1 By decision of 19 October 1999, received at the Court on 23 December 1999, the College van Beroep voor het bedrijfsleven (Administrative Court for Trade and Industry) referred to the Court for a preliminary ruling under Article 234 EC three questions on the power of the Member States to order the slaughter of United Kingdom calves and determine its timing during the bovine spongiform encephalopathy (BSE) crisis of March 1996 and on the interpretation of Article 8 of Council Directive 90/425/EEC of 26 June 1990 concerning veterinary and zootechnical checks applicable in intra-Community trade in certain live animals and products with a view to the completion of the internal market (OJ 1990 L 224, p. 29), as amended by Council Directive 92/118/EEC of 17 December 1992 laying down animal health and public health requirements governing trade in and imports into the Community of products not subject to the said requirements laid down in specific Community rules referred to in Annex A (I) to Directive 89/662/EEC and, as regards pathogens, to Directive 90/425 (OJ 1993 L 62, p. 49) (Directive 90/425).
2 Those questions were raised in proceedings brought by Denkavit Nederland BV (Denkavit) against the Minister van Landbouw, Natuurbeheer en Visserij (Netherlands Minister for Agriculture, Nature Management and Fisheries; the Minister) and the Voedselvoorzieningsin- en verkoopbureau (Office for the Purchase and Sale of Foodstuffs), concerning a request by Denkavit for authorisation to complete the fattening of United Kingdom calves which were to be slaughtered and, in the alternative, compensation for the loss allegedly suffered owing to the impossibility of completing their fattening. Relevant provisions Community legislation
3 Regulation (EEC) No 805/68 of the Council of 27 June 1968 on the common organisation of the market in beef and veal (OJ, English Special Edition 1968 (I), p. 187), in the version resulting from Commission Regulation (EC) No 2417/95 of 13 October 1995 (OJ 1995 L 248, p. 39) (Regulation No 805/68), provides as follows in Article 23, as amended by Regulation (EEC) No 1261/71 of the Council of 15 June 1971 on exceptional measures to be taken in different agricultural sectors arising from health protection problems (OJ, English Special Edition 1971 (II), p. 377): In order to take account of the restrictions on free circulation which may result from the application of measures for combating the spread of diseases in animals, exceptional measures of support for the market affected by those restrictions may be taken in accordance with the procedure provided for in Article 27. Those measures may only be taken in so far as, and for as long as, is strictly necessary for the support of that market.
4 Article 1 of Council Directive 82/894/EEC of 21 December 1982 on the notification of animal diseases within the Community (OJ 1982 L 378, p. 58), as amended by Commission Decision 90/134/EEC of 6 March 1990 (OJ 1990 L 76, p. 23) (Directive 82/894), states that that directive is concerned with the notification of outbreaks of any of the diseases listed in Annex I thereto. BSE is among the diseases referred to in that annex.
5 Article 8(1) of Directive 90/425 is worded as follows: If, during a check carried out at the place of destination of a consignment or during transport, the competent authorities of a Member State establish: (a) the presence of agents responsible for a disease referred to in Directive 82/894/EEC ..., as last amended by Commission Decision 90/134/EEC ..., a zoonosis or disease, or any cause likely to constitute a serious hazard to animals or humans, or that the products come from a region contaminated by an epizootic disease, they shall order that the animal or consignment of animals be put in quarantine at the nearest quarantine station or slaughtered and/or destroyed. ... The protective measures provided for in Article 10 may be applied. ...
6 Article 10(1) and (4) of Directive 90/425 provides: 1. Each Member State shall immediately notify the other Member States and the Commission of any outbreak in its territory, in addition to an outbreak of diseases referred to in Directive 82/894/EEC, of any zoonoses, diseases or other cause likely to constitute a serious hazard to animals or to human health. The Member State of dispatch shall immediately implement the control or precautionary measures provided for in Community rules, in particular the determination of the buffer zones provided for in those rules, or adopt any other measure which it deems appropriate. The Member State of destination or transit which, in the course of a check referred to in Article 5, has established the existence of one of the diseases or causes referred to in the first subparagraph may, if necessary, take the precautionary measures provided for in Community rules, including the quarantining of the animals. Pending the measures to be taken in accordance with paragraph 4, the Member State of destination may, on serious public or animal health grounds, take interim protective measures with regard to the holdings, centres or organisations concerned or, in the case of an epizootic disease, with regard to the buffer zone provided for in Community rules. The measures taken by Member States shall be notified to the Commission and to the other Member States without delay. ... 4. The Commission shall in all cases review the situation in the Standing Veterinary Committee at the earliest opportunity. It shall adopt the necessary measures for the animals and products referred to in Article 1 and, if the situation so requires, for the products derived from those animals, in accordance with the procedure laid down in Article 17. The Commission shall monitor the situation and, by the same procedure, shall amend or repeal the decisions taken, depending on how the situation develops.
7 Following the adoption of Commission Decision 96/239/EC of 27 March 1996 on emergency measures to protect against bovine spongiform encephalopathy (OJ 1996 L 78, p. 47), the Commission adopted Regulation (EC) No 717/96 of 19 April 1996 adopting exceptional support measures for the beef and veal market in Belgium, France and the Netherlands (OJ 1996 L 99, p. 16).
8 Regulation No 717/96 is stated to be based on Regulation No 805/68, in particular Article 23 thereof.
9 As originally drafted, Article 1(1) of Regulation No 717/96 provided: The competent authorities in Belgium, France and the Netherlands shall be authorised to purchase any bovine animal aged six months or less on 20 March 1996 and present on that date on a holding located in the territory of Belgium, France or the Netherlands respectively presented to them by any producer, which can be proved by him to have been born in the United Kingdom.
10 Commission Regulation (EC) No 841/96 of 7 May 1996 amending Regulation No 717/96 (OJ 1996 L 114, p. 18) replaced that provision with effect from the date upon which Regulation No 717/96 first applied. Article 1(1) of Regulation No 717/96, thus amended by Regulation No 841/96 (Regulation No 717/96), provides: The competent authorities in Belgium, France and the Netherlands shall be authorised to purchase any bovine animal born on or after 1 September 1995 and present on 20 March 1996 on a holding located in the territory of Belgium, France or the Netherlands respectively presented to them by any producer, which can be proved by him to have been born in the United Kingdom.
11 Article 1(5) of Regulation No 717/96 states: If the number of animals presented for sale and subsequent destruction exceeds the number for which there is capacity to destroy in the Member State concerned, the competent authority may limit access to this scheme.
12 In accordance with Article 2(1) of Regulation No 717/96, the price to be paid for animals purchased under Article 1 of that regulation by the competent authority of the Member State concerned is ECU 2.8 per kilogram live weight. Article 2(2) states that the Community is to co-finance the purchase price paid by the Member State concerned for each purchased animal which has been destroyed in accordance with Article 1, at a rate of 70%. National legislation
13 In response to information concerning a possible link between BSE and Creutzfeldt-Jakob disease in humans and to the BSE crisis in the United Kingdom, the Kingdom of the Netherlands adopted, on 23 March 1996, more stringent measures regarding cattle, beef, veal and other products derived from cattle originating from the United Kingdom. In particular, it ordered that such cattle should not be moved.
14 Following amendment by a regulation of 3 April 1996 adopted by the Minister acting jointly with the State Secretary for Health, Welfare and Sport, Article 3.10 of the Regeling handel levende dieren en levende produkten (Regulation on Trade in Live Animals and Live Products) provides: 1. The animals mentioned in the first and second subparagraphs of Article 3.8 may not be transported elsewhere from the recipient's holding referred to in the first subparagraph of Article 3.8 or from the calf-fattening station referred to in the second subparagraph of Article 3.8. 2. By way of derogation from the first subparagraph, the animals mentioned in the second subparagraph of Article 3.8 shall be slaughtered within a period to be determined by the area director and at such place as he may determine, under supervision of national officials and in accordance with the instructions of the area director in whose district the calf-fattening station is situated. 3. The keeper of the animals mentioned in the first subparagraph shall be obliged to afford to the national officials such cooperation as may be required.
15 On 26 April 1996, the Minister amended the Regeling tegemoetkoming schade kalvereigenaren BSE 1996 (1996 BSE Regulation covering the losses of owners of calves), with retroactive effect from the date upon which Regulation No 717/96 first applied, that is to say 11 April 1996. Thus amended, the regulation, whose title became Regeling vergoeding kalvereigenaren BSE 1996 (1996 BSE Regulation compensating owners of calves), provides in Article 4: Compensation shall amount to ECU 2.8 per kilogram live weight and shall be calculated in accordance with Article 2(1) of Commission Regulation (EC) No 717/96 adopting exceptional support measures for the beef and veal market in Belgium, France and the Netherlands (OJ 1996 L 99). The main proceedings and the questions referred for a preliminary ruling
16 In accordance with the national legislation set out in paragraphs 14 and 15 of this judgment, the Netherlands authorities required the United Kingdom calves owned by Denkavit to be surrendered and slaughtered. Denkavit sought authorisation to complete the calves' fattening before surrendering them for slaughter and, in the alternative, compensation for the loss resulting from being unable to bring the calves to the age at which their fattening would be completed. It commenced actions before the College van Beroep voor het bedrijfsleven for annulment of the decisions of the Netherlands authorities rejecting its objections and requests.
17 The issue as to who was competent to order the slaughter of the calves in question and to determine when their slaughter should take place was raised in the main proceedings.
18 The College van Beroep voor het bedrijfsleven accordingly decided to stay proceedings and refer the following questions to the Court for a preliminary ruling: (1) Does the fact that the calves in issue come under the common organisation of the market in beef and veal mean that the (alleged) power on the part of the Netherlands authorities to determine the point in time at which British calves are to be slaughtered must have a basis in Community legislation, in the absence of which the national authorities do not have any such power? (2) If the answer to the first question is in the affirmative: does Article 8 of Directive 90/425/EEC constitute an adequate basis for that power? (3) If the second question is answered in the negative: is there any other basis for that power in Community law? Consideration of the questions submitted
19 By its questions, which it is appropriate to consider together, the College van Beroep voor het bedrijfsleven essentially asks whether the Community provisions applicable to the common agricultural policy in the beef and veal sector are to be interpreted as meaning that, in response to information concerning a possible link between BSE and Creutzfeldt-Jakob disease in humans and to the BSE crisis in the United Kingdom, the Member States were entitled, under Article 8(1)(a) of Directive 90/425 or any other Community provision, to order the slaughter of young bovine animals originating from the United Kingdom present in their territory and to determine when their slaughter should take place. Observations submitted to the Court
20 Denkavit maintains that the calves at issue come under the common organisation of the market in the beef and veal sector and that, in accordance with settled case-law, the Member States are under an obligation to refrain from taking any measures which might undermine or create exceptions to the Community rules relating to that sector. In the main proceedings, the situation was fully governed by Directive 90/425 and Regulation No 717/96. The Netherlands authorities therefore had no legal basis for intervening.
21 In Denkavit's submission, the conditions set out in Article 8(1)(a) of Directive 90/425 were not met because no disease and no agent responsible for a disease had been established in the calves themselves. The fact that the calves came from a region contaminated by an epizootic disease is irrelevant because that condition relates only to products.
22 Furthermore, Article 10(1) of Directive 90/425 permits national authorities only to take interim protective measures. That does not cover a measure ordering the slaughter of animals, which is a definitive measure.
23 Denkavit contends that Regulation No 717/96 does not permit national authorities to determine when slaughter takes place. Article 1(1) of that regulation, which refers to any bovine animal ... presented ... by any producer or, in the Dutch version, runderen ... die door een producent voor verkoop worden aangeboden, must be interpreted as meaning that the timing is determined by the producer. He is thus entitled to complete the fattening of his calves before delivering them up to the national authorities under the destruction scheme set up by that regulation.
24 Denkavit also argues that the general scheme of Regulation No 717/96 confirms its textual interpretation of Article 1(1) thereof. According to the third recital in the preamble to the regulation, the fixed price laid down in Article 2(1) corresponds to the most recently observed price of carcases of calves, which refers, by definition, to calves whose fattening is completed. In addition, Article 1(5), which governs the situation where the number of animals presented for sale exceeds destruction capacity, would be pointless if the authorities themselves determined when animals are slaughtered.
25 In Denkavit's submission, Regulation No 717/96 had an objective of providing income support for the agricultural community and not a public health objective, a fact which justifies farmers' being entitled to complete the fattening of their calves. That interpretation of Regulation No 717/96 is borne out by the fact that, in France, the legislation implementing the regulation provides that the date of surrender of the calves concerned for destruction is determined by the producer.
26 Denkavit explains that the production cost per kilogram reduces as calves grow older. Consequently, to interpret Regulation No 717/96 as enabling national authorities to oblige a producer to surrender calves whose fattening is not completed would result in unjustified discrimination, at the financial level, between owners of young calves and those of older calves, infringing the prohibition of any discrimination between producers within the Community laid down in Article 40(3) of the EC Treaty (now, after amendment, Article 34(2) EC).
27 The Netherlands Government and the Commission contend, on the other hand, that the conditions set out in Article 8(1)(a) of Directive 90/425 were met in the main proceedings. The Commission states that Article 8(1)(a) refers to the possible situations known about at the time when that directive was adopted, but that it would be contrary to the directive's spirit to interpret it as not covering animals which come from a region contaminated by an epizootic disease. It submits that, following Decision 96/239, it was confirmed that BSE was an epizootic disease affecting the entire territory of the United Kingdom.
28 According to the Netherlands Government and the Commission, Articles 8 and 10 of Directive 90/425 confer upon the Netherlands authorities the necessary power to order the slaughter of United Kingdom calves and, therefore, to determine its timing. Article 8(1)(a) of that directive expressly refers to the slaughter of animals. The Commission also contends that the slaughter of the calves could have been justified under interim protective measures within the meaning of the fourth subparagraph of Article 10(1) of the directive.
29 Regulation No 717/96 does not cast doubt on that interpretation. The Netherlands Government states that a regulation of limited scope is involved, intended solely to define the Commission's financial contribution to combating the risk of contamination from BSE. The limited scope of Regulation No 717/96 is also apparent from its legal basis, namely Regulation No 805/68.
30 The Commission disputes Denkavit's literal interpretation of Article 1(1) of Regulation No 717/96, contending that it is contradicted by Article 1(5). If producers could choose when slaughter took place, they would wait until the fattening of the calves was completed. That would mean that the presentation of calves would be spread over time with the result that the risk of being faced with destruction capacity problems would be quite slender.
31 The Netherlands Government and the Commission contend that it would make no sense and be inconsistent with a reasonable agricultural policy to permit the fattening of calves to be completed where it is known in advance that they must be slaughtered. The Netherlands Government also states that that would prejudice the Community's financial interests. The Commission adds that it would run counter to the objective of protecting public health which, on the contrary, would require the source of danger to be eliminated as rapidly as possible. Findings of the Court
32 It should be observed at the outset that, where there is a regulation on the common organisation of the market in a given sector, the Member States are under an obligation to refrain from taking any measures which might undermine or create exceptions to it. Rules which interfere with the proper functioning of a common organisation of the market are also incompatible with such common organisation, even if the matter in question has not been exhaustively regulated by it (Case C-1/96 Compassion in World Farming [1998] ECR I-1251, paragraph 41).
33 Calves fall within the beef and veal sector, for which the common organisation of the market is governed by Regulation No 805/68. In accordance with Article 1 of Directive 90/425 and Annex A thereto, they are covered by Directive 90/425.
34 Article 8(1)(a) of that directive permits the competent authorities of the Member State to which a consignment of animals is sent to order inter alia the slaughter of animals where they establish the presence of agents responsible for a disease which is subject to notification in accordance with Directive 82/894, a zoonosis or disease, or any cause likely to constitute a serious hazard to animals or humans.
35 That provision must be interpreted in the light of its objective, which is to ensure that the health of animals and humans is protected, and of developments in scientific knowledge.
36 By order in Case C-180/96 R United Kingdom v Commission [1996] ECR I-3903, the Court accepted the ban, in March 1996, on the export of cattle from the United Kingdom by way of a protective measure under Article 10 of Directive 90/425. It took into consideration, at paragraphs 8 and 67 to 72 of the order, the number of cases of BSE in the United Kingdom, the incubation period of several years during which BSE cannot be detected, the scientific uncertainty which existed regarding the modes of transmission of the disease and the lack of traceability of the animals in the United Kingdom.
37 The same considerations mean that the Member States were entitled, at that time, to order the slaughter of calves originating from the United Kingdom present in their territory, under Article 8(1)(a) of Directive 90/425.
38 The power to order the slaughter of animals necessarily presupposes the power to arrange for slaughter to be carried out efficiently and, in particular, to dictate to the animals' keepers when slaughter takes place.
39 The wording of Regulation No 717/96 does not run counter to that interpretation. Adopted on the basis of Article 23 of Regulation No 805/68, Regulation No 717/96 has the sole objective of determining the Community's contribution to the financing of the destruction of calves originating from the United Kingdom purchased and destroyed in accordance with certain conditions. It does not replace a national measure ordering the slaughter of animals adopted in accordance with Article 8(1)(a) of Directive 90/425.
40 The words die door een producent voor verkoop worden aangeboden which appear in Article 1(1) of the Dutch version of Regulation No 717/96 and literally mean which are offered for sale by a producer do not necessarily signify that it was for the producer to determine the timing of the calves' slaughter. At the very most those words imply that the producer could choose between selling his animals in compliance with the conditions of that regulation and having them slaughtered without compensation.
41 This interpretation of Article 1(1) of Regulation No 717/96 is confirmed by the wording of Article 1(5). If the national authorities could limit access to the slaughter programme envisaged by that regulation, they could a fortiori organise it efficiently and, in particular, determine when slaughter took place.
42 Contrary to Denkavit's submissions, Regulation No 717/96 is not a support measure for producers but, as indicated by the legal basis upon which it was adopted and as stated in the first recital in its preamble, a measure to support the beef and veal markets. As such, it did not have the effect of requiring the Member States to take account only of the interest of farmers, but could justify the Member States' endeavours to reduce market supply by requiring slaughter of the animals as soon as possible in order, in particular, to limit the financial cost of the slaughter programme.
43 Nor can the fact that Regulation No 717/96 is presented as a measure to support the beef and veal markets be taken to mean that the Member States could no longer invoke public health considerations in order to dictate when the calves' slaughter took place. The objective of market support is not incompatible with the public health objective but must, on the contrary, take it into account, as required by Article 129 of the EC Treaty (now, after amendment, Article 152 EC). Furthermore, as stated in paragraph 39 of this judgment, the effect of Regulation No 717/96 is not to replace a national measure ordering the slaughter of animals adopted in accordance with Article 8(1)(a) of Directive 90/425.
44 As to the argument alleging discrimination between producers contrary to Article 40(3) of the Treaty, it should be remembered that, in accordance with settled case-law, the general principle of equality, which is one of the fundamental principles of Community law, precludes comparable situations from being treated in a different manner unless the difference in treatment is objectively justified (see, in particular, Case C-189/01 Jippes and Others [2001] ECR I-5689, paragraph 129).
45 Suffice it to state that the measure of slaughtering United Kingdom calves without delay, regardless of their age, their weight and, therefore, the profit which the farmer could derive from their sale, was objectively justified on grounds of public health.
46 Since the power of the Member States to order the slaughter of the animals and to determine its timing has been established under Article 8(1)(a) of Directive 90/425, it is unnecessary also to interpret Article 10(1) of that directive.
47 In view of all those considerations, the answer to the questions submitted must be that the Community provisions applicable to the common agricultural policy in the beef and veal sector are to be interpreted as meaning that, in response to information concerning a possible link between BSE and Creutzfeldt-Jakob disease in humans and to the BSE crisis in the United Kingdom, the Member States were entitled, under Article 8(1)(a) of Directive 90/425: - to order the slaughter of young bovine animals originating from the United Kingdom present in their territory and - consequently, to determine when their slaughter took place.