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.

• Jurisdiction: European Union
• Celex Number: 62000CJ0137
• ECLI: ECLI:EU:C:2003:429
• Date: 09 September 2003
• Docket Number: C-137/00
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling

Case C-137/00


The Queen
v
The Competition Commission, formerly The Monopolies and Mergers Commission, and Others,
ex parte Milk Marque Ltd and National Farmers' Union



(Reference for a preliminary ruling from the High Court of Justice (England & Wales), Queen's Bench Division (Crown Office))

«(Common agricultural policy – Articles 32 EC to 38 EC – Regulation (EEC) No 804/68 – Common organisation of the market in milk and milk products – Target price for milk – Regulation No 26 – Application of certain competition rules to the production of and trade in agricultural products – Whether Member States may apply national competition rules to milk producers who choose to organise themselves into cooperatives and hold market power)»

Opinion of Advocate General Stix-Hackl delivered on 17 September 2002

Judgment of the Court, 9 September 2003

Summary of the Judgment

1..

Agriculture – Common organisation of the markets – Milk and milk products – Application of national competition law to a milk producers' cooperative in a powerful position on the national market – Competence of the national authorities – Limits

(Arts 32 to 38 EC; Council Regulation No 26 and No 804/68, Art. 3(1), as amended by Regulation No 1587/96)

2..

Agriculture – Common organisation of the markets – Milk and milk products – Target price for milk – Account taken of that price by national competition authorities for the purposes of investigating the market power of an undertaking – Whether permissible

(Art. 33(1) EC; Council Regulation No 804/68, Art. 3(1) and (2), as amended by Regulation No 1587/96)

3..

Free movement of goods – Quantitative restrictions – Measures having equivalent effect – Prohibition on a dairy cooperative in a powerful position on the market against entering into contracts for processing milk on its own behalf – Application of national competition law – Whether permissible

(Arts 28 and 29 EC)

4..

Community law – Principles – Equal treatment – Discrimination on grounds of nationality – Prohibition on a dairy cooperative in a powerful position on the market against entering into contracts for processing milk on its own behalf – Whether permissible

(Arts 12 EC and 34(2), second para., EC)

1.

Articles 32 to 38 EC, Regulation No 26 applying certain rules of competition to production of and trade in agricultural products and Regulation No 804/68 on the common organisation of the market in milk and milk products, as amended by Regulation No 1587/96, 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 national competition law to a milk producers' cooperative in a powerful position on the national market. Where the national competition authorities act in the sector governed by the common organisation of the market in milk and milk products, they are under an obligation to refrain from adopting any measure which might undermine or create exceptions to that common organisation. Measures taken by national competition authorities in the sector governed by the common organisation of the market in milk and milk products may not, in particular, produce effects which are such as to impede the working of the machinery provided for by that common organisation. However, the mere fact that the prices charged by a dairy cooperative were already lower than the target price for milk before those authorities intervened is not sufficient to render the measures taken by them in relation to that cooperative in application of national competition law unlawful under Community law. 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. Secondly, given that the maintenance of effective competition is one of the objectives of the common organisation of the market in milk and milk products, Article 3(1) of Regulation No 804/68, which provides that a target price for milk is to be fixed for the Community annually, cannot be interpreted as meaning that producers of milk have the right to seek to earn an income corresponding to the target price by any means, including those that may constitute abuses or be anti-competitive. Furthermore, such measures may not compromise the objectives of the common agricultural policy as set out in Article 33(1) EC. The national competition authorities are under an obligation to ensure that any contradictions between the various objectives laid down in Article 33 EC are reconciled where necessary, without giving any one of them so much weight as to render the achievement of the others impossible. see paras 63, 67, 80, 87-89, 91, 94, operative part 1

2.

The function of the target price for milk laid down in Article 3(1) of Regulation No 804/68 on the common organisation of the market in milk and milk products, as amended by Regulation No 1587/96, does not preclude the national competition authorities from using that price for the purposes of investigating the market power of an agricultural undertaking by comparing variations in actual prices with the target price. It follows from Article 3(2), read in the light of Article 33(1) EC, that the essential function of the target price is to define, at Community level, the desirable point of equilibrium between the objective of ensuring a fair standard of living for the agricultural community on the one hand, and that of ensuring that supplies reach consumers at reasonable prices on the other. It must be observed that for the national competition authorities to use the target price as an indicator when examining the power of an agricultural undertaking on the national market in no way interferes with the essential function of the target price. Nor, furthermore, is there any provision of Community law, whether primary or secondary, which prohibits the target price being used in that way. see paras 99-102, operative part 2

3.

In the context of the application of national competition law, the Treaty rules on the free movement of goods do not preclude the competent authorities of a Member State from prohibiting a dairy cooperative which enjoys market power from entering into contracts with undertakings, including undertakings established in other Member States, for the processing, on its behalf, of milk produced by its members. First of all, Article 28 EC 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. However, 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. Given that restrictive measures concerning goods which have been exported for the sole purpose of being reimported in order to circumvent a national rule do not constitute measures having equivalent effect to a quantitative restriction on imports within the meaning of Article 28 EC, the same must be true in relation to the export of goods followed by their reimport for the purpose of avoiding the application of measures adopted under national competition law, such as a prohibition on a dairy cooperative in a powerful position on the market against entering into contracts for processing milk on its own behalf. Secondly, Article 29 EC 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. However, that is not the case with regard to measures which come within national competition policy, are designed to limit anti-competitive practices engaged in by just one agricultural cooperative and apply indistinctly to processing contracts entered into with undertakings established in a Member State and those entered into with undertakings established in other Member States. see paras 113-116, 118-120, operative part 3

4.

Article 12 EC and the second subparagraph of Article 34(2) EC do not preclude the adoption of measures such as a prohibition on entering into contracts for the processing of milk on its own behalf imposed on a dairy cooperative which enjoys market power and exploits that position in a manner contrary to the public interest, even though large vertically-integrated dairy cooperatives are permitted to operate in other Member States. First, 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, the mere fact that there are vertically-integrated cooperatives in other Member States is not sufficient to establish that the adoption of those measures amounts to discrimination on grounds of nationality. Secondly, the second subparagraph of Article 34(2) EC, 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...