Czech Republic v European Commission (T-51/14)

Contents

Judgment of the General Court (Second Chamber)12 May 2015^note(System of traditional specialities guaranteed — Regulation (EU) No 1151/2012 — Rejection of the request for registration of the name pomazánkové máslo (spreadable butter) as a traditional speciality guaranteed — Relationship with the provisions of Regulation (EC) No 1234/2007 specifying the conditions for the use of the sales description butter)In Case T‑51/14,Czech Republic, represented by M. Smolek, J. Vláčil and J. Vitáková, acting as Agents,vEuropean Commission, represented by J. Guillem Carrau, Z. Malůšková and K. Walkerová, acting as Agents,THE GENERAL COURT (Second Chamber),composed of M. E. Martins Ribeiro, President, S. Gervasoni (Rapporteur) and L. Madise, Judges,Registrar: K. Andová, Administrator,having regard to the written procedure and further to the hearing on 16 January 2015,gives the following

Judgment

Legal context

Regulations No 1234/2007 and No 445/2007

1Council Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) (OJ 2007 L 299, p. 1) regrouped all the 21 common organisations of markets covering different products or groups of products which were previously governed by as many separate basic regulations and by other Council regulations supplementing them. A number of judicial instruments have been adopted concerning milk, milk products and fats, in order to govern their marketing and designation including Council Regulation (EC) No 2991/94 of 5 December 1994 laying down standards for spreadable fats (OJ 1994 L 316, p. 2).

2Regulation No 1234/2007 which repealed and replaced, inter alia, Regulation No 2991/94, incorporating all of its provisions, is intended to standardise the use of marketing designations in order to preserve competition and to protect consumers as is apparent, in particular, in recital 51 thereto (judgment of 18 October 2012, Commission v Czech Republic, C‑37/11, ECR, EU:C:2012:640 (‘judgment in C‑37/11’), paragraphs 2 and 61).

3Thus, Article 115 of Regulation No 1234/2007 fixes the marketing standards for fats applicable to products having a fat content of at least 10% but less than 90% by weight intended for human consumption, by making reference to Annex XV to that regulation.

4The appendix to Annex XV to Regulation No 1234/2007, to which Article 115 makes reference, provides that the sales designation ‘butter’ is reserved for a ‘product with a milk-fat content of not less than 80% but less than 90%, a maximum water content of 16% and a maximum dry non-fat milk-material content of 2%’. The exceptions to that rule are set out in the annex at I(2), third subparagraph, and concern:(a) the designation of products the exact nature of which is clear from traditional usage and/or when the designations are clearly used to describe a characteristic quality of the product;(b) concentrated products (butter, margarine, blends) with a fat content of 90% or more.

5Products whose milk fat content is less than 80% and whose water content is greater than 16% must carry one of the other designations set out in Part A of the appendix to Annex XV to Regulation No 1234/2007. Part A(4) of the appendix provides that products with a milk fat content less than 39%, greater than 41% but less than 60%, greater than 62% but less than 80% must be labelled ‘dairy spread X%’.

6Article 121(c)(i) of Regulation No 1234/2007 expressly empowers the Commission to establish the detailed rules for the application of the derogations to the rules laid down by the regulation and, in particular, to draw up a list of the products to which that derogation applies, on the basis of lists sent by the Member States.

7Commission Regulation (EC) No 445/2007 of 23 April 2007 laying down certain detailed rules for the application of Regulation No 2991/94 and Council Regulation (EEC) No 1898/87 on the protection of designations used in the marketing of milk and milk products (OJ 2007 L 106, p. 24), which replaced Commission Regulation (EC) No 577/97 of 1 April 1997 laying down certain detailed rules for the application of Regulation No 2991/94 and Council Regulation (EEC) No 1898/87 on the protection of designations used in the marketing of milk and milk products (OJ 2007 L 87, p. 3), includes at Annex I the list of products benefiting from the derogation provided in Regulation No 1234/2007 at Annex XV I(2)(a). According to recital 4 in the preamble to Regulation No 445/2007, that list is exhaustive, as noted by the Court in the judgment in C‑37/11, paragraph 2 above, EU:C:2012:640.

Regulations No 509/2006 and No 1151/2012

8Council Regulation (EC) No 509/2006 of 20 March 2006 on agricultural products and foodstuffs as traditional specialities guaranteed (OJ 2006 L 93, p. 1) put in place a register of traditional specialities guaranteed permitting registration of agricultural products or foodstuffs produced using traditional raw materials or characterised by a traditional composition or a mode of production or processing reflecting a traditional type of production or processing.

9Regulation No 509/2006 was repealed and replaced from 3 January 2013 by Regulation (EU) No 1151/2012 of the European Parliament and of the Council of 21 November 2012 on quality schemes for agricultural products and foodstuffs (OJ 2013 L 343, p. 1). The purpose of this new regulation was in part to amalgamate the different provisions on the quality of agricultural products (recitals 10 to 13) and in part, to improve, clarify and sharpen the provisions of Regulation No 509/2006 in order to make the system of traditional specialities guaranteed (‘TSG’) more attractive, only a few designations having been registered (recital 34).

10Regulation No 1151/2012 establishes, under Article 1(2), quality schemes which provide the basis for the identification and, where appropriate, protection of names and terms that, in particular, indicate or describe agricultural products with value-adding characteristics or value-adding attributes as a result of the farming or processing methods used in their production, or of the place of their production or marketing. It comprises three distinct quality schemes: protected designations of origin and protected geographical indications, TSGs and optional quality terms.

11Article 2(3) of Regulation No 1151/2012 provides that ‘this Regulation shall apply without prejudice to other specific Union provisions relating to the placing of products on the market and, in particular, to the single common organisation of the markets, and to food labelling’.

12Under Article 18(1) of Regulation No 1151/2012, a name is to be eligible for registration as a traditional speciality guaranteed where it describes a specific product or foodstuff that results from a mode of production, processing or composition corresponding to traditional practice for that product or foodstuff, or is produced from raw materials or ingredients that are those traditionally used. In addition, Article 18(2) of the regulation provides that for a name to be registered as a traditional speciality guaranteed, it is to have been traditionally used to refer to the specific product or identify the traditional character or specific character of the product. The registration as a TSG of the name of a product or foodstuff must comply with the conditions set out in the regulation and, in particular, comply with a product specification defined in Article 19 of the regulation. Registration gives the protection for the name set out in Articles 23 and 24 of the regulation.

13Articles 49 to 52 of Regulation No 1151/2012 establish a registration procedure which allows groups who work with the products at issue or natural or legal persons fulfilling certain conditions to submit an application for registration as a TSG to the Member State in which the group is established. The Member State checks that the application is justified and, where appropriate, lodges an application dossier with the Commission. Where the Commission considers that the application does not fulfil the conditions for registration as a TSG, set out in the regulation, it adopts implementing measures to reject the application.

Background to the proceedings

14On 22 December 2010 the Czech Republic submitted an application to the Commission for the registration of the name ‘pomazánkové máslo’ (spreadable butter) on the register of TSGs on the basis of the provisions of Regulation No 509/2006.

15On 1 April 2011 the Commission informed the Czech Republic that it had completed the scrutiny provided for in Article 8(1) of Regulation No 509/2006 and that it considered that the application did not fulfil the conditions prescribed in the regulation, in particular, that set out in Article 4(3)(b) of that regulation in accordance with which a name cannot be registered expressing the specific character of the agricultural product or foodstuff ‘(which) is misleading, a particular example being a reference that does not correspond to the specification and is therefore likely to mislead the consumer as to the product’s characteristics’.

16The Commission, therefore, took the view that the designation ‘pomazánkové máslo’ included the term ‘máslo’ (butter), which was misleading for the consumer as it suggested the product possessed characteristics which it did not have. The fat content of the product was not, according to the Commission, in accordance with the requirements set out in Regulation No 1234/2007.

17On 30 May 2011 the Czech Republic replied to the Commission that it would consider the Commission’s legal position having regard to the proceedings before the Court in the case giving rise to the judgment in C‑37/11, paragraph 2 above (EU:C:2012:640).

18The Czech Republic had requested the Commission on two occasions, 18 June 2004 and 14 March 2007, to apply to the product ‘pomazánkové máslo’ the derogation provided in the third paragraph of Article 2(2) of Regulation No 2991/94 (repeated in Regulation No 1234/2007 in Annex XV at point I(2)(a)) but the Commission had refused in its letters of 23 September 2005 and 27 August 2007 to allow its request. On 6 June 2008 the Commission sent a letter of formal notice to the Czech Republic, the latter not having amended its legislation. On 3 November 2009 the Commission sent the Czech Republic a reasoned opinion and then, on 25 January 2011, lodged an action for failure to fulfil obligations at the Court of Justice.

19In its judgment in C‑37/11, paragraph 2 above (EU:C:2012:640), the Court held that by authorising ‘pomazánkové máslo’ to be sold under the designation ‘máslo’, even though that product has a milk fat content of less than 80% and water and dry non-fat milk-material contents of more than 16% and 2% respectively, the Czech Republic had failed to fulfil its obligations under Article 115 of Regulation No 1234/2007 read in conjunction with the first and second subparagraphs of point I(2) of Annex XV to that regulation and points 1 and 4 of part A of the appendix to that annex.

20In a letter dated 23 October 2012, the Czech Republic informed the Commission that it was of the opinion that nothing prevented the continuation of the registration procedure for the name ‘pomazánkové máslo’ in the register of TSGs and that a national survey had found that that name was not considered misleading by Czech consumers.

21Regulation No 1151/2012 came into force on 3 January 2013, repealing and replacing Regulation No 509/2006.

22On 14 May 2013 the Czech Republic informed the Commission that, following the judgment in C‑37/11, paragraph 2 above (EU:C:2012:640), it had begun a legislative process leading to replacement of the sales description ‘pomazánkové máslo’ by ‘tradiční pomazánkové’ (traditional spreadable product), a designation under the entry ‘mléčná pomazánka 34%’ (milk fat spread 34%).

23On 2 July 2013 the Commission informed the Czech Republic that, having regard to the scrutiny carried out in compliance with the provisions of Article 50(1) of Regulation No 1151/2012, the request for registration did not fulfil the conditions set out in that regulation because it did not comply with the provisions of Regulation No 1234/2007, in breach of Article 2(3) of Regulation No 1151/2012.

24The Commission sought the dismissal of the application for registration of the name ‘pomazánkové máslo’ as a TSG at the hearing of the Committee for Agricultural Product Quality Policy on 17 October 2013. That Committee gave an opinion that was mainly favourable to the Commission’s proposal.

25By decision of 13 November 2013 (‘the contested decision’), the Commission adopted Implementing Decision 2013/658/EU rejecting an application for registration on the register for TSG provided in Regulation No 1151/2012 (Pomazánkové máslo (TSG)) (OJ 2013 L 305, p. 22).

Procedure and forms of order sought

26By application lodged at the Court Registry on 22 January 2014, the Czech Republic brought the present action.

27The Czech Republic submits that the Court should:— annul the contested decision;— order the Commission to pay the costs.

28The Commission contends that the Court should:— dismiss the action;— order the Czech Republic to pay the costs.

Law

29In support of its application, the Czech Republic relies on one plea in law, alleging infringement of the provisions of Articles 50 and 52 of Regulation No 1151/2012, read in conjunction with Article 18 of that regulation, in that the Commission had not examined the conditions to be fulfilled for registration of the TSG ‘pomazánkové máslo’ and dismissed its application on a ground other than non-fulfillment of those conditions.

30The Czech Republic also maintains that the Commission based its refusal to register the name ‘pomazánkové máslo’ on the failure to satisfy the product specifications set out in Regulation No 1234/2007 which prescribed, in particular, the rules relating to the use of the sales description butter and other spreadable fats, although no provision of Regulation No 1151/2012 imposed such a condition. It considers that those regulations provide alternative methods of registration of agricultural product designations and that both are intended to ensure that consumers are informed about a product’s properties thanks to its designation. It takes the view that Article 2(3) of Regulation No 1151/2012, which provides that those regulations are to apply without prejudice to other specific EU provisions relating to the placing of products on the market and, in particular, to the single common market organisation and to food labelling, clearly indicates that this regulation is not exhaustive as far as the placing of foodstuffs on the market and their designation are concerned.

31Under the terms of Article 50(1) of Regulation No 1151/2012, ‘the Commission shall scrutinise by appropriate means any application that it receives pursuant to Article 49, in order to check that it is justified and that it meets the conditions of the respective scheme.’ Article 52(1) of that regulation provides that ‘where, on the basis of the information available to the Commission from the scrutiny carried out pursuant to the first subparagraph of Article 50(1), the Commission considers that the conditions for registration are not fulfilled, it shall adopt implementing acts rejecting the application’ and that ‘those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 57(2)’.

32Article 18(1) of Regulation No 1151/2012 provides ‘A name shall be eligible for registration as a traditional speciality guaranteed where it describes a specific product or foodstuff that … results from a mode of production, processing or composition corresponding to traditional practice for that product or foodstuff[,] or … is produced from raw materials or ingredients that are those traditionally used’. Article 18(2) of the Regulation states further that ‘for a name to be registered as a traditional speciality guaranteed it shall … have been traditionally used to refer to the specific product or … identify the traditional character or specific character of the product’.

33While the Czech Republic considers that the Commission should limit its scrutiny of the application for registration to checking that the name at issue fulfils the conditions set out in Article 18 of Regulation No 1151/2012, the Commission is of the opinion that it should also check if it meets the requirements set out in Regulation No 1234/2007 relying on Article 2(3) of Regulation No 1151/2012. That paragraph, which is part of the general provisions relating to the regulation and which determines its scope, provides ‘this Regulation shall apply without prejudice to other specific Union provisions relating to the placing of products on the market and, in particular, to the single common organisation of the markets, and to food labelling’.

34In accordance with settled case-law, when interpreting a provision of Community law, it is necessary to consider not only its wording but also the context in which it occurs and the objects of the rules of which it is part (see judgments of 7 June 2005, VEMW and others, C‑17/03, ECR, EU:C:2005:362, paragraph 41 and the case-law cited; and 26 October 2010, Germany v Commission, T‑236/07, ECR, EU:T:2010:451, paragraph 44). It is, therefore, important to take into account the purpose of EU rules so that they are given an interpretation which ensures that they are fully effective (judgment of 13 July 2004, Commission v Council, C‑27/04, ECR, EU:C:2004:436, paragraph 74).

35It is in the light of these principles that it is necessary to examine whether the provisions of Article 2(3) of Regulation No 1151/2012, according to which this regulation ‘shall apply without prejudice to other specific Union provisions relating to the placing of products on the market and, in particular, to the single common organisation of the markets, and to food labelling’, must be understood as meaning that a name may be included on the register of TSGs, only if it complies with the marketing conditions set out in Regulation No 1234/2007.

36In the first place, it appears that the response to that question can be inferred from a literal interpretation of Article 2(3) of Regulation No 1151/2012, in the light of the clear meaning of the wording ‘without prejudice to other specific Union provisions relating to the placing of products on the market and, in particular, to the single common organisation of the markets’. This wording means that the regulation cannot preclude the application of Regulation No 1234/2007, which fixes the rules of that common organisation.

37In the second place, the interpretation set out in paragraph 36 above appears consistent with the general economy of Regulation No 1234/2007. The fundamental role of this regulation in the operation of European agricultural policy should be borne in mind. In accordance with Article 288(2) TFEU the regulation is, like all regulations, binding in its entirety and directly applicable in all Member States. It consists of a set of rules on the management of agricultural markets, marketing standards and the production of agricultural products and the export and import of those products.

38As regards milk, milk products and fats, several legal instruments had been put in place for the purpose of the regulation, marketing and designation of those products, pursuing ‘the objective of improving the position of milk and milk products on the market on the one hand and ensuring a fair competition between spreadable fats of milk and non-milk origin on the other, both to the benefit of producers and consumers’ (recital 51 in the preamble to Regulation No 1234/2007). Regulation No 2991/94, which includes a classification accompanied by rules relating to designation, accordingly defined the marketing standards for milk and non-milk products (recital 51 in the preamble to Regulation No 1234/2007). Regulation No 1234/2007, which repealed and replaced Regulation No 2991/94, reproducing all its provisions (judgment in C‑37/11, paragraph 2 above, EU:C:2012:640, paragraph 2), retained this classification which should be maintained (judgment in C‑37/11, paragraph 2 above, EU:C:2012:640, paragraph 56). It is also intended to standardise the usage of marketing designations in order to preserve competition and protect consumers (recital 51 to Regulation No 1234/2007 and judgment in C‑37/11, paragraph 2 above, EU:C:2012:640, paragraph 61).

39The appendix to Annex XV of Regulation No 1234/2007, to which Article 115 of this regulation refers, provides that the sales designation ‘butter’ is reserved for the ‘product with a milk-fat content of not less than 80% but less than 90%, a maximum water content of 16% and a maximum dry non-fat milk-material content of 2%’. The only exceptions to this rule are set out in the third paragraph of point I(2) in the annex and concern:(a) the designation of products the exact nature of which is clear from traditional usage and/or when the designations are clearly used to describe a characteristic quality of the product;(b) concentrated products (butter, margarine, blends) with a fat content of 90% or more.

40Annex I to Regulation No 445/2007 includes the list of products benefiting from the derogation provided in the third paragraph of Article 2(2) of Regulation No 2991/94. As the parties acknowledged at the hearing, the repeal of Regulation No 2991/94 by Regulation No 1234/2007 did not have the effect of repealing Regulation No 445/2007, since the provisions of the third paragraph of Article 2(2) of Regulation No 2991/94 were reproduced unchanged at point I(2)(a) of Annex XV to Regulation No 1234/2007. The list, therefore, remains in force and defines the scope of point I(2)(a) of the annex. As the Court of Justice noted in its judgment in C‑37/11, paragraph 2 above (EU:C:2012:640, paragraph 57), the derogations set out in point I(2)(a) of that annex are an exception, since in accordance with recital 7 to Regulation No 2991/94, the latter sought to establish a uniform classification for spreadable fats. That list is exhaustive, as indicated in recital 4 to Regulation No 445/2007 and apparent from the judgment in C‑37/11, paragraph 2 above (EU:C:2012:640, paragraph 59).

41In that context, characterised by the importance attached by the EU legislature to standardising the commercial names for agricultural products in order to preserve competition and to protect consumers, the rules relating to the sales description ‘butter’ should be interpreted in such a way that their effectiveness is assured. The interpretation of Article 2(3) of Regulation No 1151/2012 suggested by the Czech Republic would have the effect of allowing a Member State to use the TSG system in order to circumvent the rules concerning marketing standards fixed by Regulation No 1234/2007 and, supposing that the product at issue could be marketed, of conferring on the latter an unfair competitive advantage and of misleading the consumer. Conversely, the Commission’s interpretation of that provision in the contested decision, mentioned at paragraph 36 above, allows compliance with the rules concerning the sales description ‘butter’.

42In the third place, the definition of Article 2(3) of Regulation No 1151/2012, given at paragraph 36 above, appears to be in accordance with the objectives of that regulation.

43As stated in recital 34 in the preamble to Regulation No 1151/2012, the specific objective of the TSG system is to help the producers of traditional products to communicate to consumers the value-adding attributes of their products. Article 17 of that regulation states, likewise, that the TSG scheme ‘is established to safeguard traditional methods of production and recipes by helping producers of traditional products in marketing and communicating the value-adding attributes of their traditional recipes and products to consumers’. However, it is in no way intended to establish an alternative, parallel marketing standards scheme for agricultural products to that set out in Regulation No 1234/2007, still less to provide exceptions to the rules laid down in that text.

44Further, if the argument advanced by the Czech Republic were to be accepted, it would have the effect of allowing registration as a TSG of products that did not satisfy the marketing standards provided for in Regulation No 1234/2007 and which consequently could not, in principle, be marketed, even though under the provisions of Article 23(1) of Regulation No 1151/2012 a name registered as a TSG may be used by any operator marketing a product that conforms to the corresponding specification.

45In the fourth and last place, the other arguments advanced by the Czech Republic cannot call into question the interpretation of Article 2(3) of Regulation No 1151/2012 given by the Commission in the contested decision and set out at paragraph 36 above.

46The Czech Republic maintains that the interpretation it proposes for Article 2(3) of Regulation No 1151/2012 would be coherent since the conditions specified by Article 18 of Regulation No 1151/2012 would correspond with those provided under point I(2)(a) of Annex XV to Regulation No 1234/2007.

47However, first and at all events, it should be noted that, even if the conditions laid down in Article 18 of Regulation No 1151/2012 and the provisions of point I(2)(a) of Annex XV to Regulation No 1234/2007 overlap, the Commission would remain bound by the provisions of Article 2(3) of Regulation No 1151/2012, which require it to comply with the provisions of Regulation No 1234/2007. In addition, the scope of the provisions under I(2)(a) in Annex XV is circumscribed by the exhaustive list set out in Annex I to Regulation No 445/2007 (see paragraph 40 above).

48In the alternative, as maintained by the Commission, the conditions laid down in I(2)(a) of Annex XV to Regulation No 1234/2007 and those specified in Article 18 of Regulation No 1151/2012 are different. Regulation No 1234/2007, which sets out an exception to the rules on the designation of spreadable fats, particularly in relation to the ‘designation of products the exact nature of which is clear from (their) traditional usage’, must be read as requiring not only that the designation in issue be subject to a traditional usage but also that the exact nature of the product at issue differ from that of the product whose designation is protected. On the other hand, Regulation No 1151/2012 requires only that the product at issue result from a mode of production, processing or composition corresponding to traditional practice and that it be a traditionally used name, or identify the traditional character of the product.

49Such an interpretation of I(2)(a) of Annex XV to Regulation No 1234/2007 is consistent with the objective of consumer protection and preservation of competition pursued by that regulation, which permits only exceptions for products whose real nature cannot be confused with that of products with a protected designation.

50Likewise, the argument of the Czech Republic that the Commission’s reasoning would have the effect of reducing the effectiveness of Regulation No 1151/2012, by establishing an additional procedure and limiting the appeal of the TSG qualification, cannot be upheld. The two regulations have objectives in part distinct (see paragraphs 38 and 43 above), and provide different conditions (see paragraph 48 above). It is reasonable that, to the general marketing conditions for agricultural products provided in Regulation No 1234/2007, should be added the specific and distinct procedure provided by Regulation No 1151/2012, designed to provide consumers with a guarantee that certain agricultural products can legitimately claim to possess characteristics giving them an added value.

51Lastly, if it is correct, as maintained by the Czech Republic, that the Court of Justice did not rule on the question of whether ‘pomazánkové máslo’ met the conditions laid down in Regulation No 1151/2012 in its judgment in C‑37/11, paragraph 2 above (EU:C:2012:640), this is of no consequence to the lawfulness of the contested decision. The Commission made reference, in paragraph 2 of that decision, to the finding of the Court that the contested designation was not in compliance with Regulation No 1234/2007, a finding which justified the refusal of the contested registration application on the basis of Article 2(3) of Regulation No 1151/2012.

52It follows from all the foregoing that the Commission did not err in law in its interpretation of Article 2(3) of Regulation No 1151/2012, in holding that a designation could not be registered as a TSG, where it did not satisfy the marketing conditions set out in Regulation No 1234/2007.

53The single plea in law, alleging infringement of the provisions of Articles 50 and 52 of Regulation No 1151/2012, read in conjunction with Article 18 of the same regulation, must, therefore, be rejected in its entirety.

Costs

54Under Article 87(2) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

55Since the Czech Republic has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Commission.

Operative part

On those grounds,THE GENERAL COURT (Second Chamber)hereby:

1.Dismisses the action;

2.Orders the Czech Republic to pay the costs.

Delivered in open court in Luxembourg on 12 May 2015.