OPINION OF ADVOCATE GENERAL

POIARES MADURO

delivered on 15 July 2004 ( )

Case C-124/03

1. Artrada (Freezone) NV

2. Videmecum BV

3. Jac. Meisner Internationaal Expeditiebedrijf BV

v

Rijksdienst voor de keuring van Vee en Vlees

(Reference for a preliminary ruling from the College van Beroep voor het bedrijfsleven (Netherlands))

(Interpretation of Articles 2(2) and (4) and 22 of Directive 92/46/EEC – Health rules for the production and placing on the market of raw milk, heat-treated milk and milk-based products – Concepts of ‘milk for the manufacture of milk-based products’ and ‘milk-based products’ – Compound of sugar, cocoa and skimmed-milk powder imported from the Netherlands Antilles and used for the manufacture of chocolate milk drinks)

1. In the course of proceedings relating to a decision refusing authorisation to import into the European Community a consignment of a compound of sugar, skimmed-milk powder and cocoa intended for the manufacture of chocolate milk drinks, the College van Beroep voor het bedrijfsleven (Administrative Court for Trade and Industry) has referred for a preliminary ruling four questions concerning Council Directive 92/46/EEC of 16 June 1992 laying down the health rules for the production and placing on the market of raw milk, heat-treated milk and milk-based products. ( ) Those questions concern the interpretation of ‘milk for the manufacture of milk-based products’ and ‘milk-based products’, concepts which delimit the scope of the directive.

I – Legal framework

A – Community law

2. In accordance with Article 1(1) thereof, Directive 92/46 ‘lays down health rules for the production and placing on the market of raw milk, heat-treated drinking milk, milk for the manufacture of milk-based products and milk-based products intended for human consumption.’

3. Under Article 2(2) of Directive 92/46, for the purposes of the directive, ‘milk for the manufacture of milk-based products’ means: ‘either raw milk for processing or liquid or frozen milk obtained from raw milk, whether or not it has undergone an authorised physical treatment, such as heat treatment or thermisation, or is modified in its composition, provided that these modifications are restricted to the addition and/or removal of natural milk constituents.’ Article 2(4) defines ‘milk-based products’ as ‘milk products, namely, products exclusively derived from milk, it being accepted that substances necessary for their manufacture may be added, provided that these substances are not used to replace in part or in whole any milk constituent, and composite milk products, namely products of which no part replaces or is intended to replace any milk constituent and of which milk or a milk product is an essential part either in terms of quantity or for characterisation of the product.’

4. Article 22 of Directive 92/46, which comes under Chapter III on imports from third countries, provides that ‘[t]he conditions applicable to imports from third countries of raw milk, heat-treated milk and milk-based products covered by this Directive must be at least equivalent to those laid down in Chapter II for Community production’. For the purposes of uniform application of that provision, the directive provides that, in order to be imported into the Community, milk or milk-based products must ‘come from a third country on the list to be drawn up in accordance with paragraph 3(a)’ and be ‘accompanied by a health certificate corresponding to a specimen to be drawn up in accordance with the procedure laid down in Article 31, signed by the competent authority of the exporting country and certifying that the milk or milk-based products meet the requirements of Chapter II or any additional conditions or offer the equivalent guarantees referred to in paragraph 3 and come from establishments offering the guarantees provided for in Annex B’ (Article 23(2)(a) and (b). ( )

5. Finally, Council Directive 97/78/EC of 18 December 1997 lays down the principles governing the organisation of veterinary checks on products entering the Community from third countries. ( )

B – National law

6. Directive 92/46 was transposed into Netherlands law by the Warenwetbesluit Zuivel (Legislative Commodities Dee applicable to Milk Products), ( ) Article 4 of which provides that the manufacture, treatment and marketing of milk intended for the manufacture of milk-based products, heat-treated milk, and milk-based products must be carried out in hygienic conditions.

7. Article 16 of the Warenwetregeling Zuivelbereiding ( ) (Commodities Rules concerning the Manufacture of Milk Products) provides that only milk and milk-based products from one of the third countries included on the list laid down in Decision 95/340 which are accompanied by a health certificate in accordance with the model stipulated in Decision 95/343 may be imported into the Netherlands.

8. Under Article 4 of the Warenwetregeling Veterinaire controles (derde landen) (Rules on Veterinary Checks (Third Countries)), the Rijksdienst de keuring van Vee en Vlees (Livestock and Meat Inspectorate) is the competent authority for the purpose of carrying out the checks laid down in Directive 97/78. Finally, the Warenwetbesluit Invoer levensmiddelen uit derde landen (Legislative Dee on the Import of Food from Third Countries) ( ) applies to food and drink from third countries in respect of which there is no Community legislation. Such goods may be imported into the Netherlands only if they are suitable for human consumption from a health perspective.

C – The facts, the main proceedings and the questions referred for a preliminary ruling

9. In the main proceedings, Artrada (Freezone) NV (‘Artrada’), Videmecum BV and Jac. Meisner Internationaal Expeditiebedrijf BV are in dispute with the Rijksdienst voor de keuring van Vee en Vlees (Meat and Livestock Inspectorate).

10. Artrada operates a factory in Aruba which produces, inter alia, compounds of sugar, milk powder and cocoa. Videmecum BV is wholly owned by Artrada and takes charge of transport operations for the latter’s products. Jac. Meisner Internationaal Expeditiebedrijf BV is a customs agent which provides declarations on behalf of Videmecum BV, in connection with the release for free circulation in the European Community of the product concerned.

11. On 26 January 2001, Jac. Meisner Internationaal Expeditiebedrijf BV made two import declarations relating to the release for free circulation of a 167 475 kg consignment from Aruba of a compound comprising 75.75% sugar, 15.15% skimmed-milk powder, and 9.1% cocoa. The constituents of that compound cannot be separated and the compound is used for the manufacture of chocolate milk at factories in Germany and Belgium.

12. By a decision of 23 February 2001, the Rijksdienst voor de keuring van Vee en Vlees refused to allow the release for free circulation of the consignment on the grounds that it contained an animal component and did not have a veterinary certificate.

13. That decision was challenged before the VWS-commissie bezwaarschriften Awb (Ministry of Health, Welfare and Sports Committee for Resolving Administrative Complaints), which, on 2 August 2001, ruled the complaint inadmissible in relation to the latter two undertakings referred to in point 10, and dismissed the complaint in relation to Artrada. With regard to Directive 92/46, the VWS-commissie bezwaarschriften Awb declared that the milk powder contained in the compound should be regarded as ‘milk for the manufacture of milk-based products’ within the meaning of Article 2(2) thereof and that it must satisfy the requirements laid down therein. Since the Netherlands Antilles and Aruba do not appear on the list of third countries laid down in the directive, importation of the compound could not be permitted.

14. An appeal against that decision was brought before the Rechtbank (District Court), Rotterdam, which, in a judgment of 4 March 2002, allowed the appeal and set aside the contested decision on the grounds that it had not been adopted by the competent authority, but upheld its legal effects. In the light of a working document from the Commission’s Directorate General for Agriculture (VI 88272/83-NL), the Rechtbank held that, since the compound was a semi-finished product, it could not be regarded as a ‘milk-based product’ within the meaning of Article 2(4) of Directive 92/46, because that provision relates only to finished products. However, the Rechtbank also held that the milk powder contained in the compound constituted ‘milk for the manufacture of milk-based products’, within the meaning of Article 2(2) of the directive. According to the Rechtbank, such a view is more in keeping with the principal aim of the directive, namely, the protection of public health. Since the compound originated in a country which does not appear on the list of third countries, the Rechtbank ruled that its import could not be authorised.

15. Artrada, Videmecum BV and Jac. Meisner Internationaal Expeditiebedrijf BV appealed against the judgment before the referring court, which ruled the appeal inadmissible in relation to the latter two undertakings on the ground that they did not have a direct interest in the dispute, and, having set out the arguments of the parties and its assessment, referred the following questions to the Court of Justice for a preliminary ruling:

‘1(a) Must the term “milk for the manufacture of milk-based products” in Article 2(2) of Directive 92/46/EEC be interpreted as meaning that it (also) includes milk constituents of a product which also contains other non-milk constituents and where the milk constituent cannot be separated from the non-milk constituents?

1(b) If the answer to question 1(a) is affirmative: must Article 22 of Directive 92/46/EEC be interpreted as meaning that in the case of imports from non-Member States that directive is applicable only to the milk constituent of a product and thus not to the product of which it is a constituent?

2(a) Does the concept of “milk-based products” in Article 2(4) of Directive 92/46/EEC concern only finished products or also semi-finished products which must undergo further processing before they can be offered for sale to the consumer?

2(b) In the event that Article 2(4) of Directive 92/46/EEC also refers to semi-finished products, according to which criteria must it be determined whether milk or a milk product forms an essential part of a product, either in terms of quantity or for characterisation of those products, as referred to in Article 2(4) of Directive 92/46/EEC?’

16. Artrada, the Rijksdienst voor de keuring van Vee en Vlees, the Greek Government and the Commission submitted written observations and participated in the hearing held on 24 June 2004.

II – Assessment

A – Preliminary observations

17. It is important to bear in mind, first of all, that Aruba is a third country for the purposes of Directive 92/46, although it is one of the associated ‘countries and territories’ referred to in Part Four of the EC Treaty. ( )

18. I would also point out that the questions referred do not concern the rules applicable to products from third countries but rather to the previous question of the scope of Directive 92/46, which covers both Community and non-Community products. Products not falling within the scope of the directive are not required to comply with its provisions. ( )Only if the directive is applicable will the compound at issue in this dispute be required to satisfy its requirements.

B – The first question referred

19. The referring court, Artrada, the Greek Government and the Commission take the view that the disputed compound does not constitute ‘milk for the manufacture of milk-based products’, within the meaning of Article 2(2) of Directive 92/46. The Rijksdienst voor de keuring van Vee en Vlees contends that the compound satisfies the definition in that provision, because, in its view, the milk powder contained in the compound is milk for the manufacture of milk-based products. It asserts that that interpretation is preferable in the light of the need to protect public health and prevent fraud (if the milk powder were imported separately it would be a milk-based product, but it would merely be necessary to include the milk powder in the compound for the directive not to apply).

20. To my mind, a compound such as the one in the main proceedings is not caught by the definition of ‘milk for the manufacture of milk-based products’ in Article 2(2) of Directive 92/46. That provision requires there to have been no modification of the essential composition of the milk, and prohibits the addition of any other constituents, which is what happens in this case. Moreover, such a wide interpretation of Article 2(2) would render meaningless the definition of ‘milk-based products’ in Article 2(4), which excludes from the scope of the directive products of which milk or a milk product is not an essential part. If it were possible to regard a compound as milk for the manufacture of a milk-based product on the ground that it contains milk powder, then any product which contains milk would be caught by the definition and the restriction in Article 2(4) would be devoid of effect.

21. Moreover, I do not believe that the teleological argument advanced by the Rijksdienst voor de keuring van Vee en Vlees is capable of overturning the arguments based on the wording and the scheme of Directive 92/46 which I have set out above. It is clear from Articles 1 and 2 of Directive 92/46 that the legislature did not intend to include within its scope every product which contains a trace of milk or a milk-based product. It is possible that the interpretation put forward by the Rijksdienst would ensure greater protection of public health, but it is invalidated by the wording and the scheme of the directive.

22. In conclusion, the term ‘milk for the manufacture of milk-based products’ in Article 2(2) of Directive 92/46 does not include milk constituents of a product which contains other non-milk constituents and where the milk constituent cannot be separated from the non-milk constituents.

23. That reply renders an examination of the second question unnecessary.

C – The third question

24. The Greek Government and the Commission are of the opinion that Article 2(4) of Directive 92/46 covers both finished and semi-finished products. The Rijksdienst voor de keuring van Vee en Vlees is of the opinion that the provision refers only to finished products, in the light of the wide interpretation of Article 2(2) of the directive which it has put forward. Artrada contends that Article 2(4) of the directive covers only finished products, and submits that that is in keeping with the scheme of paragraphs 1 to 4 of Article 2, which refer sequentially to milk, milk for the manufacture of milk-based products, drinking milk, and milk-based products.

25. In my opinion, Article 2(4) of Directive 92/46 refers also to semi-finished products. First and foremost, the wording of the provision does not preclude such an interpretation, because semi-finished products are milk-based products, although they have not undergone a final manufacturing process. Furthermore, there is nothing in the directive to indicate that there was a desire to exclude such products from its scope, and to include them is more in keeping with its health objective. The Court has held that ‘Directive 92/46 governs all the stages in the milk production process, from animal health to the transport of products to various sales outlets’. ( ) That suggests that, in principle, semi-finished products fall within the scope of the directive.

26. I therefore consider that the concept of ‘milk-based products’ in Article 2(4) of Directive 92/46 also comprises semi-finished products which must undergo further processing before they can be offered for sale to the consumer.

D – The fourth question

27. The Commission maintains that milk is an essential part of the product, for the purposes of Article 2(4) of Directive 92/46, if it is present in a certain quantity (more than 50% of the product) or if it is characteristic of the final product. Since the compound concerned is used for the manufacture of chocolate milk, the Commission is of the view that it is characteristic of the product. The Greek Government asserts that, from a quantitative point of view, the essential part is the constituent which is most important in terms of quantity. The Greek Government contends that it is the taste which characterises the product. Since the compound contains a large amount of cocoa it will taste of cocoa rather than of milk, from which it follows that it does not satisfy the definition in Article 2(4). Artrada asserts that the skimmed-milk powder present in the compound is not essential either in terms of quantity or for characterisation, because the essential part is the sweetened cocoa; the transformation of the product into chocolate milk; after it has been imported into the territory of the Community, requires only the addition of milk, rather than of water as the Rijksdienst voor de keuring van Vee en Vlees claims. The Rijksdienst voor de keuring van Vee en Vlees maintains that the milk characterises the final product, which must be regarded as a milk-based product on the ground that the compound is for use in the manufacture of chocolate milk.

28. It must be pointed out, first of all, that a semi-finished product, such as the compound at issue in this dispute, will be covered by Directive 92/46 only if it satisfies the definition in Article 2(4) thereof; in other words, if the milk or milk-based product is an ‘essential part’ of the product, ‘either in terms of quantity or for characterisation of the product’. That question is not a simple one, owing to the imprecise nature of the criteria selected by the legislature.

29. As far as quantity is concerned, I do not share the view of the Commission and the Greek Government that the essential part is that which comprises more than 50% of the composition of a product or which is the most important constituent in terms of quantity. A number of the different language versions of Directive 92/46 use the phrase ‘an essential part’ (the French, Portuguese, Italian, German and English versions; of the ones I have looked at only the Spanish version refers to ‘the essential part’), which suggests that it is possible for a product to have several essential parts. Accordingly, the essential part in terms of quantity must be determined negatively and by reference to the other constituents, rather than on the basis of an absolute percentage. For example, if the compound contained 33 % milk powder, 33 % sugar, 33 % cocoa and 1 % ground almonds, the ground almonds would not be an essential part from a quantitative point of view, whereas the three other constituents would. The milk-based constituent must, therefore, be regarded as essential if it is not clearly secondary from a quantitative point of view in relation to the other constituents of the product, the interpretation best according with the health objective of the directive. Although it is for the referring court to rule on the issue, I consider that, in a product which contains 75.75% sugar, 15.15% skimmed-milk powder and 9.1% cocoa, the milk-based component is not clearly secondary. Moreover, the importance of the milk powder in relation to the other components will surely increase upon the addition of the liquid necessary to produce the chocolate milk.

30. As to characterisation, it is my opinion that, in the case of semi-finished products, the matter must be determined by reference to their ultimate use, which it is the responsibility of the importer to communicate to the competent authorities. The primary objective of Directive 92/46 is to protect public health, but the legislature wished to exclude from the scope of the directive products of which a milk constituent is not an essential part, either in terms of quantity or for characterisation. Application of the latter criterion is liable to lead to inconsistent results, because a semi-finished product will or will not be regarded as a milk-based product depending on the product’s use, whereas that is the consequence of a criterion laid down in the directive. ( ) The effect will be to characterise the final product if the final product is a milk-based product, evidence that the milk component in the semi-finished product characterises the final product. The latter will be a milk-based product by virtue of either the quantity of the milk component or of its characterising effect, a matter to be determined on the basis of a range of criteria, such as taste, name, appearance and texture. In the case before the Court, the chocolate milk is unquestionably a milk-based product. Therefore, irrespective of whether its production requires only the addition of water, or whether milk must also be added, the disputed compound would be covered by Article 2(4).

31. In conclusion, Article 2(4) of Directive 92/46 must be construed as meaning that the question whether milk or a milk product is to be regarded as an essential part of a semi-finished product must be determined by reference to quantity, where the milk or milk product is not clearly secondary in relation to the other constituents of the product, and by reference to characterisation where the final product for whose manufacture the semi-finished product is to be used is a milk-based product by virtue of either the quantity of the milk constituent or of its characterising effect, a matter to be determined on the basis of a range of criteria, such as taste, name, appearance and texture.

III – Conclusion

32. In the light of the foregoing considerations, I propose that the Court of Justice should give the following replies to the questions referred by the College van Beroep voor het bedrijfsleven:

(1) The term ‘milk for the manufacture of milk-based products’ in Article 2(2) of Council Directive 92/46/EC of 16 June 1992 laying down the health rules for the production and placing on the market of raw milk, heat-treated milk and milk-based products does not include milk constituents of a product which contains other non-milk constituents and where the milk constituent cannot be separated from the non-milk constituents.

(2) The concept of ‘milk-based products’ in Article 2(4) of Directive 92/46 also comprises semi-finished products which must undergo further processing before they can be offered for sale to the consumer.

(3) Article 2(4) of Directive 92/46 must be construed as meaning that the question whether milk or a milk product is to be regarded as an essential part of a semi-finished product must be determined by reference to quantity, where the milk or milk product is not clearly secondary in relation to the other constituents of the product, and by reference to characterisation where the final product for whose manufacture the semi-finished product is to be used is a milk-based product by virtue of either the quantity of the milk constituent or of its characterising effect, a matter to be determined on the basis of a range of criteria, such as taste, name, appearance and texture.