The Queen v The Competition Commission, Secretary of State for Trade and Industry and The Director General of Fair Trading, ex parte Milk Marque Ltd and National Farmers' Union.
Date: 2003-09-09
37. It is settled case-law that it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court.  Consequently, where the questions submitted by the national court concern the interpretation of Community law, the Court of Justice is, in principle, bound to give a ruling.  The Court may refuse to rule on a question referred for a preliminary ruling by a national court only where it is quite obvious that the interpretation of Community law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (see,  inter alia , Case C-415/93  Bosman  [1995] ECR I-4921, paragraphs 59 to 61, Case C-36/99  Idéal tourisme  [2000] ECR I-6049, paragraph 20, and Case C-379/98  PreussenElektra  [2001] ECR I-2099, paragraphs 38 and 39).
57. It must first of all be observed that the maintenance of effective competition on the market for agricultural products is one of the objectives of the common agricultural policy and the common organisation of the relevant markets.
58. Whilst Article 36 EC has conferred on the Council responsibility for determining the extent to which the Community competition rules are applicable to the production of and trade in agricultural products, in order to take account of the particular position of the markets for those products that provision nevertheless establishes the principle that the Community competition rules are applicable in the agricultural sector.
59. That conclusion is also confirmed both by the first recital in the preamble to Regulation No 26 and by the Court ' s case-law, according to which the common organisations of the market are based on the concept of an open market to which every producer has free access under effective conditions of competition (see,  inter alia , Case 83/78  Pigs Marketing Board  [1978] ECR 2347, paragraph 57, and Case C-281/87  Commission  v  Greece  [1989] ECR 4015, paragraph 16).
61. As the common organisations of the markets in agricultural products are therefore not a competition-free zone, it must be pointed out that, in accordance with settled case-law, Community competition law and national competition law apply in parallel, since they consider restrictive practices from different points of view. Whereas Articles 81 and 82 EC regard them in the light of the obstacles which may result from trade between Member States, national law proceeds on the basis of the considerations peculiar to it and considers restrictive practices only in that context (see,  inter alia ,  Wilhelm and Others , paragraph 3, and Joined Cases 253/78 and 1/79 to 3/79  Giry and Guerlain and Others  [1980] ECR 2327, paragraph 15).
63. Admittedly, in a sector covered by a common organisation of the market,  a fortiori  where that organisation is based on a common price system, the Member States are under an obligation to refrain from taking any measures which might undermine or create exceptions to it (see,  inter alia , Case 111/76  Van den Hazel  [1977] ECR 901, paragraph 13,  Pigs Marketing Board , cited above, paragraph 56, and Case C-462/01  Hammarsten  [2003] ECR I-781, paragraph 28).  In particular, Member States can no longer take action, through national provisions taken unilaterally, affecting the machinery of price formation at the production and marketing stages established under the common organisation (see,  inter alia ,  Toffoli and Others , cited above, paragraph 12).
64. However, having regard to the fact that, as is clear from paragraphs 57 to 60 of this judgment, the maintenance of effective competition is one of the objectives of the common organisation of the market in milk and milk products, it must be observed that any measure adopted by the authorities of a Member State in application of national competition law cannot be regarded, by its very nature, as undermining or creating exceptions to the functioning of the common organisation of the market. Moreover, national measures which seek to eliminate a distortion of competition which is the result of abuse of the powerful position enjoyed by an agricultural cooperative on the national market cannot  a priori  be regarded as measures affecting the machinery of price formation established under the common organisation at Community level, within the meaning of the case-law cited at paragraph 63 of this judgment.
67. Having regard to those considerations, it must be concluded that Articles 32 to 38 EC and Regulat ions Nos 26 and 804/68 must be interpreted as meaning that, in the sector governed by the common organisation of the market in milk and milk products, the national authorities in principle retain jurisdiction to apply their national competition law to a milk producers ' cooperative in a powerful position on the national market.
81. Secondly, it is also clear from settled case-law that, even in regard to the competition rules of the Treaty, Article 36 EC gives precedence to the objectives of the common agricultural policy over those in relation to competition policy (see to that effect Case 139/79  Maizena  v  Council  [1980] ECR 3393, paragraph 23, and  Germany  v  Council , cited above, paragraph 61).
83. The question then arises as to whether such measures, in the light of the means employed to implement them, produce effects which are likely to impede the functioning of the mechanisms provided for by the common organisation concerned (see to that effect Joined Cases 36/80 and 71/80  Irish Creamery Milk Suppliers Association and Others  [1981] ECR 735, paragraph 19).
84. As is clear from the documents before the Court, the purpose of the national measures at issue in the main proceedings is to reduce the market power of Milk Marque and its ability to increase the price of milk charged by member producers beyond levels judged to be competitive, and to do so in the interests of both producers and consumers.
85. As the Court has already held, the essential aim of the machinery of the common organisation of the market in milk and milk products is to achieve price levels at the production and wholesale stages which take into account both the interests of Community production as a whole in the relevant sector and those of consumers and which guarantee market supplies without encouraging overproduction (see  Irish Creamery Milk Suppliers Association and Others , cited above, paragraph 20).
86. In consequence, the objectives of that common organisation cannot be compromised by national measures such as those at issue in the main proceedings since they do not as such affect the fixing of prices but rather seek to safeguard the proper working of the machinery for setting prices in order to achieve price levels which serve the interests of both producers and consumers.
88. First of all, this sort of price guideline is a political objective at Community level and is not a guarantee to all producers in every Member State that they will earn an income corresponding to the target price.
105. According to Milk Marque and the NFU, those measures cannot be justified under Articles 30 and 46 EC because aims of a purely economic nature, such as those envisaged by the Secretary of State, can never justify an obstacle to the fundamental principles of free movement (Case 288/83  Commission  v  Ireland  [1985] ECR 1761, paragraph 28; Case C-288/89  Stichting Collectieve Antennevoorziening Gouda  [1991] ECR I-4007, paragraph 11, and Case C-120/95 Decker [1998] ECR I-1831, paragraph 39) and recourse to Treaty derogations is not possible where the Community provides for harmonisation of the measures necessary to achieve the specific objective pursued by such derogations (Case C-5/94  Hedley Lomas  [1996] ECR I-2553, paragraph 18), in the present case, the fixing of the target price and the common organisation of the market in milk and milk products.
110. It must be observed, by way of preliminary observation, that the processing of milk cannot be classified as a provision of services within the meaning of Article 50 EC since it leads directly to the manufacture of a physical object which itself is intended to be sold as a product.  In any event, under Article 50 EC, services are to be considered to be   " services"  within the meaning of the Treaty where they are provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital or persons (see Case 18/84  Commission  v  France  [1985] ECR 1339, paragraph 12).
113. With regard, first of all, to the question whether measures such as those described in the third question constitute measures having equivalent effect to quantitative restrictions on imports within the meaning of Article 28 EC, it should be noted that it is settled case-law that that provision is intended to prohibit all rules or other measures enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade (see,  inter alia , Case 8/74  Dassonville  [1974] ECR 837, paragraph 5).
114. However, it is also settled case-law that a Member State is entitled to take measures to prevent certain of its nationals, under cover of freedoms created by the Treaty, from wrongfully evading the application of their national legislation (see,  inter alia , in relation to the freedom to provide services  Van Binsbergen , paragraph 13; Case C-148/91  Veronica Omroep Organisatie  [1993] ECR I-487, paragraph 12; Case C-23/93  TV10  [1994] ECR I-4795, paragraph 21; in relation to freedom of establishment, Case 115/78  Knoors  [1979] ECR 399, paragraph 25; Case C-61/89  Bouchoucha  [1990] ECR I-3551, paragraph 14; and Case C-212/97  Centros  [1999] ECR I-1459, paragraph 24; in relation to social security, Case C-206/94  Paletta  [1996] ECR I-2357, paragraph 24; in relation to free movement of workers, Case 39/86  Lair  [1988] ECR 3161, paragraph 43; in relation to the common agricultural policy, Case C-8/92  General Milk Products  [1993] ECR I-779, paragraph 21; in relation to company law, Case C-367/96  Kefalas and Others  [1998] ECR I-2843, paragraph 20).
118. With regard, secondly, to the question whether measures such as those referred to in the third question constitute measures having an equivalent effect to quantitative restrictions on exports for the purposes of Article 29 EC, it must be observed that it is settled case-law that that provision concerns national measures which have as their specific object or effect the restriction of patterns of exports and thereby the establishment of a difference in treatment between the domestic trade of a Member State and its export trade, in such a way as to provide a particular advantage for national production or for the domestic market of the State in question (see,  inter alia , Case 155/80  Oebel  [1981] ECR 1993, paragraph 15;  Jongeneel Kaas and Others , paragraph 22, and Case C-388/95  Belgium  v  Spain  [2000] ECR I-3123, paragraph 41).
124. Whilst it is true that Article 12 EC prohibits every Member State from applying its competition law differently on grounds of the nationality of the parties concerned, the fact remains that Article 12 EC is not concerned with any disparities in treatment which may result, for persons and undertakings subject to the jurisdiction of the Community, from divergences existing between the laws of the various Member States, so long as the latter affect all persons subject to them, in accordance with objective criteria and without regard to their nationality (see  Wilhelm and Others , cited above, paragraph 13).
126. With regard to the second subparagraph of Article 34(2) EC, that provision, 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 must not be treated differently and different situations must not be treated alike unless such treatment is objectively justified (see, in particular, Case 203/86  Spain  v  Council  [1988] ECR 4563, paragraph 25; Case C-15/95  EARL de Kerlast  [1997] ECR I-1961, paragraph 35; Case C-292/97  Karlsson and Others  [2000] ECR I-2737, paragraph 39, and Case C-14/01  Niemann  [2003] ECR I-2279, paragraph 49).