1.

The opinion which I have to deliver today is concerned with six cases (Joined Cases 64 and 113/76, Joined Cases 117/76 and 16/77 and Joined Cases 124/76 and 20/77) relating to agriculture and they have one important feature in common: they all raise the issue of observance of the principle of non-discrimination by the Community legislature. More specifically, the central issue is whether and under what conditions the principle of non-discrimination must be considered to have been breached when, by means of regulations, the Community authorities decide to abolish aids granted for a time to particular products while maintaining aids already granted to a product in competition with them. I should state at once that the products which in the present case no longer benefit from aids (in the form of ‘production refunds’) are ‘quell mehl’ and ‘gritz’; the product which continues to benefit from them is starch. Quellmehl, which is produced by the processing of maize, wheat or broken rice by means of a heat treatment helps to keep dough damp in the breadmaking process and is traditionally used in Germany and Denmark as an additive in the manufacture of rye bread. Gritz is meal which is made from maize by means of a purely mechanical operation and is mainly used in the brewing of beer. For the main purpose for which they are used, each of the two products can, technically speaking, be replaced by starch. During the stage at which the common organization of the market in cereals was being progressively established, the similar treatment of starch and quellmehl in the matter of production refunds was the outcome, in particular, of Regulations Nos 141 and 142/64/EEC of the Council of 21 October 1964. Article 17 (1) of Regulation No 141 instituted a system of production refunds 'in respect of maize and common wheat used by the starch and “quellmehl” industry… Regulation No 142, which was intended to provide a provisional solution of the problem for the period 1 November 1964 to 31 March 1965, left the Member States free to grant production refunds for maize, soft wheat and broken rice used in the manufacture of starch and quellmehl, and, in Article 1 (1) (e) provided as follows: “For quellmehl, the refund in respect of maize, common wheat and broken rice used for the manufacture of this product shall be equal to that allowed on the same cereal when used for starch manufacture”. In this connexion it should be noted that the condition under which the amount of the refunds was the same had been applied in Germany since 1930 to maize used both for the manufacture of starch and for the production of quellmehl. Regulation No 11/65/EEC of the Council of 26 January 1965 gave the Member States the right to grant a production refund on gritz on a temporary basis. In the preamble to the regulation, the reason given for that measure was that “the application of the levy system… has on the one hand caused maize groats and meal to increase in cost and has on the other hand given rise to difficulties as regards their use in the brewing industry, by reason of the competition from products with a similar use”. Regulation No 120/67/EEC of the Council of 13 June 1967 introduced a compulsory production refund both for maize and common wheat used by the starch industry for the manufacture of starch and quellmehl and for maize used in the maize industry for the manufacture of maize groats and meal (gritz) used by the brewing industry (Article 11 (1) (a) and (c)). There is in the tenth recital of the preamble to the regulation a clear indication of the circumstances calling for the production refund for starch and also of the grounds justifying the extension of the grant to quellmehl and to gritz. On the first aspect there is a reference to “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”. On the second aspect there is a reference to “similar reasons… because of the interchangeability of starches with quellmehl and maize groats and meal”. In essence, therefore, Community aid was given to starch producers to enable them to meet competition from synthetic substitute products: at the same time, aid was granted to quellmehl and gritz producers in order to prevent starch, which benefited from the production refund, from being used instead of quellmehl in baking and instead of gritz in the manufacture of beer. On the matter of the amount of the refund, Regulations Nos 138/67/EEC of 13 June 1967 and 367/67/EEC of 25 July 1967 adhered to the principle that the level fixed for starch should be the same as that applicable to gritz and Regulations Nos 178/67 of 27 June 1967 and 371/67 of 25 July 1967 provided likewise in the case of quellmehl. In the sole recital in the preamble to Regulation No 138, which was substantially reproduced in the recital in Regulation No 367, it is stated that “the production refund on maize used by the maize industry for the manufacture of groats and meal for the brewery industry… should be fixed at such a level as to achieve a balance between the cost of supplying the brewing industry with maize starch on the one hand and with maize groats and meal … on the other” and that “this object will be achieved by fixing the refund on maize for the manufacture of groats and meal at the same level as the refund on maize for the manufacture of starch”. Article 1 of the regulations in question provided accordingly. In turn, Regulations Nos 178 and 371 of 1967 provided for a single level of production refund for maize and common wheat for the manufacture of starch and quellmehl. These identical arrangements for the three products with which we are concerned, which, as we have seen, go back to 1964 in the case of quellmehl and to 1965 in the case of gritz, were maintained for about ten years, that is to say until the adoption of Regulation (EEC) No 1125/74 of the Council of 29 April 1974, which introduced certain amendments to Regulation No 120/67/EEC on the common organization of the market in cereals. In particular, it amended the wording of the above mentioned paragraph (1) of Article 11 by abolishing the grant of a production refund for maize and common wheat used in the Community for the manufacture of quellmehl while maintaining the refunds for maize and common wheat for the production of starch and for maize for the manufacture of gritz used in the Community by the brewing industry. On the same date, 29 April 1974, another regulation of the Council (No 1132/74) consolidated in a single instrument the provisions on production refunds for cereals and rice and was naturally to the same effect as Regulation (EEC) No 1125. A few months later, however, gritz suffered the same fate as quellmehl: Regulation (EEC) No 665/75 of 4 March 1975, in fresh amendments applied to Regulation No 120/67/EEC (in particular to Article 11 (1) thereof), ceased to provide for any production refund in respect of maize for the manufacture of gritz used by the brewery industry while merely making the refunds granted for maize and common wheat used in the manufacture of starch optional instead of compulsory, without abolishing them. The latter refund, however, again became compulsory by virtue of Regulation (EEC) No 1955/75 of the Council of 22 July 1975 which fixed them at a lower amount than previously. What grounds did the Council give for changing its attitude on the subject of aids for quellmehl and gritz? In the third and fourth recitals in the preamble to Regulation (EEC) No 1125/74, it is stated that “the production refund for quellmehl was initially granted with a view to promoting certain specific uses of quellmehl as a food for human consumption, account being taken of the possibility of its competing with a number of other products” and that “experience has shown that the opportunity for such substitution is economically slight, if not non-existent” with the result that “the production refund for quellmehl should therefore be abolished”. As for gritz the second recital to the said Regulation (EEC) No 665/75 merely states that “it no longer appears necessary to grant a refund for the production of maize groats and meal for use by the brewing industry in the manufacture of beer”. It should be noted in this connexion that less than a year earlier the Council, in the fourth recital to Regulation (EEC) No 1132/74, indicated that it still believed that the level of the production refund for maize used in the manufacture of gritz for use by the brewing industry should be “such as to achieve a balance between the cost of supplying the brewing industry with maize starch, on the one hand, and with maize groats and meal and broken rice, on the other” (these words being repeated from the sole recital in the preamble to Regulations Nos 138 and 367 of 1967). I ought also to add that the Commission on two occasions proposed to the Council that it should continue to grant the same type of aid and at the same level for maize used in the production of starch and for maize used in the manufacture of gritz for use by the brewing industry. I refer to the proposal for a regulation of 8 February 1975 and that of the following 20 June which, in its statement of the reasons on which it was based repeated the considerations set out in the preamble, referred to above, to Regulation (EEC) No 1132/74. Despite this, the Council decided to limit the production refund for maize and common wheat used in the manufacture of starch and this attitude was confirmed by Article 11 (1) of Regulation (EEC) No 2727/75 of 29 October 1975 the preamble to which again refers to the “special market situation for … starch”. A more recent regulation (No 1862/76) dated 27 July 1976, raised the amount of the refund for starch from 10 to 14 units of account.