Important legal notice
Opinion of Mr Advocate General Lenz delivered on 10 January 1990. - Société française des Biscuits Delacre e.a. v Commission of the European Communities. - Agriculture - Aid for butter for use in the manufacture of pastry products - Tendering procedure - Commission decision reducing the level of aid - Action for annulment. - Case C-350/88.
European Court reports 1990 Page I-00395
Opinion of the Advocate-General
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Mr President,
Members of the Court,
A - Facts
1 . The case in which I now deliver my Opinion is an application for annulment under Article 173 of the EEC Treaty made by three French companies who manufacture pastry products . They are : ( 1 ) Société francaise des Biscuits Delacre, a public limited company, whose registered office is at Nieppe ( France ), ( 2 ) Etablissements J . Le Scao, a public limited liability company, whose registered office is at Briec-de-l' Odet ( France ), and ( 3 ) Biscuiterie de l' Abbaye, a private limited liability company, whose registered office is at Lonlay-l' Abbaye ( France ) ( hereinafter called "the applicants ").
2 . The applicants took part in a standing invitation to tender for the grant of aid of butter under the provisions of Regulation ( EEC ) No 570/88 of the Commission, of 16 February 1988, on the sale of butter at reduced prices and the granting of aid for butter and concentrated butter for use in the manufacture of pastry products, ice-cream and other foodstuffs . ( 1 )
3 . By a decision of 30 September 1988 addressed to the Member States, the Commission fixed a maximum amount of aid for tender No 8, with the result that the applicants' s tenders were not accepted . ( 2 ) The maximum aid allowable according to the decision was less than the previous tenders and at the same time less than the rates of aid stated by the applicants in their tenders . From tender No 4 ( 3 ) in July to the contested tender No 8 in September 1988 there was a continuous decline in the maximum amount of aid . From ECU 167 per 100 kg of butter aid fell to ECU 166, 163, 159 and then to 154 in September 1988 and even by another ECU 4 to ECU 150 on tender No 9 .
4 . As a result of a reduction in butter stocks, the whole price structure of the butter market started to move . The minimum prices for the sale of butter from public stocks continually rose in the second half of 1988 . Likewise, a considerable increase in the market price of butter was to be observed .
5 . Because the market price rose and at the same time the aid for the purchase of market butter fell, the cost of purchasing butter increased by some 50 %. The applicants who regularly met their needs with market butter were affected by that trend .
6 . The applicants take the view that the Commission acted unlawfully in reducing butter aid at relatively short notice without previously warning the manufacturers . They claim that the decision of 30 September 1988 is unlawful for several reasons . First, there was an infringement of essential procedural requirements in so far as there was no proper statement of reasons for the decision within the meaning of Article 190 of the EEC Treaty . It ought to have contained the opinion of the Management Committee and the reasons for the reduction of the amount of aid . In addition, there was an infringement of the general principles of Community law, notably the principle of proportionality, the protection of legitimate expectations and the principle of non-discrimination .
7 . The applicants claim that the Court should :
( i ) declare the application admissible;
( ii ) declare the contested decision void;
( iii ) order the Commission to pay the costs .
8 . The Commission contends that the Court should :
( i ) dismiss the application as unfounded;
( ii ) order the applicants to pay the costs .
9 . Reference is made to the Report for the Hearing for the detailed facts and the arguments of the parties . The facts are repeated hereinafter only in so far as it is necessary for the reasoning of the Court .
B - Opinion
I - Admissibility
10 . The Court must consider the admissibility of the application of its own motion . ( 4 ) The difficulty is that the contested decision was not addressed to the applicants but to the Member States . Under the second paragraph of Article 173 of the EEC Treaty, any natural or legal person may institute proceedings against a decision which, although addressed to another person, is of direct and individual concern to it .
11 . In the standing invitation to tender procedure, the intervention agencies function to some extent as an intermediary . They collect the various tenders made during a particular period and forward them to the Commission . Having regard to the tenders from the whole Community the Commission then fixes a minimum price for the sale of intervention butter and a maximum amount of aid for the purchase of market butter . The rates are addressed to the Member States as a decision and bind the intervention agencies in relation to the particular tender .
12 . The decision whether a tenderer' s offer is accepted or whether he is granted aid is in fact taken by the Commission, for the intervention agencies have no discretion to depart from the price fixed by the Commission . The intervention agencies' notice to the tenderers that they have not been awarded the particular tender is a binding decision in which the intervention agency has no discretion .
13 . Thus the contested decision of 30 September 1988 alone determined that the applicants' tender was not accepted . in that way the Commission' s decision, although formally addressed to the Member States and through them to the intervention agencies, directly determined whether any offer made in relation to tender No 8 was accepted or rejected . Since in fact the invitation to tender covered the whole Community and was decided upon by the Commission without the intervention agencies being able to intervene under the procedure and influence the decision, it is of direct and individual concern to the applicants . ( 5 ) It is individual because it was individualized by participation in the invitation to tender by the making of an offer . The application is therefore admissible .
14 . That result is supported by the fact that the Commission has raised no objection to admissibility in the proceedings .
II - Merits
( 1 ) Failure to state reasons as required by Article 190 of the EEC Treaty
15 . In the applicants' view, the contested decision does not satisfy the requirement to state reasons laid down by Article 190 of the EEC Treaty because, on the one hand, it does not refer to the opinion of the Management Committee and, on the other, gives no reasons for the change in the amount of aid .
16 . Article 18 of Regulation No 570/88 governs the procedure for fixing the minimum sale price and the maximum amount of aid . Reference is made to Article 30 of Regulation ( EEC ) No 804/68, ( 6 ) which governs the management committee procedure .
17 . The applicants are right in claiming that the prescribed procedure is mandatory . It may be queried whether in the statement of reasons of the relevant decision the various stages of the course of the procedure must be set out or whether a simple reference to the relevant procedural rules is sufficient . The scope of the obligation to state reasons for a decision cannot be defined in the abstract, for it depends on the substance and scope of the decision .
18 . It is true that the Court has consistently held ( 7 ) that the statement of grounds must disclose in a clear and unequivocal fashion the reasoning followed by the Community authority which adopted the measure in question in such a way as to make the persons concerned aware of the reasons for the measure and to enable the Court to exercise its supervisory jurisdiction .
19 . In actually assessing contested decisions the Court has always taken into account the legal context and scope of the decision . ( 8 ) In the Court' s view, it is thus not necessary for all the factually or legally relevant factors to be referred to in the statement of reasons . A statement of grounds must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question . ( 9 )
20 . If the contested decision is considered in the general context of the rules for reducing the butter mountain and in particular Regulation No 570/88, then it is clear that the setting of the maximum rates of aid and minimum prices is a constantly repeated similar procedure and the decisions do not essentially differ from one another either in the manner in which they are adopted or in their substance .
21 . Moreover, the decisions depend upon factual circumstances over which the authority taking the decision has no control . Once all the tenders have been lodged in respect of a particular invitation and after considering stocks, market price and market trend, the Commission reaches its decision . The factors determining a decision are so limited that reference to the relevant legal basis and context must generally be sufficient statement of reasons .
22 . ( a ) The specific complaint that there is no reference to the opinion of the Management Committee in the decision is unfounded, for in the decision of 30 September 1988, ( 10 ) as notified to the permanent representation for France, it is expressly set out in the statement of reasons : "considérant que le comité de gestion du lait et des produits laitiers n' a pas émis d' avis dans les délais impartis par son président ...".
23 . The whole statement of reasons is not, however, contained in the publication of the results of the decision in Official Journal 1988, C 259 . The abridged form of publication could however lead to the unlawfulness of the decision only if publication were necessary for the decision' s taking of effect and thus the form adopted there were decisive .
24 . Even if it does produce direct effects for the applicants, the contested decision is, however, addressed to the Member States . Under the second paragraph of Article 191 of the EEC Treaty, it is therefore effective upon notification . Publication is only for the purpose of general information, since tenderers responding to an invitation to tender are directly informed by the intervention agency of the result of their tenders .
25 . The abridged publication is, moreover, based on a Commission notice, ( 11 ) which announced that the purely declaratory publications would be simplified . In view of the similarity of form already referred to and the frequency of the decisions, that seems altogether expedient .
26 . Admittedly, the position of the defence of the tenderers is unsatisfactory in that they do not dispose of the full statement of reasons immediately after the decisions have been taken . That result is a disadvantage which to some extent has to be accepted, for it arises only from the fact that the tenderers are challenging a decision which has not been addressed to them . A limit must, however, be placed on that factual disadvantage once the tenderers' rights of defence are adversely affected .
27 . The possibility of action under the second paragraph of Article 173 of the EEC Treaty requires that access to a decision which is addressed to a third party but which directly and individually affects the person concerned must be possible, for otherwise effective legal protection will be frustrated . Tenderers must therefore, if necessary upon inquiry, be placed in a position in which they may have full knowledge of the decision which affects them .
28 . The statement in the proceedings that the tenderers could obtain further information does not completely remove the misgivings, for a request for information must be balanced by an obligation to inform in order to satisfy the requirements of legal protection . The conduct described in the proceedings, according to which the applicants' request to the French intervention agency Onilait for information remained unanswered, is unsatisfactory from the point of view of judicial protection .
29 . Nevertheless, that procedural defect does not lead to the unlawfulness of the decision, for it is clear that the alleged failure to state reasons in the contested decision, in so far as the opinion of the Management Committee is concerned, does not exist .
30 . ( b ) In so far as the complaint of insufficient statement of reasons is based on the fact that no explanations were given for the reduction in the maximum amount of aid, the applicant' s submission cannot succeed . Adjustment of minimum prices and maximum rates is inherent in the system . ( 12 ) The standing invitation to tender, which leads to roughly fortnightly individual invitations, is intended to ensure a flexible reaction to the market situation, stocks and tenders lodged . The changing nature of the prices laid down is so inherent in the system that it requires no special statement of reasons .
( 2 ) Principle of legitimate expectations
31 . The applicants are of the opinion that there was a special obligation to state reasons because the prices fixed by the decision of 30 September 1988 represented a departure from the previous long-standing practice .
32 . That would be true only if tenderers could have a legitimate expectation in the retention of a rate of aid reached at any given moment . ( 13 )
33 . As already pointed out, it is intended that the levels fixed should vary . Otherwise, a single decision could be adopted which would be necessary for a longer period and the manufacturers in such a case could rely on the rate of aid remaining the same .
34 . The system of minimum prices and aid provided for by Regulation No 570/88 is, however, by definition transitory and is primarily intended to reduce the large butter stocks in the Community . In that context the system of aid for market butter is intended to counteract an increase in stocks . The reduction in costs of supply for processors of butter is an induced effect which, although intended, is not the object of the system .
35 . In so far as the adoption of Regulation No 570/88 gave grounds for an expectation that the measures to encourage sales would continue, that expectation was not disappointed since the system of aid was maintained as previously . Only the amount of aid was adjusted .
36 . The considerable increase in acquisition costs is due only partially to the adjustment of aid . The increase in the market price was at least just as significant . The Commission has, however, no direct influence on that development so that it cannot be held responsible for it .
37 . Nor is the Commission under any duty to ensure that the costs of supplies remain the same . In so far as the considerable increase in the costs of supplies appears disproportionate, it is due to the accumulation of various factors of which the reduction in the rate of aid is only one . There could be no expectation deserving protection that purchase costs would remain the same and the Commission should be responsible for ensuring that they did so . The advantages which the applicants had derived over a long period from the system of measures to encourage sales are not accompanied by any protection in law in the form of vested rights .
38 . Finally, no expectation could be based on Regulation ( EEC ) No 3206/88 . ( 14 ) That regulation merely gave the Member States the possibility of granting a consumption aid for butter . Only private consumers are potential beneficiaries so that the applicants could under no circumstances have benefited from that regulation .
( 3 ) Principle of proportionality
39 . To determine whether the decision of 30 September 1988 was proportionate, the desired aim must be considered in the light of the means adopted . In the words of the regulation ( second recital in the preamble ), the aim of the rule is defined as follows :
"whereas the butter market in the Community is encumbered by heavy stocks bought in ...; whereas all the butter corresponding to these stocks cannot be disposed of in the normal way; whereas Council Regulation ( EEC ) No 1723/81 ... lays down general rules on measures intended to maintain the level of the use of market butter by certain classes of consumer and undertakings; whereas, in both cases, the sale of butter from stock at reduced prices or the introduction of aids reducing market butter prices to a level comparable with that charged for butter from stock, in favour of certain Community processing firms with a view to the manufacture of pastry products, ice-cream or other foodstuffs, should help to promote the disposal and use of butter ".
40 . The main aim pursued is thus the sale of butter, whereby the Community to a certain extent uses the forces which in any event use butter and supports them economically . However, butter stocks declined considerably in the Community in the course of 1988, that trend having started in 1986 . In September 1988 stocks in the Community had shrunk to roughly less than a third of the quantities in September 1986 ( 1 473 000 tonnes to 439 000 tonnes, source : Eurostat ).
41 . The development was even more drastic in relation to public stocks . According to the figures of the Directorate-General for Agriculture, stocks shrank from 1 323 000 tonnes in September 1986 to 206 000 tonnes in September 1988, or less than a sixth . Stocks continued to decline also after that period .
42 . From the beginning of 1988, prices for butter and milk fat continued to increase .
43 . In view of those circumstances, the Commission had to be allowed to adjust its aid policy to the changing situation . In judging the proportionality of its measures it should not be overlooked that the applicants suffered no disadvantage but were simply granted a lesser advantage . ( 15 )
44 . Finally, there can be no objection to the extent of the reduction in aid compared with the changed situation of the market . Although the applicants refer to a sudden, harsh and unforeseeable reduction in aid, in fact it was constantly reduced by six individual invitations to tender in the course of some 10 weeks . ( 16 ) Each reduction was from one to five ecus per 100 kg of butter .
45 . The fact that as a result of additional factors the practical effects of the decisions hit the applicants harder can in no way affect consideration of the proportionality of the contested decision and thus of its lawfulness .
( 4 ) Prohibition of discrimination
46 . In the applicants' view, the prohibition of discrimination has been infringed in two ways . In the first place, under the relevant French regulations on food, only butter may be used in the manufacture of products described as "au beurre" whereas under the regulations of other Member States other fat may be used .
47 . Secondly, they consider they did not receive equal treatment since as undertakings established in France they received information only about French stocks . Because of insufficient information they could not obtain supplies of cheap butter in good time as could undertakings of other Member States .
48 . ( a ) As far as the first complaint is concerned, reference must be made to the principles of free movement of goods . The adverse consequences of stricter standards of one Member State for its domestic traders are to be treated as a marketing rule which may not preclude access to the market for foreign goods if they could be duly marketed in the country of manufacture . Community law, however, does not prevent a Member State from imposing stricter marketing rules on its own traders .
49 . Moreover, the Commission is right in contending that the diverse scope of the obligations in respect of the description of food in the rules of the Member States cannot be attributed to the contested decision .
50 . ( b ) As regards the second complaint, the sole criterion is whether traders can obtain comprehensive information from the intervention agencies of other Member States about the stocks existing there . Access to information must be ensured .
51 . The applicants have not disputed the Commission' s observation that on the occasion of the invitations to tender complete lists of stocks were drawn up . The obligation to provide information arises under Articles 13 and 15 of Regulation No 570/88 .
52 . The fact that the stocks in the individual Member States vary may be regarded as discrimination . That is a factual circumstance and not unequal treatment . Nor does the fact that more costs may be involved in obtaining supplies from another Member State amount to discrimination . In that respect, too, the circumstances are the same for all traders . All manufacturers of pastry products are subject in the same way to the general provisions on the invitations to tender . There is thus no discrimination .
III - Costs
53 . Under Article 69(2 ) of the Rules of Procedure, the unsuccessful party must bear the costs .
C - Proposal
54 . In conclusion, I propose that the Court decide as follows :
"( 1 ) The application is rejected .
( 2 ) The applicants are ordered to pay the costs ."
(*) Original language : German .
( 1 ) OJ 1988, L 55, p . 31 .
( 2 ) The result of the Commission Decision of 30 September 1988 ( OJ 1988, C 259, p . 9 ).
( 3 ) Commission Decision of 1 August 1988 ( OJ 1988, C 204, p . 12 ).
( 4 ) See judgment of 6 March 1979 in Case 92/78 Simmenthal v Commission (( 1979 )) ECR 777, paragraph 22 .
( 5 ) See judgment in Case 92/78, cited above, paragraphs 23 to 26 .
( 6 ) Regulation ( EEC ) No 804/68 of the Council of 27 June 1968 on the common organization of the market in milk and milk products ( OJ, English Special Edition 1968 ( I ), p . 176 ).
( 7 ) Judgment of 25 October 1984 in Case 185/83 Interfacultair Instituut Electronenmicroscopie der Rijksuniversiteit Groningen v Inspecteur der Invoerrechten en Accijnzen Groningen (( 1984 )) ECR 3623, paragraph 38 .
( 8 ) Judgments of 1 December 1965 in Case 16/65 Firma C . Schwarze v Einfuhr - und Vorratsstelle fuer Getreide und Futtermittel (( 1965 )) ECR 1151, of 26 November 1975 in Case 73/74 Groupement des fabricants de papiers peints de Belgique and Others v Commission (( 1975 )) ECR 1491, paragraphs 30 to 33, of 26 November 1981 in Case 195/80 Bernard Michel v European Parliament (( 1981 )) ECR 2861, paragraphs 20 to 27, of 8 November 1983 in Joined Cases 96 to 102, 104, 105, 109 and 110/82 NV IAZ International Belgium and Others v Commission (( 1983 )) ECR 3369, paragraph 37, and of 17 January 1984 in Joined Cases 43 and 63/82 Vereniging ter Bevordering van het Vlaamse Boekwezen ( VBVB ) and Others v Commission (( 1984 )) ECR 19, paragraphs 21 and 22 .
( 9 ) Judgment in Case 185/83, cited above, paragraph 38; judgments of 23 February 1978 in Case 92/77 An Bord Bainne Cooperative v Minister for Agriculture (( 1978 )) ECR 497, paragraphs 36 and 37, and of 25 October 1978 in Case 125/77 Koninklijke Scholten-Honig und De verenigde Zetmeelbedrijven "De Bijenkorf" BV v Hoofdproduktschap voor Akkerbouwprodukten (( 1978 )) ECR 1991, paragraphs 18 to 22 .
( 10 ) Decision COM(88 ) 1778 .
( 11 ) OJ 1982, L 360, p . 43 .
( 12 ) See the judgments of 5 May 1981 in Case 112/80 Firma Anton Duerbeck v Hauptzollamt Frankfurt am Main/Flughafen (( 1981 )) ECR 1095, paragraphs 47 to 50, of 12 April 1984 in Case 281/82 Unifrex SARL v Commission and Council of the European Communities (( 1984 )) ECR 1969, paragraphs 25 and 26, of 7 May 1987 in Case 258/84 Nippon Seiko KK v Council of the European Communities (( 1987 )) ECR 1923, paragraphs 31 and 32, and of 7 May 1987 in Case 260/84 Minebea Company Limited v Council of the European Communties (( 1987 )) ECR 1975, paragraphs 26 to 28 .
( 13 ) See Cases 112/80, 281/82, 258/84 and 260/84 .
( 14 ) Council Regulation ( EEC ) No 3206/88 of 17 October 1988 amending Regulation ( EEC ) No 1307/85 ( OJ 1988, L 286, p . 1 ).
( 15 ) See the judgment of 27 September 1979 in Case 230/78 Eridania-Zuccherifici Nazionali and SpA Società italiana per l' industria degli zuccheri v Minister for Agriculture and Forestry, Minister for Industry, Commerce and Crafts and SpA Zuccherifici Meridionali (( 1979 )) ECR 2749, paragraph 22 .
( 16 ) Invitation to tender No 4 ( decision of 1 August 1988 ) to invitation to tender No 9 ( decision of 17 October 1988 ).
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