222/82
Grade B
mapped from publisher markup. A grade says how a document's structure was obtained, not how reliable the law is.
Not the law itself: Judgment
Address https://gelex.eu/eli/EU/judgment/61982J0222@1983-12-13/en
In Case 222/82 REFERENCE to the Court under Article 177 of the EEC Treaty by the Tunbridge Wells County Court for a preliminary ruling in the proceedings pending before that court between Apple and Pear Development Council and K. J. Lewis Ltd and Others inter alia on whether the establishment and/or continuation of a body having the constitution and/or functions of the Apple and Pear Development Council and a system of financing such as that forming the basis for the activities of that organization are in accordance with certain provisions of the EEC Treaty, of the Act of Accession of 1972 and of Regulation (EEC) No 1035/72 of the Council of 18 May 1972 and of Regulation (EEC) No 1035/72 of the Council of 18 May 1972 on the common organization of the market in fruit and vegetables (Official Journal, English Special Edition 1972 (II), p. 437), THE COURT composed of: J. Mertens de Wilmars, President, T. Koopmans and K. Bahlmann (Presidents of Chambers), P. Pescatore, Lord Mackenzie Stuart, A. O'Keeffe, G. Bosco, O. Due and U. Everling, Judges, Advocate General: S. Rozès Registrar: H. A. Rühi, Principal Administrator gives the following
JUDGMENT
Facts and Issues The facts of the case, the course of the procedure and the observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the EC may be summarized as follows:
The Apple and Pear Development Council (hereinafter referred to as the Development Council) was established under the Apple and Pear Development Council Order of 6 May 1980 (Statutory Instrument 1980 No 623, hereinafter referred to as the 1980 Order), as amended by the Order of 17 December 1980 (Statutory Instrument 1980 No 2001). The 1980 Order replaced the Apple and Pear Development Council Order of 1966. The two orders in question were adopted under the Industrial Organization and Development Act 1947 (hereinafter referred to as the 1947 Act). Pursuant to Section 1 (1) of the 1947 Act the Minister of Agriculture, Fisheries and Food (hereinafter referred to as the Minister) may make a development council order in respect of an industry where it appears to him to be expedient to increase efficiency or productivity in the industry, to improve or develop the service that it renders or could render to the community, or to enable it to render such service more economically. Before making such an order, the Minister is required to consult persons representative of a substantial number of those carrying on business, or employed, in the industry in question (Section 1 (3) of the 1947 Act). The Minister has no power to make an order unless he is satisfied that the establishment of a development council for the industry is desired by a substantial number of the persons engaged in the industry (Section 1 (4) of the 1947 Act). Not less than three years after the making of an order, and every five years thereafter, the Minister is nevertheless required to review the question whether a development council should remain in being and, if so, whether the relevant order should be amended. The Minister is required to hold wide-ranging consultations with those affected by the order. (Section 8 (3) of the 1947 Act). In 1966 growers of apples and pears, represented by the National Farmers' Union, took the initiative in approaching the Minister to ask him to establish a development council for apples and pears under the 1947 Act. Since the requirements of the 1947 Act were satisfied the Minister acceded to the growers' request and made the Apple and Pear Development Council Order 1966 (Statutory Instrument 1966 No 1579) which was duly approved by both Houses of Parliament and came into operation on 23 December 1966. The question whether the Development Council should continue was reviewed in 1969, 1974 and 1979. On those occasions the Minister considered it appropriate to ascertain whether in fact the continuation of the Council was desired by growers. On the occasion of the 1979 review a poll was held in which 55% of the 82% of growers who voted (representing 65% of the area under cultivation) declared themselves in favour of the continuation of the Development Council. The Development Council consists of members appointed by the Minister as follows: eight growers, two employee members, two independent members and two members with special knowledge of marketing and distribution. According to the Schedule to the 1980 Order the functions of the Development Council are as follows: The activities of the Development Council are financed by the statutory levy which it is empowered to impose on producers in England and Wales under Article 9 (1) of the 1980 Order. Since the accession of the United Kingdom to the European Communities the maximum amount of the levy, which must be approved by the Minister, has been fixed as follows: Date Amount Statutory Instrument Accession UKL 3 per acre S.I. 1970 No 830, Art. 2 1 April 1975 UKL 6 per acre S.I. 1975 No 142, Art. 2 1 April 1976 UKL 14.50 per hectare S.I. 1975 No 142, Art. 2 7 May 1980 UKL 29 per hectare S.I. 1980 No 623, Art. 9 (1) 18 December 1980 UKL 40 per hectare S.I. 1980 No 2001, Art. 2 Growers with less than two hectares planted with 50 or more apple and pear trees (that is, those below a minimum economic size) are exempt from payment. The threshold has varied in the course of the period in question. The levy does not apply to imports. The necessary machinery for the fair and accurate application of the levy to all growers in respect of the land which they occupy is provided for by certain provisions of the 1980 Order. That machinery comprises : By virtue of Article 2 (b) of the Apple and Pear Development Council (Amendment) Order 1980, the Development Council may, in financing itself, have recourse not only to the compulsory annual charge, but also to contributions paid by participants in any optional scheme. According to the annual reports of the Development Council the principal activities financed by the levy are advertising, promotion and publicity, expenditure on which comprises about 70% of the income from the levy. The relevant figures are as follows : Year Levy income due Expenditure on advertising, promotion and publicity 1976/77 UKL 277959 UKL 189276 1977/78 UKL 241346 UKL 155191 1978/79 UKL 347980 UKL 293748 1979/80 UKL 346984 UKL 253035 1980/81 UKL 633356 UKL 420542 The advertising and promotion carried out by the Council includes some television advertising (a recent popular slogan being Polish up your English), press advertising (mainly women's magazines and the like) and the provision of point-of-sale and in-store merchandising and promotional material. Such advertising promotes varieties grown in England and Wales such as Cox, Bramley, Worcester Pearmain and Conference pears. With regard to the promotional activities of the Development Council the Kingdom Scheme should also be mentioned. The scheme was launched in 1980 with the aim of improving the standards and presentation of apples and pears. Participation in the scheme is voluntary. Growers who join it agree to conform to certain minimum standards of grading and sizing and to use a pack bearing a distinctive logo. The scheme has its own separate administration and offices. Growers who participate pay a contractual levy. When the scheme was launched the United Kingdom Government made a contribution of UKL 300000 to its funds. In order to meet a shortfall in income the Development Council made a contribution in the second year of the operation of the scheme (1981-82). However it is expected that the sums charged to the growers will render the scheme wholly self-financing by its third year (1982-83) and thereafter. Annex 3 to the observations of the United Kingdom shows that the Kingdom Scheme was notified to the Commission which intimated that it had no comments to make but reserved the right to return to the matter when it had completed its examination of that form of aid in relation to Article 93 (1) of the EEC Treaty. According to the annual reports of the Development Council other tasks undertaken by it include research, surveys, public relations, the collection of information and similar activities. According to the 1980 Report the objectives of the Information Group are to maintain a constant check on the quality standards achieved by English growers with fruit sent for sale. Thus the 1981 Report of the Development Council states: As in the previous year, with a view to ensuring that fruit offered for sale was mature, the Group recommended minimum sizes for all varieties. These minimum size recommendations were, as before, basically an extension of the EEC derogation system from the statutory minimum sizes. The Council is pleased to be able to report that, while fruit below the recommended minimum size was found on the wholesale markets, it was rarely that a grower again marketed such fruit after the lapse had been brought to his notice ... Reports of substandard fruit by wholesalers were also analysed and the names of wholesalers who featured on several occasions were brought to the notice of the National Federation of Fruit and Potato Trades. By letter of 17 August 1981 Mr Poul Dalsager, a Member of the Commission of the European Communities, notified Mr James Scott Hopkins, a Member of the European Parliament, that the levy on registered growers was not barred by Articles 12 and 95 of the Treaty and that the measures adopted by the Development Council were not contrary to the provisions of Community law. Nevertheless the Commission reserved the right subsequently to make a ruling on the compatibility of the aid financed by parafiscal charges with Article 92 (3) of the Treaty. The Development Council instituted civil proceedings before the Tunbridge Wells County Court, claiming that three growers should be ordered to pay it the charge due for the financial year 1980-81. The defendants submitted by way of counterclaim that the annual charges paid by them since 1 January 1973 should be refunded to them. They claimed that the continuation of the Development Council was contrary to Community law as from the date of United Kingdom accession to the European Communities and that the said levy, being a charge having an effect equivalent to a customs duty, should have been abolished at the latest by 1 February 1973, in accordance with Article 60 of the Act of Accession. The Tunbridge Wells County Court decided, by order of 19 January 1982, to submit the following questions to the Court of Justice :
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Facts and written procedure
1. Promoting or undertaking scientific research.
2. Promoting or undertaking inquiry as to materials and equipment and as to methods of production, management and labour utilization, including the discovery and development of new materials, equipment and methods and of improvements in those already in use, the assessment of the advantages of different alternatives, and the conduct of experimental establishments and of tests on a commercial scale.
3. Promoting the production and marketing of standard products.
3.
(a) Advising persons who participate in any scheme for promoting the production and marketing of standard products as to the prices at which they should endeavour to sell such products, and undertaking inquiry for the purpose of enabling the Council so to advise.
4. Promoting the better definition of trade descriptions and consistency in the use thereof.
5. Undertaking the certification of products, the registration of certification trademarks, and the functions of proprietors of such marks.
6. Promoting or undertaking research for improving arrangements foimarketing and distributing products.
7. Promoting or undertaking research into matters relating to the consumption or use of the products of the industry.
8. Promoting arrangements for cooperative organizations for supplying materials and equipment, for coordinating production, and for marketing and distributing products.
9. Promoting the development of export trade, including promoting or undertaking arrangements for publicity overseas.
10. Promoting or undertaking arrangements for better acquainting the public in the United Kingdom with the products of the industry and methods of using them.
11. Promoting or undertaking the collection and formulation of statistics.
12. Undertaking arrangements for making available information obtained, and for advising, on matters with which the Council are concerned in the exercise of any of their functions.
(i) The obligation to the grower to register under Article 7 (1) and upon the Development Council to effect registration under Article 6 (1);
(ii) The obligation under Article 11 upon any person carrying on business in the industry to furnish a written return, if required by the Development Council, for the purpose of the recovery of the charges;
(iii) The penalties provided under Article 12.
Question 1 Do Articles 30 and 34 and/or 38 to 47 of the EEC Treaty and/or Articles 42 and 60 (1) of the Treaty of Accession and/or Regulation (EEC) No 1035/72 of the Council as amended preclude a Member State from adopting and/or maintaining by law measures
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(i) establishing and/or continuing in part of that Member State a body (hereinafter referred to as the Development Council) having the constitution and/or the functions set out in United Kingdom S.I. 1966 No 1579 and/or 1980 No 623, and/or
(ii) requiring persons carrying on business in the apple and pear growing industry (the industry) and (a) prior to 1 April 1976 (but after 1 April 1971) occupying land in that part of the Member State of five acres or more planted with 50 or more apple or pear trees and/or (b) after 1 April 1976 occupying land in that part of the Member State of two hectares or more planted with 50 or more apple or pear trees, to register with the Development Council and making it a criminal offence to fail to apply to be so registered, and/or
(iii) permitting the Development Council after obtaining the consent of the Minister of Agriculture, Fisheries and Food to require registered growers to furnish returns and information relating to activities carried on by him and comprised in the industry, and making it a criminal offence to fail to furnish such returns or information, and/or
(iv) permitting the Development Council to levy upon growers liable to register a compulsory annual charge based upon the area of land occupied by them for the purpose of business in the industry to enable the Development Council to meet their administrative and other expenses, and/or
(v) exempting from the measures growers occupying less than two hectares of land or land planted with less than 50 apple or pear trees?
Question 2 If the answer to the whole or any part of Question 1 would otherwise be in the affirmative would the fact (if established) that the Development Council was established and/or continued with the express support of those growers recorded in the survey referred to above as supporting the continuance of the Development Council and representing the proportion of land therein referred to and after consultation with organizations appearing to be representative of numbers of persons carrying on business or employed in the industry affect that answer and if so in what way?
Question 3 If any such measure as is described in Question 1 or any part of such a measure is incompatible with any one or more of the provisions of Community law referred to in Question 1, is the provision of Community law with which any such measure or part of such measure is incompatible of direct effect within the Member States of the Community so as to confer upon individuals Community rights enforceable in the court of a Member State, and if so,
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(i) is that provision of Community law capable of being raised by a grower as a defence to a claim by the Development Council for the said annual charge and if so is such provision of Community law capable of being a complete or only a partial defence thereto and if only partial how should such part be determined, and/or
(ii) is that provision of Community law capable of being raised as a ground for claiming restitution of any of such annual charges as have been paid by a grower, and if so and/or
(ii)
(a) is such provision of Community law capable of being a ground for claiming restitution of the whole or only a part of such charges and if only a part how should such part be determined;
(b) is such a claim for restitution available in respect of annual charges paid where such payment was made prior to the promulgation of the judgment of the Court of Justice in this case or only in respect of such payments (if any) as may be made after such promulgation;
(iii) in deciding whether to order restitution of any of the annual charges paid by a grower is the court of the Member State entitled to take into account that the money raised by the annual charges has been used by the Development Council for purposes from which the grower has and/or might have derived a benefit?
Question 4 If any such measure as is described in Question 1 or any part of such measure is incompatible with Article 30 or 34 of the EEC Treaty did such conflict arise on the date referred to in Article 42 of the Treaty of Accession or the date referred to in Article 60 (1) thereof? The order making the reference was received at the Court Registry on 24 June 1982. Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC written observations were submitted to the Court by the Apple and Pear Development Council, represented by D. Vaughan, Queen's Counsel, and G. Barling, Barrister, by the United Kingdom Government, represented by R. N. Ricks, of the Treasury Solicitor's Department, acting as Agent, by the Danish Government, represented by L. Mikaelsen, Legal Adviser, Department for External Economic Relations, Ministry of Foreign Affairs, and by the Commission, represented by F. Lamoureux and P. Oliver, both Members of its Legal Department, acting as Agents. On hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preliminary inquiry. The Court nevertheless requested the Development Council, the United Kingdom Government, the Danish Government and the Commission to reply to certain questions.
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Written observations submitted to the Court
First question The observations submitted to the Court concern not only whether the establishment of the Development Council and the methods of financing its activities are compatible with Articles 30 to 34 and 38 to 47 of the EEC Treaty, with Articles 42 and 60 of the Act of Accession and with Regulation (EEC) No 1035/72 of the Council of 18 May 1972 on the common organization of the market in fruit and vegetables (Official Journal, English Special Edition 1972 (II), p. 437) but also whether other provisions of the Treaty, in particular Articles 92 and 93, have been infringed. An appropriate subdivision has accordingly been made in the following summary.
The Development Council points out that, since no allegation has been made that there are quantitative restrictions on either imports or exports, it is only necessary to consider the alternative, namely whether there exist measures having equivalent effect. With regard to Articles 30 and 34 the Development Council cites certain decisions of the Court, in particular the judgment of 12 July 1974 in Case 8/74 Dassonville [1974] ECR 837 which concerns imports and relates to Article 30 of the Treaty, and the judgment of 8 November 1979 in Case 15/79 Groenveld [1979] ECR 3409 which concerns exports and relates to Article 34 of the Treaty. According to the Development Council the view taken by the Court in the Groenveld case was confirmed by the judgment of 14 July 1981 in Case 155/80 Oebel [1981] ECR 1993 and in the judgment of 1 April 1982 in Joined Cases 141 to 143/81 Holdijk [1982] ECR 1299. In the Groenveld case the Court placed a narrower interpretation upon Article 34 than that which it adopted regarding Article 30 in the Dassonville case. In the Groenveld case the Court stated that Article 34 concerns national measures which have as their specific object or effect the restriction of patterns of exports and it further laid down the requirement of a difference in treatment between domestic trade and export trade and that the trade of other Member States should be adversely affected. The Development Council considers that there is no reason why the Groenveld test should not apply mutatis mutandis to Article 30. The Development Council emphasizes that it is merely an advisory, research and promotional body with no power to intervene in the market or to enforce rules as to marketing, prices or production and notes that, even on the broad approach adopted in the Dassonville case, it is inconceivable that it as an organization, or any of its measures or powers could amount, indirectly or potentially, to an obstacle or hindrance to exports. The position becomes even clearer if the more narrow Groenveld test is applied. Not only would it be wholly unfounded to suggest that the specific object or effect of the Development Council and its activities is to restrict the pattern of exports of apples and pears, but there could not possibly be shown to exist the necessary additional factor of resultant discrimination between the domestic trade and the export trade in apples and pears or the prejudice thereby caused to other Member States. The Development Council considers it quite clear that its functions relate indiscriminately to all production in England and Wales, irrespective of whether it is to be exported or consumed domestically. In this connection it refers to paragraph 11 of the decision in the Holdijk case. The Development Council further states that domestic production of apples and pears in the United Kingdom is capable of supplying only about 40% of the whole market so that, in its view, there is no realistic prospect of establishing a significant export trade in the near future. On the basis of the observations which have been summarized above the Development Council considers that any argument based on Article 34 must fail. The Development Council also denies that there has been any infringement of Article 30. The powers and functions of the Council extend only to growers established in England and Wales and their products. Exporters in other Member States are entirely free to place apples and pears on the United Kingdom market. In this connection the Development Council observes that imports from other Member States have increased since 1972: apples by about 170% and pears by about 120%, thereby accounting for the major proportion of United Kingdom consumption of apples and pears. It is clear not only from the approach in the Dassonville case that there has been no infringement of Article 30. The same result is obtained by applying the decision in Groenveld, both with regard to Article 30 and to Article 34. The Development Council considers that there are no grounds for the claim that it accords different treatment to the domestic trade and the import trade in apples and pears, emphasizing once again that its powers are wholly confined to the national product. There is therefore no question of any prejudice to the production or trade of any other Member State. Finally, the Development Council argues that, whilst the use by the Court of Justice in the Dassonville case of the words all trading rules is clearly not definitive, it gives a reasonable indication of the proper sphere of operation of Articles 30 and 34. Viewed in that light none of the activities of the Development Council falls within the scope of those articles since they do not amount to trading and it has no power to impose rules. With regard to the charge the Development Council takes the view, on the basis of the judgment of the Court of 12 July 1973 in Case 2/73 Geddo [1973] ECR 865 and of the opinion of the Advocate General in Case 177/78 Pigs and Bacon Commission v McCarren [1979] ECR at pp. 2209 and 2210, that it cannot constitute a measure having equivalent effect since those cases show that pecuniary barriers to trade should be assessed under Articles 12 to 16 of the Treaty. In this connection the Development Council observes that the Court also stated in Geddo that an internal payment levied exclusively on national products, the purpose of which is to provide funds to assist national production, did not constitute a measure having equivalent effect to a customs duty on exports. The Development Council also refers to the judgment of 10 March 1981 in Joined Cases 36 and 71 Irish Creamery Milk Suppliers' Association [1981] ECR 735 in which the Court held that a national duty to be borne by agricultural producers on the value of certain agricultural products did not constitute a measure having an effect equivalent to a customs duty on exports if it was applied systematically to both goods intended for sale on the home market and to those destined for export, which is the position in this case. The Development Council thus considers that the charge is unlawful only if it allows the financing of activities which themselves are unlawful. In view of the fact that most of the funds raised by the annual charge are spent on promotion and publicity with a view to maintaining and increasing consumer-awareness of English apples and pears the Development Council considers that the charge is fully compatible with the rules of Community law as set out in the decisions of the Court (see Geddo, cited above): In this connection the Development Council also relies upon the judgment of 26 June 1979 in Case 177/78 Pigs and Bacon Commission v McCarren [1979] ECR 2161 in which the Court accepted implicitly that the purely promotional purposes for which the national authority also used the levy in question were acceptable under Community law, which was furthermore the view taken by the Advocate General in that case (see page 2214). Finally the Development Council emphasizes the difference which exists between the present case and the judgment of 10 July 1980 (Case 152/78 Commission v France [1980] ECR 2299). The Development Council goes on to state that it has no power to impose restrictions of any kind or to affect in any other way the freedom to import or export. Since Articles 30 to 36 of the Treaty refer to measures (Articles 30 and 34) and prohibitions (Article 36) it claims that its activities cannot be covered by such words. The Development Council is entirely free to make up its own mind how to spend its money and is entirely free to decide how best to promote the distinctive apples and pears produced by growers in England and Wales. Finally, the Development Council does not see how the tenuous and incidental connection between it and the State can transform a lawful and indeed laudable activity by growers, which is fully compatible with the essential objectives of the market organization, into a measure having equivalent effect to a quantitative restriction on imports or exports. It is self-evident that the apple and pear market forms a minute segment of the economy. In this connection the Development Council also refers to Commission Directive 70/50/EEC of 22 December 1969 based on the provisions of Article 33 (7) on the abolition of measures which have an effect equivalent to quantitative restrictions on imports and are not covered by other provisions adopted in pursuance of the EEC Treaty (Official Journal, English Special Edition 1970 (I), p. 17), and in particular to Article 2 (3) (k) thereof. Even if it were accepted that that directive was directly applicable and the Development Council could be properly described as a public authority its activities would not amount to encouragement for the purposes of the directive. If that were the case there would not be a sufficient causal connection between such encouragement and the behaviour of consumers. The United Kingdom states in its observations that the essential issue raised by the first question is the validity of the compulsory levy. Therefore, the United Kingdom first provides an analysis in order to establish whether such a levy is contrary to the relevant provisions of the Treaty before proceeding to consider the essential problems to which it gives rise in connection with the common organization of the market. The United Kingdom takes the view that the levy is not contrary to Articles 12, 16 or 95 of the EEC Treaty and, on the basis of the judgment of the Court of 22 March 1977 in Case 78/76 Steinike mid Weinlig [1977] ECR 595, that the levy must in principle be regarded as part of a system of aid to which Articles 92 to 94 of the Treaty apply; it then considers Articles 30 and 34 of the EEC Treaty in closer detail, noting that the judgment of 22 March 1977 in Case 74/76 [1977] ECR 557 Iannelli & Volpi appears clearly to indicate that measures which are of a fiscal nature or which comprise a system of aid do not ordinarily fall under Article 30 or 34 at all. The United Kingdom also refers to the opinion of the Advocate General in Pigs and Bacon Commission v McCarren, in particular his observation (at p. 2209) that there is no case in which a pecuniary obstacle to trade such as a levy has been held to be contrary to Articles 30 or 34, and also to the judgment of the Court in Geddo (pp. 875 to 879). Finally, the United Kingdom states that it could not be validly suggested that the levy in this case satisfies the test laid down in Oebel, cited above, in which (at p. 2009) the Court confined the application of Article 34 to national measures which have as their specific object or effect the restriction of patterns of exports. The United Kingdom concludes, from an analysis not only of Articles 30 and 34 but of all the provisions of the Treaty which it considers relevant, that it appears clear that the levy at issue in this case could not be challenged in the national courts. In its written observations, the Commission does not expressly set out its views on the question whether there has been an infringement of Articles 30 to 34 but examines the application of Articles 92 and 93 and considers the discriminatory effect which may be produced by promotion of sales of domesticallyproduced pears and apples alone. The Danish Government docs not make specific reference to Articles 30 and 34 of the Treaty in its written observations. It indicates, however, that one of the conditions for acceptance under Community law of a system such as that with which this case is concerned is that it must not hinder the free movement of goods.
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1. Articles 30 and 34 of the EEC Treaty
The Development Council considers two judgments of the Court, namely Pigs and Bacon Commission v McCarren, cited above, and the judgment of 29 November 1978 in Case 83/78 Pigs Marketing Board [1978] ECR 2347 and observes that Article 40 of the Treaty must be interpreted and considered in conjunction with the regulation on the common organization of the market in the product in question and with the provisions of the Treaty on the abolition of tariffs and commercial barriers, which provisions must be regarded as an integral part of the common organization of the markets. The Development Council refers to the principle that once the Community has, pursuant to Article 40 of the Treaty, legislated for the establishment of a common organization of the markets in a given sector the Member States are under an obligation to refrain from taking any measure which might undermine or create exceptions to it. In this connection the Development Council relies upon the Pigs and Bacon Commission and Pigs Marketing Board cases cited above. It also refers to the judgment of 18 October 1979 in Case 5/79 Buys and Others [1979] ECR 3203, emphasizing that it is consistently clear from the case-law that the existence of a common organization of the markets in a given sector does not preclude a Member State from taking action in that sector provided that the aims or functions of the common organization of the market are not thereby endangered or jeopardized. In view of that principle, the Development Council considers it necessary to examine its constitution, powers and functions in the light of the provisions of the regulation establishing the common organization of the market in fruit and vegetables, regard being had to the provisions of the Treaty on the free movement of goods. That examination confirms that the Development Council and its activities are entirely consistent with the relevant rules of Community law. The Development Council analyses the relevant parts of Regulation No 1035/72, as amended, and states that the initiative for the creation of a body to promote the production of sound standards, to encourage market and consumer research and to collect and disseminate relevant information and statistics came from growers in England and Wales. The Development Council then provides a summary of its functions, as laid down in the 1980 Order. Those functions include : the standardization of products; publicity; improved production, distribution and marketing (including promotion of cooperative producer organizations) ; the collection and dissemination of relevant statistics and other information needed by the industry. In this connection the Development Council considers it necessary to emphasize at the outset certain factors relating to the nature of its status which are of crucial significance in the context of this action. The Development Council is essentially a promotional, advisory, research and coordinating body. It has no power to trade or otherwise intervene in the market in apples and pears or to impose upon growers in the industry an obligation to obey rules whether in relation to production, marketing, pricing, distribution or to other matters. Consequently, growers are completely free, so far as the Council is concerned, to carry on business in whatever way they see fit. Moreover, the Council does not play any part in relation to the physical importing or exporting of apples and pears. In this respect the Development Council submits that this case is wholly distinct from other cases which have come before the Court where national measures have been held to be incompatible with the common organization of a particular market, as for example, the judgments of 30 October 1974 (Case 190/73 Van Haaster [1974] ECR-1123), of 22 January 1976 (Case 60/75 Russo [1976] ECR 45), of 23 January 1975 (Case 51/74 Van der Hulst's Zonen [1975] ECR 79), of 23 January 1975 (Case 31/74 Galli [1975] ECR 47) and of 18 May 1977 (Case 111/76 Van den Hazel [1977] ECR 901) and the Buys, Pigs Marketing Board and Pigs and Bacon Commission cases cited above. In those cases the national measure of which complaint was made fell into one or other of the following categories : The fundamental limitations upon the Development Council's powers set out above are sufficient in themselves to refute any suggestion that its activities could be incompatible with the common organization or could infringe the provisions of the Treaty relating to the free movement of goods. Moreover a detailed examination of the Development Council's powers and activities reveals that they are completely consistent with the common organization of the market. There is accordingly no basis for the contention of the defendants in the main proceedings that the Development Council or its functions undermine or create exceptions to or jeopardize the common organization of the market. The Development Council next compares the essential objectives of Regulation No 1035/72, as amended, with its own activities and makes the following observations.
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2. Articles 38 to 47 of the EEC Treaty and Regulation No 1035/72 on the common organization of the market in fruit and vegetables
(i) Measures having the effect of a production quota for a product subject to common organization of the market;
(ii) Measures forbidding the producer to trade unless such trading was done through a particular body;
(iii) Measures which restrict in other ways the ability of the producer to trade freely;
(iv) Measures interfering with the price formation machinery of the common organization;
(v) Payments of export bonuses.
Achieving a balance between supply and demand According to the Development Council several of its functions are related to supply and demand. None of these in any way conflicts with the Community objectives; rather they are complementary. Moreover, no steps taken by the Development Council relating to these matters has or could in any way hinder the functioning of Community machinery in this area. Indeed the advisory functions of the Development Council, in so far as they assist in increasing efficiency in production and marketing and in ascertaining consumer preferences, further the Community interest.
Fair prices to the consumer and improved profitability of production Nothing that the Development Council does has, in its opinion, any direct effect upon prices or the profitability of production. The only possible effect would be indirect in so far as the Development Council attempts to increase demand by its publicity activities. The Development Council is under an express obligation to improve and develop the service rendered by the industry to consumers and to enable the industry to provide an economic service, and this it does. All these matters are entirely consistent with the essential objectives of the common organization of the market and further the Community interest.
Encouragement of specialization in the Community The Development Council states that the principal United Kingdom varieties of both apples and pears are distinctive in quality and in flavour. It is in the interests of consumers throughout the Community that these varieties should survive commercially and many of the Development Council's advisory and promotional activities are intended to achieve that result. In reply to the questions submitted by the Court the Development Council stated that the promotional campaigns (the Friends of the Cox and the Bramley Queen Contest) were of very little significance in the context of the general promotional activities of the Development Council. As a rule, the Development Council's advertising is generic.
The adoption of common standards In this connection the Council invokes the Vriend judgment, cited above, in which the Court implicitly accepted the Commission's argument that national measures intended to promote the quality of a product pursue precisely the same objective as the regulation on the common organization of the market in the sector in question. Furthermore, the circumstances in the Vriend case differ from those of the Development Council, which has no power to enforce legally binding standards and may only provide encouragement. The function mentioned in Paragraph 3 of Schedule I to the 1980 Order is the promotion of the production and marketing of standard products. It is recognized by the Development Council that growers must be reminded of the importance of maintaining quality standards so as to ensure that apples and pears grown in England and Wales and offered for sale are comparable in quality, presentation and packaging to imported fruit. Some of the steps taken by the Development Council to assist in this are described in Paragraph 7 of the Council's Report for the year ended 31 March 1980. One of the initiatives mentioned in that paragraph was the setting up in May 1979 of an Information Group consisting of growers and representatives of other interests in the industry. In this connection the Development Council states that one of the functions of that Group is to discourage growers from marketing immature fruit and it observes that the Community regulations, which have the same aim in view, provide for an increase in the normal Community minimum sizes for a specified period at the beginning of each season. The government of each Member State may choose whether or not to accept this derogation and is also free to extend the specified period if appropriate for its area of the Community. In respect of varieties not covered by those EEC regulations, the Information Group recommends minimum sizes for the same periods and in very exceptional circumstances the Group recommends that in respect of a variety covered by the EEC regulations the period of derogation specified in the regulation in question be extended where this is desirable in view of local conditions. These recommendations are based on the same principles as the Community regulations in so far as they increase the minimum sizes but do not in any way conflict or even overlap with the Community's sphere of operation. The recommendations are without any binding force and in issuing them the Group takes the opportunity of reminding growers of the Community regulations relating to minimum sizes. With regard to certification, registration of trademarks for certified products and the functions of the proprietors of such marks, the Development Council emphasizes that, save for its ownership of the certification trademark rights in the Kingdom Scheme logo, the Council has not exercised any of the abovementioned functions. The existence of a power to exercise rights in relation to trademarks cannot possibly jeopardize or undermine the common organization in question or hinder intra-Community trade. That could only happen if such rights were exercised in a manner contraiy to Community law and there is no question of that in the present case.
Promotion and the organization of the market The Development Council considers that there are no grounds for any allegation that those activities are capable of undermining, creating exceptions to or otherwise jeopardizing the common organization of the markets in that sector. Regulation No 1035/72 itself is silent as to publicity save in so far as its encouragement of the creation of producers' organizations implicitly approves the promotional ventures in which such organizations would engage. Furthermore, the activities of the Development Council are part and parcel of the fair competition and specialization included in the list of objectives of that regulation. Furthermore in other Member States there are State-subsidized bodies which organize publicity campaigns abroad, for example in the United Kingdom, to promote fruit produced in their country. The Development Council submits that the obligation upon growers to register with it in no way conflicts with or affects the common organization and is not capable of infringing either Article 30 or Article 34 of the Treaty. If the case-law of the Court referred to above is taken into account it is impossible to see how that obligation could have, actually or potentially, an effect equivalent to a quantitative restriction upon either imports or exports. In the Pigs Marketing Board case the Court held that an obligation to register was unlawful because that obligation formed part and parcel of a national marketing scheme which was manifestly incompatible with the Community rules in so far as it was designed to channel all trade in a product through a national authority. With regard to the Vriend case cited above the Development Council claims that in that case, by contrast with the present case, the obligation to register was such that traders who failed to register and who were not producers, where prohibited from carrying out commercial transactions in any form whatever and that compulsory affiliation to an official supervisory body carried with it the obligation for its members to comply with the rules and general instructions issued by the supervisory body. Furthermore, in the Vriend case the rules in question conferred a trading monopoly on affiliated producers. In the present case growers are at liberty to carry on their business as they please and the requirement of registration does not affect in any way the quantity of apples and pears available on the market. The Development Council declares that in those circumstances the obligation to register must be regarded as wholly a matter of administrative convenience connected to the payment of the annual charge and the making of returns. The Development Council considers that, if its other functions are not incompatible with Community law, the obligation to register is likewise not incompatible. Finally, with regard to the exemption from the national measures which is afforded to growers occupying less than two hectares of land or land planted with less than 50 apple or pear trees, the Development Council submits that such an exemption accords with common sense, good administration and with the principle of proportionality and that it cannot constitute discrimination so as to contravene Article 40 (3) or any other provision of Community law. The exempted producers cannot realistically be regarded as commercial growers. The exemption in question certainly does not constitute a breach of the principle of nondiscrimination contained in Article 40 (3) which, as the Court emphasized in the Holdijk case, applies to the objectives pursued by the relevant common organization of the markets. A right to confer certain advantages on certain small-scale producers was upheld in the judgment of 30 October 1980 (Case 76/80 Schneider-Import, [1980] ECR 3469). The United Kingdom considers that the mere existence of a common organization of the market does not ipso facto preclude all national measures affecting the agricultural products concerned. In this connection it refers to the judgment of the Court of 2 February 1977 in Case 50/76 Amsterdam Bulb [1977] ECR 137 and to the judgment in the Holdijk case cited above. With reference to the Pigs and Bacon Commission case and the Buys case, cited above, the United Kingdom considers that a national measure is incompatible with the common organization of the markets if it undermines or creates exceptions to, or jeopardizes its aims and functioning. According to the United Kingdom the essential question is whether a national compulsory levy to finance promotional activities for apples and pears is so clearly incompatible with Regulation No 1035/72 that individuals may invoke such incompatibility in the national courts. In that regard, the United Kingdom observes that the Development Council has no power to, and does not, make binding rules as to common quality standards, that it has no power in relation to producer organizations and does not affect their formation or activities in any way and that likewise no activity of the Council infringes upon the intervention and price mechanism established under Regulation No 1035/72. With regard to Articles 92 and 93 of the Treaty, which were given effect by Article 31 of the regulation, the United Kingdom Government refers to the Pigs and Bacon Commission case, cited above, which, in its view, does not entail the result that all State aids are rendered unlawful but establishes that, in addition to being subject to Articles 92 to 94, the aid must not of its nature be incompatible with the common organization of the market. For the reasons set out above the levy at issue is not incompatible with the common organization. Nevertheless, on the basis of the Steinike case cited above the levy remains subject to review by the Commission pursuant to Article 93 of the Treaty. In the opinion of the United Kingdom examination of the characteristics of the regulation in question do not suggest that the levy at issue is incompatible with the specific mechanisms thereof. Furthermore, the United Kingdom submits that there is no principle of Community law whereby a levy used to finance advertising and related activities is of its nature incompatible with the regulation in question. In this connection the United Kingdom refers to the decisions of the Court in the Geddo and Pigs and Bacon Commission cases, cited above. In conclusion it should be observed that there is no a priori reason why a levy like the one in question should be contrary to the principles of the common organization of the markets. Thus, whilst the United Kingdom fully accepts that the basic principle underlying Regulation No 1035/72 is the freedom of trade and of commercial transactions subject to the provisions of that regulation, it does not consider that the levy at issue endangers that principle. With regard to the obligation of growers to register with the Development Council the United Kingdom considers that registration of itself is unobjectionable provided that the levy as such is compatible with Community law. Nor may it be suggested that the means of collecting the levy are out of proportion to the end to be achieved. The Danish Government declares in its written observations that this case turns primarily on the question whether national rules setting up an organization such as the Development Council are compatible with the common agricultural policy. It considers that the object of the Development Council appears to be to improve the efficiency and productivity of the sector as a whole and observes that it is therefore necessary to determine the extent to which the national rules on agricultural products, for which a common organization of the market exists, are permitted under Community law. In this connection it summarizes the principles which the Court has set out in its case-law, for example, in the judgments in the Van der Hulst's Zonen, Pigs Marketing Board, and Irish Creamery cases, cited above. The Danish Government concludes from its analysis of that case-law that once a common organization of the market has been established for a given product Member States are under an obligation to refrain from taking any measure which might alter the common organization or affect its scope. On the other hand the existence of a common organization of the market does not exclude all national measures. Thus the Member States are obliged to adopt the necessary provisions for implementing the common rules, for example provisions imposing penalties, rules of procedure, and rules on supervision. Even in the more restricted sphere of measures regulating the market properly so-called the Member States continue to retain certain powers. The extent of such supplementary powers depends upon an appraisal both of the express provisions of the common organization of the market and of its objectives. Finally, the Member States may assess taxes and duties, subject always to the limitations flowing from Community law, in particular from the requirement that such taxes and duties may not hinder the operation of common organizations of the markets. The Danish Government then refers to the other central provisions of Regulation No 1035/72 and notes that the regulation contains provisions concerning aid for the formation of producers' organizations with a view to consolidating the position of producers through concentration of supply and regulation of prices at the producer stage. The Community has taken the view that, in particular in the market in fruit and vegetables, it is important to consolidate the position of producers. The Danish Government refers to the Van der Hulst's Zonen case, cited above, and emphasizes that the organization of the market in question contains no reference, either in positive or in negative terms, to the compatibility or otherwise of national regulations, present or future, with the common organization of the market. That also applies to the organization of the market in fruit and vegetables. The Danish Government considers that the United Kingdom measures concerning the Development Council are compatible with the objective of the common organization of the markets and with Regulation No 1035/72. On the basis of the information available to the Danish Government there is no reason to consider that the measures in question limit production or the right of the producers freely to market their products. They do not affect the rules of the organization of the market and of the Treaty concerning trade between Member States and with nonmember countries. There are, finally, no grounds for considering that any other aspect of the national measures in this case entails any discriminatory treatment contrary to the principles laid down in the Treaty. With regard to the levy of the charge, the Danish Government considers that, in the absence of any provisions on the matter, it is not contrary to the provisions governing the common organization of the market. It is proper for the expense of financing the Development Council to be shared equally by the growers concerned, all of whom benefit from it. It is assumed that the charge is not so heavy as to affect the operation of the organization of the market, including its system of prices. The settled case-law of the Court of Justice shows that it is the task of the national court to decide whether a national measure has in fact produced effects which hinder the operation of the common organization of the market. The Commission observes for its part that if the sales promotion carried out by the Development Council covered apples and pears generally, the Commission would see no objection to it as regards Community law in general or the common organization of the market. However, the Development Council carries out sales promotion for English and Welsh apples and pears only which could lead to their share of the market increasing at the expense of competing products from other Member States. Indeed, the Council's Report and Statement of Accounts for the Year 1981 shows clearly that the aim of the promotion campaign is to recover for growers their rightful share of the United Kingdom market. The Commission therefore considers that the campaign appears to be directed in particular at certain varieties of apples and pears at the expense of others. The Commission is unwilling to express a definitive view at this stage regarding the compatibility of such a campaign with the common organization of the market and recalls the two judgments of the Court in the Geddo and Van der Hulst's Zonen cases, cited above. If, as the Commission thinks, the approval of the Court relates to publicity campaigns the second case may be regarded as reversing Geddo pn that point in so far as the Court stated that national provisions conflict with the principle of nondiscrimination where the revenue from the charge is intended to place national products at an advantage. The Commission also refers to the Pigs and Bacon Commission case, cited above, in which the Court held that in so far as a levy was employed for purposes incompatible with the common organization of the market that levy was itself incompatible therewith, and to the Irish Creamery case, likewise cited above, which the Commission considers may not be entirely relevant here since that case was concerned with a charge paid into the general budget of the State and accordingly was not earmarked for a use which would in any way affect the operation of the common organization of the market. After considering the relevant case-law the Commission regrets that it is still unable to express a view as to whether an advertising compaign of the kind in question is compatible with Regulation No 1035/72. If the campaign is not compatible, the levy must also be incompatible in so far as it is used to finance the campaign. With regard to the Development Council's influence on the quality of apples and pears produced in the United Kingdom, the Commission observes that it is incompatible with the common organization of the market in fruit and vegetables. Member States do not have sweeping powers to derogate from the quality standards fixed by the Community. The Member States indeed enjoy a certain discretion, as is shown by the requirement that the fruit must be sufficiently developed and sufficiently ripe to withstand the transport and handling ensuring its arrival in a satisfactory condition at its place of destination (Section II (A) of the Annex to Regulation (EEC) No 1641/71 of the Commission of 27 July 1971 laying clown quality standards for dessert apples and pears (Official Journal, English Special Edition 1971 (II), p. 616). Likewise, when a derogation from the Community quality standards is provided for by a Community regulation the Member States may be empowered not to apply that derogation (see Article 1 (1) of Regulation (EEC) No 1677/82, Official Journal 1982, L 186, p. 11). Nevertheless, such a measure must take the form of a formal decision by a Member State and not an administrative measure adopted by a body such as the Development Council. According to the Commission the Development Council's 1981 Annual Report shows that the Council exerts its influence on growers to prompt them to comply with quality standards which are not necessarily those of the Community. Such compliance is ensured by means of recommendations which appear to be more peremptory than is usually implied by that word, since the report states it was rarely that a grower again marketed such fruit after the lapse had been brought to his notice and that wholesalers who repeatedly supply substandard fruit are reported to the National Federation of Fruit and Potato Traders. Furthermore, the Development Council is not one of the authorities notified by the United Kingdom to the Commission as empowered to apply quality standards pursuant to Article 8 of Regulation No 1035/72. The Commission considers that it is unable to take a final decision on this point and observes that if the Development Council induces or seeks to induce producers to comply with quality standards other than those fixed by the Community regulations it may undermine the operation of the common organization of the market. Consequently, in so far as the levy is applied for such purposes it is also incompatible with the common organization of the market. As regards exemption from the levy and the requirement of registration the Commission considers that they are not incompatible with Article 40 (3) of the Treaty. It is clearly sound to exempt from such requirements producers who are not engaged in commercial production and those who produce small quantities. The Commission considers that the requirement to register is merely incidental to the collection of the levy even though failure to comply with the requirement has been made a separate offence under English law. In this case the requirement cannot be considered to be a restriction on growers' access to the market. That is why the Commission considers that the judgment of the Court in the Vriend case, cited above, is not relevant since in that case, according to the Commission, the requirement of registration constituted a restriction on marketing. The lawfulness of a requirement to register thus depends on the lawfulness of the levy.
With regard to the applicability of Articles 92 to 94 on aid granted by States the Development Council observes that the question should be examined, even though it has not been raised by the defendants in the main proceedings, in the light of the Steinike und Weinlig case, cited above. Although Articles 92 to 94 are applicable to the common organization of the market (see Article 31 of Regulation No 1035/72) according to the judgment in the Pigs and Bacon Commission case, cited above, they cannot receive priority over the provisions of the regulation on the organization of that sector of the market. In the opinion of the Development Council priority must therefore be given to the regulation in question and to the provisions of the Treaty relating to commercial barriers to the freedom of trade. The Development Council emphasizes that even if the annual charge were capable of amounting to State aid (which it does not accept), it is sufficient to recall that the Commission has been at all times kept informed by the United Kingdom Government of the existence and functions of the Development Council and how it discharges those functions and has made no objection. The Development Council observes that by virtue of the judgment in Steinike und Weinlig, cited above, the compatibility of aid granted by a State with the Treaty is a matter solely for the Commission (or, on the basis of a direct action, for the Court of Justice) and not for the national courts. In its observations the United Kingdom points out that Article 31 of Regulation No 1035/72 gives effect to Articles 92 to 94 of the Treaty and it maintains that the effect of Article 31 must be considered in the light of the judgment in the Pigs and Bacon Commission case, cited above. In that case it was held that the payment of an export bonus was of its nature incompatible with the principles of the common organization of the market. Nevertheless it would be quite contrary to principle to suggest that all State aid is precluded by the mere existence of a common organization of the market. According to the United Kingdom the effect of the Pigs and Bacon Commission case is not to exclude all State aid but to establish that such aid, in addition to being subject to Articles 92 to 94, must not of its nature be incompatible with the common organization of the market. As is apparent from the other observations of the United Kingdom the levy in question is not incompatible with Regulation No 1035/72. Nevertheless, on the basis of Steinike und Weinlig it is subject to the appraisal of the Commission, pursuant to Article 93 of the Treaty. According to the United Kingdom the Commission is fully informed as to the functions and financing of the Council. In its reply to the questions put by the Court the United Kingdom refers to the judgment of 24 November 1982 in Case 249/81 Commission v Ireland [1982] ECR 4005 (the Buy Irish case) and emphasizes that the present proceedings concern aid for agriculture and that in such cases the Commission has frequently taken the view that the aid is not incompatible with either the Treaty or regulations adopted thereunder. The United Kingdom considers that serious problems will arise if the blunt instrument of Article 30 is applied instead of the complex process of evaluation in accordance with Articles 92 and 93. The application of Article 30 would abrogate Articles 90 and 94, which would lead not only to a significant substantive difference but also to an important difference of a procedural nature. Under Articles 92 and 94 Member States may notify an aid to the Commission which, in its turn, may decide whether the aid is compatible with the Treaty, whilst Article 30 entails the total prohibition of certain national measures. The application of Article 30 would make it impossible for the Member States to establish, in the manner provided for in Article 92 (3), that the aid in question facilitates the development of certain activities where such aid does not adversely affect trading conditions to an extent contrary to the common interest. With regard to notification the United Kingdom does not accept that it has been in breach of Article 93 (3) of the Treaty: changes in the rate of the levy have been duly notified to the Commission which has been sufficiently informed at all material times to enable it to initiate the procedure envisaged under Article 93 (2) if it considered that course appropriate. The United Kingdom also refers to a distinction which, in its view, the Commission drew in the Buy Irish case between State aid for domestic production, which is contrary to the Treaty, and aid for export, which is compatible with the Treaty. It considers that such a distinction is misconceived and must be rejected because of the absurdities which it entails. Thus for example it would be lawful for the French Government to subsidize promotion of French apples and pears in the United Kingdom but unlawful for the Development Council to promote English apples and pears in the same market. Furthermore, it is discriminatory to apply different legal regimes (Article 30 versus Articles 92 and 93) solely on the basis of the old national frontiers, contrary to the unity of the market and the spirit of the common organization; in addition it is similarly unfair to industries where exports are insignificant, and overlooks the fact that its promotion of domestic production tends to increase exports, yet it fails to address the problem of regional aid and draws an unrealistic distinction between the home trade and the export trade. The Commission emphasizes in its written observations that it is necessary to examine Articles 92 to 94 of the Treaty even though the national court has not requested the Court of Justice to give a ruling on the compatibility with those articles of measures such as those at issue in this case. According to the Commission, services of the kind provided by the Development Council constitute an aid within the meaning of Article 92 of the Treaty even if they are financed by a charge imposed on producers. In that connection the Commission refers to the decision of the Court of Justice in Steinike und Weinlig, cited above. It observes that those services were already provided before the accession of the United Kingdom to the Community and thus in 1973 they constituted existing aid for the purposes of Article 93. It notes that the maximum amount of the levy has been increased three times since that date, on 1 April 1975, 7 May 1975 and 18 December 1975, and it considers that the increase of a parafiscal charge used to fund an aid constitutes the alteration of an aid within the meaning of Article 93 (3). In that regard the Commission recalls the view expressed by the Advocate General in his opinion in Pigs and Bacon Commission v McCarren ([1979] ECR 2195 at pp. 2204 and 2205). The Commission was not notified in advance, as is required by Article 93 (3), of any of the three abovementioned increases in the levy. It is well established that an aid implemented contrary to the last sentence of Article 93 (3) is not only unlawful but also subject to challenge by individuals before the national courts. In this connection the Commission refers to the judgments of the Court of 15 July 1964 (Case 6/64 Costa [1964] ECR 585) of 19 June 1973 (Case 77/72 Capolongo [1973] ECR 611) and of 11 December 1973 (Case 120/73 Lorenz [1973] ECR 1471). It follows that the aid in question in this case has been unlawful since 1 April 1975 when it was altered in contravention of Article 93 (3). On the basis of the foregoing observations the Commission considers that in this case the obligation contained in Article 93 (3) applies to the alteration of the maximum rate of the parafiscal charge rather than to its actual rate because, unlike the determination of the actual charge by the Development Council, the fixing of the maximum amount in fact constitutes a legislative measure. In any case the aid in question has been unlawful for some time since the actual amount of the levy has also been increased on a number of occasions since 1 January 1973 without the provisions of Article 93 (3) being observed. The Commission concludes by referring to the judgment of the Court of 25 June 1970 in Case 47/69 France v Commission [1970] ECR 487 from which it follows that as a result of the illegal nature of the aid in question the parafiscal charge imposed on English growers of apples and pears has also been unlawful from the same date.
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3. Articles 92 to 94 of the Treaty
In the light of the observations summarized above the Development Council considers that the reply to the first question should be in the negative and that it is therefore unnecessary for the Court to reply to the remaining questions. The United Kingdom concludes that the reply to the first question should be as follows : A national levy on growers of apples and pears which is substantially devoted to advertising, promotion, publicity and related functions does not contravene Articles 30 or 34 of the Treaty or the provisions of Regulation No 1035/72. The Danish Government proposes that the Court of Justice should take account of the following factors: It is not incompatible with either the provisions of the EEC Treaty or with the common organization of the market in fruit and vegetables to compel growers of apples and pears to register with an organization whose object inter alia is to increase efficiency and productivity within the sector and for that purpose to provide services for growers of apples and pears. It is also compatible with Community law to require growers to pay a charge to meet the organization's costs, provided that the operation of the mechanisms introduced by the common organization of the market in fruit and vegetables is not hindered and the free movement of goods is not hampered. The national court is competent to decide whether the organization in question in actual fact produces such effects, and if so to what extent. The Commission suggests that the questions should be answered as follows:
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4. The answers to be given to the questions submitted
1. An increase in a charge by which an aid is financed constitutes an alteration of that aid for the purposes of Article 93 (3) and must therefore be notified before it is put into effect. Where such an alteration has been effected without prior notice being given to the Commission individuals may challenge it before the national courts.
2. A requirement to register, such as that in issue, is merely a means of enforcing the collection of the levy and is therefore not in itself contrary to Regulation (EEC) No 1035/72.
3. The establishment of a body empowered to require apple and pear growers to furnish statistics and other information is compatible with Regulation (EEC) No 1035/72.
4. A levy of the kind in question is incompatible with Regulation (EEC) No 1035/72 in so far as it serves to finance activities which are themselves contrary to that regulation.
Second question As regards the question whether the legal position is affected by the express approval of those of the producers who, when canvassed regarding continuation of the Development Council, declared themselves in favour thereof, the Development Council considers that the express support of a large proportion of growers for the establishment and continuation of the Council and the predominant part played by growers in its management are of considerable importance in assessing its compatibility with the common organization of the market in this case. The Development Council refers by analogy to the provisions of Regulation No 1035/72 which encourage the establishment of producers' organizations on the producers' own initiative. The United Kingdom has not formulated any answer to the second question, in view of its answer to the first question. The Danish Government has likewise not expressed any views on the second question. The Commission states that if the measures in question are incompatible with Community law they are not rendered lawful by the fact that they were supported by a majority of growers who voted in a referendum. Neither such consent nor a fortiori the consultation of other interested parties can have the effect of making such measures compatible with Community law.
Third question The Development Council accepts that Articles 30 and 34 of the Treaty and Regulation No 1035/72 are of direct effect so as to confer upon individuals rights which are enforceable in the courts of a Member State and refers by way of example to the Pigs Marketing Board case, cited above. However, if and in so far as the defendants seek to rely upon the principle of nondiscrimination contained in Article 40 (3) of the Treaty, the Development Council submits, without prejudice to its primary contention, that that article does not have direct effect. In this connection it refers to the judgment in Geddo, cited above, and to the opinion of the Advocate General on that point (in particular at pp. 886 to 889). The United Kingdom points out that if the levy were considered incompatible with Articles 30 or 34 or with the provisions of Regulation No 1035/72 such incompatibility would be capable of being raised before the national courts as a defence against any claim to recover that levy. The Danish Government has not submitted any observations on the third question. The Commission considers that the failure of a Member State to notify the alteration of an aid prior to putting it into effect may be relied upon by individuals before the national courts. The same applies to the incompatibility of a national measure with a common organization of the market. It could be relied upon by a grower in an action for recovery of the levy. The Commission goes on to observe that the same answers must be given to the other parts of the question except that a decision on the basis of Article 93 (3) would make the charge wholly unlawful whereas a ruling confined to the compatibility of such measures with a common organization of the market may render the levy unlawful only in part. The Development Council takes the view, on the basis of the judgments of the Court of 8 April 1976 in Case 43/75 Defrenne [1976] ECR 455 and of 27 March 1980 in Case 61/79 Denkavit Italiana [1980] ECR 1205, and also of 27 March 1980 in Joined Cases 66, 127 and 128/79 Salumi, Vasanelli and Ultrocchi [1980] ECR 1237, that if the Court were to declare that all or part of the levy in question were incompatible with Community law it should also rule that the effects of the judgment are restricted to the financial years after the date thereof. In any case it is clear from the Pigs and Bacon Commission case that repayment of the levy may be claimed only in respect of that part of it which is incompatible with Community law or which is earmarked for activities which are incompatible. According to the Development Council it is the duty of the national court to decide in each particular case, in accordance with national law and procedure whether, and to what extent, the charge may be recovered by the grower and to decide what, if any, sums paid to the grower or for his benefit should be taken into account. The Council also refers to the Denkavit Italiana case, cited above, drawing attention to the principle of unjust enrichment which might justify a refusal to permit recovery, for example, where the charges in question have already been passed on to the claimant's customers or where the claimant has received some benefit in return for the charges. The United Kingdom considers that paragraphs (ii) and (iii) of the third question are matters of national law and refers more generally to the judgment of the Court of 10 July 1980 in Case 811/79 Ariete [1980] ECR 2545. The Commission considers that the direct applicability of the provisions in question means that a charge which is incompatible with those provisions may not properly be imposed on a grower (see the Pigs and Bacon Commission case). A producer is entitled to claim the refund of any sums paid in contravention of those provisions. Furthermore, if a charge is found to be partly lawful and partly unlawful the national court must determine what proportion of the charge must be recovered or reimbursed. The Commission refers to the Pigs and Bacon Commission case, cited above, and proposes that the Court follow that decision which, in its view, establishes that the matter of the calculation of the refund or restitution must be settled by the national court in accordance with the national system of law. Community law may thus take account of the benefit which the grower has or might have derived from the money raised by such annual charges. With regard to the question whether a judgment of the Court of Justice also applies in this case to events prior to :he date of the judgment the Commission refers to the Denkavit Italiana and De/renne cases, cited above, and emphasizes that the present case displays no features of such a nature as to show that it is appropriate or necessary for :he Court to restrict the retroactive effect of its judgment, as it may do in higily exceptional circumstances.
Fourth question The Development Council accepts that pursuant to Article 60 of the Act of Accession the relevant date is 1 February 1973. That constitutes an additional argument for adopting the same approach as that in the De/renne case, cited above, because, if the Development Council were required to refund to the growers all the charges collected since 1 February 1973, it would be impossible for it to make such payments. If the defendants recovered such sums in the present action in full they would obtain an unfair commercial advantage over all other growers since the Council would have no funds available with which to repay the latter. In view of their answers to the first question, the United Kingdom and the Danish Government do not suggest any answer to the fourth question. The Commission, following its reply to the first question, points out that in the light of Article 93 (3) the illegality of the measures at issue dates from 1 April 1975. If the Court declares that the measures in question are incompatible with the common organization of the market that incompatibility must, pursuant to Article 60 (1) of the Act of Accession, be regarded as dating from 1 February 1973.
In its reply to the questions put to it by the Court the Commission observes that favouring certain varieties of apples in publicity campaigns may affect the proper functioning of the machinery of the common organization of the market in so far as the express intention of such campaigns is to exclude the other varieties from the market. If the other varieties were in fact excluded there would be a risk of disturbing the prices for those varieties which are distributed not only on the United Kingdom market but also on all the other markets of the Community, which could lead other Member States to buy in, at the expense of the Community budget, apples the marketing of which has been hampered by national measures favouring certain varieties. Moreover, the advertising campaigns in favour of Cox and Bramley apples are contrary to the principle contained in Article 40 (3) of the Treaty if they have as their object or effect the exclusion from the market of varieties of apples which are also produced in the United Kingdom and amount to 30% of total national production. At the sitting on 31 May 1983 oral argument was presented by the following: D. Vaughan Q. C, for the plaintiff in the main action; C. Bellamy, barrister, for the Government of the United Kingdom; L. Mikalesen, for the Government of the Kingdom of Denmark, acting as Agent; D. Keur, for the Government of the Kingdom of the Netherlands, acting as Agent; and R. Wainwright, for the Commission, acting as Agent. The Advocate General delivered her opinion at the sitting on 20 September 1983.
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5. Replies to the questions and oral procedure
Decision
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1 By order of 19 July 1982, which was received at the Court on 23 August 1982, Tunbridge Wells County Court referred to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty several questions on the interpretation of, in particular Articles 30, 34 and 38 to 47 of the Treaty, Articles 42 and 60 (1) of the 1972 Act of Accession and Regulation No 1035/72 of the Council of 18 May 1972 on the common organization of the market in fruit and vegetables (Official Journal, English Special Edition 1972 (II), p. 437), in order to enable it to assess: (i) the compatibility with those provisions of the British rules concerning the Apple and Pear Development Council; and (ii) the consequences of any such incompatibility with regard to the charge used to finance the said Council.
2 The Apple and Pear Development Council (hereinafter referred to as the Development Council) was established by a statutory instrument made under the Industrial Organization and Development Act 1947, which enables the Minister responsible to make a development council order in respect of an industry where it appears to him to be expedient to increase efficiency or productivity in the industry, to improve or develop the service that it renders or could render to the community, or to enable it to render such service more economically. Before making such an order, the Minister is required to consult persons representative of a substantial number of those carrying on business or employed in the industry in question. The Minister has no power to make an order unless he is satisfied that the establishment of a development council for the industry is desired by a substantial number of persons engaged in the industry. The extent of the support for the existence of a development council must be reviewed periodically.
3 In 1966 growers of apples and pears took the initiative in approaching the Minister for Agriculture, Fisheries and Food (hereinafter referred to as the Minister) with a request to establish a development council for their industry. After holding the consultations provided for by the Act, the Minister made the Apple and Pear Development Council Order 1966 (Statutory Instrument 1966 No 1579), which came into operation on 23 December 1966. Subsequently, the question whether the Development Council should continue has been reviewed on several occasions in accordance with the Act, and the rules at present applicable to it are contained in an Order made on 6 May 1980 (Statutory Instrument 1980 No 623 — hereinafter referred to as the 1980 Order).
4 The Development Council consists of the following members appointed by the Minister: eight grower members, two employee members, two independent members and two members with special knowledge of marketing and distribution.
5 According to Schedule 1 to the 1980 Order, the functions of the Development Council are as follows :
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1. Promoting or undertaking scientific research.
2. Promoting or undertaking inquiry as to materials and equipment and as to methods of production, management and labour utilization, including the discovery and development of new materials, equipment and methods and of improvements in those already in use, the assessment of the advantages of different alternatives, and the conduct of experimental establishments and of tests on a commercial scale.
3. Promoting the production and marketing of standard products.
3.
(a) Advising persons who participate in any scheme for promoting the production and marketing of standard products as to the prices at which they should endeavour to sell such products, and undertaking inquiry for the purpose of enabling the Council so to advise.
4. Promoting the better definition of trade descriptions and consistency in the use thereof.
5. Undertaking the certification of products, the registration of certification trademarks, and the functions of proprietors of such marks.
6. Promoting or undertaking research for improving arrangements for marketing and distributing products.
7. Promoting or undertaking research into matters relating to the consumption or use of the products of the industry.
8. Promoting arrangements for cooperative organizations for supplying materials and equipment, for coordinating production, and for marketing and distributing products.
9. Promoting the development of export trade, including promoting or undertaking arrangements for publicity overseas.
10. Promoting or undertaking arrangements for better acquainting the public in the United Kingdom with the products of the industry and methods of using them.
11. Promoting or undertaking the collection and formulation of statistics.
12. Undertaking arrangements for making available information obtained, and for advising, on matters with which the Council are concerned in the exercise of any of their functions.
6 The activities of the Development Council are financed by a charge which it is empowered to impose on growers in England and Wales under the 1980 Order. Since the accession of the United Kingdom to the European Communities, the maximum annual amount of the charge, which must be approved by the Minister, has been increased, in several stages, from UKL 3 per acre (approximately UKL 7.50 per hectare) to UKL 40 per hectare. Growers with less than two hectares planted with 50 apple or pear trees are exempt from payment.
7 The growers concerned are obliged to register and to furnish to the Development Council returns and informtion on the activities carried on by them in the industiy.
8 The Development Council commenced actions in the Tunbridge Wells County Court to recover from three growers the charge due for the financial year 1980-81. The defendants counterclaimed for restitution of the annual charge paid by them since 1 January 1973. They submitted that the continuation of the Development Council was contrary to Community law with effect from the date of the United Kingdom's accession and that the said charge, being a charge having effect equivalent to a customs duty, should have been abolished at the latest by 1 February 1973, in accordance with Article 60 of the Act of Accession.
9 In those circumstances, the County Court decided to submit the following questions to the Court of Justice:
Question 1 Do Articles 30 and 34 and/or 38 to 47 of the EEC Treaty and/or Articles 42 and 60 (1) of the Treaty of Accession and/or Regulation (EEC) No 1035/72 of the Council as amended preclude a Member State from adopting and/or maintaining by law measures
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(i) establishing and/or continuing in part of that Member State a body having the constitution and/or the functions set out in United Kingdom S.I. 1966 NO 1579 and/or 1980 No 623, and/or
(ii) requiring persons carrying on business in the apple and pear growing industry (the industry), and (a) prior to 1 April 1976 (but after 1 April 1971) occupying land in that part of the Member State of five acres or more planted with 50 or more apple or pear trees and/or (b) after 1 April 1976 occupying land in that part of the Member State of two hectares or more planted with 50 or more apple or pear trees, to register with the Development Council and making it a criminal offence to fail to apply to be so registered, and/or
(iii) permitting the Development Council after obtaining the consent of the Minister for Agriculture, Fisheries and Food to require registered growers to furnish returns and information relating to activities carried on by them and comprised in the industry, and making it a criminal offence to fail to furnish such returns or information, and/or
(iv) permitting the Development Council to levy upon growers liable to register a compulsory annual charge based upon the area of land occupied by them for the purpose of business in the industry to enable the Development Council to meet their administrative and other expenses, and/or
(v) exempting from the measures growers occupying less than two hectares of land or land planted with less than 50 apple or pear tress?
Question 2 If the answer to the whole or any part of Question 1 would otherwise be in the affirmative would the fact (if established) that the Development Council was established and/or continued with the express support of those growers recorded in the survey referred to above [in the order for reference] as supporting the continuance of the Development Council and representing the proportion of land therein referred to and after consultation with organizations appearing to be representative of numbers of persons carrying on business or employed in the industry affect that answer and if so in what way?
Question 3 If any such measure as is described in Question 1 or any part of such a measure is incompatible with any one or more of the provisions of Community law referred to in Question 1, is the provision of Community law with which any such measure or part of such measure is incompatible of direct effect within the Member States of the Community so as to confer upon individuals Community rights enforceable in the court of a Member State, and if so,
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(i) is that provision of Community law capable of being raised by a grower as a defence to a claim by the Development Council for the said annual charge and if so is such provision of Community law capable of being a complete or only a partial defence thereto and if only partial how should such part be determined, and/or
(ii) is that provision of Community law capable of being raised as a ground for claiming restitution of any of such annual charges as have been paid by a grower, and if so and/or
(ii)
(a) is such provision of Community law capable of being a ground for claiming restitution of the whole or only a part of such charges and if only a part how should such part be determined;
(b) is such a claim for restitution available in respect of annual charges paid where such payment was made prior to the promulgation of the judgment of the Court of Justice in this case or only in respect of such payments (if any) as may be made after such promulgation;
(iii) in deciding whether to order restitution of any of the annual charges paid by a grower is the court of the Member State entitled to take into account that the money raised by the annual charges has been used by the Development Council for purposes from which the grower has and/or might have derived a benefit?
Question 4 If any such measure as is described in Question 1 or any part of such measure is incompatible with Articles 30 or 34 of the EEC Treaty did such conflict arise on the date referred to in Article 42 of the Treaty of Accession or the date referred to in Article 60 (1) thereof?
The first question
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10 By this question, the Tunbridge Wells County Court wishes, in the first place, to know whether the Community provisions indicated in the question preclude the establishment or continuation of a body having a constitution such as that of the Development Council, if that body is financed by a charge levied on growers who have at their disposal potential production capacity in excess of certain limits and if those growers are obliged to register with the body and to furnish returns and information on their activities in the industry. In the second place, the Court asks whether such a body may be contrary to the said provisions by reason of its functions.
11 In that regard, it should be noted that the compatibility of such a body with Community law depends above all upon its functions. Therefore, in order to reply to the first question, the functions of the Development Council, as described in Schedule 1 to the 1980 Order, must first be examined.
The functions of the Development Council in general
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12 It is apparent from that description that the Development Council is not a producers' organization, within the meaning of Title II of Regulation No 1035/72, participating in the administration of the prices and intervention system provided for by that regulation. It is not the purpose of the Development Council to act as an intermediary for the sale of products or to intervene in the market. It follows that consideration of the functions entrusted to the Development Council must focus on the question whether the exercise of those functions is capable of hindering in some other way either intra-Community trade or the functioning of the common organization of the markets established in that sector under the rules in the Treaty relating to agricultural policy.
13 In that regard it must be noted in the first place that activities relating to scientific or technical research, the compilation of statistics, the dissemination amongst growers of the information obtained and purely advisory functions are not of such a nature as to hinder intra-Community trade or the functioning of the common organization of the markets.
14 On the other hand, the description of the other functions entrusted to the Development Council in the Schedule to the 1980 Order does not in itself exclude the possibility that such functions might be exercised in a manner capable of hindering either intra-Community trade or the proper functioning of the common organization of the markets, a situation which might therefore be incompatible with the Community provisions referred to in the request for a preliminary ruling.
15 It appears however from the documents before the Court that the Development Council is concerned essentially with publicity and promotion on the British market and improvement of the quality of the indigenous fruit marketed in the United Kingdom. It is therefore necessary to consider to what extent such activities might be incompatible with the Community provisions referred to by the national court. As regards publicity and promotional measures, particular attention should be given to the interpretation of Article 30 of the Treaty, which prohibits, inter alia, all measures having an effect equivalent to quantitative restrictions on imports. On the other hand, the Development Council's activities regarding quality must be considered in the light of the quality standards provided for by the rules on the common organization of the market in fruit and vegetables.
The publicity activities in particular
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16 With respect to publicity and promotion, it is apparent from the documents before the Court that, in addition to advertising apples and pears in general, the Development Council organizes compaigns relating specifically to English and Welsh apples and pears and, in particular, certain varieties which are typical of English and Welsh production.
17 As the Court held in its judgment of 24 November 1982 in Case 249/81 (Commission v Ireland [1982] ECR 4005), a publicity campaign to promote the sale and purchase of domestic products may, in certain circumstances, fall within the prohibition contained in Article 30 of the Treaty, if the campaign is supported by the public authorities. In fact, a body such as the Development Council, which is set up by the government of a Member State and is financed by a charge imposed on growers, cannot under Community law enjoy the same freedom as regards the methods of advertising used as that enjoyed by producers themselves or producers' associations of a voluntary character.
18 In particular, such a body is under a duty not to engage in any advertising intended to discourage the purchase of products of other Member States or to disparage those products in the eyes of consumers. Nor must it advise consumers to purchase domestic products solely by reason of their national origin.
19 On the other hand, Article 30 does not prevent such a body from drawing attention, in its publicity, to the specific qualities of fruit grown in the Member State in question or from organizing campaigns to promote the sale of certain varieties, mentioning their particular properties, even if those varieties are typical of national production.
20 In the observations which it submitted to the Court, the Commission stated that campaigns to promote certain varieties might result in the exclusion of other varieties from the market and make it necessary, either in the Member State in question or in other Member States which export the latter varieties, to apply the intervention measures provided for in the common organization of the market in relation to those varieties.
21 Although it is true that such a distortion of the conditions of competition, which would be incompatible with the proper functioning of the common organization of the markets, might occur in a market where the publicity measures related exclusively or essentially to certain varieties to the exclusion of the others, that consideration cannot justify the prohibition of all publicity campaigns whereby an organization such as the Development Council draws attention to the properties of certain varieties and indicates the uses for which those varieties are specifically suitable.
Activities relating to quality
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22 As regards the quality of the domestic fruit marketed in the United Kingdom, it appears that the Development Council makes recommendations concerning the size of the fruit marketed at the beginning of the season and that those recommendations go beyond what is required by the Community quality standards. Moreover, the Development Council's annual reports show that it carries out quality control inspections on the wholesale markets and reports any cases of failure to comply with those recommendations to the growers in question and to the organizations of which the wholesalers concerned are members.
23 In that regard, it should be emphasized that the rules on the common organization of the market in fruit and vegetables provide for an exhaustive system of quality standards applicable to the products in question. Unless those rules provide otherwise, Member States and, a fortiori, bodies such as the Development Council are therefore prevented from imposing unilateral provisions concerning the quality of the fruit marketed by growers.
24 The Community rules certainly do not prevent competition regarding the quality of the produce between growers in a Member State or between those growers and importers. Nor do they prevent growers from concerning themselves with the reputation of national produce or a body such as the Development Council from giving advice to growers in that connection in the form of simple recommendations concerning the quality and presentation of the fruit marketed. On the other hand, any attempt by such a body to impose compliance with those recommendations by applying any sort of penalties or by using the authority vested in it by its constitution to bring pressure to bear on growers or on traders would be unlawful in view of the exhaustive nature of the Community rules.
25 It is for the national court to decide, on the basis of the interpretative criteria given above, whether, and if so to what extent, the exercise by the Development Council of the functions which the national rules have entrusted to it is incompatible with Community law.
Compulsory membership
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26 In parts (ii) and (v) of the first question, the national court specifically asks whether the Community provisions mentioned in that question render unlawful the obligation imposed upon growers whose potential production capacity exceeds certain limits to register with an organization such as the Development Council.
27 In that regard it is to be noted that the provisions of Title II of Regulation No 1035/72 relating to producers' organizations do not prohibit the existence of other organizations of which producers must become members. It should also be noted that, according to the information contained in the documents before the Court, the body in question does not carry out any activities relating to intra-Community trade.
28 In those circumstances the obligation to become a member of such a body cannot be regarded as incompatible with the provisions mentioned in the question unless the activities of that body are themselves contrary to those provisions.
The charge imposed on growers
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29 In part (iv) of the first question, the national court asks whether a charge such as the one in issue is incompatible, as such, with the Community provisions referred to in that question.
30 As regards Articles 30 and 34 of the Treaty, it is sufficient in this respect to point out, as the Court did in inter alia its judgment of 22 March 1977 in Case 74/76 (Iannelli & Volpi v Meroni [1977] ECR 557), that the charges, being measures of a fiscal nature or of equivalent effect, fall within the scope, not of those articles, but of Articles 9 to 16 and 95 of the Treaty. Since the charge in question does not apply to imported produce and only affects produce intended for export in the same way as produce sold on the home market, it does not raise any problem in relation to the last-mentioned articles either.
31 As the Court has held previously, in particular in its judgment of 26 October 1983 in Case 297/82 (De Samvirkende Danske Landboforeninger [1983] ECR 3299), a charge imposed on agricultural producers is incompatible with the Community provisions relating to agricultural policy, in so far as it has the effect, as a result of its influence on price formation or through the change in the structure of agricultural holdings which may result therefrom, of impeding functioning of the machinery provided for under the common organization of the markets. Although it is for the national court to consider whether, and if so, to what extent, the charge which it is called upon to consider has actually produced such effects, it should nevertheless be noted that as a general rule a charge of which the proceeds are essentially used for publicity measures which would otherwise have to be financed by the producers themselves cannot have such effects.
32 However, it should be emphasized that the levying of a charge such as the one in question would be contrary to Community law to the extent to which it served to finance activities which were incompatible with the provisions referred to in the request for a preliminary ruling.
33 The first question must therefore be answered as follows :
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(a) The provisions of the Treaty relating to the free movement of goods and. to agriculture and the rules on the common organization of the market in fruit and vegetables do not prevent a Member State from adopting or maintaining measures in so far as the activities of the council consist in compiling statistics, promoting or undertaking research, making the results thus obtained available to growers and giving growers technical advice about fruitgrowing.
(a)
(i) establishing a development council for fruit production, composed of members appointed by the Minister responsible, in particular from among the growers involved, and
(ii) requiring only fruit growers with a plantation which exceeds a specified size to register with the said council, to furnish returns and information on their activities in the industry and to finance the administrative and other expenses of the council by the payment of an annual charge,
(b) The said provisions do not prevent such a body from drawing attention, in its publicity, to the specific qualities of fruit produced within the Member State in question or from organizing campaigns to promote the sale of certain varieties, mentioning their particular properties, even if those varieties are typical of national production; on the other hand, it would be contrary to Article 30 of the Treaty for such a body to engage in publicity intended to discourage the purchase of products from other Member States or to disparage those products in the eyes of consumers, or to advise consumers to purchase domestic products solely by reason of their national origin.
(c) The said provisions do not prevent such a body from addressing to growers, within the framework of its general advisory role, recommendations concerning the quality and presentation of the fruit marketed; on the other hand, in view of the exhaustive nature of the system of common quality standards it would be unlawful for such a body to attempt to impose compliance with standards different from those common standards, by applying any sort of sanctions or by using the authority vested in it by its constitution to bring pressure to bear on growers or traders.
(d) The said provisions render unlawful the requirement for growers to become members of such a body or to finance its activities by the payment of a charge, if and in so far as those activities are contrary to the said provisions.
The second question
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34 As will be apparent from the foregoing, the answer given to the first question takes into account, on the one hand, the nature of the functions discharged by the body in question and, on the other, the fact that it is a body created by the government of a Member State and financed by a charge imposed on growers by virtue of national regulations. By contrast, the procedure followed by the government in establishing that body and, in particular, the nature and the results of the consultations carried out by the government before taking its decisions regarding the creation or continuation of the body are of no relevance to the answer to be given.
35 The answer to the second question must therefore be that the fact that the council in question was created and maintained with the express approval of growers representing more than half of the land planted and after consultation with organizations apparently representing a large number of persons carrying on business or employed in the industry does not affect the reply given to the first question.
Third question
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36 By this question the national court wishes to be informed of the criteria for the interpretation of Community law which it needs in order to consider the consequences of any incompatibility of the rules in question with the Community provisions referred to in its first question.
37 In that respect it must, in the first place, be emphasized that, as the Court has consistently held, Articles 30 and 34 of the Treaty confer upon individuals rights which they may enforce before the courts of a Member State. As regards the regulations on the common organization of the markets, the same direct effect derives from the fact that, by virtue of Article 189 of the Treaty, regulations are directly applicable in every Member State.
38 In the second place, it must be pointed out, as the Court did in, inter alia, its judgment of 27 March 1980 in Case 61/79 (Amministrazione delle Finanze dello Stato v Denkavit Italiana, [1980] ECR 1205), that the interpretation of the rules of Community law given by the Court under Article 177 of the Treaty may and must be applied by the national court even to legal relationships arising and established before the judgment ruling on the request for interpretation, provided that in other respects the conditions enabling an action relating to the application of the said rules to be brought before the courts having jurisdiction are satisfied.
39 It follows that the provisions of Community law mentioned above may be raised as a defence to a claim for payment of a charge which is incompatible with those provisions and that they may also be raised as grounds for claiming restitution of such a charge, where it has been improperly levied.
40 Where a charge serves to finance a body some of whose activities are held to be contrary to Community law, it is for the national court to decide whether, in the light of the importance of the activities in question, that fact renders the charge unlawful and must entail total or partial exemption.
41 It is also for the national court to determine, according to its national law, whether and to what extent such a charge must be refunded and whether and to what extent such entitlement to a refund is offset by the advantages accruing directly to the person concerned as a result of the activities of the said body.
42 The reply to the third question must therefore be that:
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(a) Articles 30 and 34 of the Treaty and the regulations on the common organization of the makets confer upon individuals rights which they may enforce before the courts of a Member State.
(b) Those provisions may be raised as a defence to a claim for payment of a charge which is incompatible therewith and may be raised as a ground for claiming restitution of such a charge, even if payment took place before that incompatibility was declared in an interpretation given by the Court under Article 177 of the Treaty.
(c) Where a charge serves to finance a body some of whose activities are held to be contrary to Community law, it is for the national court to decide whether, in the light of the importance of the activities in question, that fact renders the charge unlawful and must entail total or partial exemption.
(d) In the same circumstances, it is also for the national court to determine, in accordance with its national law, whether and to what extent the charge must be refunded and whether and to what extent such entitlement to a refund is offset by the advantages accruing directly to the person concerned as a result of the activities of the said body.
The fourth question
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43 In its last question, the national court asks, in essence, whether, as regards products which were subject to the common organization of the markets when the United Kingdom acceded to the Communities, the prohibition of measures having an effect equivalent to quantitative restrictions laid down in Articles 30 and 34 of the Treaty took effect on 1 February 1973, as provided in Article 60 (1) of the Act of Accession, or on 1 January 1975, the date stipulated by the general rule laid down in the second paragraph of Article 42 of the Act of Accession.
44 As the Court held in its judgment of 20 March 1979 in Case 231/78 (Commission v United Kingdom [1979] ECR 1447), the provisions of Article 60 derogate from the general rules laid down in Article 42.
45 The reply to the fourth question must therefore be that, as regards products subject to the common organization of the agricultural markets at the time of the United Kingdom's accession, the provisions of the Treaty prohibiting measures having an effect equivalent to quantitative restrictions became applicable in the United Kingdom on 1 February 1973 in accordance with Article 60 (1) of the Act of Accession.
Costs
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46 The costs incurred by the Danish Government, the United Kingdom and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the proceedings before the national court, costs are a matter for that court.
On those grounds THE COURT, in reply to the questions submitted to it by the Tunbridge Wells County Court, by order of 19 July 1982, hereby rules:
1.
(a) The provisions of the Treaty relating to the free movement of goods and to agriculture and the rules on the common organization of the market in fruit and vegetables do not prevent a Member State from adopting or maintaining measures in so far as the activities of the council consist in compiling statistics, promoting or undertaking research, making the results thus obtained available to growers and giving growers technical advice about fruit-growing.
(a)
(i) establishing a development council for fruit production, composed of members appointed by the Minister responsible, in particular from among the growers involved, and
(ii) requiring only fruit growers with a plantation which exceeds a specified size to register with the said council, to furnish returns and information on their activities in the industry and to finance the administrative and other expenses of the council by the payment of an annual charge,
(b) The said provisions do not prevent such a body from drawing attention, in its publicity, to the specific qualities of fruit produced within the Member State in question or from organizing campaigns to promote the sale of certain varieties, mentioning their particular properties, even if those verieties are typical of national production; on the other hand, it would be contrary to Article 30 of the Treaty for such a body to engage in publicity intended to discourage the purchase of products from other Member States or to disparage those products in the eyes of consumers, or to advise consumers to purchase domestic products solely by reason of their national origin.
(c) The said provisions do not prevent such a body from addressing to growers, within the framework of its general advisory role, recommendations concerning the quality and presentation of the fruit marketed; on the other hand, in view of the exhaustive nature of the system of common quality standards it would be unlawful for such a body to attempt to impose compliance with standards different from those common standards, by applying any sort of sanctions or by using the authority vested in it by its constitution to bring pressure to bear on growers or traders.
(d) The said provisions render unlawful the requirement for growers to become members of such a body or to finance its activities by the payment of a charge, if and in so far as those activities are contraiy to the said provisions.
2. The fact that the council in question was created and maintained with the express approval of growers representing more than half of the land planted and after consultation with organizations apparently representing a large number of persons carrying on business or employed in the industry does not affect the reply given to the first question.
3.
(a) Articles 30 and 34 of the Treaty and the regulations on the common organization of the markets confer upon individuals rights which they may enforce before the courts of a Member State.
(b) Those provisions may be raised as a defence to a claim for payment of a charge which is incompatible therewith and may be raised as a ground for claiming restitution of such a charge, even if payment took place before that incompatibility was declared in an interpretation given by the Court under Article 177 of the Treaty.
(c) Where a charge which serves to finance a body some of whose activities are held to be contrary to Community law, it is for the national court to decide whether, in the light of the importance of the activities in question, that fact renders the charge unlawful and must entail total or partial exemption.
(d) In the same circumstances, it is also for the national court to determine, in accordance with its national law, whether and to what extent the charge must be refunded and whether and to what extent such entitlement to a refund is offset by the advantages accruing directly to the person concerned as a result of the activities of the said body.
4. As regards products subject to the common organization of the agricultural markets at the time of the United Kingdom's accession, the provisions of the Treaty prohibiting measures having an effect equivalent to quantitative restrictions became applicable in the United Kingdom on 1 February 1973 in accordance with Article 60 (1) of the Act of Accession.
Mertens de Wilmars Koopmans Bahlmann Pescatore Mackenzie Stuart O'Keeffe Bosco Due Everling Delivered in open court in Luxembourg on 13 December 1983. For the Registrar H. A. Rühi Principal Administrator J. Mertens de Wilmars President