Republic of Austria v Scheucher-Fleisch GmbH and Others.

• Jurisdiction: European Union
• Celex Number: 62010CC0047
• ECLI: ECLI:EU:C:2011:373
• Court: Court of Justice (European Union)
• Docket Number: C-47/10
• Date: 09 June 2011
• Procedure Type: Recurso de anulación

OPINION OF ADVOCATE GENERAL

BOT

delivered on 9 June 2011 (1)

Case C‑47/10 P

Republic of Austria

v

Scheucher-Fleisch GmbH and Others

(Appeal – State aid awarded by the Republic of Austria in the organic farming sector – Commission decision not to raise objections – Action for annulment – Admissibility – Rights of ‘interested parties’ – Conditions for initiating a formal investigation – Concept of ‘serious difficulties’ – Scope of the General Court’s jurisdiction to review legality)

1. This case is another illustration of the problems associated with applying the case-law of the Court of Justice concerning the rights of complainants in the procedure for reviewing State aid. One of the issues it raises concerns the extent of the prerogatives enjoyed by the General Court of the European Union in interpreting the pleas raised by a party concerned where, in support of its action, that party puts forward pleas which are intended to safeguard its procedural rights as well as pleas seeking to call into question the merits of the decision by the European Commission. (2)

2. This case also provides the Court with the opportunity to draw attention to the discretion enjoyed by the Commission when it encounters serious difficulties in examining the compatibility of the aid and the scope of the related review of legality.

3. By judgment of 18 November 2009 in Scheucher-Fleisch and Others v Commission, (3) the Court of First Instance (now ‘the General Court’) upheld the action brought by Scheucher-Fleisch GmbH and other undertakings (4) (‘Scheucher-Fleisch and Others’) as being partially admissible and annulled Commission Decision C(2004) 2037 final of 30 June 2004 on State aid NN 34A/2000 concerning the quality programmes and labels AMA-Biozeichen and AMA-Gütesiegel in Austria. (5) The General Court held that the assessment of the compatibility with the common market of the aid in question in actual fact raised serious difficulties which should have led the Commission to initiate the formal investigation procedure provided for under Article 88(2) EC. The Republic of Austria and the Commission each dispute that analysis, the latter lodging a cross-appeal.

4. In this Opinion, I shall be proposing that the Court dismiss these appeals.

I – Relevant European Union legislation

5. First of all, I shall set out the relevant provisions of the EC Treaty and then indicate the applicable provisions of Regulation (EC) No 659/1999, (6) which is the regulation implementing Articles 87 EC and 88 EC. I shall also indicate the relevant points in the Guidelines for State aid for advertising.

A –The EC Treaty

6. Under Article 87 EC, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort intra‑Community competition is, in principle, prohibited, subject to the exceptions listed in Article 87(2) and (3) EC.

7. Article 87(3) EC lists the aid which may be considered to be compatible with the common market. This includes aid to facilitate the development of certain economic activities or of certain economic areas.

8. To ensure implementation of those provisions, the Treaty – in particular, Article 88 thereof – establishes a procedure for the reviewing and prior approval of State aid, in which the Commission plays the central role. That review procedure comprises two stages.

9. The preliminary examination of the aid is provided for in Article 88(3) EC. (7) Under that provision, Member States are required to notify to the Commission their plans to grant or alter aid and are not to put such plans into effect until the Commission has reached a decision. That stage is intended merely to allow the Commission to form a prima facie opinion on the partial or complete conformity of the aid in question. (8)

10. If the Commission has doubts as to the conformity of the aid with the common market, it must initiate the formal investigation procedure under Article 88(2) EC. (9) In that context, the Commission must request that the parties concerned submit their comments so that it can be fully informed of all the facts of the case.(10) If, following that investigation, the Commission finds that the aid in question is not compatible with the common market in the light of Article 87 EC, or that such aid is being misused, it is to decide that the Member State concerned must abolish or alter such aid within a period of time to be determined by the Commission.

B – Regulation No 659/1999

11. The Commission’s exercise of the powers conferred on it by the Treaty is a practice that has been codified by Regulation No 659/1999. That regulation lays down rules which have been drawn up in accordance with the case-law of the Court of Justice. (11)

12. Accordingly, Article 1(h) of Regulation No 659/1999 reproduces, with almost identical wording, the definition that the Court gave to the concept of ‘parties concerned’ (or ‘interested parties’) in the judgment of 14 November 1984 in Intermills v Commission, (12) as consistently confirmed by the Court since then. (13) Under that provision, an ‘interested party’ is to mean ‘any Member State and any person, undertaking or association of undertakings whose interests might be affected by the granting of aid, in particular the beneficiary of the aid, competing undertakings and trade associations.’

13.Article 4 of Regulation No 659/1999 concerns the preliminary examination which the Commission must carry out when a Member State notifies to it plans to grant or to alter aid.

14. Under that provision, the Commission may adopt three types of decision: (i) it may decide that the notified measure does not constitute aid; (ii) it may find that no doubts are raised as to the compatibility with the common market of the notified measure and decide not to raise objections to the grant of the aid in question; and (iii) where doubts are raised as to the compatibility with the common market of the notified measure, it may decide to initiate the formal investigation procedure under Article 88(2) EC.

15. In that last case, the Commission must, in accordance with Article 6(1) of Regulation No 659/1999, call upon the Member State concerned and upon other interested parties to submit comments within a period prescribed by it.

16.Article 20 of Regulation No 659/1999 relates specifically to the rights of interested parties. Article 20(1) states that any interested party may submit comments following a Commission decision to initiate the formal investigation procedure. Article 20(2) further states that any interested party may inform the Commission of any alleged unlawful aid and any alleged misuse of aid.

C – Guidelines for State aid for advertising

17. The Community Guidelines for State aid for advertising of products listed in Annex I to the EC Treaty and of certain non-Annex I products (14) encompass the public intervention measures by which the national authorities help to finance the promotion and advertising of agricultural products either through direct financial contributions from their budgets or using government resources including parafiscal charges or compulsory contributions. Provided that certain conditions are met, the Commission takes a favourable view of such activities, since they facilitate the development of economic activities in the agricultural sector and the achievement of the objectives of the common agricultural policy. (15)

18. In accordance with paragraph 10 of the Guidelines for State aid for advertising, ‘[t]he general prohibition on State aid contained in Article 87(1) [EC] is only applicable if the publicly funded advertising distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods. Where such publicly funded advertising activities refer to the national or regional origin of the products concerned, the advertising clearly favours certain products and therefore Article 87(1) may apply.’

19. Paragraphs 49 and 50 of those guidelines read as follows:

‘49. National quality control schemes should be dependent solely on the existence of intrinsic objective characteristics … and not dependent on the origin of the products or the place of production. Irrespective of whether the quality control schemes are compulsory or voluntary, access to such schemes must therefore be granted to all products produced in the Community, irrespective of their origin, provided that they meet the conditions laid down. …

50. Where the scheme is restricted to products of a particular origin …, the scheme itself is contrary to the Treaty, and it is self-evident that the Commission cannot consider aid for the advertising of such a scheme to be compatible with the common market. …’

20. It follows from paragraph 46 of those guidelines that the origin of the products must be understood to mean ‘national, regional or local origin’.

II – Facts

21. The facts, as stated in the judgment under appeal, may be summarised as follows.

22. In 1992, the Republic of Austria adopted the Federal Law on the establishment of the market-regulating agency ‘Agrarmarkt Austria’ (Bundesgesetz über die Errichtung der Marktordnungsstelle ‘Agrarmarkt Austria’), (16) Paragraph 2(1) of which created a public-law corporation, Agrarmarkt Austria (‘AMA’). AMA’s function is to promote agricultural marketing. To that end, it is responsible for the collection of contributions which must, in particular, under Paragraph 21c(1)(3) of the AMA-Gesetz 1992, be paid for the slaughter of animals.

23. The aim of the aid in question is to encourage the production, treatment, processing and sale of agricultural products in Austria by means of the AMA bio-label and AMA quality label (‘the AMA labels’).

24. As Austrian undertakings specialising in the slaughter and butchering of animals, Scheucher-Fleisch and Others must pay contributions to AMA. However, their products are not entitled to the AMA...