Case C-34/08, Azienda Agricola Disarò Antonio and Others

This reference for a preliminary ruling concerned the validity of Regulation 1788/2003 establishing a levy in the milk and milk products sector. The claimants in the main proceedings were milk producers and members of Cooperativa Milka, a cooperative society which, by virtue of its status as ‘first purchaser’, was responsible for collecting the levy in accordance with Art. 11(1) of Regulation 1788/2003. Considerable sums were being demanded from those companies by way of that levy.

The claimants in the main proceedings objected to those sums before the Italian courts, contesting the validity of Regulation 1788/2003, as well as the criterion on the basis of which, under that regulation, the guaranteed total quantity for the whole of the Community was to be allocated between the Member States and, more specifically, the way in which that criterion had been applied in the case of the Italian Republic.

They submitted in essence that, for the purposes of determining the ‘national reference quantity’ as fixed by Regulation 1788/2003, account ought also to have been taken of the fact that the Italian Republic had a milk production deficit. They furthermore questioned whether Regulation 1788/2003 was compatible with the objectives of the common agricultural policy as laid down in Art. 33 EC.

The national court first of all asked whether the fact that Regulation 1788/2003 did not take into account, for the purposes of determining the national reference quantity, the fact that the Member State concerned had a milk production deficit was capable of affecting the compatibility of that regulation with the objectives laid down, in particular, in Art. 33(1)(a) and (b) EC. Furthermore, the national court asked whether Regulation 1788/2003 infringed the principle of non‑discrimination or the principle of proportionality, or Art. 33 EC.

Whether fact Member State had milk production deficit relevant factor
The Court pointed out that the main purpose of Regulation 1788/2003, as described in the third recital in the preamble thereto, was to address the imbalance between supply and demand in the context of milk products with regard to both reductions and increases in the reference quantity. In order to achieve that purpose, a concerted effort was required by all Community producers in equal measure (see
Case 179/84 Bozzetti [1985]).

The Court argued that the mechanism of the common agricultural market was predicated on the assumption that, where domestic demand for milk exceeded supply, the Member States could import milk, especially from Member States where demand was lower than supply.

The Court therefore found that the fact that a Member State had a milk production deficit was not a relevant factor for the purposes of determining the national reference quantity (see also
Case C‑203/86 Spain v Council [1988]).

Compatibility of Regulation 1788/2003 with Article 33(1) EC
With regard to the question whether Regulation 1788/2003 was compatible with the objectives of the common agricultural policy as laid down in Art. 33 EC, the Court of Justice reiterated that the Community legislature enjoyed a wide discretion in matters concerning the common agricultural policy, commensurate with the political responsibilities given to it by Arts 34 EC to 37 EC (see
Joined Cases C-37/06 and C‑58/06 Viamex Agrar Handel and ZVK [2008]).

As regards, more specifically, the objectives of the common agricultural policy as laid down in Art. 33 EC, the Court held that the Community institutions must make sure that a way was found to pursue those objectives in harmony and on an ongoing basis, where this became necessary as a result of conflicts which might arise between those objectives when they were pursued in isolation, and, where necessary, gave any one of them temporary priority in order to satisfy the demands of the economic factors or conditions in the light of which their decisions were made (see, in particular,
Case C-311/90 Hierl [1992]).

The Court found that, by temporarily according priority to the objective of “stabilising markets” as laid down in Art. 33(1) EC, the Council had not exceeded its discretion by adopting Regulation 1788/2003.

Principle of non‑discrimination
The Court stressed that under the second subparagraph of Art. 34(2) EC, the common organisation of agricultural markets must exclude any discrimination between producers and consumers within the Community. It reiterated that the principle of non-discrimination required that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment was objectively justified (see
Case C‑273/04 Poland v Council [2007], on which I wrote this post).

The Court held that even if Regulation 1788/2003, which applied to all recipients of reference quotas alike, did in fact place a heavier burden on small producers than on large producers, the fact that a measure adopted within the framework of the common organisation of the market might affect producers in different ways, depending upon the particular nature of their production, did not constitute discrimination if that measure was determined on the basis of objective criteria which were adapted to meet the needs of the general common organisation of the market. The Court argued that that was true of the milk quota and levy system, which was arranged in such a way that national and individual reference quantities were set at such a level that their total did not exceed the overall guaranteed reference quantity for each Member State. It followed that Regulation 1788/2003 was compatible with the principle of non‑discrimination.

Proportionality principle
The Court finally held that it was necessary to adopt Regulation 1788/2003 in order to reduce the imbalance between supply and demand on the milk and milk products market, as well as the resulting structural surplused , in order to achieve better market equilibrium. It followed that Regulation 1788/2003 was also compatible with the principle of proportionality.

Text of Judgment