1 BY AN ORDER DATED 18 JANUARY 1974, FILED AT THE COURT ON 20 FEBRUARY, THE CONSEIL D'ETAT OF THE FRENCH REPUBLIC REFERRED THE QUESTION, UNDER ARTICLE 177 OF THE TREATY ESTABLISHING THE EEC, WHETHER REGULATION NO 1210/70 OF THE COUNCIL OF 29 JUNE 1970, DETERMINING THE PRINCIPAL MARKETING CENTRES FOR CEREALS AND THE DERIVED INTERVENTION PRICES APPLICABLE AT THOSE CENTRES FOR THE 1970/71 MARKETING YEAR, FAILS TO COMPLY WITH THE PROVISIONS OF THE SECOND PARAGRAPH OF ARTICLE 40 ( 3 ) OF THE EEC TREATY, OF THE SECOND PARAGRAPH OF ARTICLE 4 ( 1 ) OF REGULATION NO 120/67 OF THE COUNCIL OF 13 JUNE 1967 AND OF ARTICLES 1, 3 AND 6 OF REGULATION NO 131/67 OF THE COUNCIL OF 13 JUNE 1967 .
2 THIS QUESTION HAS BEEN RAISED IN RESPECT OF AN APPLICATION IN WHICH THE UNION DES MINOTIERS DE LA CHAMPAGNE ASKED THE CONSEIL D'ETAT TO ANNUL DECREE NO 70-691 OF 31 JULY 1970 FIXING THE PRICES FOR CEREALS AND THE FINANCIAL ARRANGEMENTS FOR THE 1970/71 MARKETING YEAR .
3 THE CONSEIL D'ETAT CONSIDERED THAT THE LEGALITY OF THIS DECREE, WHICH ADOPTED THE DERIVED INTERVENTION PRICES AS LAID DOWN IN UNITS OF ACCOUNT BY REGULATION NO 1210/70 AND CONVERTED THEM TO FRENCH FRANCS, DEPENDS ON THE VALIDITY OF THAT REGULATION .
4 IT APPEARS FROM THE ORDER FOR REFERENCE THAT THE APPLICANT HAS MAINTAINED BEFORE THE CONSEIL D'ETAT THAT THE REGULATION FAILS TO COMPLY WITH CERTAIN PROVISIONS OF THE TREATY AND OF THE REGULATIONS OF THE COUNCIL RELATING TO THE COMMON MARKET IN CEREALS IN THAT IT CREATES DISCRIMINATION BETWEEN PRODUCERS OR CONSUMERS WITHIN THE COMMUNITY, ALTERS THE DISPARITIES IN PRICES RESULTING FROM THE NATURAL CONDITIONS OF PRICE FORMATION ON THE MARKET AND INVOLVES DISTURBANCE IN THE NORMAL PATTERN OF TRADE .
5 THE SECOND PARAGRAPH OF ARTICLE 40 ( 3 ) OF THE TREATY PROVIDES THAT THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS 'SHALL EXCLUDE ANY DISCRIMINATION BETWEEN PRODUCERS OR CONSUMERS WITHIN THE COMMUNITY '.
6 THE AIM OF REGULATION NO 120/67 OF THE COUNCIL ON THE COMMON ORGANIZATION OF THE MARKET IN CEREALS IS TO ENABLE COMPENSATION TO BE EFFECTED BETWEEN THE SURPLUSES OF THE PRODUCER AREAS AND THE NEEDS OF THE DEFICIT AREAS BY PROVIDING, APART FROM THE BASIC INTERVENTION PRICE, FOR THE ESTABLISHMENT OF DERIVED INTERVENTION PRICES, IN SUCH A WAY 'THAT THE DIFFERENCES BETWEEN THEM CORRESPOND TO THE PRICE DISPARITIES IN PRICES TO BE EXPECTED IN A NORMAL HARVEST UNDER NATURAL CONDITIONS OF PRICE FORMATION ON THE MARKET AND ALLOW THE FREE MOVEMENT OF CEREALS WITHIN THE COMMUNITY IN ACCORDANCE WITH THE REQUIREMENTS OF THE MARKET' ( SECOND PARAGRAPH OF ARTICLE 4 ( 1 )).
7 RULES FOR FIXING DERIVED INTERVENTION PRICES WERE LAID DOWN BY REGULATION NO 131/67 OF THE COUNCIL, ARTICLE 1 OF WHICH SPECIFIES, IN RESPECT OF FIVE DIFFERENT CLASSES OF AREAS, THE FACTORS ON THE BASIS OF WHICH MARKET PRICES SHALL BE CONSIDERED AS BEING ESTABLISHED UNDER NATURAL CONDITIONS OF PRICE FORMATION .
8 UNDER ARTICLE 3 OF THE SAME REGULATION 'IN ALL CASES, DERIVED INTERVENTION PRICES SHALL BE FIXED IN SUCH A WAY THAT THERE IS NO DISCRIMINATION BETWEEN COMMUNITY PRODUCERS AND IN PARTICULAR THAT CEREALS COMING FROM ONE REGION CANNOT BE OFFERED IN ANOTHER REGION FOR LESS THAN THE INTERVENTION PRICE APPLICABLE THEREIN '.
9 ARTICLE 6 PROVIDES THAT INTERVENTION PRICES FOR THE MARKETING CENTRES OTHER THAN THE PRINCIPAL CENTRES SHALL BE FIXED 'IN SUCH A WAY THAT THEY CANNOT DISTURB THE NORMAL PATTERN OF TRADE '.
10 REGULATION NO 1210/70 OF THE COUNCIL SPECIFIED, IN RESPECT OF THE 1970/1971 MARKETING YEAR, THE PRINCIPAL MARKETING CENTRES AND THE DERIVED INTERVENTION PRICES APPLICABLE AT THOSE CENTRES BY FIXING, INTER ALIA, THE PRICE OF COMMON WHEAT AT 94.95 U.A . PER 1 000 KG FOR COMPIEGNE ( MARNE ) AND 91.77 U.A . FOR CHARTRES ( CENTRAL FRANCE ).
11 IT APPEARS FROM THE DOCUMENTS SUPPLIED BY THE CONSEIL D'ETAT THAT THE APPLICANT IN THE MAIN PROCEEDINGS, THE MEMBERS OF WHICH COME FROM THE REGION OF THE MARNE, HAS STATED THAT THE DISPARITY IN PRICES AS BETWEEN THIS REGION AND CENTRAL FRANCE IS SUCH AS TO CAUSE THEM DETRIMENT IN PERIODS OF PLENTY, IN PARTICULAR BY PUTTING THEM AT A DISADVANTAGE IN RELATION TO THE MILLERS OF CENTRAL FRANCE IN DISPOSING OF THEIR PRODUCTS ON THE MARKET IN THE PARIS REGION AND THAT THE FIXING OF DERIVED INTERVENTION PRICES FAILS TO MEET THE PROVISIONS OF THE TREATY AND THE BASIC REGULATIONS .
12 IN THIS RESPECT IN PARTICULAR THE APPLICANT IN THE MAIN PROCEEDINGS HAS CRITICIZED THE SYSTEM OF REGIONALIZATION OF DERIVED PRICES WHICH DOES NOT RESPECT 'THE NATURAL CONDITIONS OF PRICE FORMATION ON THE MARKET', ON THE BASIS OF WHICH, UNDER THE SECOND PARAGRAPH OF ARTICLE 4 ( 1 ) OF REGULATION NO 120/67, THE DIFFERENCES BETWEEN THE DERIVED INTERVENTION PRICES FOR THE DIFFERENT MARKETING CENTRES HAS TO BE CALCULATED .
13 THE PRINCIPLE OF REGIONALIZATION OF DERIVED PRICES, AS PUT INTO EFFECT BY REGULATION NO 131/67, INVOLVES THE ESTABLISHMENT OF FIVE CATEGORIES OF AREA AND THE DEFINITION, IN RESPECT OF EACH OF THEM, OF THE CRITERIA ON THE BASIS OF WHICH DERIVED INTERVENTION PRICES MUST BE FIXED SO AS TO HAVE REGARD TO THE NATURAL CONDITIONS OF PRICE FORMATION .
14 TRANSPORT COSTS BETWEEN THE AREAS, IN PARTICULAR FROM THE SURPLUS AREAS TO THE DEFICIT AREAS ARE A WEIGHTY COMPONENT OF THESE CRITERIA, BUT OTHER COMPONENTS LIKEWISE ENTER INTO ACCOUNT, SUCH AS THE GEOGRAPHICAL SITUATION OF THE SURPLUS AND DEFICIT AREAS, THE NEEDS OF OTHER CONSUMER AREAS, IMPORTS FROM THIRD COUNTRIES AND THE POSSIBILITIES OF EXPORT .
15 ALTHOUGH THIS SYSTEM CAN GIVE RISE, IN CERTAIN SPECIAL CIRCUMSTANCES, TO THE FIXING OF DERIVED PRICES WHICH DIFFER SLIGHTLY FROM PRICES WHICH WOULD ARISE IN A FREE MARKET, IT MUST NEVERTHELESS BE REGARDED AS BASICALLY IN ACCORDANCE WITH THE GENERAL REQUIREMENTS OF THE SECOND PARAGRAPH OF ARTICLE 4 ( 1 ) OF REGULATION NO 120/67, ESPECIALLY AS THESE REQUIREMENTS ARE SUCH AS TO LEAVE A CERTAIN MARGIN OF DISCRETION TO THE COUNCIL .
16 IT IS RIGHT THEREFORE TO CONCLUDE THAT THE DERIVED INTERVENTION PRICES FIXED BY REGULATION NO 1210/70, WITHIN THE FRAMEWORK OF THE SYSTEM OF REGIONALIZATION PROVIDED FOR BY REGULATION NO 131/67, ACCORD WITH REGULATION NO 120/67 .
17 THE APPLICANT IN THE MAIN PROCEEDINGS HAS FURTHER STATED THAT THE DERIVED INTERVENTION PRICES FIXED BY REGULATION NO 1210/70 ARE OF SUCH A NATURE AS TO DISTURB THE NORMAL PATTERN OF TRADE, THEREBY INFRINGING ARTICLE 6 OF REGULATION NO 131/67 .
18 IN THIS RESPECT IT APPEARS FROM THE STATISTICS IN THE FILE THAT THE COMMON ORGANIZATION OF THE MARKET HAS INVOLVED CERTAIN ALTERATIONS IN THE TRADITIONAL PATTERN OF TRADE RELATING TO CEREAL PRODUCTS, ESPECIALLY IN NORTHERN FRANCE .
19 THESE ALTERATIONS, HOWEVER, FAR FROM CONSTITUTING DISTURBANCES IN THE NORMAL PATTERN OF TRADE, MUST BE REGARDED AS RESULTING FROM THE ESTABLISHMENT OF A SINGLE MARKET AND THUS ARISING FROM THE ATTAINMENT OF THE OBJECTIVE OF THE PROVISIONS RELATING TO THE COMMON ORGANIZATION OF THE MARKET .
20 IT FOLLOWS THAT THE DERIVED INTERVENTION PRICES FIXED BY REGULATION NO 1210/70 ARE NOT INCOMPATIBLE WITH ARTICLE 6 OF REGULATION NO 131/67 .
21 FINALLY, THE PLAINTIFF IN THE MAIN PROCEEDINGS HAS REFERRED TO THE PROHIBITION ON ANY DISCRIMINATION BETWEEN PRODUCERS OR CONSUMERS WITHIN THE COMMUNITY CONTAINED IN THE SECOND PARAGRAPH OF ARTICLE 40 ( 3 ) OF THE TREATY AND MENTIONED AGAIN IN ARTICLE 3 OF REGULATION NO 131/67 .
22 DIFFERENCE IN TREATMENT CANNOT BE REGARDED AS CONSTITUTING DISCRIMINATION WHICH IS PROHIBITED UNLESS IT APPEARS ARBITRARY .
23 PRICE DIFFERENCES RESULTING FROM REGULATION NO 1210/70 FOR PRODUCERS AND CONSUMERS OF WHEAT ARE DETERMINED ON THE BASIS OF OBJECTIVE CRITERIA PROPER TO THE COMMON RULES OF THE MARKET AND CANNOT THEREFORE BE REGARDED AS DISCRIMINATORY .
24 IT IS THEREFORE RIGHT TO REPLY TO THE QUESTION RAISED BY THE CONSEIL D'ETAT THAT THE EXAMINATION OF THIS QUESTION HAS NOT REVEALED MATTERS OF A NATURE SUCH AS TO AFFECT THE VALIDITY OF REGULATION NO 1210/70 OF THE COUNCIL .