143/85 · GlobalLawDB

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Judgment of the Court (Fourth Chamber)8 October 1986^noteIn Case 143/85REFERENCE to the Court under Article 177 of the EEC Treaty by the tribunal de première instance [Court of First Instance], Brussels, for a preliminary ruling in the proceedings pending before that court betweenNicolas Corman et fils SAandOffice belge de l'economie et de l'agriculture (OBEA) [Belgian Trade and Agriculture Board]THE COURT (Fourth Chamber)composed of: C. Kakouris, President, T. Koopmans and G. C. Rodríguez Iglesias, Judges,Advocate General: J. MischoRegistrar: P. Heimafter considering the observations submitted on behalf ofthe plaintiff in the main proceedings, by G. Vandersanden and L. Defalque, avocats,the defendant in the main proceedings, by Mr Fruy, avocat,the Commission of the European Communities, by D. Sorasio, a member of its Legal Department, acting as Agent,having regard to the Report for the Hearing as supplemented further to the hearing on 28 May 1986,after hearing the Opinion of the Advocate General delivered at the sitting on 25 June 1986,gives the following

Judgment

1By a judgment of 8 May, which was received at the Court on 15 May 1985, the tribunal de première instance, Brussels, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question as to the interpretation of the third indent of Article 5 (1) of Commission Regulation (EEC) No 649/78 of 31 March 1978 on the sale at reduced prices of intervention butter for direct consumption as concentrated butter.

2That question was raised in connection with a dispute between Nicolas Corman et fils SA (hereinafter referred to as ‘Corman’) and the Office belge de l'economie et de l'agriculture [Belgian Trade and Agriculture Board, hereinafter referred to as ‘the Board’], the Belgian intervention agency, concerning the release of certain sums lodged as securities for the processing and packaging of intervention butter, in accordance with the provisions of Regulation No 649/78.

3According to the preamble to Regulation No 649/78, the aim of that regulation is to promote the sale of intervention butter by making available to consumers concentrated butter for use in food preparation; at the same time it seeks to ensure that such butter is not diverted from its intended use in such a way as to create disturbances of the butter market.

4In order to ensure that at all the marketing stages a proper distinction is made between the intervention butter sold and other butter on the Community market, Regulation No 649/78 provides that the purchaser must have the butter concentrated and packed in accordance with the specific requirements laid down within four weeks of taking delivery. The purchaser must lodge a security guaranteeing that that obligation will be fulfilled. Except in cases of force majeure, that security is released only in respect of the quantity of butter which has been processed and packed in accordance with the regulation.

5According to the third indent of Article 5 (1) of Regulation No 649/78, in the version in force at the material time, ‘concentrated butter must... be marketed in plastic packs of not more than 250 grams, the form of which makes it possible to distinguish between concentrated butter and ordinary butter, bearing on the upper surface in letters at least 5 millimetres high, one or more of the following statements: “butteroil for cooking”, ... “Butterschmalz or Butterreinfett”, “beurre concentré pour la cuisine”, “burro concentrato da cucina”...’

6In accordance with that regulation, Corman concluded with the Board five contracts pursuant to which, between 25 March 1978 and 19 February 1979, it acquired 210 tonnes of butter. It paid the reduced price and lodged the processing securities. The securities relating to two of those contracts were released by the Board in September 1979. On the other hand, the securities relating to the other three contracts were declared forfeit by the Board on 8 January 1982. The Board refused to release them after the Commission had informed it that Corman had failed to comply properly with the requirements laid down in Article 5, since it had packaged the butter in such a way that the requisite statements appeared on a sheet of foil placed between the butter and the transparent lid which sealed the pack, whereas the statements were supposed to appear on the upper surface of the lid.

7On 22 November 1982 Corman brought an action against the Board before the tribunal de première instance, Brussels, for recovery of the securities which that body had declared forfeit on 8 January 1982. The Board lodged a counterclaim for the repayment of the securities which had been released, on the ground that they had been released in error.

8The tribunal de première instance, Brussels, found that in order to resolve the dispute between Corman and the Board it was necessary to interpret the third indent of Article 5 (1) of Regulation No 649/78. By a judgment of 8 May 1985 it therefore stayed the proceedings and asked the Court for a preliminary ruling on the following question:‘Must the third indent of Article 5 (1) of Commission Regulation No 649/78 of 31 March 1978 be interpreted as meaning that the packaging of concentrated butter in plastic packs of 250 grams with a transparent plastic lid through the upper surface of which it is possible to see the statements required by the regulation printed on a sheet of paper placed inside the pack on the butter itself is perfectly lawful having regard to the purpose of the rules in question?’

9In the observations which it has submitted to the Court Corman states that the packaging which it used consisted of a plastic pack, a sheet of foil placed on the concentrated butter and a transparent plastic lid covering the pack and the sheet of paper, and that the statements required by the regulation, which were printed on the sheet of paper, could be read through the plastic transparent lid.

10It takes the view that, if a lid covers the upper surface of the pack (which is not prohibited), the rules are complied with and consumers' interests protected provided that the requisite statements are perfectly legible, which is not contested in this instance. Moreover, the form of packaging which it used, was approved unconditionally by various government departments and by the Board. The packaging was effected subject to the joint control of the Office national du lait [National Milk Board] and the Board and a certificate of conformity signed by those two bodies was issued in respect of each packaging.

11Corman submits that, by interpreting the provision as meaning that the requisite statements must appear on the upper surface of the lid, the Board seeks to establish a requirement which is not laid down by the rule in question since the provision refers to ‘the upper surface’ of the packaging of the butter, in other words to the statement which must appear on that surface and therefore in principle on the packaging itself and not on a lid, and it cannot be inferred from the definition of the word ‘gode’ (pack) that it is necessary to use a lid.

12Finally, Corman notes that it is common ground that no fraud was committed under any of the contracts concluded by it. It adds that the packaging which it used made any attempt at fraud more difficult since it is easier and less costly to replace a printed lid by another than to try to remove the sheet of paper at the risk of soiling the concentrated butter to which that sheet adheres and to replace the lid.

13The Board contends that in the contested provision the word ‘bearing’ relates to the word ‘packs’ and not to ‘butter’. In its view that is even clearer from the Dutch and German versions. In addition, it considers that, although a pack need not necessarily be equipped with a lid, if that form of sealing device is used, the upper surface of the pack is the external surface of the lid, and consequently the requisite statements must appear on the surface of that lid.

14In the Board's view, only by interpreting the disputed provision strictly is it possible to attain the objectives, pursued by the Community rules and to ensure that the principle of the equality of all the traders of the Community is applied by maintaining normal competition. It considers that a strict interpretation is not contrary to the principle of proportionality because the objectives of the regulation require that the presentation and the packaging of the product in question make that product easily distinguishable from other butter both for consumers and for the authorities whose duty it is to ensure that it is used in accordance with its intended purpose.

15The Board contends that the method used by Corman is liable to facilitate fraud as it is less expensive to replace or even remove the sheet of foil placed between the lid and the butter than to replace the lid sealing the pack.

16The Commission is convinced that the requirements of Regulation No 649/78 as to packaging constitute an essential component of the system designed to prevent concentrated butter from being used for purposes other than those envisaged and considers that any derogation from those requirements which makes it more difficult to distinguish the product from other butter must be regarded as contrary to the Community provision.

17The Commission maintains that the packaging used by Corman does not comply with the requirements of Article 5 of Regulation No 649/78, inasmuch as it may be concluded merely from the wording of that provision that the required statements must indeed appear on the upper surface of the pack. It considers that use of the form of packaging adopted by Corman would mean that it would be possible to dispose of the statement ‘butteroil for cooking’ completely by the simple operation of removing the sheet of paper placed under the lid. Although, in view of the size of the packs, such an operation is likely to entail additional costs, the financial advantages are such that there remains a genuine risk of fraud.

18The Commission points to various decisions of the Court. Thus, it argues, the Court held, in relation to the clearance of accounts, that it was necessary to apply the Community provisions strictly without considering the actual effectiveness and value of measures adopted which were comparable but not identical to those laid down in the Community provisions (judgment of 14 January 1981 in Case 819/79 Germany v Commission [1981] ECR 21), and has rejected a broad interpretation of the applicable provisions where such an interpretation may place traders in other Member States at an advantage (judgments of 7 February 1979 in Case 11/76 Netherlands v Commission [1979] ECR 245, in particular paragraph 9 of the decision, at p. 279, and in Case 18/76 Germany v Commission [1979] ECR 343, in particular paragraph 8 of the decision, at p. 384).

19The Court notes, in the first place, that the provision in question must be interpreted in the light of the aim set out in the eighth recital in the preamble to Regulation No 649/78, according to which ‘it is necessary to ensure, at all marketing stages, that a proper distinction is made between butter sold under this regulation and other butter’, and, ‘to that end, provisions should be laid down governing the composition of concentrated butter, the means of distinguishing it from other butter and its putting up in small packs.’

20It is clear from the words ‘packs ... bearing on the upper surface ... ’ in the third indent of Article 5 (1), in the version in force at the material time, that the concentrated butter must be packaged in such a way as to have an upper surface which seals the pack. The provision does not however stipulate a specific type of sealing device, for example, a lid, a sheet of foil, or other type of sealing device.

21By the expression ‘upper surface’, the contested provision means the surface of the packaging which is neither one of the sides, nor the lower surface, in order to ensure that the statements required by the regulation are easily discernible for the purpose of informing consumers and facilitating control. It therefore means the surface of the packaging which is visible from above.

22It follows that the expression ‘upper surface’ does not necessarily mean ‘external surface’. Consequently, a sealing device such as that described by the national court, including a sheet of foil bearing the requisite statements, constitutes the ‘upper surface’ of the pack within the meaning of the provision in question even where a lid is placed above that sheet of foil, provided that the lid is transparent and that the statements are perfectly legible. In such a case, the fact that the external surface of the sealing device is that of the lid is immaterial if visually the result is the same.

23Moreover, it should be noted that, even if it is accepted that it is one of the objectives of that provision, to prevent fraud by means of the requirement which it imposes, it has not been established during the procedure before the Court that packaging such as that described by the national court has actually given rise to fraud or is liable to facilitate fraud. In addition, Corman has rightly pointed out that any attempt to remove the sheet of foil would entail the risk of soiling the concentrated butter, and it is therefore incorrect to state that the packaging chosen made it easier to commit fraud than would a pack whose lid had to be replaced.

24In reply to the question submitted by the national court it must therefore be stated that the third indent of Article 5 (1) of Commission Regulation No 649/78 of 31 March 1978 must be interpreted as meaning that the packaging of concentrated butter in plastic packs of 250 grams with a transparent plastic lid through the upper surface of which it is possible to see the statements required by the regulation printed on a sheet of paper placed inside the pack on the butter itself is lawful.

Costs

25The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. Since these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the proceedings before the national court, the decision as to costs is a matter for that court.

Operative part

On those grounds,THE COURT (Fourth Chamber)in answer to the question referred to it by the tribunal de première instance, Brussels, by a judgment of 8 May 1985, hereby rules: The third indent of Article 5 (1) of Commission Regulation (EEC) No 649/78 of 31 March 1978 must be interpreted as meaning that the packaging of concentrated butter in plastic packs of 250 grams with a transparent plastic lid through the upper surface of which it is possible to see the statements required by the regulation printed on a sheet of paper placed inside the pack on the butter itself is lawful.

Delivered in open court in Luxembourg on 8 October 1986.