OPINION OF MR CAPOTORTI — CASE 95/80

OPINION OF MR ADVOCATE GENERAL CAPOTORTI DELIVERED ON 3 DECEMBER 1980 1

Mr President, terms of Article 1 (2) of Regulation No Members of the Court, 974/71 the Commission may lay down compensatory amounts as regards specific products covered by the common 1. By a judgment of 19 February 1980, organization of agricultural markets which is based on Article 177 of the EEC where intervention arrangements are Treaty, the Tribunal d'Instance of the provided for them, or, alternatively, the First Arrondissement of Paris asks the price of them depends on the price of Court to consider the validity of the other products for which intervention regulations "pursuant to which monetary arrangements are provided (leaving aside compensatory amounts are levied on the case of products which are not exports of Roquefort cheese from France covered by the common organization of to other countries, both Member States the market and are subject to specific and non-member countries". The rules pursuant to Article 235 of the question arises out of an action pending Treaty). Moreover, the power conferred before that court in which a number of on the Commission may only be producers and exporters of Roquefort exercised as regards products in which cheese are claiming reimbursement from trade is disturbed by monetary fluc­ the French customs authorities of sums tuations (Article 1 (3) of Regulation No which were paid by way of monetary 974/71 as amended by Regulation No compensatory amounts on exports, and 2746/72 of the Council of 19 December which the plaintiffs consider were unduly 1972). paid, between March 1976 and June 1979 (the period during which the system of compensatory amounts applied In the case with which the Court is to Roquefort cheese). The answer to the concerned there is no question but that question makes it necessary for the regu­ Roquefort, like any other cheese, is lations by means of which the covered by the common organization of Commission laid down that Roquefort the market in milk and milk products cheese should be subject to that system (Article 1 of Regulation No 804/68 of to be examined in the light of Regulation 27 June 1968) and that, on the other No 974/71 of the Council of 12 May hand, no intervention arrangements are 1971 on certain measures of conjunctural provided for it. The points in dispute are policy to be taken in agriculture therefore two in number, namely following the temporary widening of the whether the price of Roquefort is to be margins of fluctuation for the currencies held to depend on that of other products of certain Member States, that is to say, for which intervention arrangements are the legislative measure which created the provided and whether in 1976 there were system of monetary compensatory disturbances in the trade in Roquefort amounts and laid down its basic because of the fluctuations undergone by conditions. the French franc.

2. It is appropriate to recall at the 3. In regard to the first point, the outset what those conditions are. In Commission observes first that all

1 — Translated from the Italian.

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cheeses gain advantages of a general minimum price levels for cheese" nature from the common organization of (p. 1131). the market in milk products by benefiting from specific measures such as levies on imports, even though intervention prices were fixed only for two cheeses, Grana Padano and Parmigiano Reggiano. In the context of the common organization of the market That opinion was accepted by the Court. in question, the Commission perceives a In its judgment of 24 October 1973 in general relationship of dependence the Balkan case it in fact recognized (at between the prices of cheeses and those paragraph 39) the existence of a link of butter and powdered milk, two between the price of cheese on the one products for which intervention arrange­ hand and that of butter and skimmed- ments are provided. That relationship milk powder on the other hand, notably exists for all cheeses whether made from as regards threshold prices, by virtue of cow's or sheep's milk. Moreover, Regulations Nos 804/68 and 823/68 of Roquefort and "blue" cheeses made the Council of 27 and 28 June 1968, from cow's milk are interdependent as respectively, which contain provisions regards their selling prices since the price determining the groups of products and of Roquefort varies according to the special provisions for calculating variations in the prices of the other blue levies on milk and milk products. Then, cheeses which are in competition with it. more recently, the Court had another opportunity to attribute a broad interpre­ tation to the concept of dependence adopted in Article 1 (2) of Regulation No 974/71. It stated, in fact, in its judgment of 3 May 1978 in Case 131/77 Milac [1978] ECR 1041 that "the price of a product depends ... on the price of a product covered by intervention In support of the general relationship of arrangements under the common organi­ dependence which it asserts, the zation of agricultural markets, which is Commission recalls the observations governed by the common organization made by Mr Advocate General Roemer of the markets, if the former price fluc­ in his opinion delivered on 26 June 1973 tuates appreciably owing to the incidence in Case 5/73 Balkan-Import-Export of variations in the latter price" GmbH [1973] ECR 1091. What was (paragraph 5 of the decision). The two involved then was an examination of the precedents appear to me to be decisive. dependence of the prices of cheese (and in particular of a Bulgarian cheese made from sheep's milk to which compensa­ tory amounts had been applied on import) ön intervention prices for butter and skimmed-milk powder. The Advocate General stated inter alia: "For However, the producers of Roquefort even if there is no close connexion maintain that that cheese, in contrast to between the price of cheese and the the cheese, also made from sheep's milk, intervention prices mentioned, yet one to which the Balkan judgment related, cannot accept that there is no connexion has special characteristics which take it at all. Indeed the intervention prices in out of competition with other cheeses respect of butter and skimmed-milk and the influence of the Community powder could at least guarantee intervention machinery. The judgment of

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the Court making the reference itself that of cow's milk, is determined by also alludes to the specific characteristics the production of Roquefort, which of Roquefort cheese which are said to constitutes its principal outlet. If that is justify the doubt concerning the validity true, the variations in the price of of the Community regulations by which Roquefort must be regarded as produced payment of monetary compensatory by factors other than the price of sheep's amounts on export was laid down. milk and precisely by the trends in the market for blue cheeses produced from cow's milk. In fact, since the production It is in fact the case that Roquefort may of Roquefort is much more limited than be distinguished from other analogous that of similar cheeses made from cow's products because it is made from sheep's milk, it is necessary to hold that it is the milk. But that does not alter the fact that prices of the latter which influence the it belongs to the family oft "blue" cheeses price of Roquefort and not vice versa. (which are also defined: as "blue-veined cheese") and that, from the point of view of the consumer, its belonging to that It should be said finally that Roquefort, family constitutes its primary and like the other blue cheeses of the fundamental characteristic. It thus does Community, benefits at least indirectly not appear to me to be correct that the from the protection which flows from product in question is removed from the system of levies which are applicable competition because it is unique. In the to all blue-veined cheeses. In particular, experience of the average consumer, the it is protected against imports into the difference in taste compared with other Community of such cheeses coming from blue cheeses is. not such as to make the countries of Eastern Europe. Roquefort irreplaceable. I therefore share the Commission's view that, in the same way as other cheeses, Then, in regard to prices, it is well Roquefort must be regarded as part of known that Roquefort,, just because it the market in milk products as a whole is produced from sheep's milk, is and that the price of Roquefort is traditionally more expensive (by some included amongst those prices which 30% at least), than other blue cheeses have a relationship of dependence on the made from cow's milk. But what is of price of products subject to intervention interest to us is the constant relationship arrangements in the framework of the between the prices of the one and the common organization of the market in others. The table produced by the milk (butter and skimmed-milk powder). Commission, which has not been subject to any challenge in the course of the procedure, indicates that in the period between 1974 and 1978 the price of 4. The other point which must be Roquefort fluctuated, both up and down, clarified is whether there was in 1976 a following a curve parallel to that of risk of disturbance in trade in the similar cheeses made from cow's milk, product in question as a consequence of amongst which Bleu des Causses and fluctuations in the exchange rates. In that Bleu d'Auvergne are the best known in regard, it must be borne in mind at the France. outset that under Article 6 of Regulation No 974/71 it is for the Commission, which engages in consultations in The Roquefort producers have submitted accordance with the so-called Manage­ that in France the price level for sheep's ment Committee Procedure, to establish milk, which is significantly higher than whether there is a risk of disturbances of

338 DERVIEU-DELAHAIS v DIRECTEUR GÉNÉRAL DES DOUANES ET DROITS INDIRECTS the kind indicated. As the Court have already been set forth by Mr observed in the judgment which it Advocate General Roemer in his delivered on 22 January 1976 in Case aforementioned opinion in the first 55/75, the second Balkan-Import case Balkan case. He observed indeed that the [1976] ECR 19 (especially at paragraphs Commission could not regard itself as 8 and 11 of the decision), where the bound to assess the expediency of assessment of a complex economic exceptions for individual products when situation is involved, the Commission introducing monetary compensatory and the Management Committee enjoy a amounts on a given category of goods wide measure of discretion. In reviewing (cheese) since that would have entailed the legality of the exercise of such the necessity of making the products in discretion, the Court must confine itself question subject to special tests which to examining whether it contains a would constitute a considerable burden manifest error or constitutes a misuse of upon the administration ([1973] ECR at power or whether the authority did not p. 1133). In the same context, Mr clearly exceed the bounds of its Advocate General Roemer added that at discretion. (This view was repeated in the time of the fixing of compensatory the judgment of 25 May 1978 in Case amounts by means of Commission regu­ 136/77 Firma A. Racke v Hauptzollamt lations, "a correct exercise of discretion Mainz [1978] ECR 1245.) The Court required no more than a summary excluded in particular the Commission's prognosis of the future development of a being obliged to decide case by case, in number of products". The Advocate respect of each product individually, General stated finally that, at most, whether there is a risk of disturbance special treatment of individual products and interpreted the provisions of the final paragraph of Article 1 of Regu­ could be considered following an express lation No 974/71 as meaning that the request coupled with precise grounds. Commission may in this respect carry out The Court accepted that point of view general evaluations relating to entire when it stated — in paragraph 41 of the groups of products. Therefore, even decision in the said judgment of 24 were it demonstrated, subsequently .to October 1973 — that "the necessarily the fixing of compensatory amounts on a general and flat-rate nature of the given product, that the importing or compensatory amounts system and the exporting of it could not cause disturb­ need to adapt [it] quickly to constant ances in trade in agricultural products in fluctuations in currency justify the the Community, it would not follow Commission's having considered disturb­ from that alone that the Commission had ances only in relation to groups of made a manifest error or clearly products ...". exceeded the bounds of its discretion in holding that in the absence of compensatory amounts trade in the product in question would have been disturbed (see paragraph 11 of the decision in the above-mentioned judgment in Case 55/75). In the present case, the tests adopted in the earlier decisions of this Court lead to a precise conclusion. Given that, at the time of introducing the compensatory amounts in question, neither interested parties nor any of the governments represented on the relevant Management The considerations of a practical nature Committee were concerned to bring to which speak in favour of that approach the Commission's attention the alleged

339 OPINION OF MR CAPOTORTI — CASE 95/80

special position of Roquefort cheese or Commission Regulation No 777/79 of to ask that it be exempted from the 20 April 1979, which came into force on application of monetary compensatory 4 June 1979, abolished compensatory amounts the Commission was lawfully amounts on Roquefort cheese. That entitled to subject Roquefort to the measure falls within the framework of general treatment extended to almost all the efforts which the Commission is other cheeses. making progressively to eliminate compensatory amounts and had been pressed for in two questions presented by a Member of the European Parliament on 2 June and 4 December 1978, which were accompanied by a request from the This conclusion of a general nature producers of Roquefort dated 15 appears to be reinforced when the November 1978. In all of those ap­ respective positions of the principal proaches stress was placed above all on French blue cheeses are considered from the risks which compensatory amounts the point of view of their ability to presented to exports of Roquefort to the compete. It should not be overlooked United States, which represents the that in the period to which reference principal outlet abroad for this product. must be made the monetary The Commission considered that compensatory amounts applied in France Roquefort did not benefit from export were fairly high (some 18 to 20%). On refunds and that, moreover, the two the other hand, according to the French cheeses which constitute Commission's statements, the difference Roquefort's direct competitors are in between the price of Roquefort and that practice not exported to the United of its most immediate competitor, Bleu States market. In addition, the des Causses, was some 30%. Accord­ Commission bore in mind that at the ingly, any exemption of Roquefort from beginning of 1979 the compensatory compensatory amounts would have amounts on Roquefort and its allowed the producers concerned to align competitors had fallen to 5% as opposed the price of their product considerably to '18 to 20% in 1977 and 1978. nearer to that of other French blue Therefore, their withdrawal for the cheeses the quality of which was less benefit of Roquefort could no longer highly esteemed and thereby put their entail a serious risk of disturbance in product in a privileged competitive intra-Community trade in blue-veined position on both the French and export cheese. markets. That would have seriously distorted conditions of competition and reflected adversely on the balance of trade-flows in the agricultural products in question, jeopardizing the proper functioning of the common organization of the market in milk and milk products The abolition of compensatory amounts in the blue-veined cheese sector. on Roquefort was therefore decided on the basis of further factors of assessment. That makes it impossible to accuse the Commission of having adopted a position which contradicts its previous decision to apply such amounts to Roquefort at the time of the events 5. What I have stated hitherto is not under discussion in the context of the proved wrong by the fact that case pending before the French court.

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6. The considerations which I have set forth lead me to hold that exam­ ination of the question has not revealed any grounds upon which the Commission regulations which provided for monetary compensatory amounts for Roquefort cheese during the period between 25 March 1976 and 3 June 1979 were invalid. I am therefore of the opinion that the Court should answer to that effect the question submitted for a preliminary ruling by the Tribunal d'Instance of the First Arrondissement of Paris and contained in its judgment of 19 February 1980.

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