rules that might have to be observed also by the final retailer are e.g. those contained in Chapter 4 (Article 30 et seq.) of Regulation No 889/2008 on collection, packaging, transport and storage of products and those contained in Title III (Article 57 et seq.) of Regulation No 889/2008 on labelling. As the Commission correctly stated in its ‘interpretative note No 2012-03’, storage needs physical infrastructure that is also subject to certain operational requirements like cleaning and disinfection.

( 38 ) See Article 27(5) of Regulation No 834/2007.

( 39 ) Recitals 3 and 5 of Regulation No 834/2007 also mention consumer confidence which shows its pivotal status in this Regulation.

( 40 ) See e.g. recital 3 second sentence of Regulation No 834/2007.

( 41 ) Recital 22 Sentence 2 of Regulation No 834/2007 provides: ‘Exceptions from the requirements applicable to organic production should be strictly limited to cases where the application of exceptional rules is deemed to be justified.’ The respondent invokes recital 22 as an argument for a narrow reading of the exemption.

( 42 ) See points 33 and 34 above.

( 43 ) See point 29 above.

( 44 ) The Member States have actually made use of the possibility of granting an exemption under Article 28(2) in quite differing ways: Some restrict it to prepackaged products, e.g. Italy (Article 2.4 of the Disposizioni per l’attuazione dei regolamenti (CE) n. 834/2007, n. 889/2008, n. 1235/2008 e successive modifiche riguardanti la produzione biologica e l’ettichettatutra dei prodotti biologici Registro ufficiale 0018354 – 27/11/2009, provides: ‘Ai sensi dell’articolo 28 paragrafo 2 del Reg. (CE) n. 834/2007 sono esentati dall’applicazione del medesimo articolo gli operatori che vendono prodotti da agricoltura biologica al consumatore all’utilizzatore finale in imballaggio preconfezionato, a condizione che non li producano …’) and Estonia (§ 5(2) of the Organic Farming Act reads in English: ‘A holding of a person specified in Article 28(2) of Council Regulation (EC) No 834/2007 need not be approved if the holding engages only in the sale of pre-packaged products. [RT I 2009, 12, 72 – entry into force 01.03.2009]’). In Spain, the Comunidad Valenciana directs its risk assessment not only at the prepacked status of the product but also at factors like the annual value of sales, or the possibility of the consumer monitoring the process of splitting the product (Resolutión de 20 de junio de 2016, de la Dirección General de Desarrollo Rural y Política Agraria Común, por la que se regulan determinadas excepciones relativas al régimen de control de los comerciantes minoristas en la Comunitat Valenciana, que vendan directamente al consumidor final productos ecológicos, conforme al Reglamento (CE) 834/2007 de 28 junio de 2007 y el Reglamento 889/2008 que lo desarrolla [2016/5529, Diari Oficial de la Comunitat Valenciana, Num. 7842/02.08.2016, p. 2249]). Other Member States plainly adopt the broader wording of the directive (see e.g. Paragraph 3(2) of the German ÖLG, see point 6 above, or Article 4 of The British Organic Products Regulations 2009 or Article 2 of the Dutch Regeling van de Minister van Landbouw, Natuur en Voedselkwaliteit van 4 december 2008, nr. TRCJZ/2008/3442, houdende wijziging van de Landbouwkwaliteitsregeling 2007).

( 45 ) My emphases. Whereas – in a random sample – most of the language versions of the regulation use an equivalent to the more abstract English wording (e.g. ‘pas ailleurs qu’au point de vente’, ‘solo in connessione con il punto di vendita’, ‘salvo en el punto de venta’, ‘senão no ponto de venda’, ‘w celach innych niż odnoszących się do punktu sprzedaży’, ‘undtagen I forbindelse med salgsstedet’, ‘ħlief in konnessjoni mal-punt ta' bejgħ’, ‘išskyrus pardavimo punktus’), the German version gives it a certain local connotation by using ‘an einem anderen Ort als in Verbindung mit der Verkaufsstelle’ as does the Dutch and Swedish versions which read: ‘op een plaats die geen verband houdt met het verkoopunt’ and ‘annat än i anslutning till försäljningsplatsen’, as well as the Romanian and Bulgarian versions, which read: ‘în alte părți decât în legătură cu locul de vânzare’ and ‘другаде, освен в мястото на продажба’ (my emphases). Except for the Bulgarian one, all of the latter versions however clearly use as a conjunction a translation of ‘in connection’ and refrain from using a local one like ‘at’. Taking into account the disparity between the various language versions, an argument based on the wording cannot have a strong impact on my interpretation of Article 28(2), so that the other methods of interpretation (see points 19 to 52 and 55 et seq.) have more weight in the present context.

( 46 ) Four out of the 13 language versions analysed here do not use ‘in connection with’, see supra footnote 44. Three out of these four, however, refer to a point and not to a place or location.

( 47 ) See Schmidt, H., and Haccius, M., cited in footnote 33 above.

( 48 ) Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce).

( 49 ) For the wording of the question see point 14 above.

( 50 ) The fact that this might involve considering additional points or issues does not prevent the Court from doing so. See e.g. judgments of 23 February 2006, van Hilten-van der Heijden, C‑513/03 EU:C:2006:131 paragraphs 25 to 27; of 11 March 2008, Jager, C‑420/06, EU:C:2008:152 paragraphs 45 to 58; of 18 November 2010, Lahousse and Lavichy, C‑142/09, EU:C:2010:694, paragraphs 35 to 48; and of 10 February 2011, Vicoplus and Others, C‑307/09 to C-309/09, EU:C:2011:64, paragraphs 22 to 25.