EXPLANATORY NOTES ON THAT NOMENCLATURE IN ORDER TO INTERPRET THE ANNEX . ACCORDING TO THE EXPLANATORY NOTE ON HEADING 35.07 ANIMAL RENNET COMES UNDER THAT HEADING AND DOES NOT THEREFORE COME UNDER THE HEADINGS LISTED IN ANNEX II TO THE TREATY .
21 ACCORDING TO ARTICLE 42 OF THE EEC TREATY THE PROVISIONS OF THE CHAPTER RELATING TO RULES ON COMPETITION ARE TO APPLY TO PRODUCTION OF AND TRADE IN AGRICULTURAL PRODUCTS ONLY TO THE EXTENT DETERMINED BY THE COUNCIL . ARTICLE 38 ( 3 ) OF THE TREATY PROVIDES THAT THE PRODUCTS SUBJECT TO THE PROVISIONS OF ARTICLES 39 TO 46 ARE LISTED IN ANNEX II TO THE TREATY AND THAT THE COUNCIL COULD ADD OTHER PRODUCTS TO ANNEX II WITHIN TWO YEARS OF THE ENTRY INTO FORCE OF THE TREATY . IT WAS IN ACCORDANCE WITH THOSE PROVISIONS OF THE TREATY THAT THE SCOPE OF REGULATION NO 26/62 APPLYING CERTAIN RULES OF COMPETITION TO PRODUCTION OF AND TRADE IN AGRICULTURAL PRODUCTS WAS RESTRICTED BY ARTICLE 1 THEREOF TO THE PRODUCTION OF AND TRADE IN THE PRODUCTS LISTED IN ANNEX II TO THE TREATY . THAT REGULATION MAY NOT THEREFORE BE APPLIED TO THE MANUFACTURE OF A PRODUCT WHICH DOES NOT COME UNDER ANNEX II EVEN IF IT IS A SUBSTANCE ANCILLARY TO THE PRODUCTION OF ANOTHER PRODUCT WHICH ITSELF COMES UNDER THAT ANNEX . IN ORDER FOR THE REGULATION TO BE APPLICABLE TO RENNET THAT PRODUCT MUST THEREFORE ITSELF COME UNDER ANNEX II TO THE TREATY . IT FOLLOWS THAT REGULATION NO 26/62 CAN HAVE NO APPLICATION IN THIS CASE AND THAT THE APPLICANT ' S FIFTH SUBMISSION MUST BE REJECTED .
THE OBSERVATIONS OF THE GOVERNMENT OF THE FRENCH REPUBLIC
22 THE GOVERNMENT OF THE FRENCH REPUBLIC SUBMITS INTER ALIA THAT , EVEN OUTSIDE THE SCOPE OF REGULATION NO 26/62 , IT IS NECESSARY WHEN ASSESSING THE POSSIBLE EFFECTS OF COMPETITION TO TAKE THE GREATEST POSSIBLE ACCOUNT OF THE SPECIFIC CIRCUMSTANCES OF AGRICULTURAL PRODUCTION AND THE PARTICULAR REQUIREMENTS OF THE SPECIAL KIND OF ORGANIZATION CONSTITUTED BY AGRICULTURAL COOPERATION . IN ITS VIEW , BY VIRTUE OF ITS VERY OBJECT , WHICH IS TO ENABLE SMALL FARMS TO HAVE COMMON USE OF ALL THE MEANS REQUIRED TO FURTHER THEIR ECONOMIC ACTIVITIES , AGRICULTURAL COOPERATION REQUIRES THE CREATION OF PREFERENTIAL TIES BETWEEN THE FARMERS ON THE ONE HAND AND THE FARMERS AND THE COOPERATIVE ON THE OTHER . THUS , IN THE VIEW OF THE FRENCH GOVERNMENT , NEITHER AN EXCLUSIVE SUPPLY OBLIGATION NOR AN OBLIGATION TO PAY A SEVERANCE FEE , UNLESS THE LATTER IS PROHIBITIVE , CANNOT BE REGARDED AS BEING , IN PRINCIPLE , INCOMPATIBLE WITH ARTICLE 85 ( 1 ). AS SUCH OBLIGATIONS ARE MORE OFTEN THAN NOT INDISPENSABLE IN ORDER TO ENABLE A COOPERATIVE TO BE SET UP WITH REASONABLE CHANCES OF SUCCESS , IT IS NOT POSSIBLE EITHER TO RULE OUT COMPREHENSIVELY THE APPLICATION OF ARTICLE 85 ( 3 ).
23 THE FRENCH GOVERNMENT ACCORDINGLY TAKES THE VIEW THAT ANY EFFECT WHICH THE