JUDGMENT OF 15. 5. 1975 — CASE 92/74 VAN DEN BERGH v PRODUKTSCHAP VOOR ZUIVEL

In Case 92/74 Reference to the Court under Article 177 of the EEC Treaty by the College van Beroep voor het Bedrijfsleven for a preliminary ruling in the case pending before that court between

THE COURT composed of: R. Lecourt, President, J. Mertens de Wilmars and A. J. Mackenzie Stuart (Rapporteur), Presidents of Chambers, A. M. Donner, R. Monaco, P. Pescatore, H. Kutscher, M. Sørensen and A. O'Keeffe, Judges, Advocate-General: A. Trabucchi Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts

The facts of the case, the procedure and the observations submitted under Article 20 of Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows:

I — Facts and procedure

The Produktschap voor Zuivel, the defendant in the main action, refused to pay to Melkproduktenmaatschappij G. van den Bergh the aid provided for by Regulation (EEC) No 986/68 of the Council laying down general rules for granting aid for skimmed milk and skimmed milk powder for use as feed (OJ Special Edition 1968 (I), p. 260) in respect of two consignments of denatured milk powder of 1850 kg and 3600 kg respectively.

According to the Produktschap, the two consignments had a fat content exceeding 1·5 % which is considered by the regulation as the maximum permissible fat content.

The applicant instituted proceedings against the decision of refusal before the College van Beroep voor het Bedrijfsleven.

Because of a certain number of considerations, the College van Beroep considered that it had to base its decision on the results supplied by an analysis of samples according to the Rose-Gottlieb method.

T he applicant in the main action maintained in this connexion that the percentage of fats revealed by the use of the Rose-Gottlieb method also includes a certain amount of phosphatides, that that amount is equal to 0·165 and that that percentage must be deducted in order to obtain the pure fat content of milk powder referred to in Article 1 (c) of Regulation (EEC) No 986/68, which means that the fat content is in this case lower than 1·5 %.

The expert called by the College van Beroep emphasized in his statement ‘that a chemist cannot lump together fat and fat-like material (phosphatides). For phosphatides are chemically quite different from fat. There are some six combinations which chemically behave in an identical manner. Fats are built up from glycerol and three esterified fatty acids. Phosphatides on the other hand are built up from glycerol and two esterified fatty acids and a futher specific group. It is this specific group which defines the character of the phosphatide’.

As the College van Beroep considered that a question of interpretation of Community law was raised, it referred the following question to the Court:

‘Does a correct interpretation of Article 1 (c) of Regulation (EEC) No 986/68 of the Council involve that the term “fat content” in that article must be interpreted as meaning only the proportion of pure milk fat present in milk powder and that that term does not also include the proportion of other fat-like substances present in milk powder, such as in particular phosphatides?’

The order referring the matter was received at the Court Registry on 12 December 1974.

The Produktschap voor Zuivel and the Commission of the European Communities lodged written observations.

After hearing the report of the Judge-Rapporteur and the views of the Advocate-General, the Court decided not to make any preparatory inquiry.

Written observations

The Produktschap voor Zuivel observes that the Rose-Gottlieb method of analysis was prescribed by the Food and Agriculture Organization of the United Nations and by the World Health Organization for the calculation of the fat content of milk powder. This method is also recognized inter alia by Belgium, Denmark, France, Britain, Ireland, Italy, Luxembourg, The Netherlands, Australia, New Zealand and the United States of America.

in order to calculate the rat content of milk powder according to the Rose-Gottlieb method, account is taken at the same time of milk fats and fat-like material (phosphatides); the fat-like materials present in the milk powder are considered as milk fats.

The Produktschap submits that, as the Rose-Gottlieb method is used internationally as the standard method for the determination of the fat content of milk powder, milk fats should also be understood, at the Community level, as including the fat-like material contained in milk powder (phosphatides).

The Commission points out that the expression ‘fat content’ without any definition, is used in several regulations and in particular in the basic regulation concerning the milk sector with regard to the target price of whole milk.

With regard to whole milk, the expression ‘fats’ includes pure fats and fat-like material which constitute a whole, which is also the case for skimmed milk in so far as it concerns whole milk imperfectly skimmed.

In the second place, the purpose of the rule fixing a maximum fat content for skimmed milk is to avoid a milk product receiving aid in respect of its lipidic element also being taken into consideration for aid in respect of its protein element. The defendant takes the example of buttermilk: as a by-product of the processing of cream into butter, buttermilk receives the aid granted to butter. As skimmed milk powder, processed buttermilk in powdered form may also receive aid since the two products are similar in respect of their pure fat content. Buttermilk is distinguished from skimmed milk powder by its characteristically higher content of phosphatides.

In the third place, the Commission considers that in determining the fat content the legislature took into account the methods of analysis currently used which do not make any distinction between pure fats and phosphatides. The Commission contends that:

‘The expression “fat content” used in Article 1 (c) of Regulation (EEC) No 986/68 must be interpreted as meaning that it defines the fat content of skimmed milk powder, including fat-like materials such as phosphatides, in so far as those materials cannot be extracted when applying methods of analysis in current use.’

Oral procedure

The hearing in open court took place on 23 April 1975.

A. Marres, appearing for Van den Bergh B. V., observes that if the Röse-Gottlieb method is applied to a sample of skimmed milk powder the result also includes a certain percentage of phosphatides. The phosphatides which are not chemically fats represent at least 0·14 %.

As the Community provision only speaks of ‘fats’, the percentage of phosphatides must be deducted from the result of the analysis in order to arrive at a more precise percentage.

To interpret the expression fats' as including unextracted phosphatides has the effect not only of preventing the grant of aid for the small proportion of fats which were present in the skimmed milk belonging to Van den Bergh, but also of preventing the grant of aid for the high protein content.

Mr Bobeldijk, appearing for the Produktschap voor Zuivel, considers that the question is not what the meaning of the term ‘fats’ is for a chemist but rather what is understood by this term in commerce.

The result of the application of the Röse-Gottlieb method is regarded in commerce as the fat content in milk powder.

If the customs authorities had still to make deductions, this might be prejudicial to exporters of other milk products which are thus in a group inferior to that giving right to a large subsidy.

Mr Bourgeois, appearing for the Commission, maintains that the Community legislature may use terms by reference not to their chemical meaning but to the meaning given to them in current commercial usage: cf. Case 51/70, Lütticke v Hauptzollamt Passau (‘chocolate’) (Rec. 1971, p. 121).

In commerce, ‘fats’ are simply the content fixed in terms of the current method of analysis.

In all the Member States of the Community, except Ireland and Denmark, the Röse-Gottlieb method is currently used without, however, being compulsory. In Denmark a less precise method is used, but if the results are very close to the limit, analysis according to the Röse-Gottlieb method is recommended. The pure milk fats and the phosphatides not extracted are considered as fats within the meaning of the Community provisions.

The Advocate-General delivered his opinion on 7 May 1975.

Law

1. By judgment of 10 December 1974, received at the Registry on 12 December 1974, the College van Beroep voor het Bedrijfsleven has asked the Court, under Article 177 of the Treaty, to rule whether the term ‘fat content’ appearing in Article 1 (c) of Regulation (EEC) No 986/68 of the Council of 15 July 1968 (OJ Special Edition 1968 (I), p. 260) refers not only to the pure milk fat content but also to the content of other fat-like substances in milk powder, such as phosphatides.

2. It appears from the file that the company Van den Bergh was refused Community aid for a quantity of skimmed milk powder for use as feed, on the ground that that product had a fat content exceeding the limit of 1·5 %, according to the most widespread method of analysis, at both Community and international level, and conforming to the provisions of the Food and Agriculture Organization of the United Nations and the World Health Organization.

3. The company maintains that as the phosphatides, which are fat-like substances chemically different from pure fats, cannot be extracted under that method or under the majority of other methods of analysis, the fat content resulting from that method should be corrected by deduction of the estimated content of phosphatides.

4. The concept of fat content is used in Community legislation not only in connexion with aid for skimmed milk but also in connexion with the target price of whole milk, the intervention price of butter and most of the products relating to heading 04.04 of the Common Customs Tariff.

5. The minimum or maximum fat content always serves as the basic criterion for enabling the national authorities to establish in practice the classification of products and by-products in the milk sector.

6. The approximate nature of the criterion in question and the absence of a Community provision prescribing a single method of analysis for each product indicate that it is not the definition of milk fats from the chemical point of view which is important but rather the practicability of an interpretation for the national authorities in their checking duties.

7. In practice in all the Member States the expression ‘fat content’ of skimmed milk powder indicates the content determined according to the method of analysis used, without any alteration.

8. An interpretation of the expression ‘fat content’ which would have the effect of obliging the national authorities to correct in any manner the result of an analysis would introduce an element of uncertainty and cannot therefore be accepted.

9. In these circumstances, the reply to be given to the national court must be that the expression ‘fat content’ used in Article 1 (c) of Regulation No 986/68 must be interpreted as referring to the fat content of skimmed milk powder, including fat-like substances such as phosphatides, in so far as those substances are not extracted when applying the methods of analysis in current use.

Costs

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

On those grounds, THE COURT in answer to the question referred to it by the College van Beroep voor het Bedrijfsleven by order of 10 December 1974, hereby rules: