A. H. Kuipers v Productschap Zuivel.

• Jurisdiction: European Union
• Celex Number: 62003CC0283
• ECLI: ECLI:EU:C:2004:820
• Docket Number: C-283/03
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Date: 16 December 2004

OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 16 December 2004 (1)

Case C-283/03

A. H. Kuipers

(Request for a preliminary ruling from the College van Beroep voor het bedrijfsleven (Netherlands))

(Milk and milk products – National legislation on increasing or reducing the price paid for raw milk according to quality – Regulation (EEC) No 804/68 – Prohibition of State aids (Articles 87 EC and 88 EC))

I – Introduction

1. There are in the Netherlands rules on prices under which dairies impose on producers, that is to say on the relevant farmers, price deductions for raw milk of inferior quality. At the same time these price deductions are used to fund moderate price supplements for those producers who, over a specific period, have delivered to the dairies raw milk of unblemished quality.

2. In the present case these rules on prices are being assessed in the light of Community law. Mr Kuipers, whose raw milk was, in some cases, classified as being of inferior quality by the dairies to which it was delivered, disputes the price deductions made by these dairies. He considers that such deductions are contrary to Community law.

3. In this connection the Netherlands College van Beroep voor het bedrijfsleven (Administrative Court for Trade and Industry) (also ‘the national court’) asks for the Court’s assistance in interpreting the prohibition of aids laid down in Community law (Article 87(1) EC), the prohibition on implementation laid down in the law on aids (Article 88(3) EC), and Regulation (EEC) No 804/68 of the Council of 27 June 1968 on the common organisation of the market in milk and milk products (‘Regulation No 804/68’). (2)

II – Relevant legislation

A – Community law

4. The relevant legislation in this case comprises Article 36(1) EC, Article 87(1) EC, Article 88(3) EC, and Regulation No 804/68. (3)

5. Under Article 36(1) EC, the provisions of the Chapter relating to rules on competition are to apply to production of and trade in agricultural products only to the extent determined by the Council within the framework of Article 37(2) and (3) EC and in accordance with the procedure laid down therein, account being taken of the objectives set out in Article 33 EC.

6. Article 87(1) EC reads as follows:

‘Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, insofar as it affects trade between Member States, be incompatible with the common market.’

7. Article 88(3) EC stipulates as follows:

‘The Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. If it considers that any such plan is not compatible with the common market having regard to Article 87, it shall without delay initiate the procedure provided for in paragraph 2. The Member State concerned shall not put its proposed measures into effect until this procedure has resulted in a final decision.’

8. Articles 23 and 24 of Regulation No 804/68 are worded as follows: (4)

‘Article 23

Save as otherwise provided in this Regulation, Articles 92 to 94 of the Treaty shall apply to the production of and trade in the products listed in Article 1.

Article 24

1. Subject to the provisions of Article 92(2) of the Treaty, aids the amount of which is fixed on the basis of the price or quantity of products listed in Article 1 shall be prohibited.

2. National measures permitting equalisation between the prices of products listed in Article 1 shall also be prohibited.’

The goods listed in Article 1 of Regulation No 804/68, to which Article 24(2) thereof refers, are in particular milk, cream, butter, cheese, curds, lactose and lactose syrup.

9. The following overall explanation is provided in the 12th recital in the preamble to Regulation No 804/68:

‘Whereas the establishment of a single market based on a common price system would be jeopardised by the granting of certain aids; whereas, therefore, the provisions of the Treaty which allow the assessment of aids granted by Member States and the prohibition of those which are incompatible with the common market should be made to apply to milk and milk products; … .’

10. Reference should also be made to Article 3 of Regulation No 804/68 which contains the following rules on fixing the price for milk:

‘Article 3

1. Before 1 August of each year a target price for milk shall be fixed for the Community in respect of the milk year beginning in the following calendar year.

...

2. The target price shall be that price which it is aimed to obtain for the aggregate of producers’ milk sales, on the Community market and on external markets, during the milk year.

3. The target price shall be fixed for milk containing 3.7% fat, delivered to dairy. …’ (5)

11. Furthermore, at the time of the facts of the main proceedings the second subparagraph of Article 5(1) stipulated as follows: (6)

‘Milk used for making ... drinking milk shall have been subject to a system of payment varying according to quality. This system must guarantee that milk used as raw material for making drinking milk reaches certain standards of quality, including composition.’

B – National law

12. As regards national Netherlands law, particular reference should be made to the Law on the Quality of Agricultural Products (Landbouwkwaliteitswet: ‘the Law on Agricultural Product Quality’), (7) the Decree on the Quality of Agricultural Products: raw milk and dairy production (Landbouwkwaliteitsbesluit rauwe melk en zuivelbereiding: ‘Netherlands Basic Decree on Milk’), (8) and the Implementing Regulation of the Secretary of State for Agriculture, Nature Management and Fisheries on the Quality of Agricultural Products: payment for farm milk according to quality (Landbouwkwaliteitsregeling uitbetaling van boerderijmelk naar kwaliteit: ‘Netherlands Implementing Regulation on Milk’). (9) There is also a byelaw and a decision adopted by the Productschap Zuivel (Milk and Milk Products Board), the defendant in the main proceedings.

13. Essentially, the following emerges from the extremely complex interaction between all these provisions:

14. Article 2(1) of the Law on Agricultural Product Quality, in conjunction with Article 3(a) of the Netherlands Basic Decree on Milk, grants authority to lay down provisions on the quality of [agricultural] goods, namely raw milk. Such provisions may provide for inter alia payment according to the quality of products.

15. Article 2(2)(f) of the Law on Agricultural Product Quality, in conjunction with Article 3(a) and (c) of the Netherlands Basic Decree on Milk, permits in respect of raw milk the introduction of a system of price reductions and price supplements depending on the quality of the product.

16. Article 8 of the Law on Agricultural Product Quality enables private-law legal persons to be entrusted with supervisory functions and also with the inspection of agricultural products and implementation of the provisions of law concerning payment according to the quality of products. Under Article 3(1)(c) and Article 7 of the Netherlands Basic Decree on Milk this competence for the dairy farming is essentially transferred to the Stichting Centraal Orgaan voor Kwaliteitsaangelegenheden in de Zuivel (‘the COKZ’) (10) based in Leusden.

17. Article 2 of the Netherlands Implementing Regulation on Milk in turn authorises the competent board – the Productschap Zuivel – to lay down by byelaw rules relating to payment according to quality for farm milk insofar as concerns inter alia quality testing, the withholding of a price deduction and payment of a quality supplement. Having regard to Article 2 of the Implementing Regulation on Milk, the Productschap Zuivel adopted the Byelaw on the Quality of Agricultural Products 1994: Payment for farm milk according to quality (Landbouwkwaliteitsverordening 1994, Uitbetaling van boerderijmelk naar kwaliteit: ‘1994 Byelaw’), (11) which reads as follows, as far as is relevant:

‘Article 2

1. The recipient of farm milk shall pay the dairy farmers concerned for that milk according to the quality, having due regard to the provisions set out in or pursuant to this byelaw.

...

3. The recipient of farm milk shall,

(a) have the quality of farm milk received from dairy farmers determined, and

(b) register the result of the quality testing referred to at (a), having due regard to the provisions set out in or pursuant to this byelaw.

…

Article 10

1. An assessment shall be attributed by the milk monitoring station to the results of the quality testing, in accordance with a system comprising standards, deduction points and other deductions to be imposed, adopted by the chairman after hearing the views of the COKZ.

…

Article 11

1. The recipients of farm milk shall, in respect of a fixed period of twelve weeks, pay a quality supplement to dairy farmers who in the period in question are assigned in total not more than 1 deduction point and whose milk is found not to contain any substance which inhibits bacteria growth and is not naturally present in milk. ...

2. The amount of the quality supplement shall be fixed per 100 kg of milk for each region determined by the chairman, after hearing the views of the COKZ, in such a way that the total amount of quality supplements per period is the same or approximately the same as the total amount of deductions withheld.

Article 12

For each sampling period, the recipient of farm milk shall withhold, on the basis of the total number of deduction points assigned, a deduction to be determined by the chairman after hearing the views of the COKZ, in respect of the total quantity of farm milk delivered in that period by the dairy farmer concerned, as well as any deduction(s) in respect of individual deliveries on account of the presence of...