3.

I now come to the heart of the proceedings, namely the question whether the Commission correctly assumed in the spring of 1979 that serious disturbances were to be expected on the Community market in dessert apples owing to imports. We must determine in particular, as Regulation No 2707/72 requires, which findings the Commission arrived at and was properly entitled to arrive at with respect to the volume of probable imports, the quantities available on the common market, the prices of domestic produce on the common market and the quantities for which withdrawals were or might be effected; then we must consider whether the supension of imports from Chile appears justified. (a) In view of what we have learned in the proceedings it can hardly be denied that the common market in dessert apples was in a really difficult situation in spring 1979. As proof of that, the figures on the size of the harvest in the marketing year 1978/79 (6676000 tonnes) and the comparison with previous harvests (1975/76: 7551000 tonnes; 1976/77: 6497000 tonnes; 1977/78: 5122000 tonnes) are certainly not sufficient. For, as the plaintiff has correctly pointed out, only marketable goods, that is to say goods meeting the quality standards of the common organization of the market, are relevant to the market and in its appraisal. However, the Commission could not adduce any figures, just as the plaintiff's argument that only less than one-third of the 1978/79 harvest met the quality standards was not proved. Other facts, however, are of crucial importance. — For example, the figures for the quantities in storage are impressive, especially when compared to the harvest figures. Whilst 1499000 tonnes and 1152000 tonnes were in storage in March 1979 and April 1979 respectively, the figures for the same periods in 1977 were 1264000 tonnes and 872000 tonnes and in 1978, after a particularly small harvest, 1072000 tonnes and 750000 tonnes. Nor can the conclusion to be drawn about the situation on the market in this case be affected by any of the various arguments put forward by the plaintiff. That applies above all as regards its observation that 55 to 60 °/o of imports from Chile were destined for the Federal Republic of Germany where the quantities of apples in storage were smaller. For, in the case of a protective measure applying throughout the Community, the situation in the entire Community is naturally important, just as it will not do to take only Chilean exports into account here. The plaintiff could not adduce any evidence for its contention that at the end of the harvest producers deliberately withheld apples from the market or, at any rate, that they withheld excessive quantities ignoring market requirements. As regards the plaintiffs observation that only stocks kept in cold stores may be properly taken into account and that an appreciable proportion of produce unsuitable for intervention measures was stockpiled we have been told by the Commission with quotations from reference books that the storage of certain kinds of apples is possible until May, even outside cold stores, so that it was possible for them to be taken into account in an assessment of the market situation in April. Secondly, not only is it obvious that stockpiling, which is very expensive is economic only in relation to marketable goods. It must also be borne in mind, as far as the intervention stores are concerned, that responsibility for the intervention measures and the quality checks to be carried out in that connexion lies with the Member States and that accordingly when adopting the measures which it has to take the Commission may assume that the figures supplied by the Member States are correct provided there are no serious reasons to doubt them. However, the plaintiff has not been able to point to any such reasons with regard to the period with which we are concerned and it is difficult to discern any in the special report of the Court of Auditors, referred to by the plaintiff, on various measures affecting the management of the European Agricultural Guidance and Guarantee Fund, Guarantee Section (Financial Year 1978) (Official Journal 1980, C 258, p. 1); the report contains only very general criticisms about the proper application of intervention measures, controls by Member States and the furnishing of information to the Commission by the Member States, although it does also mention repeated attempts of the Commission to tighten controls. — What was said about the price situation existing on the common market in spring 1979 is also impressive. Apparently in April 1979 market prices in the Federal Republic of Germany were between 16.46 and 19.84 units of account, in Belgium between 13.90 and 16.39 units of account and in the Netherlands between 14.86 and 20.26 units of account so that they did not reach the basic price of 21.26 units of account which is determined in accordance with Article 16 of Regulation No 1035/72 on the basis of the trend of the arithmetic mean of prices recorded on the representative Community markets. It is also worth noting that in March 1979 prices in five of seven Member States were still nowhere near the level prevailing in March of the 1976/77 marketing year in which there was a comparable harvest. That is clear from the tables which were submitted by the Commission on 30 October 1980 in response to an inquiry from the Court. Moreover, the price trend in spring 1979 (February to April) in most Member States (France, Federal Republic of Germany, Italy, Ireland and Denmark) was clearly downward, as may also be seen from the outline supplied by the Commission. — Not least what has become known about the extent of the withdrawals from the market effected at the time in question must give cause for thought; according to the common organization of the market (Articles 15, 15a and 19), withdrawals may take place only if the prices recorded on the market fall far below the basic price. On 1 March 1979 those withdrawals amounted to 90000 tonnes, whilst the corresponding figures for 1978 and 1977 are 2450 and 115000 tonnes respectively; on 1 April 1979 they already amounted to 143512 tonnes and reached 378974 tonnes in the whole of the 1978/79 marketing year. It is also worth noting that in 1976/77 they totalled 167189 tonnes and in 1975/76, in the spring of which there were clearly the same stocks as in spring 1979, as much as 840000 tonnes. All those circumstances undoubtedly lead to the conclusion that in the spring of 1979 there existed an extraordinarily critical situation on the common market in dessert apples. (b) That conclusion gives rise to the question whether the volume of imports to be expected might lead to an appreciable deterioration of the situation and whether the import reductions envisaged by the Commission to avert that threat seem appropriate. The plaintiff has basically objected that a negative answer to that question is inescapable because, owing to the kinds, qualities and prices in question, imported and home-produced apples may be viewed as interchangeable only to a limited extent and because all previous experience shows that in the spring and early summer it must even be expected that imported apples will promote the sale of domestic produce and have a beneficial effect on the price situation. That contention, however, is difficult to accept. It is hard to imagine that, in a situation characterized by great difficulties in disposing of domestic produce and by falling prices on the common market, consumers who are no longer attracted by domestic produce should be prepared, when freshly-harvested apples are imported, to buy not only those apples but stored domestic produce, too, and at a higher price. As far as the question of inter-changeability is concerned reference may be made not only to the affirmative finding by the special GATT group which had to deal with Chile's complaint and about which the Commission informed the Court. The case-law on this subject (judgment in Joined Cases 41 to 44/70 [1971] ECR 411 et seq., especially paragraphs 47 to 54) is quite plain as well. I need only recall two observations made in that judgment: “Yet, irrespective of the prices of these products there is still a danger that because they can be substituted for domestic products they may attract paa of the internal demand and thus cause even greater quantities to flow in to the intervention agencies.” “It is true that the products coming from third countries during this period” (spring) “were manifestly superior both as to quality and price to the domestic products, but on the other hand the quality of the latter products was not so inferior that interchange of the two categories was in no circumstances possible.” If that approach is adopted in this case, too, it must be remembered that according to the Commission's inquiries the imports envisaged would have amounted to 380000 tonnes. That would have represented an increase even as against the previous year in which there had been a particularly small domestic harvest; it would have been a very considerable increase in comparison with imports in 1977 (249000 tonnes), a year in which the harvest was of comparable size. What is more, imports had never reached that magnitude in any other previous year. It is therefore difficult to criticize the Commission for believing that such a volume of imports would create the risk of a disturbance, and in view of the situation described there can be no question of an error of judgment if the Commission was attempting to achieve a reduction of imports to roughly 310000 tonnes. We should not therefore accept the plaintiff's view that the only issue was whether an additional quantity of 8000 tonnes of apples to be imported from Chile would have created the risk of a disturbance. Quite irrespective of the fact that at the time when the disputed measures were adopted there was still no reliable information about contracts of carriage for some 5000 tonnes and that it could not be assumed, either, that Chile would restrict itself to 55000 tonnes (because no agreement on that compromise figure had been reached), the risk of a disturbance must more correctly be seen to exist in an additional volume of imports comprising some 70000 tonnes altogether. The curtailment of imports which the Commission consequently believed to be correct, and properly so in my view, was, as we know, achieved in relation to other exporting countries on the basis of voluntary restriction agreements. The plaintiff may be critical of that course of action and doubt its legality but consideration of that issue may in my opinion remain open since the voluntary restriction agreements did not constitute a legal pre-condition in the sense of being a legal basis for the protective measures adopted against Chile. The only important point is that those steps were in fact effective; they did reduce the risk of a disturbance so that it was possible for the adoption of unilateral protective measures to be restricted to Chile. A decision not to adopt protective measures against Chile would on the other hand have run the risk that the other exporting countries would not have kept to their voluntary restriction agreements so that it would have been necessary to provide for an actual increase in imports of not just some 8000 tonnes but, as the Commission feared, of some 70000 tonnes. As regards the further issue of the fair, proportionate reduction of all the exports envisaged, I see no reason for criticism here either. The Commission's approach was to take as a basis the average imports during the three previous years, although in the case of 1976 when, unlike other countries, Chile clearly did not keep to a voluntary restriction agreement, agreed imports and not actual imports were taken into account. A specific percentage reduction was then made. As the Commission told us, using that method it arrived at the lowest percentage reduction in the case of Chile so that there cannot basically be any question of that country's being put at a disadvantage. When the plaintiff says however that there was reason to give Chile a greater proportion of the volume of imports envisaged in view of the fact that Chile did not start exporting until a late stage and the fact that in spring 1979 it was to be expected that the exporting countries who had signed voluntary restriction agreements would not exhaust the quotas provided, I would beg to differ. I cannot in fact discern the considerations which would have provided compelling reasons for so proceeding. Secondly, in my view it does not seem permissible to draw inferences with regard to the year which concerns us here from the conduct of certain States in the southern hemisphere (Argentina, Australia, New Zealand) in the marketing year 1979/80 when obviously greater amounts were announced for import than were actually imported. The only important point is simply that, according to the unchallenged statements of the Commission, in 1979 the quotas specified in the voluntary restriction agreements were actually used up and the plaintiff has not been able to demonstrate that this occurred — by means of additional purchases from other countries — merely out of fear that during negotiations for future voluntary restriction agreements the Community might otherwise rely on the fact that the 1979 quotas had not been exhausted. c) If, therefore, the foregoing considerations can leave no doubt as to the justification of the protective measure adopted by the Commission and if there can, in particular, be no question of the Commission regulations being invalid on the grounds of inadequate examination or erroneous appraisal of the facts with respect to Article 29 of Regulation No 1035/72 and Regulation No 2707/72, that result is not affected by two further arguments partly stemming from the actions for damages. One of those arguments concerns the fact that Commission Regulation No 687/79 was amended twice. That fact really does not lead to the conclusion that the measure complained of is invalid for having been enacted on the basis of inadequate information. There was no such uncertainty as far as the appraisal of the situation on the domestic market and the volume of imports to be expected is concerned. That may have been the case as far as concerns details about the arrival of the goods in the Community, for which the Commission was dependent on information from Chile. When this information became available, however, there was no alternative in view of the principle of proportionality clearly expressed in Article 3 of Regulation No 2707/72 but to adjust the measure originally adopted to meet the changed circumstances. The other argument rests on a comparison with 1979/80 and the fact that in that year, despite an apple harvest of 6869000 tonnes and withdrawals from the market totalling 480186 tonnes, protective measures were not taken against imports which reached a volume of 370000 tonnes. To draw conclusions from that comparison about the correctness of the exercise of discretion in spring 1979 and the legality of the measures based thereon seems to me to be misguided because for one thing the conduct of the Community institutions in 1980 might also have been affected by the proceedings pending under GATT which might possibly have occasioned special restraint; it should not be overlooked either that the position in 1980 was more favourable than in 1979 in so far as a rise in prices was recorded in February and March and basic prices were exceeded in the countries with the largest stocks (see the statement of Commissioner Gundelach, Official Journal C 190 of 28 July 1980, p. 12). Moreover sale prices of the exporting countries were clearly higher than in the previous year and, in comparison with the actual imports in the previous year, it was possible to speak of only a moderate increase in imports.