CELEX: 62001CC0416
Language: en
Date: 2003-05-15 00:00:00
Title: Opinion of Mr Advocate General Mischo delivered on 15 May 2003. # Sociedad Cooperativa General Agropecuaria (ACOR) v Administración General del Estado. # Reference for a preliminary ruling: Tribunal Supremo - Spain. # Common organisation of the markets in the sugar sector - Reallocation or transfer of quotas - Interpretation of Council Regulations (EEC) No 1785/81, (EEC) No 193/82 and (EC) No 1260/2001 - Decision of competent authorities of a Member State, when approving a merger, to reallocate sugar production quotas - Sale by public auction - Transfer of quotas for consideration. # Case C-416/01.

OPINION OF ADVOCATE GENERALMISCHO delivered on 15 May 2003  (1)
         Case C-416/01 Sociedad Cooperativa General Agropecuaria (ACOR) vAdministración General del Estado,joined parties: Azucareras Reunidas de Jaén SA, Ebro Puleva SA, formerly Azucarera Ebro Agrícolas SA (Reference for a preliminary ruling from the Tribunal Supremo (Supreme Court) (Spain))
            ((Common organisation of the markets in the sugar sector – Reallocation or transfer of quotas – Interpretation of Council Regulation (EEC) No 1785/81, Council Regulation (EEC) No 193/82 and Council Regulation (EC) No 1260/2001 – Decision by the competent authorities of a Member State, when approving a merger of sugar undertakings, to reallocate sugar
               production quotas – Sale by public auction – Transfer of quotas for consideration))
            
            
      
         
        I ─ Introduction  
      
       1.  The Tribunal Supremo (Supreme Court), Spain, is asking the Court to clarify whether the Community legislation on the common
      organisation of the markets in the sugar sector allows the competent authorities of a Member State to decide that a transfer
      or reallocation of quotas is to be carried out for value, by means of a public auction procedure, when, under national competition
      law, the competent authorities of this Member State have taken the view that approval of a merger of sugar undertakings should
      be subject to redistribution, between the sugar undertakings established on its territory, of part of the sugar quotas of
      the undertaking which results from the merger. 
       II ─ Legal background
       A─ The Community legislation
      
       2.  In the main proceedings, the applicable Community legislation at the material time consisted of Council Regulation (EEC) No
      1785/81 of 30 June 1981 on the common organisation of the markets in the sugar sector  
      
         			(2)
         		 and Council Regulation (EEC) No 193/82 of 26 January 1982 laying down general rules for transfers of quotas in the sugar
      sector.  
      
         			(3)
         		
       3.  In the meantime, new provisions have been adopted, and the legislation in force at present is Council Regulation (EC) No 1260/2001
      of 19 June 2001 on the common organisation of the markets in the sugar sector.  
      
         			(4)
         		
       4.  The common organisation of the markets (or  
      the COM) in the sugar sector includes, inter alia, a system of quotas. The Community legislation distinguishes two types of quota
      and three types of sugar. A quota sugar represents consumption within the Community and may be freely marketed on the common
      market, with its disposal being guaranteed by the intervention price. The B quota is the quantity of sugar produced in excess
      of the A quota without, however, exceeding the  
      maximum quota provided for by the Regulation. B quota sugar may also be freely marketed on the common market, but without an intervention
      price guarantee, or it may be exported to non-member countries with export aid. The sugar produced in quantities exceeding
      the sum of the A and B quotas is called  
      C sugar and must be exported without the grant of any export aid. The quotas in question in the present case are the A and B quotas
      and it is unnecessary, I believe, to distinguish between them in order to answer the question raised. 
      
       5.  Under Article 24(1) of Regulation No 1785/81 (now Article 11(1) of Regulation No 1260/2001),  
      Member States shall, under the conditions of this Title, allocate an A quota and a B quota to each sugar-producing undertaking
      ... which either had ... a basic quota as defined, as the case may be, in Regulation (EEC) No 3330/70 or in Regulation (EEC)
      No 1111/77 .... 
      
       6.  As regards the transfer of quotas, the 14th recital to Regulation No 1785/81 states that the Member States have  
      in the form of rules and special Community criteria, in addition to the power to allocate the quotas on the basis of ... producing
      ... undertakings, the power to amend subsequently the quotas of existing undertakings ... and to reallocate to other undertakings
      the quantities of quotas withdrawn, with the aim of  
      meet[ing], should the case arise, the restructuring needs of the sugar beet and sugar cane crop sectors, the sugar production
      sector and the isoglucose production sector .... In addition, according to the 15th recital to the same Regulation,  
      since the production quotas allocated to undertakings constitute a means of guaranteeing producers Community prices and an
      outlet for their production, quota transfers should be made taking into consideration the interests of all the parties concerned
      and in particular those of sugar beet and sugar cane producers. The 18th and 19th recitals to Regulation No 1260/2001 have a similar wording to those of the two abovementioned recitals
      to Regulation No 1785/81.
      
       7.  Article 25 of Regulation No 1785/81 (now Article 12 of Regulation No 1260/2001) provides:  
       1.  Member States may transfer A quotas and B quotas between undertakings under the conditions laid down in this Article, taking
      into consideration the interests of each of the parties concerned and in particular those of sugar beet producers or sugar
      cane producers. 
      
       2.  Member States may reduce the A quota and the B quota of each sugar-producing undertaking or each isoglucose-producing undertaking
      situated in their territories by a total quantity not exceeding ... 10% of the A quota or of the B quota, as the case may
      be, fixed for each of them in accordance with Article 24.... 
      
       3.  The withdrawn quantities of A quotas and B quotas shall be allocated by the Member States to one or more other undertakings,
      whether or not in possession of a quota, situated in the same region ... as the undertakings from which these quantities were
      withdrawn. ...
      
      
       8.  As regards, in particular, the treatment of quotas in the event of the merger or transfer of sugar-producing undertakings,
      Article 2(1)(a) of Regulation No 193/82 (now Point II.1(a) of Annex IV to Regulation No 1260/2001) provides that  
      the Member States shall allocate to the undertaking resulting from the merger an A quota and a B quota equal respectively
      to the sum of the A quotas and the sum of the B quotas allocated prior to the merger to the sugar-producing undertakings concerned. 
      
       9.  However, under Article 2(2) of that regulation (now Point II.2 of Annex IV to Regulation No 1260/2001): Where a number of the sugar-beet or cane producers directly affected by one of the operations referred to in paragraph 1 expressly
      show their willingness to supply their beet or cane to a sugar-producing undertaking which is not party to those operations,
      the Member State may make the allocation on the basis of the production absorbed by the undertaking to which they intend to
      supply their beet or cane.
      
       10.  Finally, under Article 4 of Regulation No 193/82 (now Point IV of Annex IV to Regulation No 1260/2001):  ... the measures, taken pursuant to Article 2 and Article 3, may take effect only if: 
      (a) the interests of each of the parties concerned are taken into consideration,and
      
      (b) the Member State concerned considers them to be such as to improve the structure of the beet, cane and sugar-manufacturing
      sectors,and
      
      (c) they concern undertakings established in the same region within the meaning of Article 24(2) of Regulation (EEC) No 1785/81.
      
       B─ National law
      
       11.  The act contested in the main proceedings, by which the Spanish Council of Ministers approved the merger between the companies
      Ebro Agrícolas, Compañía de Alimentación SA and Sociedad General Azucarera de España SA was based on Spanish Law No 16/89
      of 17 July 1989 on the protection of competition (BOE No 170 of 18 July 1989, p. 22747), which governs inter alia the review
      of a concentrations. 
       III ─ The facts and the question referred for a preliminary ruling
      
       12.  At the time the facts in the main proceedings originated, the sugar sector in Spain comprised four undertakings, and the maximum
      sugar production quota assigned to Spain ─ 1 000 000 metric tonnes for the A and B quotas ─ was distributed among them on
      the following basis: 
      
      
      ─
          Ebro Agrícolas, Compañía de Alimentación SA, one of the merged undertakings, 540 786 tonnes; this undertaking had 10 sugar
         factories (out of the 19 industrial sugar-processing plants operating in Spain);
      
      
      
      ─
          Sociedad General Azucarera de España SA, the other merged undertaking, 241 688 tonnes; this undertaking comprised five sites
         refining sugar from beet and one factory processing sugar cane;
      
      
      
      ─
          Sociedad Cooperativa General Agropecuaria (or  
         ACOR), 147 797 tonnes; this undertaking had two factories, situated in the northern region;
      
      
      
      ─
          Azucareras Reunidas de Jaén SA (or  
         ARJ), 69 732 tonnes (66 900 tonnes from the A quota and 2 832 tonnes from the B quota); this undertaking owned a single factory,
         situated in the southern region. 
      
      
      
       13.  On 25 September 1998, the Spanish Council of Ministers approved, under Law No 16/89, the transaction involving the merger
      between Ebro Agrícolas, Compañía de Alimentación SA and Sociedad General Azucarera de España SA. Since this merger would allow
      the new company, Azucarera Ebro Agrícolas SA (or  
      Azucarera Ebro), to assume control of 78.23% of the Spanish A and B sugar quotas and a very large part of national A and B beet purchases,
      the Spanish Government, in order to safeguard effective competition in the sugar market, made the merger subject to certain
      conditions. The second of these conditions stipulates that,  
      in order to increase the opportunities for competition in the market, the Ministry of Agriculture, Fisheries and Food, in
      accordance with Council Regulation (EEC) No 1785/81, shall in turn reallocate, for value, up to 30 000 tonnes of the Spanish
      sugar production quota to undertakings situated in Spanish territory. So that the reallocation of the quota may be determined
      using market mechanisms, the price of the quota to be transferred and the distribution thereof shall be decided by public
      auction of up to 30 000 tonnes of the ... quotas assigned to Azucarera Ebro. The sixth condition lays down that,  
      as part of the quota reallocation which is to be conducted by auction, the government will adopt the measures necessary to
      prevent any possible adverse effects for national agricultural producers of sugar beet .... 
      
       14.  Having been informed of this agreement, the Commission decided to initiate infringement proceedings. The second condition,
      relating to the transfer of sugar production quotas by public auction, was one of the aspects which the Commission considered.
      The Spanish authorities then announced that they were disposed to abandon the public auction and there have not, up to now,
      been any new developments in the proceedings. Nevertheless, as it had not received written confirmation of this decision to
      abandon the public auction, the Commission informed the Spanish authorities that it reserved the right to bring an action
      for infringement, without limit of time, should they decide to implement the second condition. 
      
       15.  On 1 December 1998, ACOR challenged the Spanish Council of Ministers' decision of 25 September 1998 before the Tribunal Supremo,
      asserting that the reallocation of quotas for value rather than free of charge was contrary to the Community legislation on
      the COM in the sugar sector. 
      
       16.  Against this background, the Tribunal Supremo has referred a three-part question to the Court for a preliminary ruling. 
       IV ─ Law
       A─ First part of the question
      
       17.  The first part of the question is formulated as follows:  If, in the exercise of its power of administrative review of a merger of undertakings, the competent authority of a Member
      State deems it necessary to redistribute sugar production quotas among undertakings situated in its territory in order to
      safeguard competition: 
      (a) Do the provisions of Council Regulation (EEC) No 1785/81 of 30 June 1981 and Council Regulation (EEC) No 193/82 of 26 January
      1982 preclude those authorities from stipulating that such a transfer or reallocation of quotas is for value and, therefore,
      that the recipient undertaking or undertakings must pay financial consideration?
      
      
       18.  I shall examine the different arguments put forward by the plaintiff in the main proceedings against the allocation of these
      quotas for value and, in turn, the observations submitted by the Commission, Azucarera Ebro and the Spanish Government, before
      making my own assessment. 
      
       1. The limits of Member States' powers to apply their own competition rules on agricultural policy
      
      (a) Observations submitted to the Court
      
       19.   ACOR , supported at the hearing by ARJ, points out that the main objective of the redistribution of the quotas for value, imposed
      in the present case by the Spanish Government, is to increase the possibilities of effective competition in the Spanish market
      and that it involves applying competition rules to a sector governed by the Common Agricultural Policy. 
      
       20.  According to ACOR, where the regulation of agricultural market conditions brings into conflict, as in the main proceedings,
      rules such as those which apply to the COM in the sugar sector and those which govern competition law, pre-eminence should
      be granted to the specific provisions laid down by the regulations establishing COMs. Firstly, Council Regulation No 26 of
      4 April 1962 applying certain rules of competition to production of and trade in agricultural products,  
      
         			(5)
         		 adopted pursuant to Article 42 of the EC Treaty (now Article 36 EC), provides that the rules on competition are to apply
      to production of and trade in agricultural products only to the extent determined by the Council, having regard to the objectives
      of the agricultural policy referred to in Article 39 of the EC Treaty (now Article 33 EC). In particular, the third recital
      in the preamble to this regulation states that, if the rules on competition must in fact be applied to production of and trade
      in agricultural products, this must be solely  
      in so far as their application does not impede the functioning of ... organisations of agricultural markets or jeopardise
      attainment of the objectives of the Common Agricultural Policy.
      
       21.  Secondly, ACOR points out that the case-law of the Court has explicitly confirmed the precedence of the Common Agricultural
      Policy over aims pursued within the framework of the law safeguarding competition.  
      
         			(6)
         		 As regards specifically the market in sugar, the Court has held that although, in the absence of Community provisions on
      the procedure for the allocation among sellers of the quantities of sugar beet that the manufacturer is offering to buy within
      the limits of the A and B quotas, Community law does not preclude the application of the principle of equal treatment for
      suppliers resulting from national law on cartels, Member States are not dispensed from observing the principles and general
      rules governing the Common Agricultural Policy.  
      
         			(7)
         		
       22.  ACOR and ARJ also observe that, from the time when the Community exercises its power under Article 34 EC to establish a COM,
      this replaces national organisations, and the Member States no longer have competence to regulate the market in question unless
      a Community regulation expressly provides otherwise.  
      
         			(8)
         		 In the absence of such provisions, the Member States have a substituted power which has to be exercised in compliance with
      Article 10 of the EC Treaty (now, after amendment, Article 24 EC) and the applicable secondary legislation. This principle
      has been confirmed by the case-law of the Court.  
      
         			(9)
         		
       23.  It follows that, in a sector covered by a COM, the powers of Member States are limited. They cannot intervene, through national
      provisions adopted unilaterally, in the mechanisms established under the COM  
      
         			(10)
         		 or take measures likely to hinder its functioning. Indeed, they are required to comply with the principles which govern the
      COM, as well as the aims of the Common Agricultural Policy. 
      
       24.  Since there are no gaps in the Community legislation governing the COM in sugar, ACOR argues that the Spanish Government has
      no powers to take measures or adopt provisions on a subject covered by this COM, beyond powers that have been specially conferred
      on the Member States by the legislation introducing the COM concerned. 
      
       25.  Moreover, according to ACOR, even if the legislation in question should be viewed as incomplete, the Member States could intervene
      only on condition that they respected the principles which govern the COM in the sugar sector.  
      
         			(11)
         		
       26.  The  
       Commission , for its part, points out that the COM in the sugar sector forms a complete system, particularly as regards prices and intervention,
      of rules on trade with non-member countries or for regulating relations between sellers and buyers of beet, and that powers
      to allocate sugar production quotas have been delegated to the Member States within the limits of the rules and criteria laid
      down by the Community legislation. 
      
       27.  In addition, the Court has ruled that  
      once rules on the common organisation of the market may be regarded as forming a complete system, the Member States no longer
      have competence in that field unless Community law expressly provides otherwise.
         			(12)
         		
       28.  The Commission considers that the decision in principle to proceed in due course to the reallocation of a maximum quantity
      of 30 000 tonnes of sugar from Azucarera Ebro's A and B quotas in favour of other producers can be based only on the powers
      delegated to Member States by Article 25 of Regulation No 1785/81. 
      
       29.  This is because Article 2 of Regulation No 193/82 provides that, in the event of a merger of sugar-producing companies, the
      Member State shall allocate to the company resulting from the merger the sum of the quotas allocated in respect of the merged
      companies. The matter of the relationship between this provision and Article 25 of Regulation No 1785/81 has been analysed
      by the Court, which concluded that  
      [t]here is no reason why the power of manoeuvre conferred on Member States by Article 25 of Regulation No 1785/81 cannot be
      exercised at the same time ... as an adjustment of quotas pursuant to Article 2 of Regulation No 193/82, provided however
      that the specific conditions governing the application of each provision are complied with.  
      
         			(13)
         		
       30.  In the present case, the Spanish authorities have made use of the power delegated by Article 25 of Regulation No 1785/81 with
      an aim other than those of this provision. Indeed, in order to meet the needs for structural adaptation of the sugar-beet
      crop sector and the sugar production sector, provision was made within the framework of the COM in the sugar sector for the
      possibility of altering the allocation of production quotas.  
      
         			(14)
         		 In contrast, in order to safeguard competition, the national authorities have provided for the possibility of altering the
      allocation of the quotas awarded to the undertaking resulting from the merger. 
      
       31.  The Commission points out that, when a Member State has recourse to national rules on competition in an agricultural sector
      covered by a COM, its capacity to act is limited by the rules laid down by the COM concerned. 
      
       32.   Azucarera Ebro , too, relies on  
       Mörlins ,  
      
         			(15)
         		 but emphasises a different passage. It asserts that the Court accepts the joint application of national law on collusive
      practices and Community legislation on the COM in the sugar sector because,  
      if there are no Community rules or agreements concluded within the framework of an agreement within the trade, the Member
      States are empowered to effect such allocation in accordance with the rules of their own national law. It follows that Regulation
      No 1785/81 does not preclude the application of national cartel and company law in connection with the allocation of quantities
      of sugar beet among sellers within the limits of the A and B quotas. .... 
      
       33.  The  
       Spanish Government   asserts that Community law does not contain any provision expressly prohibiting the reallocation of sugar quotas for value
      and that this action is, therefore, possible on grounds related to safeguarding competition. 
      
      (b) Appraisal 
      
       34.  It undoubtedly follows from the case-law quoted by ACOR, ARJ and the Commission that Member States are not empowered to intervene
      unilaterally in the mechanisms established under a COM. Their ability to intervene is restricted to two situations: where
      a specific power has been delegated to them or where the broad logic of the legislation or a lacuna in the legislation leaves
      them a residual power. In both cases,  
      Member States are not dispensed from observing the principles and general rules governing the Common Agricultural Policy and, in particular, those which govern the organisation of the market in question.  
      
         			(16)
         		
       35.  How does this relate to the present case? 
      
       36.  A passage already quoted from the written observations submitted by the Commission shows that it takes the view that the Spanish
      authorities have indeed made use of a power delegated to Member States by the relevant legislation (Regulation No 1785/81,
      Article 25), but that they have done so with an aim other than the one envisaged by that provision. 
      
       37.  Should the view be taken, therefore, that a reallocation of quotas in order to maintain more effective competition is not
      permitted by Regulation No 1785/81? I do not think so. 
      
       38.  Article 2(1)(a) of Regulation No 193/82 provides that,  
      in the event of the merger of sugar-producing undertakings, the Member States shall allocate to the undertaking resulting
      from the merger an A quota and a B quota equal respectively to the sum of the A quotas and the sum of the B quotas allocated
      prior to the merger to the sugar-producing undertakings concerned. 
      
       39.  However, Article 2(2) provides that  
      [w]here a number of the sugar-beet or cane producers directly affected by one of the operations referred to in paragraph 1
      expressly show their willingness to supply their beet or cane to a sugar-producing undertaking which is not party to those
      operations, the Member State may make the allocation on the basis of the production absorbed by the undertaking to which they
      intend to supply their beet or cane.
      
       40.  Even though the latter provision is not at issue in the main proceedings, it is nevertheless worthy of citation, since it
      shows that there is no absolute rule that all the quotas of merged undertakings should be allocated to the undertaking resulting
      from the merger. 
      
       41.  Moreover, it is apparent from Article 25(2) of Regulation No 1785/81 that  
      Member States may reduce the A quota and the B quota of each sugar-producing undertaking or each isoglucose-producing undertaking
      situated in their territories by a total quantity not exceeding, for the period referred to in Article 23(1), 10% of the A
      quota or of the B quota, as the case may be, fixed for each of them in accordance with Article 24. 
      
       42.  As the referring court points out, the power that the Member States have to transfer A quotas and B quotas between undertakings
      has been conferred on them  
      ... under the conditions laid down in this article, taking into consideration the interests of each of the parties concerned
      and in particular those of sugar beet producers or sugar cane producers (Article 25(1) of Regulation No 1785/81; Article 30(1) of Council Regulation (EC) No 2038/99 of 13 September 1999 on the
      common organisation of the markets in the sugar sector,  
      
         			(17)
         		 and Article 12(1) of Regulation No 1260/2001). The only conditions mentioned relate to the limits of the reduction resulting
      from the transfer (Article 25(2) of Regulation No 1785/81; Article 30(2) of Regulation No 2038/99 and Article 12(2) of Regulation
      No 1260/2001), to the obligation to communicate restructuring plans and the ensuing measures affecting the A and B quotas
      to the Commission without delay (final subparagraphs of the abovementioned paragraphs) and to the obligation on the Member
      States to allocate the withdrawn quantities of A quotas and B quotas as such to one or more other undertakings, whether or
      not in possession of a quota, situated in the same region as the undertakings from which these quantities were withdrawn (paragraph
      3 of the abovementioned articles). 
      
       43.  In its judgment in  
       Cavarzere Produzioni Industriali ,  
      
         			(18)
         		 the Court accepted that  
      the power of manoeuvre conferred on Member States by Article 25 of Regulation No 1785/81 may be exercised at the same time
      as an adjustment of quotas pursuant to Article 2 of Regulation No 193/82 following a transfer of undertakings or factories,
      provided that the specific conditions governing the application of each of those provisions are complied with. In my opinion, the same rule must apply in the event of a merger of undertakings. 
      
       44.  In the present case, the total of the A quotas and the B quotas of the merged undertakings was 782 474 metric tonnes. A reduction
      of 10% would, therefore, amount to 78 247.4 tonnes. However, the reduction actually at issue is 30 000 tonnes. 
      
       45.  Finally, as regards the grounds on which a Member State may reallocate quotas, I cannot see why a merger, accompanied by conditions
      imposed by the competent authorities, cannot correspond to  
      restructuring needs of the sugar beet and ... the sugar production sector, in accordance with the 14th recital to Regulation No 1785/81.
      
       46.  In this context, the referring court points out that  
      in the Government's view, the existence of various factors meant that it would not be prudent to oppose the merger, and it
      therefore made the transaction subject to the fulfilment of certain conditions (which were laid down in the agreement of the
      Council of Ministers). In short, it was felt that the merger could bring about improvements in the production and marketing
      of sugar and in the international competitiveness of the Spanish sugar industry if it led to an overall restructuring of the
      sector, a restructuring of the undertakings involved in the merger and a transfer of the gains in efficiency to consumers
      and users. 
      
       47.  Moreover, the Commission itself has acknowledged, in the context of the Decision of 20 December 2001 relating to the compatibility
      with the Common Market and the EEA agreement of a merger (Case COMP/M.2530 ─ Südzucker/Saint Louis Sucre)  
      
         			(19)
         		 (
      the Südzucker/Saint Louis Decision), that concerns relating to competition have a place in the framework of the COM in the sugar sector. Thus, part of the press
      release on this decision reads as follows:  
      [i]n this highly regulated context, the safeguarding of any remaining degree of competition is of utmost importance for sugar
      customers and ultimately the consumer. ... The importance of preserving potential competition is all the greater in highly
      regulated markets where, by essence, there is little competition and customers are hugely dependent on limited suppliers. The Commission therefore imposed some conditions on Südzucker AG (
      Südzucker), to which I shall return later in this Opinion. 
      
       48.  At this stage, I conclude, therefore, that the  
       principle  of a reduction in the quotas of the merged undertaking and their reallocation to one or more other undertakings is not incompatible
      with the principles governing the COM in the sugar sector. 
      
       49.  However, the question remains whether a reallocation of sugar quotas  
       for value  interferes with the mechanisms of the COM and must therefore be considered as contrary to Community law. I must now examine
      this. 
      
       2.  Is the transfer of quotas for value compatible with the legal nature of quotas? 
      
      (a) Observations submitted to the Court
      
       50.  For  
       ACOR   and  
       ARJ , the legal nature of sugar production quotas prevents their being viewed as an asset which would form an integral part of
      the assets of the undertaking to which they were allocated. Quotas are a mechanism in the functioning of the COM, designed
      to regulate and manage the sugar market. The Community entrusts the distribution of quotas between sugar-producing undertakings
      to the Member States, but quotas do not belong to Member States or, even less, to undertakings. 
      
       51.  Production quotas, in ACOR and ARJ's view, are more in the nature of an act of public authority, an authorisation to operate
      on the market profitably and to produce a defined quantity of sugar at a guaranteed price. They are allocated to each enterprise
      according to the principle of actual production over a defined reference period. It is a matter of, as far as possible, adapting
      production to consumption within each Member State. Consequently, the quota as such has no independent pecuniary or economic
      value. 
      
       52.  ACOR and ARJ find confirmation of this in the specific provisions of Regulation No 193/82, which provide for all cases of
      transfer of quotas between undertakings: merger or transfer of undertakings, transfer of factories, closure of one or more
      factories, lease of a factory or the situation where a sugar-producing undertaking can no longer ensure that it meets its
      obligations towards sugar-beet or sugar-cane producers. Furthermore, Article 25 of Regulation No 1785/81 gives Member States
      a great deal of room for manoeuvre in transferring quotas, inter alia where the sector is restructured, if they consider it
      appropriate in order to regulate the market. 
      
       53.  At no time do these provisions refer to an obligation on the part of the undertaking receiving the quota to pay a financial
      consideration to the undertaking which held it. If the Community legislature had taken the view that the undertaking  
      dispossessed of the quota was subject to some kind of economic loss, it would have introduced an off-setting mechanism intended to compensate
      it for any possible pecuniary damage. If some of these cases give rise to monetary consideration, the latter is linked to
      the financial asset which is the object of the transfer (such as the transfer of a factory or of an undertaking). However,
      the fact that the factory or the undertaking acquires a higher value because it is associated with a production quota does
      not mean that the quota has a value in itself. 
      
       54.  Consequently, if no transfer of assets is involved, but only the quota, then the receiving undertaking does not have to pay
      any kind of consideration in exchange for it.
      
       55.  ACOR and ARJ note that this has in fact been the situation for previous quota transfers carried out in Spain: the Ministerial
      Decree of 19 February 1991 transferred a quota to ACOR following the merger which resulted in the creation of Azucarera Ebro,
      while two later ministerial decrees effected two quota transfers free of charge. 
      
       56.  ACOR and ARJ then refer to the Court's case-law relating to milk quotas and point out that the Court has clearly declared
      that the marketing of quotas is incompatible with the Community legislation relating to transfers of milk quotas. Thus, ACOR
      observes that, in its judgments in  
       Von Deetzen   
         			(20)
         		 and  
       Bostock ,  
      
         			(21)
         		 the Court declared that  
      the right to property thus safeguarded within the Community legal order does not comprehend the right to dispose, for profit,
      of an advantage, such as the reference quantities allocated in the framework of the common organisation of a market, which
      does not derive from the assets or occupational activity of the person concerned. 
      
       57.  For ACOR and ARJ, this reasoning can be transposed to sugar production quotas, which also do not belong to sugar undertakings,
      since they do not derive from the assets or occupational activity of these undertakings. If this were not the case, that is
      to say if the possibility of placing sugar quotas on the market were accepted, numerous problems would result, such as the
      risk of a market in quotas appearing which would not be linked to direct, actual sugar production. 
      
       58.  The  
       Commission  makes the following two observations. Firstly, the reallocation of sugar production quotas by public auction exceeds the
      power conferred on Member States by the Community legislation, which consists in allocating sugar production quotas to producing
      undertakings. In no case has the Community legislature granted Member States the power to put these quotas on sale. The regulations
      relating to the COM in the sugar sector do not distinguish semantically between operations consisting in  
      allocating quotas on the basis of Article 24 of Regulation No 1785/81,  
      allocating quantities withdrawn from these quotas on the basis of Article 25 of Regulation No 1785/81 or  
      allocating corresponding quotas under Article 2 of Regulation No 193/82. Even though the specific objectives of these quota allocation
      operations may differ, it is certain that their public interest objective is identical as far as producers' interests are
      concerned. 
      
       59.  In conclusion, Regulation No 1785/81 and Regulation No 193/82 refer to the allocation by Member States of sugar production
      quotas, but there are no grounds for inferring from this legislation any implication that the intention was also to give Member
      States the power to sell for value the use of a market mechanism intended to guarantee producers Community prices and an outlet
      for their production. 
      
       60.  Secondly, not only is the sale of quotas unnecessary for the purpose of their allocation by the Member State, but it implies,
      in the Commission's opinion, a change in the very nature of this instrument, which is likely to lead to disruptions that would
      risk harming the operation and the efficiency of the Community regime. It should be pointed out that the Community legislation
      mentioned above does not contain any element which establishes a difference of status between quotas depending on which provision
      has been the basis of their allocation. Sale by public auction, on the other hand, could alter the legal status of these quotas
      by granting the person who holds them a subjective right not provided for by the legislation. 
      
       61.  The Commission draws attention to  
       Eridania and Società italiana per l'industria degli zuccheri ,  
      
         			(22)
         		 in which the Court held that the quotas specify the quantities of sugar in respect of which the undertakings enjoy the guarantees
      as to price and marketing provided for producers in the context of the COM and that they cannot, in any event, be viewed as
      vested rights to the maintenance of advantages which an undertaking enjoyed at a given time. The Commission points out that
      to attribute a financial value to sugar production quotas could result in the undertakings which acquire the volumes put up
      for auction coming to view them as a vested right, forming an integral part of their assets. 
      
       62.  This alteration to the legal status of the volume of sugar in question is also likely, in the Commission's opinion, to undermine
      the Member State's capacity to reconsider later, and for the public interest reasons mentioned above, the allocation of the
      quotas. This is because the company affected by the reallocation could, in this situation, make a compensation claim against
      the national authorities. Finally, the decision to allocate quotas for value in the present case could lead to another undertaking,
      which was harmed by a reallocation of quotas, claiming economic compensation. 
      
       63.  By contrast,
       Azucarera Ebro , joined party in the main proceedings, takes the view that it does not contravene Community legislation if, when a Member
      State, for reasons relating to safeguarding competition, makes a concentration subject to the condition that part of the quotas
      are redistributed, this redistribution is made for value through a public auction. Azucarera Ebro invokes, to that effect,
      considerations relating to compatibility between the legislation on review of concentrations of undertakings and the COM in
      the sugar sector, to the wording, objectives and principles of Community legislation concerning the COM in the sugar sector,
      to the case-law of the Court and to the Commission's practice concerning concentrations with a Community dimension between
      sugar-producing undertakings. 
      
       64.  Azucarera Ebro first observes that the condition of redistribution of quotas for value was not laid down under the Community
      legislation according to which quotas are to be redistributed in order to guarantee the application of the principle of actual
      production. The condition at issue is in fact the consequence of the review of a concentration of undertakings, pursuant to
      national law safeguarding competition. 
      
       65.  In this regard, referring to the Community legislation (Article 25(1) and (3) of Regulation No 1785/81) and, again, to  
       Mörlins ,  
      
         			(23)
         		 Azucarera Ebro takes the view that, where there is no specific reference to the way in which quotas are awarded or reallocated
      in the interest of each party, the reviewing national authority may impose a transfer for value between sugar producers. 
      
       66.  Referring to the Südzucker/Saint Louis Decision,  
      
         			(24)
         		 Azucarera Ebro asserts that there is nothing to suggest, in respect of the way Südzucker's Belgian sugar production quota
      is to be transferred, that it will not be for value. Azucarera Ebro points out that, although the case refers to sugar-producing
      undertakings' production quotas, the Commission has taken the exceptional approach of not requiring that these transfers be
      made free of charge. 
      
       67.  Azucarera Ebro concludes from this that there are striking parallels between the precedent established by the European Commission
      and the concentration review procedure followed by the Spanish authorities, which lies at the origin of the present reference.
      In both cases, there is a concentration which limits effective competition on the market, providing a reason why the operation
      may be authorised only on condition that the body resulting from the merger gives up part of its sugar production quota. In
      neither case have the reviewing authorities dictated that the transfer of quotas should be free of charge. 
      
       68.  The precedent set by the Commission in this case of reviewing a concentration of undertakings shows that, continues Azucarera
      Ebro, when it is a matter of a national procedure for reviewing a concentration and the competent authority of a Member State
      must make its authorisation contingent on certain conditions, nothing prevents this authority from dictating that the disinvestments,
      whether these are of production quotas or of other assets, shall be made for value. Such transfers of production quotas for
      value infringe neither the letter, the objective nor the principles of the Community legislation governing the COM in the
      sugar sector. 
      
       69.  Azucarera Ebro refers, in addition, to the judgment in  
       Cavarzere Produzioni Industriali ,  
      
         			(25)
         		 submitting that it may be deduced from this that Member States' room for manoeuvre under Article 25 of Regulation No 1785/81
      must be interpreted broadly. For Azucarera Ebro, even if it does not relate directly to the issues raised in the present case,
      this judgment seems to give an affirmative reply to the question of whether Member States can impose redistribution of quotas
      for value. 
      
       70.  According to the  
       Spanish Government , the reallocation of sugar quotas for value and on grounds relating to safeguarding competition complies with Community law.
      
       71.  The Spanish Government, too, considers that the Commission's decision relating to the merger between Saint Louis Sucre SA
      and Südzucker AG constitutes a precedent likely to justify the transfer, in the present case, of quotas for value. 
      
       72.  The Spanish Government again asserts that a reallocation of quotas for value would guarantee that this redistribution was
      made according to market mechanisms and by applying rational economic criteria. 
      
      (b) Appraisal 
      
       73.  I propose that the Court accept the convergent arguments expounded by ACOR, ARJ and the Commission, which it would be superfluous
      to repeat again. 
      
       74.  The arguments to the contrary invoked by Azucarera Ebro and by the Spanish Government are not convincing. 
      
       75.  I should first state that the Südzucker/Saint Louis Decision does not constitute a relevant precedent. 
      
       76.  This decision imposed two conditions on the merger between Südzucker AG and Saint Louis Sucre SA. 
      
       77.  Firstly, Südzucker must sell a 68% share in the Belgian undertaking, Suikerfabriek van Veurne SA, ensuring that the latter
      undertaking retains its quota. This is in no way, therefore, a free-standing transfer of quotas for value. 
      
       78.  Secondly, Südzucker is obliged to sell to an independent commercial undertaking not a quota, but an annual quantity of 90
      000 tonnes of sugar already produced in its factories, at a price  
      
         			(26)
         		 that enables this purchaser to compete with Südzucker when reselling this sugar (paragraph B.11 in Annex II to the Decision).
      Far from being transferred for value, the quota relating to these 90 000 tonnes remains with Südzucker. 
      
       79.  Nor can  
       Mörlins   
         			(27)
         		 be usefully invoked in this context. In that judgment, the Court stated, first of all, that the Community legislature was
      competent to lay down the procedure for the allocation among sellers of the quantities of sugar beet which the manufacturer
      offers to buy, but that it had not yet adopted rules on this. 
      
       80.  The Court then made it clear that, under the relevant regulations, in the absence of Community rules or agreements concluded
      within the framework of an agreement within the trade, the Member States were empowered to effect such allocation in accordance
      with the rules of their own national law. 
      
       81.  The Court concluded from this that Regulation No 1785/81 did not preclude the application of national cartel and company law
      in connection with the allocation of quantities of sugar beet among sellers within the limits of the A and B quotas. However,
      the Court added that, although they are empowered to apply their national law, Member States are not dispensed from observing
      the principles and general rules governing the Common Agricultural Policy. 
      
       82.  It is not stated in any way in the relevant provisions that a reduction in quotas must be accompanied by financial compensation.
      If the legislature had started from the idea that such compensation should be made, it would have said so. ACOR, ARJ and the
      Commission have established ─ convincingly, in my opinion ─ that this would be incompatible with the legal nature of the concept
      of a sugar quota. Therefore, since, in  
       Mörlins ,  
      
         			(28)
         		 the Court maintained that, while applying their national law, Member States are not dispensed from observing the principles
      and rules governing the Common Agricultural Policy, this judgment cannot be invoked to justify financial compensation for
      merged undertakings. 
      
       83.  As to the judgment in  
       Cavarzere Produzioni Industriali ,  
      
         			(29)
         		 also invoked by Azucarera Ebro, this merely confirms the broad  
      room for manoeuvre conferred on Member States by Article 25 of Regulation No 1785/81, but provides no ground for inferring anything whatsoever
      on the subject of the possibility of transferring quotas for value. 
      
       84.  There remains the Spanish Government's argument, according to which any reallocation of quotas must be made according to market
      mechanisms and by applying rational economic criteria. 
      
       85.  However, the very concept of  
      organisation of the markets in sugar is clearly far removed from the  
      market mechanisms of the free market economy. It seeks largely to protect sugar-beet producers and sugar undertakings against the harsh laws
      of the market. Consequently, it follows from the 15th recital in the preamble to Regulation No 1785/81 that  
      the production quotas allocated to undertakings constitute a means of guaranteeing producers Community prices (which are higher than those which they would obtain if the laws of the market were left to operate)  
      and an outlet for their production (which, in the absence of the COM, could probably not be at remunerative prices). 
      
       86.  Therefore, according to the same recital,  
      quota transfers should be made taking into consideration the interests of all the parties concerned and in particular those
      of sugar beet and sugar cane producers (repeated in Article 25(1) of the same regulation). Similarly, under Article 1 of Regulation No 193/82 (now Point I in Annex
      IV to Regulation No 1260/2001),  
      Member States shall adopt such measures as they deem necessary to take account of the interests of sugar-beet and sugar-cane
      producers in the event of allocation of quotas to a sugar-producing undertaking having more than one factory. Under Article 4 of the same regulation, the measures taken pursuant to Article 2 and Article 3 of the Regulation may take
      effect only if  
      the interests of each of the parties concerned are taken into consideration and if  
      the Member State concerned considers them to be such as to improve the structure of the beet, cane and sugar-manufacturing
      sectors. 
      
       87.  I am therefore of the opinion, like the Commission,  
       that the award of sugar production quotas to the highest bidder, that is to say, according to purely financial considerations,
      does not take account of the abovementioned public interest objectives defined by the Community legislation and, in particular,
      of the protection of the interests of sugar-beet and sugar-cane producers. This system does not therefore permit national
      authorities to safeguard these interests in the conditions that have just been described. A precise analysis of the agreement
      being challenged before the referring court leads to the conclusion that, despite the reservation contained in the sixth condition,
       
      
         			(30)
         		 this agreement does not adequately guarantee the protection of the interests of sugar-beet producers. 
      
       88.  Finally, I should point out that quotas are not, properly speaking, concessions (they do not confer the enjoyment of property
      for a fixed period of time), instruments representing a right of ownership or enjoyment over movable or immovable goods or
      assets. 
      
       89.  Quota recipients do not have at their disposal an abstract asset, indefinitely and unconditionally negotiable, with fixed
      parameters, which can, at any time, be valued according to the usual criteria of commercial markets. Furthermore, quotas are
      likely to vary over time. They may be altered or even abolished by the public authority, to meet the needs of the Common Agricultural
      Policy. They are not, in any case, the proper subject of an abstract,  
      bearer exchange market, which would disregard the capacities and rights of the operators concerned. 
      
       90.  The general principles and the broad logic of the COM in the sugar sector, the case-law of the Court and the Commission's
      decision-making practice all lead to the conclusion that the  
       legal nature of quotas  does not permit a Member State to decree, as the Spanish Government has done, that sugar quotas will be transferred for value.
      
      
       3.  Is the reallocation of sugar quotas for value compatible with the basic mechanisms of the COM in the sugar sector? 
      
      (a) Observations submitted to the Court
      
       91.   ACOR , with which ARJ agreed at the hearing, again asserts that the system of transferring a sugar-production quota for value directly
      contravenes the provisions relating to the COM in the sugar sector, since it has an adverse impact on the functioning of quota
      and intervention price arrangements. 
      
       92.  This is because, ACOR points out, redistribution of the quota by fixing a price implies a sale, and this supposes the introduction
      of a cost or an additional charge into the sugar-production line of the undertaking that finally acquires the quota. The payment
      of this price would have a negative impact on the process of forming the goods' final price. 
      
       93.  ACOR notes that, for each marketing year, the Commission calculates the intervention price for sugar based on a certain number
      of elements provided for in the COM rules (the different costs that the undertaking must bear, the costs of processing sugar
      beet, depreciation, etc., while the basic price of sugar beet is calculated on the basis of the intervention price). The rules
      also provide for a more precise method of calculating derived intervention prices (applied in areas with deficits). The possibility
      that there could be any cost linked to the allocation of sugar production quotas is at no time recognised or even mentioned.
      
      
       94.  For this reason, altering the scheme which applies to the allocation of quotas, thus creating an additional cost for sugar-producing
      undertakings and sugar-beet producers, would ─ as well as subverting the whole price-fixing mechanism ─ seriously undermine
      the objectives and the principles of the Common Agricultural Policy and would be incompatible with the very essence and nature
      of the COM. Consequently, it is an integral part of the COM itself that the allocation of quotas, as well as their transfer,
      be free of charge. 
      
       95.  ACOR mentions, in this regard, the judgment in  
       Commission  v  
       Greece ,  
      
         			(31)
         		 a case relating to the COM in the cereals sector: ... the common organisations of the markets are based on the concept of an open market to which every producer has free access
      under genuinely competitive conditions and the functioning of which is regulated solely by the instruments provided for in
      those organisations. In particular, in sectors covered by a common organisation of the market, and  
       a fortiori  when that organisation is based, as in the present case, on a common price system, Member States can no longer take action,
      through national provisions adopted unilaterally, affecting the machinery of price-formation as established under the common
      organisation (judgment in Case C-35/88  
       Commission  v  
       Greece  [1990] ECR I-3125, paragraph 29). 
      
       96.  ACOR adds that, apart from a straightforward transfer of quotas free of charge, the Spanish Government had other, less restrictive,
      possibilities at its disposal, which would have enabled it to mitigate the strengthening of the dominant position acquired
      by the new undertaking resulting from the merger and, furthermore, would have increased the possibilities of effective competition
      on the Spanish market without transgressing the rules governing the COM in the sugar sector. 
      
       97.  In this regard, ACOR mentions several possibilities and, in particular, the transfer of one or more of the factories belonging
      to the merged undertakings, which would result in the transfer of the quota relating to the factory to the new owner, or else
      the provision of a certain quantity of sugar, which has already been processed, to an independent dealer, at the intervention
      price, following the example of the conditions imposed by the Commission in respect of the Südzucker/Saint Louis concentration.
       
      
         			(32)
         		
       98.  For the  
       Commission , the transfer of quotas for value is likely to lead to disruptions which risk harming the operation and efficiency of the
      Community regime. 
      
       99.   Azucarera Ebro  asserts that, where one sugar producer sells a factory or undertaking to another, the national authority is obliged to transfer
      the quotas immediately and that nothing in the principles or in the objectives of the COM prevents the Member State from ordering
      that the transfer shall be made for value. 
      
       100.  The  
       Spanish Government   considers that the reallocation of quotas for value cannot in any way harm the good functioning of the COM. 
      
      (b) Appraisal 
      
       101.   ACOR 's reasoning, in which it points out that the allocation of quotas for value affects the formation of sugar and sugar-beet
      prices, concerns, I believe, a major aspect of the problem posed. The rules on price formation constitute the nerve centre
      of the COM in sugar. 
      
       102.  As the case-law cited by ACOR confirms, a Member State cannot, therefore, interfere in the way prices are formed without calling
      into question,  
       ipso facto , the very essence of the Community market system. 
      
       103.  This is why I conclude that the basic mechanisms of the COM in the sugar sector are another factor precluding the allocation
      of quotas for value. 
      
       4. The interests of sugar producers and sugar-beet producers ─ The principles of equality and legal certainty 
      
      (a) Observations submitted to the Court
      
       104.   ACOR  presents a series of arguments deriving from the very negative, extremely costly consequences, for sugar-producing undertakings,
      for other undertakings in the sector, for sugar-beet producers and for consumers, of being obliged to pay for the transferred
      sugar quota. In addition, ACOR points out that there is a risk of affecting the price paid by sugar undertakings to the sugar-beet
      producers who supply their product to them, thus reducing the revenues received by these producers. 
      
       105.  ACOR also points out that, if an acquisition were made for value, the undertaking would have to reflect the cost of the quota
      in its accounts. The undertaking would have had to pay a price for the quota concerned, while the rest of that undertaking's
      quotas would have been obtained free of charge. 
      
       106.  Up to now, a production quota could not be entered in an undertaking's balance sheet, since it is not a recordable asset.
      But, in the case of an award by public auction, the undertaking which acquires part of the quota by this means would be required,
      pursuant to its accounting obligations, to reflect the acquisition transaction in its annual accounts, with the price paid
      on that occasion. So what is to be done, in that case, with the remaining quota, for which no price had to be paid? 
      
       107.  Should all undertakings in the sector be obliged to record in their accounts an amount for their quota, to be fixed by the
      authorities, proportional to the price paid for the quantity of 30 000 metric tonnes? 
      
       108.  Furthermore, ACOR asserts that the practical problems are not merely related to accounting. There is also a risk that the
      reallocation of quotas for value would create a quotas market, without the quota necessarily being associated with actual,
      genuine sugar production. This risk could even extend to the Community level. According to ACOR, the Spanish Government could,
      for example, act in concert with the French Government so that Spanish undertakings bought quotas allocated to French undertakings
      (which are all excessive) with the aim of making good the sugar deficit on the Spanish market. That would then lead to a serious
      distortion on the Community sugar market and would make the rules of the COM in the sugar sector completely ineffective. 
      
       109.  Further, the consequences arising from the possibility of transferring a sugar quota for value would have future repercussions.
      Production quotas are a temporary instrument for regulating the market, which is renewed by successive regulations. If the
      quota scheme were repealed in the future, there would be obvious economic damage to undertakings which had acquired quotas
      for value. 
      
       110.  Furthermore, from the competition point of view, sugar undertakings with a production quota, established in other European
      Union countries, would be favoured by comparison with undertakings established in Spain which would have had to buy their
      production quota. This would lead to a flagrant breach of the principle of equality between producers, as well as to obvious
      discrimination, prohibited by the second subparagraph of Article 34(2) EC. 
      
       111.  ACOR also points out that discrimination would occur not only with regard to producers, but also with regard to sugar-beet
      growers themselves. This is because, given that one of those permitted to tender in the public sale is the cooperative undertaking
      ACOR, within which the sugar-beet growers themselves have the status of co-operators, any discrimination with regard to the
      company would have a total, immediate impact on these beet growers. 
      
       112.  According to the  
       Commission , a precise analysis of the decision challenged before the national court leads to the conclusion that, despite the reservation
      contained in the sixth condition, this decision does not adequately guarantee the protection of sugar-beet producers' interests.
      In particular, according to the Commission, by taking as a starting point the location of the factories of the three Spanish
      sugar groups, namely Azucarera Ebro, ACOR and ARJ, one could draw the following conclusions. A possible transfer of quotas
      in favour of ACOR would not be likely to undermine sugar-beet producers, given that this undertaking's two factories are situated
      in the northern production region where Azucarera Ebro also has its factories. On the other hand, a transfer of quotas in
      favour of ARJ could harm the sugar-beet producers, given that ARJ's only factory, situated at Linares in the province of Jaén
      (southern production region), is relatively distant and isolated from other refineries in the southern region. The allocation
      of new sugar-production quotas to ARJ would inevitably lead to a reduction in the area of sugar beet cultivated by traditional
      producers established in the northern production region and to an increase in sugar-beet growing in the area around Linares.
      
      
       113.  At the hearing, ARJ challenged the validity of this analysis on the ground that it had a factory which processed 49.62% of
      the sugar beet produced in the central region. 
      
       114.  For  
       Azucarera Ebro , Article 25 of Regulation No 1785/81 must be interpreted broadly. When the Member States exercise the powers it lays down,
      they must respect the principle of legal certainty to the advantage of sugar-producing undertakings. Azucarera Ebro asserts
      that quotas are in the nature of a concession and give rise to legal interests on the part of sugar-producing undertakings,
      which the Member States should respect. It relies, in this regard, on the judgment in  
       Cavarzere Produzioni Industriali .  
      
         			(33)
         		
      (b) Appraisal 
      
       115.  An operation to reallocate sugar quotas for value undeniably affects the situation of the sugar producer or producers concerned
      in relation to other operators whose accounting position is not burdened by paying to obtain a quota. There is a risk that
      the same could be true of sugar-beet producers who depend on the sugar producer concerned. 
      
       116.  According to settled case-law of the Court: The second subparagraph of Article 40(3) of the Treaty, which prohibits all discrimination in the context of the Common Agricultural
      Policy, is merely a specific expression of the general principle of equal treatment, which requires that comparable situations
      not be treated differently and different situations not be treated alike unless such treatment is objectively justified (Case
      203/86  
       Spain   v  
       Council  [1988] ECR 4563, paragraph 25, and Case C-15/95  
       EARL de Kerlast  [1997] ECR I-1961, paragraph 35).  
      
         			(34)
         		
       117.  In any event, therefore, a measure taken by a national authority, which, as in the present case, leads to the creation of
      a difference in the treatment of operators who are in comparable situations, is contrary to the principle of equality. 
      
       118.  As regards legal certainty, relied on by Azucarera Ebro, we have previously seen how and why quotas could not be viewed as
      vested rights, on which operators can rely without qualification. 
      
       119.  Finally, a public auction could lead to quotas being allocated to an undertaking situated too far from the sugar-beet producers
      who have been in the habit of supplying their production to one of the merged undertakings. This is probably why Article 25(3)
      of Regulation No 1785/81 and Article 4 of Regulation No 193/82 provide that the quantities of quotas withdrawn must be allocated
      to one or more undertakings established in the same region. 
      
       5. Answer to the first part of the question
      
       120.  Therefore, the answer to the question raised by the referring court should be that the provisions of Regulation No 1785/81
      and of Regulation No 193/82 preclude the authority of a Member State, in the exercise of its power of administrative review
      of a merger of undertakings, from stipulating that such a transfer or reallocation of quotas is for value and, therefore,
      that the recipient undertaking or undertakings must pay financial consideration.
       B─ Second part of the question
      
       121.  The second part of the question is formulated as follows: (b) Even if the answer [to the first part of the question] is in the negative, do the same provisions nevertheless preclude
      the price of the quota to be transferred, and the distribution thereof, from being decided by public auction? Do those provisions
      preclude recourse to public auction even where it has been stipulated that, as part of the reallocation of quotas carried
      out by such a procedure, the measures required to prevent any possible adverse effects for national agricultural producers
      of sugar beet will be adopted?
      
       122.  As I am proposing that the Court give a positive answer to the first part of the question, an answer to the second part is
      not, in my opinion, necessary. Therefore, it is only in the alternative that I shall examine the observations submitted in
      this connection. 
      
       1. Observations submitted to the Court
      
       123.   ACOR and ARJ  assert that it is obvious that the public auction procedure implicitly includes the fixing of a starting price and that consequently
      it is a procedure for value. Having regard to the arguments expounded about the first part of the question, ACOR is of the
      opinion that the provisions of Community law also preclude the price of the quota to be transferred, and the distribution
      thereof, from being decided by public auction. According to ACOR, any procedure for value, whether it is a public auction
      or any other procedure including price fixing, is incompatible with the Community legislation. 
      
       124.   Azucarera Ebro  takes the view that the question relating to the possibility of transferring quotas by means of a public auction procedure
      is purely incidental, in so far as what is important is not the award procedure but the bases of quota transfer, namely the
      assets to be sold and the interests of the parties concerned in the region in question. 
      
       125.  For the  
       Spanish Government , the allocation of the sugar quotas in question by means of a public sale would meet rational economic criteria. An auction
      sale would ensure that the price of the quota would be fixed by the rules of the market and not at the discretion of the authorities.
      
      
       126.  Moreover, this means of reallocating quotas would not be incompatible with any of the provisions of the Community regulations.
      
      
       127.  As I have already pointed out in point 87 above, the  
       Commission 's view is that the award of sugar production quotas to the highest bidder does not take account of the public interest objectives
      defined by the Community legislation and, in particular, of the protection of the interests of sugar-beet and sugar-cane producers.
      
      
       128.  A precise analysis of the decision challenged before the national court leads to the conclusion that, despite the reservation
      contained in the sixth condition, this decision does not adequately guarantee the protection of the interests of sugar-beet
      producers. 
      
       2. Appraisal 
      
       129.  Public auction is merely a particular form of reallocating quotas for value. 
      
       130.  Even if effective measures can be taken in order to avoid any adverse effect on sugar-beet producers, public auction is nevertheless
      open to all the objections I have set out above with regard to the very principle of allocation for value. As various interveners
      have pointed out, this method of allocation implies an amendment of the very nature of the instrument of quotas, which is
      likely to lead to disruptions which would compromise the operation and efficiency of the Community regime. 
      
       131.  Therefore, if it were necessary to answer the second part of the question referred for a preliminary ruling, I would propose
      that the Court declare that the provisions of Regulation No 1785/81 and those of Regulation No 193/82 preclude the price of
      the quota to be transferred, and the distribution thereof, from being decided by public auction, and that they preclude the
      organisation of such auctions even where it has been stipulated that, as part of the reallocation of quotas carried out by
      such a procedure, the measures required to prevent any possible adverse effect on national producers of sugar beet will be
      adopted. 
       C─ Third part of the question
      
       132.  The third part of the question is formulated as follows:(c) Does the entry into force of Council Regulation (EC) No 1260/2001 of 19 June 2001 on the common organisation of the markets
      in the sugar sector, which repeals the earlier regulations, affect the interpretation of Community law and the answers of
      the Court?
      
       133.  The parties who have submitted observations are unanimous in the view that Regulation No 1260/2001 has in no way varied the
      provisions, relevant in the present case, of the Community legislation. 
      
       134.  I share their point of view and propose that the Court reply to this part of the question that Regulation No 1260/2001 has
      not altered the interpretation of the Community legislation or the Court's answers.
        V ─Conclusion
      
       135.  My analysis leads me to propose that the Court reply as follows to the first and third parts of the question referred for
      a preliminary ruling:  
      (1) If, in the exercise of its power of administrative review of a merger of undertakings, the competent authority of a Member
      State deems it necessary to redistribute sugar production quotas among undertakings situated in its territory in order to
      safeguard competition, the provisions of Council Regulation (EEC) No 1785/81 of 30 June 1981 on the common organisation of
      the markets in the sugar sector and Council Regulation (EEC) No 193/82 of 26 January 1982 laying down general rules for transfers
      of quotas in the sugar sector preclude that authority from stipulating that such a transfer or reallocation of quotas is for
      value and, therefore, that the recipient undertaking or undertakings must pay financial consideration.  
      
      (2) The entry into force of Council Regulation (EC) No 1260/2001 of 19 June 2001 on the common organisation of the markets in
      the sugar sector does not alter the interpretation of the Community legislation or the Court's answers.
      
      
       1 –
         
           Original language: French.
      
      2 –
         
         OJ 1981 L 177, p. 4.
      
      3 –
         
         OJ 1982 L 21, p. 3.
      
      4 –
         
         OJ 2001 L 178, p. 1.
      
      5 –
         
         OJ, English Special Edition 1959-1962, p. 129. 
      
      6 –
         
         See Case 139/79  
             Maizena  v  
             Council  [1980] ECR 3393, paragraph 23, and Case C-280/93  
             Germany  v  
             Council  [1994] ECR I-4973.
         
      
      7 –
         
         Case C-134/92  
             Mörlins [1993] ECR I-6017, paragraph 17.
         
      
      8 –
         
         Case 16/83  
             Prantl  [1984] ECR 1299, paragraph 13.
         
      
      9 –
         
         See the judgments in Case 51/74  
             Hulst [1975] ECR 79, paragraph 25; Case 111/76  
             Van den  Hazel  [1977] ECR 901, paragraph 13; Joined Cases 47/83 and 48/83  
             Midden-Nederland and Van Miert  [1984] ECR 1721, paragraph 25; and  
             Mörlins , paragraph 17.
         
      
      10 –
         
         Case C-61/90  
             Commission  v  
             Greece  [1992] ECR I-2407, paragraph 22.
         
      
      11 –
         
         Case 90/86  
             Zoni  [1988] ECR 4285, and Case C-32/89  
             Greece  v  
             Commission  [1991] ECR I-1321, paragraph 20.
         
      
      12 –
         
         . Prantl , paragraph 13.
         
      
      13 –
         
         Case C-1/94  
             Cavarzere Produzioni Industriali and Others [1995] ECR I-2363, paragraphs 33 and 34.
         
      
      14 –
         
         See, inter alia,  
             Maizena  v  
             Council .
         
      
      15 –
         
         . Mörlins , paragraphs 16 and 17.
         
      
      16 –
         
         See  
             Mörlins , paragraphs 16 and 17.
         
      
      17 –
         
         OJ 1999 L 252, p. 1.
      
      18 –
         
         . Cavarzere Produzioni Industriali , paragraph 34.
         
      
      19 –
         
         Unpublished decision: the German text and the press release are available through the Commission's online data service; see
            also the prior notification, OJ 2001 C 211, p. 53.
         
      
      20 –
         
         Case C-44/89  
             Von Deetzen [1991] ECR I-5119, paragraph 27.
         
      
      21 –
         
         Case C-2/92  
             Bostock  [1994] ECR I-955, paragraph 19.
         
      
      22 –
         
         Case 230/78 [1979] ECR 2749, paragraphs 21 and 22.
      
      23 –
         
         See footnote 7.
      
      24 –
         
         See footnote 19.
      
      25 –
         
         See footnote 13.
      
      26 –
         
         Intervention price, plus certain actual costs. 
      
      27 –
         
         See footnote 7.
      
      28 –
         
         See footnote 7.
      
      29 –
         
         See footnote 13.
      
      30 –
         
         Under the terms of which,  
            as part of the quota reallocation which is to be conducted in good time by auction, ... the government will adopt the measures
            it judges necessary to prevent any possible negative repercussions for national agricultural producers of sugar beet.
         
      
      31 –
         
         . Commission  v  
             Greece , paragraph 22.
         
      
      32 –
         
         See footnote 19.
      
      33 –
         
         See footnote 13.
      
      34 –
         
         Case C-292/97  
             Karlsson and Others  [2000] ECR I-2737, paragraph 39.