Court of Justice of the European Communities (including Court of First Instance Decisions)

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Agriculture ° Common organization of the markets ° Sugar ° Production quotas ° Relationship between sugar manufacturers and beet growers ° Offers from the manufacturer to purchase quantities of beet intended for the manufacture of sugar within the limits of the A and B quotas ° Detailed rules for the allocation of the quantities to be delivered by sellers ° Community powers ° Inaction on the part of the Community legislature ° Application of national law ° Limits
(Council Regulation No 1785/81)

Since the Community legislature has not yet exercised its power under Regulation No 1785/81 on the common organization of the markets in the sugar sector to lay down detailed rules on the allocation among sellers of the quantities of sugar beet which the manufacturer offers to buy before sowing for the manufacture of sugar within the limits of the A and B quotas, Regulation No 1785/81 does not preclude the application, in connection with that allocation, of the principle under cartel law of equal treatment for suppliers and under company law for shareholders in a share company subject to accessory contributions. Although they are empowered to apply their national law, Member States are not dispensed from observing the principles and general rules governing the common agricultural policy.

In Case C-134/92,
REFERENCE to the Court under Article 177 of the EEC Treaty by the Landgericht Braunschweig for a preliminary ruling in the proceedings pending before that court between
Burkhard Moerlins
and
Zuckerfabrik Koenigslutter-Twuelpstedt AG,
on the interpretation of Council Regulation (EEC) No 1785/81 of 30 June 1981 on the common organization of the markets in the sugar sector (OJ 1981 L 177, p. 4),
THE COURT (Sixth Chamber),
composed of: G.F. Mancini, President of the Chamber, M. Diez de Velasco, C.N. Kakouris, F.A. Schockweiler and P.J.G. Kapteyn, Judges,
Advocate General: M. Darmon,
Registrar: H.A. Ruehl, Principal Administrator,
after considering the written observations submitted on behalf of:
° Burkhard Moerlins, by B. Tammen, Rechtsanwalt, Braunschweig,
° the German Government, by E. Roeder, Ministerialrat in the Federal Ministry of Economic Affairs, and C.D. Quassowski, Regierungsdirektor in that ministry, acting as Agents,
° the Commission of the European Communities, by U. Woelker, of its Legal Service, acting as Agent, assisted by R. Winkler, of the Brussels Bar,
having regard to the Report for the Hearing,
after hearing the oral observations of Zuckerfabrik Koenigslutter-Twuelpstedt AG, represented by B. Huck, Rechtsanwalt, Braunschweig, and the Commission at the hearing on 27 May 1993,
after hearing the Opinion of the Advocate General at the sitting on 16 September 1993,
gives the following
Judgment

1 By order of 7 April 1992, which was received at the Court on 27 April 1992, the Landgericht (Regional Court) Braunschweig referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Council Regulation (EEC) No 1785/81 of 30 June 1981 on the common organization of the markets in the sugar sector (OJ 1981 L 177, p. 4).
2 The questions arose in proceedings between Burkhard Moerlins and Zuckerfabrik Koenigslutter-Twuelpstedt (hereinafter "Zuckerfabrik") concerning the allocation of delivery quantities of sugar beet under annual contracts.
3 Mr Moerlins is a sugar-beet producer in Germany and a shareholder in the sugar manufacturer, Zuckerfabrik. That company' s Articles of Association provide that the shareholders are under an obligation to deliver the sugar beet which they produce to the company.
4 Regulation No 1785/81 establishes, in particular, a quota system for the production of sugar. Under that system, sugar is divided into three categories, A, B and C, the first two of which are subject to quotas. The quantities of A sugar and B sugar benefit by price guarantees, the minimum price of B sugar being lower than the minimum price of A sugar.
5 Article 30 of Regulation No 1785/81 provides that, in contracts for the delivery of beet for the manufacture of sugar, a distinction is to be made between beet depending on whether the quantities of sugar to be manufactured from it are subject to the A quota or the B quota.
6 It appears from the case-file that Zuckerfabrik allocated delivery quantities of sugar beet to Mr Moerlins under both the A quota and the B quota pursuant to Article 30. Taking the view that those quantities should be adjusted by increasing the quantities allocated under the A quota, Mr Moerlins brought an action against Zuckerfabrik in the Landgericht Braunschweig in which he asked the court to order Zuckerfabrik to conclude a fresh delivery contract.
7 The Landgericht took the view that the action raised problems concerning the interpretation of Community law and, accordingly, decided to refer the following questions to the Court for a preliminary ruling:
"1. In the determination of the criteria to be observed by sugar manufacturers when dividing between beet sellers the beet quantities which they offer to accept before sowing for the manufacture of sugar as part of the A sugar and B sugar quantities, to what extent do, in particular, Articles 7 and 30 of Council Regulation (EEC) No 1785/81 of 30 June 1981 preclude the application of the competition rules of German cartel law and the rules of German law on share companies applicable to the accessory obligations of shareholders?
2. What criteria does the common organization of the market in sugar lay down as directly applicable law for the application of the domestic law of contract in the case of the conclusion of contracts for the sale and purchase of sugar beet as regards the allocation of the sugar beet quantities which the manufacturer offers to accept before sowing for the manufacture of sugar as part of the A sugar and B sugar quantities?"
8 Reference is made to the Report for the Hearing for a fuller account of the facts, the national legislation, the course of the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.
9 By its first question, the national court essentially seeks to establish the extent to which Regulation No 1785/81 precludes the application, in connection with the allocation of quantities of sugar beet among sellers, of the principle of equal treatment under German cartel law for suppliers and under German company law for shareholders in a company subject to accessory contributions. By its second question, the national court asks the Court to indicate what criteria the common organization of the markets in the sugar sector affords for the purposes of that allocation. Since these questions are closely connected, they should be considered together.
10 First, Article 30 of Regulation No 1785/81 contains provisions on the allocation amongst sellers of quantities of beet intended for the manufacture of sugar. According to Article 30(5), detailed rules for the application of Article 30 were to be adopted in accordance with the procedure laid down in Article 41. It follows from the wording of Article 30(5) that those detailed rules include the criteria with which sugar manufacturers must comply when dividing amongst beet sellers the quantities in respect of which pre-sowing contracts are to be concluded. However, such detailed rules have still not been adopted.
11 Secondly, Article 7(3) of Regulation No 1785/81 empowers the Council to adopt outline provisions, to which, according to Article 7(1), agreements within the trade and contracts concluded between buyers and sellers of beet must conform.
12 In that regard, it should be noted that Regulation (EEC) No 206/68 of the Council of 20 February 1968 laying down outline provisions for contracts and inter-trade agreements on the purchase of beet (OJ, English Special Edition 1968(I), p. 19), which was not repealed by Regulation No 1875/81, also makes no provision for the allocation of quantities of beet amongst sellers.
13 Thirdly, reference should be made to Article 7(5) of Regulation No 1785/81, which provides that, if there are no agreements within the trade, the Member State in question may take the necessary measures to protect the interests of the parties concerned.
14 Likewise, Regulation (EEC) No 741/75 of the Council of 18 March 1975 laying down special rules for the purchase of sugar beet (OJ 1975 L 74, p. 2) provides in the first subparagraph of Article 1 that:
"Where there is no set agreement within the trade as to how the quantities of beet which the manufacturer offers to buy before sowing should be allocated among the sellers, these quantities being intended for the manufacture of beet within the basic quota limits, the Member State concerned may itself lay down rules for such allocation."
15 It follows from these provisions, taken as a whole, first that the Community legislature is competent to lay down detailed rules for the allocation among sellers of the quantities of sugar beet which the manufacturer offers to buy before sowing for the manufacture of sugar within the limits of the A and B quotas, but that it has not yet adopted any rules in that regard.
16 Next, it should be observed that, according to the same regulations, if there are no Community rules or agreements concluded within the framework of an agreement within the trade, the Member States are empowered to effect such allocation in accordance with the rules of their own national law.
17 It follows that Regulation No 1785/81 does not preclude the application of national cartel and company law in connection with the allocation of quantities of sugar beet among sellers within the limits of the A and B quotas. Although they are empowered to apply their national law, Member States are not dispensed from observing the principles and general rules governing the common agricultural policy.
18 Accordingly, the reply to the national court' s questions should be that, since Community law has not yet laid down criteria for the allocation among sellers of the quantities of sugar beet which the manufacturer offers to buy before sowing for the manufacture of sugar within the limits of the A and B quotas, Regulation No 1785/81 does not preclude the application, in connection with that allocation, of the principle of equal treatment under national cartel law for suppliers and under national company law for the shareholders in a share company subject to accessory contributions. Although they are empowered to apply their national law, Member States are not dispensed from observing the principles and general rules governing the common agricultural policy.

Costs
19 The costs incurred by the German Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

On those grounds,
THE COURT (Sixth Chamber),
in answer to the questions referred to it by the Landgericht Braunschweig, by order of 7 April 1992, hereby rules:
Since Community law has not yet laid down criteria for the allocation among sellers of the quantities of sugar beet which the manufacturer offers to buy before sowing for the manufacture of sugar within the limits of the A and B quotas, Regulation No 1785/81 does not preclude the application, in connection with that allocation, of the principle of equal treatment under national cartel law for suppliers and under national company law for shareholders in a share company subject to accessory contributions. Although they are empowered to apply their national law, Member States are not dispensed from observing the principles and general rules governing the common agricultural policy.