1 BY TWO ORDERS DATED 22 MARCH 1983 , WHICH WERE RECEIVED AT THE COURT ON 25 MARCH 1983 , THE COLLEGE VAN BEROEP VOOR HET BEDRIJFSLEVEN ( ADMINISTRATIVE COURT OF LAST INSTANCE IN MATTERS OF TRADE AND INDUSTRY ) REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A QUESTION , WHICH IS IDENTICAL IN BOTH CASES , ON THE INTERPRETATION OF ARTICLE 2 OF REGULATION ( EEC ) NO 2777/75 OF THE COUNCIL OF 29 OCTOBER 1975 ON THE COMMON ORGANIZATION OF THE MARKET IN POULTRYMEAT ( OFFICIAL JOURNAL 1975 , L 282 , P . 77 ).
2 THE QUESTION WAS REFERRED IN ORDER TO ENABLE THE COLLEGE VAN BEROEP TO ASSESS WHETHER THE VERORDENING KWALITEITSEISEN ( REGULATION ON QUALITY STANDARDS ) OF 24 FEBRUARY 1966 ADOPTED BY THE BEDRIJFSCHAP VOOR DE PLUIMVEEHANDEL IN -INDUSTRIE ( TRADE AND INDUSTRY BOARD FOR POULTRY , HEREINAFTER REFERRED TO AS ' ' THE BOARD ' ' ). THE NETHERLANDS REGULATION CONTAINS DETAILED PROVISIONS REGARDING THE CLASSIFICATION , PRESENTATION , PACKAGING AND TRANSPORT OF SLAUGHTERED POULTRY . IN THE EVENT OF INFRINGEMENT IT PROVIDES FOR DISCIPLINARY SANCTIONS IN THE FORM OF FINES WHICH ARE IMPOSED BY THE BOARD ' S DISCIPLINARY TRIBUNAL ( TUCHTGERECHT ). APPEALS FROM SUCH DECISIONS LIE TO THE COLLEGE VAN BEROEP VOOR HET BEDRIJFSLEVEN .
3 BY REGULATION NO 123/67/EEC OF 13 JUNE 1967 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1967 , P . 63 ) THE COUNCIL ADOPTED THE FIRST COMMON ORGANIZATION OF THE MARKET IN POULTRYMEAT . THE REGULATION WAS AMENDED SEVERAL TIMES AND THE MATTER IS NOW CODIFIED IN REGULATION NO 2777/75 . LIKE ITS PREDECESSOR , REGULATION NO 123/67 , THAT REGULATION PROVIDES IN ARTICLE 2 THAT MEASURES DESIGNED IN PARTICULAR TO IMPROVE QUALITY AND FIX MARKETING STANDARDS MUST BE ADOPTED IN SUBSEQUENT REGULATIONS TO BE ENACTED BY THE COUNCIL .
4 IT SHOULD BE NOTED THAT , WITH THE EXCEPTION OF A REGULATION GOVERNING WATER-CONTENT OF FROZEN POULTRYMEAT ( REGULATION NO 2967/76 OF 23 NOVEMBER 1976 , OFFICIAL JOURNAL L 339 , P . 1 ), WHICH IS IRRELEVANT IN THIS CONTEXT , THE COUNCIL HAS STILL NOT ADOPTED THE STANDARDS REFERRED TO IN ARTICLE 2 .
5 ACCORDING TO THE INFORMATION WHICH THE COMMISSION PROVIDED TO THE COURT , ON 15 JULY 1971 IT SUBMITTED TO THE COUNCIL A PROPOSAL FOR A REGULATION ON MARKETING STANDARDS FOR POULTRYMEAT AND , OWING TO THE DIFFICULTIES WHICH THE PROPOSAL ENCOUNTERED WITHIN THE COUNCIL , IT SUBMITTED A ' ' COMPROMISE ' ' TEXT IN 1978 . SINCE THE EXAMINATION OF THAT TEXT ALSO RESULTED IN DEADLOCK AFTER MANY FRUITLESS EFFORTS IN 1978 AND 1979 , AND THE COUNCIL HAD NOT DISCUSSED THE PROPOSAL SINCE THAT TIME , THE COMMISSION WITHDREW IT ON 21 DECEMBER 1982 . THE COMMISSION HAS LET IT BE KNOWN THAT IT IS AT PRESENT PLANNING TO SUBMIT TO THE COUNCIL A PROPOSAL CONCERNING THE EGG MARKET AND WILL NOT RETURN TO THE QUESTION OF THE POULTRY MARKET UNTIL THE QUESTION OF EGGS IS SETTLED . THE FACTS AND HISTORY OF THE CASE
6 ACCORDING TO THE DOCUMENTS BEFORE THE COURT , THE TWO POULTRY-SLAUGHTERING UNDERTAKINGS MIDDEN-NEDERLAND BV AND C . VAN MIERT BV , APPEARING AS THE APPELLANTS IN THE MAIN ACTIONS WERE FINED BY THE TUCHTGERECHT IN 1982 AFTER INSPECTIONS REVEALED VARIOUS INFRINGEMENTS OF THE PROVISIONS OF THE VERORDENING KWALITEITSEISEN CONSISTING IN PARTICULAR OF THE MARKETING OF PRODUCTS WHICH WERE NOT FRESH , THE INCOMPLETE CLEANING OF POULTRY CARCASES AND THE PRESENCE OF DIRT , BRUISES AND BROKEN BONES . THE UNDERTAKINGS APPEALED FROM THOSE DECISIONS TO THE COLLEGE VAN BEROEP .
7 ACCORDING TO THE ORDERS FOR REFERENCE , THAT COURT ASKED THE PARTIES TO STATE THEIR VIEWS ON THE QUESTION ' ' WHETHER THE PROVISIONS OF ARTICLE 2 OF REGULATION NO 2777/75 HAVE LEFT INTACT THE POWER TO LAY DOWN NATIONAL QUALITY STANDARDS FOR SLAUGHTERED POULTRY ' ' . AFTER HEARING THEIR VIEWS , THE COLLEGE VAN BEROEP REFERRED THE FOLLOWING QUESTION TO THE COURT IN BOTH CASES : ' ' MUST ARTICLE 2 OF REGULATION ( EEC ) NO 2777/75 BE INTERPRETED AS MEANING THAT NATIONAL PROVISIONS NOT BASED ON COMMUNITY LAW WHICH LAY DOWN REQUIREMENTS AS TO QUALITY FOR SLAUGHTERED POULTRY AND ARE ENFORCEABLE BY MEANS OF DISCIPLINARY MEASURES ARE INCOMPATIBLE WITH IT? ' '
8 THE APPELLANTS IN THE MAIN ACTIONS DID NOT SUBMIT OBSERVATIONS TO THE COURT . WRITTEN AND ORAL OBSERVATIONS WERE , HOWEVER , SUBMITTED BY THE BOARD AND THE COMMISSION . THE SUBSTANCE OF THE CASE
9 THE BOARD ' S OPINION IS THAT , SO LONG AS THE COUNCIL HAS NOT EXERCISED THE POWER WHICH IT VESTED IN ITSELF IN ARTICLE 2 OF REGULATION NO 2777/75 , MEMBER STATES ARE AT LIBERTY TO ESTABLISH AND APPLY THEIR OWN QUALITY STANDARDS WITHIN THE SCOPE OF THE REGULATION ' S OBJECTIVES . IN ANY EVENT , ACCORDING TO THE BOARD , THE POWERS DEFINED IN THE REGULATION DO NOT EXCLUDE THE ENACTMENT OF NATIONAL MEASURES . NATIONAL RULES MAY NOT THEREFORE BE CONSIDERED INCOMPATIBLE WITH THE ORGANIZATION OF THE MARKET UNLESS IT IS PROVED THAT THEY IN FACT PREVENT IT FROM FUNCTIONING PROPERLY . THAT IS NOT THE CASE HERE , SINCE THE RULES WHICH WERE BROUGHT INTO FORCE BY THE BOARD HAVE NO OTHER AIM THAN TO GUARANTEE FAIR COMPETITION AND ENSURE THAT CONSUMERS ARE PROTECTED .
10 THE BOARD FURTHER POINTS OUT THAT THE PROVISIONS CHALLENGED BY THE APPELLANTS IN THE MAIN ACTIONS WERE ALREADY IN FORCE WHEN THE COMMON ORGANIZATION OF THE MARKET WAS INTRODUCED AND THAT IN SUBSTANCE THEY ARE EQUIVALENT TO THE PROPOSALS LATER INTRODUCED BY THE COMMISSION . IN ITS DECISIONS ON FISHERIES , AND MOST RECENTLY IN ITS JUDGMENT OF 5 MAY 1981 IN CASE 804/79 ( COMMISSION V UNITED KINGDOM , ( 1981 ) ECR 1045 ), THE COURT HAS HELD THAT , IF THE COUNCIL FAILS TO ACT , MEMBER STATES MAY NOT ONLY MAINTAIN NATIONAL PROVISIONS WHICH ARE CONSISTENT WITH THE AIM LAID DOWN BY COMMUNITY LAW BUT EVEN AMEND THEM IF NECESSARY .
11 FINALLY , THE BOARD EMPHASIZES THE CLOSE LINK BETWEEN PROVISIONS GOVERNING QUALITY AND THOSE GOVERNING HEALTH INSPECTIONS ; IN ITS VIEW , THIS LAST POINT CANNOT BE IGNORED WHEN THE QUESTION REFERRED TO THE COURT BY THE COLLEGE VAN BEROEP IS EXAMINED .
12 IN ITS WRITTEN OBSERVATIONS THE COMMISSION ARGUES THAT IN ARTICLE 2 OF REGULATION NO 2777/75 THE COMMUNITY LEGISLATURE EXPRESSED ITS INTENTION TO ' ' OCCUPY THE GROUND ' ' REGARDING THE MATTERS GOVERNED BY THE ORGANIZATION OF THE MARKET AND THAT MEMBER STATES MAY THEREFORE NO LONGER LEGISLATE ON THOSE MATTERS . IN ITS OPINION , THE MAINTENANCE OF NATIONAL QUALITY STANDARDS DISTURBS THE FUNCTIONING OF THE MARKET ORGANIZATION AND MAKES THE SUBSEQUENT INTRODUCTION OF COMMUNITY QUALITY STANDARDS MORE DIFFICULT .
13 IN REPLY TO QUESTIONS PUT BY THE COURT THE COMMISSION ADMITTED THAT THE COMMUNITY MAY HARDLY CONTINUE TO CLAIM TO HAVE EXCLUSIVE POWERS IN THIS AREA IF IT DOES NOT EXERCISE THEM IN ONE WAY OR ANOTHER WITHIN A REASONABLE TIME . IT THEREFORE CONSIDERS IT PERMISSIBLE FOR MEMBER STATES TO MAINTAIN THEIR EXISTING QUALITY AND MARKETING STANDARDS , PROVIDED THAT THEY ARE CONSISTENT WITH THE AIM OF THE COMMON ORGANIZATION OF THE MARKET . AT THE SAME TIME IT DRAWS ATTENTION TO THE DANGER TO THE FREE MOVEMENT OF THE PRODUCTS IN QUESTION WHICH MIGHT ARISE IF , OWING TO THE COUNCIL ' S INACTION , MEMBER STATES INTRODUCE THEIR OWN QUALITY RULES , WHICH , OWING TO THE DIFFERENCES BETWEEN THEM , MIGHT CREATE OBSTACLES TO TRADE BETWEEN MEMBER STATES . IT THEREFORE EMPHASIZES THAT ANY POWERS WHICH MAY BE RECOGNIZED AS BEING VESTED IN THE MEMBER STATES IN THIS FIELD ARE SUBORDINATE AND TRANSITIONAL ONLY , AND THAT IN ANY EVENT THE MEMBER STATES MUST GRANT FREE ACCESS TO THEIR MARKETS TO PRODUCTS WHICH HAVE BEEN LEGALLY MARKETED IN THE MEMBER STATE OF ORIGIN IN ACCORDANCE WITH THE LEGISLATION APPLICABLE THERE .
14 AS REGARDS THE NETHERLANDS REGULATION , THE COMMISSION ACKNOWLEDGES THAT IT CONTAINS NO PROVISIONS WHICH , CONSIDERED IN ISOLATION , RUN COUNTER TO THE AIM OF THE COMMON ORGANIZATION OF THE MARKET . IT CONSIDERS , HOWEVER , THAT IF THAT REGULATION WERE APPLIED TO IMPORTED POULTRY ITS DETAILED NATURE MIGHT CREATE OBSTACLES TO INTRA-COMMUNITY TRADE .
15 FINALLY , THE COMMISSION CONSIDERS IT UNNECESSARY TO EXAMINE THE QUESTION OF HEALTH REGULATIONS , WHICH ARE NOT THE SUBJECT-MATTER OF THE QUESTION RAISED BY THE NATIONAL COURT AND WHICH AT THE COMMUNITY LEVEL ARE GOVERNED BY PROVISIONS DIFFERENT FROM THOSE GOVERNING THE COMMON ORGANIZATION OF THE MARKET .
16 BEFORE THE QUESTION RAISED BY THE COLLEGE VAN BEROEP IS EXAMINED IT SHOULD BE OBSERVED THAT IT IS APPARENT FROM THE DOCUMENTS BEFORE THE COURT AND MORE PARTICULARLY THE ORDERS FOR REFERENCE THAT THE QUESTION TO BE RESOLVED IN THESE PROCEEDINGS DOES NOT CONCERN HEALTH CONTROL MEASURES . THIS QUESTION WAS NOT RAISED BY THE NATIONAL COURT AND COULD NOT THEREFORE BE CONSIDERED BY THE PARTIES . THE ARGUMENTS ADVANCED BY THE BOARD IN THIS REGARD MUST THEREFORE BE DISREGARDED .
17 IN ORDER TO ANSWER THE QUESTION RAISED BY THE COLLEGE VAN BEROEP IT SHOULD FIRST BE RECALLED THAT THE COMMON ORGANIZATION OF THE MARKET IN POULTRYMEAT , AS AT PRESENT LAID DOWN IN REGULATION NO 2777/75 , IS BASED ON A SET OF MEASURES DESIGNED TO STABILIZE THE MARKET AND ENSURE FAIR PRICES WITHOUT RESORT TO INTERVENTION MEASURES OF THE KIND PROVIDED FOR IN OTHER AGRICULTURAL MARKETS . ACCORDING TO ARTICLE 2 , SUPPLY IS TO BE ADJUSTED TO MARKET REQUIREMENTS BY MEANS OF A SET OF MEASURES DESIGNED TO PROMOTE BETTER ORGANIZATION OF PRODUCTION , PROCESSING AND MARKETING , TO IMPROVE QUALITY AND TO FACILITATE THE ESTABLISHMENT OF MARKET FORECASTS AND THE RECORDING OF PRICE TRENDS .
18 TO THIS END ARTICLE 2 ( 1 ) PROVIDES THAT THE COUNCIL MAY IN ACCORDANCE WITH THE PROCEDURE LAID DOWN IN ARTICLE 43 ( 2 ) OF THE TREATY ADOPT MEASURES TO IMPROVE THE QUALITY OF THE PRODUCTS COVERED BY THE MARKET ORGANIZATION .
19 ACCORDING TO ARTICLE 2 ( 2 ), MARKETING STANDARDS ARE TO BE ADOPTED BY THE COUNCIL , ACTING BY A QUALIFIED MAJORITY ON A PROPOSAL FROM THE COMMISSION . THEY MUST BE ADOPTED FOR THE PRODUCTS SPECIFIED IN ARTICLE 1 ( 1 ) ( B ), THAT IS TO SAY , FOR DEAD POULTRY AND EDIBLE POULTRY-OFFAL , AND MAY BE ADOPTED FOR THE OTHER PRODUCTS TO WHICH THE MARKET ORGANIZATION APPLIES . IT IS STATED THAT SUCH STANDARDS MAY RELATE IN PARTICULAR TO GRADING BY QUALITY OR WEIGHT , PACKAGING , STORAGE , TRANSPORT , PRESENTATION AND MARKETING .
20 IT IS NOT ENTIRELY CLEAR FROM THOSE PROVISIONS WHETHER THE COUNCIL MUST ADOPT BINDING STANDARDS OR WHETHER THE REGULATION MERELY ENABLES IT TO DO SO . HOWEVER , THE WHOLE OF ARTICLE 2 EVINCES A CLEAR INTENTION TO ESTABLISH PROGRESSIVELY UNIFORM BINDING QUALITY STANDARDS AND COMMON MARKETING STANDARDS , WHICH ARE IN FACT INDISPENSABLE FOR A PROPERLY FUNCTIONING , TRANSPARENT MARKET IN WHICH NORMAL CONDITIONS OF COMPETITION PREVAIL .
21 IN THIS CONTEXT IT IS NECESSARY TO POINT OUT THE COUNCIL ' S ALMOST TOTAL FAILURE TO ACT ; IN A SECTOR GOVERNED BY A COMMON ORGANIZATION OF THE MARKET SINCE 1967 IT HAS STILL NOT ENACTED THE RULES NEEDED TO ENABLE THAT ORGANIZATION TO FUNCTION NORMALLY . HAVING ENCOUNTERED RESISTANCE IN THE COUNCIL , THE COMMISSION HAS APPARENTLY RESIGNED ITSELF FOR THE MOMENT TO NOT USING ITS RIGHT TO MAKE PROPOSALS AND THE OTHER POSSIBILITIES OF TAKING ACTION OPEN TO IT UNDER THE TREATY .
22 IN THOSE CIRCUMSTANCES THERE CANNOT IN PRINCIPLE BE ANY OBJECTION TO A MEMBER STATE ' S RETAINING OR INTRODUCING NATIONAL MEASURES DESIGNED TO ACHIEVE IN ITS OWN TERRITORY THE AIMS OF THE MARKET ORGANIZATION AND , MORE PARTICULARLY , OF ARTICLE 2 OF REGULATION NO 2777/75 .
23 HOWEVER , IN CONFORMITY WITH THE COURT ' S JUDGMENT OF 5 MAY 1981 , CITED ABOVE , SUCH MEASURES MUST NOT BE REGARDED AS INVOLVING THE EXERCISE OF THE MEMBER STATE ' S OWN POWERS , BUT AS THE FULFILMENT OF THE DUTY TO COOPERATE IN ACHIEVING THE AIMS OF THE COMMON ORGANIZATION OF THE MARKET WHICH , IN A SITUATION CHARACTERIZED BY THE INACTION OF THE COMMUNITY LEGISLATURE , ARTICLE 5 OF THE TREATY IMPOSES ON THEM . CONSEQUENTLY , THE MEASURES ADOPTED BY THE MEMBER STATES MAY ONLY BE TEMPORARY AND PROVISIONAL IN NATURE AND THEY MUST CEASE TO BE APPLIED AS SOON AS COMMUNITY MEASURES ARE INTRODUCED .
24 HOWEVER , IN VIEW OF THE RISK , RIGHTLY MENTIONED BY THE COMMISSION , THAT THE CONSOLIDATION OF UNILATERAL AND POSSIBLY DIFFERENT NATIONAL RULES MAY HAVE THE EFFECT , OWING TO CONTINUING INACTION ON THE PART OF COMMUNITY AUTHORITIES , OF CREATING OBSTACLES TO TRADE , IT IS IMPORTANT TO DRAW ATTENTION TO CERTAIN CONDITIONS WHICH MUST BE TAKEN INTO ACCOUNT IN APPRAISING SUCH RULES .
25 IN THE FIRST PLACE IT SHOULD BE BORNE IN MIND THAT , AS THE COURT HELD IN ITS JUDGMENT OF 23 JANUARY 1975 IN CASE 51/74 ( VAN DER HULST V PRODUKTSCHAP VOOR SIERGEWASSEN , ( 1975 ) ECR 79 ) AND OF 18 MAY 1977 IN CASE 111/76 ( OFFICIER VAN JUSTITIE V VAN DEN HAZEL , ( 1977 ) ECR 901 ), PROVISIONS ADOPTED OR MAINTAINED BY MEMBER STATES IN THE CIRCUMSTANCES DESCRIBED ABOVE ARE PERMISSIBLE ONLY IF THEY ARE COMPATIBLE WITH THE PRINCIPLES OF THE COMMON ORGANIZATION OF THE MARKET .
26 IT MAY BE OBSERVED , AS THE COMMISSION HAS ACKNOWLEDGED , THAT IN PRINCIPLE MEASURES OF THE KIND PROVIDED FOR BY THE RULES APPLIED BY THE BOARD WITH RESPECT TO QUALITY AND MARKETING STANDARDS ARE UNOBJECTIONABLE WITH REGARD TO THE REQUIREMENTS OF THE COMMON ORGANIZATION OF THE MARKET IN POULTRYMEAT .
27 SECONDLY , IT MUST BE EMPHASIZED THAT THE APPLICATION OF NATIONAL QUALITY AND MARKETING STANDARDS MUST NOT RESTRICT THE FREEDOM TO IMPORT POULTRYMEAT LAWFULLY PRODUCED AND MARKETED IN OTHER MEMBER STATES IN ACCORDANCE WITH THE QUALITY AND MARKETING STANDARDS IN FORCE THERE .
28 FINALLY , IF FREE TRADE IS RESTRICTED BY THE DIFFERENCES BETWEEN THE NATIONAL RULES OR THE ABSENCE OF MEASURES FOR ENSURING APPROPRIATE QUALITY CONTROL LEADS TO ECONOMIC DISTURBANCES IN THE MARKET SECTOR IN QUESTION , THE COUNCIL ' S FAILURE TO ACT CANNOT DISCHARGE THE COMMISSION FROM ITS DUTY TO TAKE THE NECESSARY STEPS , USING ITS POWERS UNDER ARTICLE 155 OF THE TREATY , TO ENSURE THAT THE PRODUCTS COVERED BY THE ORGANIZATION OF THE MARKET CAN MOVE FREELY WITHIN THE COMMUNITY UNDER CONDITIONS CONSISTENT WITH THE AIMS OF THAT ORGANIZATION .
29 TAKING ALL THOSE CONSIDERATIONS INTO ACCOUNT , THE ANSWER TO THE QUESTION REFERRED TO THE COURT BY THE COLLEGE VAN BEROEP MUST BE THAT ARTICLE 2 OF REGULATION NO 2777/75 IS TO BE INTERPRETED AS MEANING THAT , IN A SITUATION CHARACTERIZED BY THE ABSENCE OF THE IMPLEMENTING MEASURES PROVIDED FOR BY THAT REGULATION , NATIONAL PROVISIONS LAYING DOWN MARKETING AND QUALITY STANDARDS FOR SLAUGHTERED POULTRY AND ENFORCEABLE BY DISCIPLINARY MEASURES ARE COMPATIBLE WITH IT , PROVIDED THAT THEY ARE COMPATIBLE WITH THE AIM OF THE COMMON ORGANIZATION OF THE MARKET AND APPLIED IN SUCH A WAY THAT IMPORTS OF POULTRYMEAT LAWFULLY PRODUCED AND MARKETED IN ACCORDANCE WITH THE MARKETING AND QUALITY STANDARDS IN FORCE IN THE OTHER MEMBER STATES ARE NOT RESTRICTED .
30 IT IS FOR THE NATIONAL COURT TO DECIDE , IN THE LIGHT OF THE PRINCIPLES SET FORTH IN THIS JUDGMENT , WHETHER THE QUALITY AND MARKETING STANDARDS LAID DOWN BY THE NETHERLANDS LEGISLATION ARE COMPATIBLE WITH THE REQUIREMENTS OF THE COMMON ORGANIZATION OF THE MARKET IN POULTRYMEAT .