Denkavit Futtermittel GmbH v. Land Baden-Württemberg (Case C-39/90) Before the Court of Justice of the European Communities (2nd Chamber)

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1 Denkavit Futtermittel GmbH v. Land Baden-Württemberg (Case C-39/90) Before the Court of Justice of the European Communities (2nd Chamber) ECJ (2nd Chamber) (Presiding, O'Higgins P.C.; Mancini and Schockweiler JJ.) M. Marco Darmon, Advocate General. 20 June 1991 Reference from Germany by the Verwaltungsgerichtshof (Administrative Court of Appeal), Baden-Württemberg, under Article 177 EEC. Provisions Considered: EEC 30, 36 Dir. 79/373 (Art. 5(4)(B) & (7)) Food. Animal feedingstuffs. Ingredients. Community law and national law. Article 5(4)(b) and (7) of Directive 79/373 on the marketing of compound feedingstuffs does not include a standstill obligation precluding member-states from introducing into national legislation an obligation to indicate the ingredients used in descending order of their proportion, even if no such obligation existed in national law when the directive entered into force. [15] Imports. Inter-State trade. Food. Animal feedingstuffs. The imposition by a member-state of an obligation to provide a semi-open declaration (list of ingredients in descending order of their proportion) for compound feedingstuffs, which applies without distinction to national and to imported products, has the effect of making the importation of feedingstuffs from other member-states, which do not require such a declaration, more difficult. Therefore, in accordance with the consistent case law of the Court, such a requirement is caught by Article 30 EEC. [17] *596 Procureur du Roi v. Dassonville (8/74): [1974] E.C.R. 837, [1974] 2 C.M.L.R. 436; Rewe-Zentral AG v. Bundesmonopolverwaltung für Branntwein

2 (120/78): [1979] E.C.R. 649, [1979] 3 C.M.L.R. 494, applied. Imports. Standards. It follows from Article 30 et seq. EEC that national rules, adopted in the absence of common or harmonised rules and applicable without distinction to national products and to products imported from other member-states where they are lawfully manufactured and marketed, are compatible with the Treaty only in so far as they are necessary on grounds relating to public interest listed in Article 36 or in order to satisfy imperative requirements relating, inter alia, to fair trading and consumer protection. [18] Re Milk Substitutes: E.C. Commission v. Germany (76/86): [1989] E.C.R. 1021, [1991] 1 C.M.L.R. 741, applied. Imports. Standards. Community law and national law. Occupied field. Recourse to Article 36 EEC ceases to be justified only if, pursuant to Article 100, Community directives provide for complete harmonisation of national laws. Therefore, where the approximation of the laws of the member-states has not yet been achieved in a given field the corresponding national laws may place obstacles in the way of the principle of free movement in so far as the obstacles in question are justified by one of the grounds set out in Article 36 or by imperative requirements. [19] Tedeschi v. Denkavit Commerciale Srl (5/77): [1977] E.C.R. 1555, [1978] 1 C.M.L.R. 1, applied. Imports. Animal feedingstuffs. Labelling. Health control. Consumer protection. Fair trading. Proportionality. A requirement imposed under the legislation of a member-state to provide a semi-open declaration (listing ingredients in descending order of their proportion) for compound feedingstuffs is conducive to ensuring the protection of human and animal life within the meaning of Article 36 EEC, and also consumer protection and fair trading, and may be regarded as an appropriate and proportionate means to those ends since it is accepted that labelling is one of the means which least restricts the free movement of those products within the Community. [23]- [24] Legislation. Harmonisation of laws. In the exercise of the powers conferred on them with respect to the approximation of laws, the Community institutions enjoy a discretion in relation to the stages in which harmonisation is to take place, having regard to the particular nature of the field subject to co-ordination. Accordingly, in an area where harmonisation is incomplete, the fact that *597 Community legislation allows disparities in national legislation, which result in justifiable obstacles to free

3 movement, does not affect the validity of those provisions. [26]-[27] The Court interpreted Articles 30 and 36 EEC and Article 5(4)(b) and (7) of Directive 79/373 in the context of German law which, since 1988, required labelling on compound feedingstuffs listing all ingredients in descending order of their proportion, to the effect that Article 5(4)(b) and (7) did not preclude Germany from introducing the labelling requirement, that it was caught by Article 30 EEC but could be justified under Article 36 or imperative requirements since harmonisation in the compound feeding sector was incomplete, that it was justified for the protection of human and animal health, as well as consumer protection and fair trading, and that given the discretion, enjoyed by the Community institutions, to introduce harmonisation in stages the validity of Article 5(4) and (7) of the directive could not be questioned on the ground that it aggravated obstacles to trade contrary to the Treaty provisions. Representation V. Schiller, of the Cologne Bar, for the applicant company. Joachim Hentze, Regierungsdirektor, Toni Roth, Oberamtsrat, and W. Ziegler, Ministerialrat at the Ministry for Rural Development, Food, Agriculture and Forestry of the Land Baden-Württemberg, for the defendant. P. Pouzoulet, Assistant Director, and G. de Bergues, Principal Assistant Secretary, at the Department of Legal Affairs of the Ministry of Foreign Affairs, for the French government as amicus curiae. Ivo M. Braguglia, Avvocato dello Stato, for the Italian government as amicus curiae. Guus Houttuin, of the Legal Service of the E.C. Council, for the Council as amicus curiae. Jörn Sack, Legal Adviser to the E.C. Commission, for the Commission as amicus curiae. The following cases were referred to in the judgment: 1. Procureur du Roi v. Dassonville (8/74), 11 July 1974: [1974] E.C.R. 837, [1974] 2 C.M.L.R Gaz:8/74 2. Rewe-Zentral AG v. Bundesmonopolverwaltung für Branntwein (120/78), 20 February 1979: [1979] E.C.R. 649, [1979] 3 C.M.L.R Gaz:120/78 3. Re Milk Substitutes: E.C. Commission v. Germany (76/86), 11 May 1989: [1989] E.C.R. 1021, [1991] 1 C.M.L.R Gaz:76/86 4. Tedeschi v. Denkavit Commerciale Srl (5/77), 5 October 1977: [1977] E.C.R. 1555, [1978] 1 C.M.L.R. 1. Gaz:5/77 5. Denkavit Futtermittel GmbH v. Land Nordrhein-Westfalen (73/84), 27 March 1985: [1985] E.C.R. 1013, [1986] 2 C.M.L.R Gaz:73/84 6. Les Assurances du Credit SA v. E.C. Council and Commission (63/89), 18 April 1991: [1991] I E.C.R. 1799, [1991] 2 C.M.L.R Gaz:63/89 *598 The following further cases were referred to by the Advocate General:

4 7. Re the Re-Export of Caribbean Rum: E.C. Commission v. E.C. Council (218/82), 13 December 1983: [1983] E.C.R. 4063, [1984] 2 C.M.L.R Gaz:218/82 8. Officier Van Justitie v. de Peijper (104/75), 20 May 1976: [1976] E.C.R. 613, [1976] 2 C.M.L.R Gaz:104/75 9. Procureur de la Republique v. Rivoira and Giovanni Rivoira & Figli SNC (179/78), 28 March 1979: [1979] E.C.R. 1147, [1979] 3 C.M.L.R Gaz:179/ Denkavit Nederland BV v. Hoofdproduktschap voor Akkerbouwprodukten (15/83), 17 May 1984: [1984] E.C.R Gaz:15/ Les Commissionnaires Reunis Sàrl v. Receveur des Douanes (80-81/77), 20 April 1978: [1978] E.C.R Gaz: 80/ Rewe-Zentral AG v. Hauptzollamt Kehl (10/73), 24 October 1973: [1973] E.C.R Gaz:10/ Denkavit Futtermittel GmbH v. Minister für Ernährung, Landwirtschaft und Forsten des Landes Nordrhein-Westfalen (251/78), 8 November 1979: [1979] E.C.R. 3369, [1980] 3 C.M.L.R Gaz:251/ Re Inspection Fees on Exported Plants: E.C. Commission v. Netherlands (89/76), 12 July 1977: [1977] E.C.R. 1355, [1978] 3 C.M.L.R Gaz:89/ Rewe-Zentrale AG v. Direktor der Landwirtschaftskammer Rheinland (37/83), 29 February 1984: [1984] E.C.R. 1229, [1985] 2 C.M.L.R Gaz:37/ Fietje (27/80), 16 December 1980: [1980] E.C.R. 3839, [1981] 3 C.M.L.R Gaz:27/ De Kikvorsch Groothandel-Import-Export BV (94/82), 17 March 1983: [1983] E.C.R. 947, [1984] 2 C.M.L.R Gaz:94/ Eau de Cologne & Parfumerie-Fabrik Glock Engasse No KG v. Provide Srl (C-150/88), 23 November 1989: [1989] E.C.R. 3891, [1991] 1 C.M.L.R Gaz:150/88 The following additional cases were referred to in argument: 19. Re Purity Requirements for Beer: E.C. Commission v. Germany (178/84), 12 March 1987: [1987] E.C.R. 1227, [1988] 1 C.M.L.R Gaz:178/ Bundesverwaltungsgericht, 5 June 1986: 74 BVerwGE E.C. Commission v. Denmark (278/85), 14 October 1987: [1987] E.C.R Gaz:278/ Julius Kind KG v. European Economic Community (106/81), 15 September 1982: [1982] E.C.R Gaz:106/81 * E.C. Commission v. Germany (28/84), 3 October 1985: [1985] E.C.R Gaz:28/ Zoni (90/86), 14 July 1988: [1988] E.C.R Gaz:90/ Smanor SA (298/87), 14 July 1988: [1988] E.C.R Gaz:298/ Ministere Public v. Mathot (98/86), 18 February 1987: [1987] E.C.R. 809, [1988] 1 C.M.L.R Gaz:98/ Denkavit Futtermittel GmbH v. Land Nordrhein-Westfalen (195/84), 3 October 1985: [1985] E.C.R. 3181, [1987] 3 C.M.L.R Gaz:195/84

5 28. Robertson (220/81), 22 June 1982: [1982] E.C.R. 2349, [1983] 1 C.M.L.R Gaz:220/81 TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE Facts Legislative framework Pursuant to Article 5(4)(b) and (7) of Council Directive 79/373 on the marketing of compound feedingstuffs: [FN1] 4. Member-States may require all or some of the following particulars only to be indicated: (a)... (b) the ingredients; FN1 [1979] O.J. L86/ Where particulars of the ingredients are given, all the ingredients present shall be listed, either by giving the quantities of each ingredient or [by stating] in descending order [...] their proportion in the compound feedingstuff. Member- States may prescribe the use of one of these two forms of indication, but not both. Where no measures have been adopted pursuant to Article 10(b), member- States may group ingredients together by category or maintain existing categories and permit particulars of ingredients to be replaced by those relating to categories. The Council states in the fifth recital in the preamble to Directive 79/373 that pending the adoption of further provisions, it is necessary, given the existing practices in certain member-states, to provide temporarily for national administrations to require a fuller declaration of the composition of feedingstuffs, with regard to both analytical constituents and ingredients;... such declarations may be required only as provided for in this directive. Article 8 of Directive 79/373 is worded as follows: *600 Article 8 In so far as their national laws so provide at the time of adoption of this directive, member-states shall be authorised to limit the marketing of compound feedingstuffs to those: -- obtained from certain ingredients, or -- free from certain ingredients. In accordance with Article 9 of the directive: Member-States shall ensure that compound feedingstuffs are not subject, for reasons concerning the provisions included in this directive, to marketing

6 restrictions other than those provided for by this directive. Trade in imported or manufactured compound feedingstuffs in Germany is governed by the German Act of 2 July 1975 on feedingstuffs [FN2] (hereinafter 'FMG') and by regulations adopted on the basis of that Act, including in particular that of 8 April 1981 [FN3] (hereinafter the 'FMV'). Pursuant to the first sentence of section 13(2) of the FMV (amended by, inter alia, the Sixth Regulation of 22 June 1988 amending the FMV, [FN4] it is necessary, as from 30 June 1988, that, in respect of compound feedingstuffs for breeding animals, 'all the constituent ingredients [shall be indicated] in descending order of their proportion' (hereinafter referred to as a 'semi-open declaration'). FN2 [1975] I Bgb FN3 [1981] I Bgb FN4 [1988] I Bgb As early as from 1 October 1985, the FMV (as amended by the Fourth Regulation of 23 January 1985 [FN5] required the 'percentage by weight of all the ingredients' forming part of compound feedingstuffs for breeding animals to be indicated (hereinafter an 'open declaration'). To these particulars it was necessary to add the 'names of the ingredients' (pursuant to the Fifth Regulation amending the FMV of 2 January [FN6] Prior to 1976, German law required an open declaration to be made concerning the ingredients of compound feedingstuffs. Between 1976 and 1985, the German legislation on compound feedingstuffs did not require a declaration to be made concerning the ingredients of those feedingstuffs. FN5 [1985] Bgb FN6 [1987] I Bgb Background to the main proceedings Denkavit Futtermittel GmbH (hereinafter referred to as 'Denkavit'), the plaintiff in the main proceedings, produces and imports feedingstuffs, in particular compound feedingstuffs. One of Denkavit's main activities is the importation into Germany of certain compound feedingstuffs manufactured in the Netherlands. Denkavit wished to import these compound feedingstuffs without complying with the obligation to declare the ingredients laid down by the first sentence of section 13(2) of the FMV. The defendant in the main proceedings, the Land Baden- Württemberg, refused to allow those imported *601 compound feedingstuffs to be marketed. Faced with that refusal, Denkavit claimed that the requirement to make a semi-open declaration, within the meaning of the first sentence of section 13(2) of the FMV, was contrary to Directive 79/373 and to Article 30 EEC and that it was not justified by one of the reasons set out in Article 36 EEC.

7 At first instance the Verwaltungsgericht (Administrative Court) Stuttgart held that the requirement of the open declaration--laid down pursuant to the Fifth Regulation of 2 January 1987, applicable at the time when that court so ruled-- infringed Directive 79/373. The Land Baden-Württemberg brought an appeal against that decision in the Verwaltungsgerichtshof (Higher Administrative Court) Baden-Württemberg. The preliminary questions Taking the view that the proceedings raised questions concerning the interpretation and the validity of the provisions of Directive 79/373 and of the EEC Treaty, the Verwaltungsgerichtshof Baden-Württemberg, by order of 16 January 1990, stayed the proceedings and asked the Court of Justice, in accordance with Article 177 EEC, to give a preliminary ruling on the following questions: (1) Is Article 5(4)(b) of Council Directive 79/373 on the marketing of compound feedingstuffs, read together with Article 5(7) thereof, to be interpreted as meaning: -- that the member-states are entitled to introduce an obligation, which did not exist under national law at the time that the directive entered into force, requiring the ingredients contained in compound feedingstuffs to be listed in descending order of their proportion in the compound feedingstuff ('semi-open declaration'), or -- that the member-states are merely entitled to maintain such an obligation if it already existed in national law at the time of the entry into force of the directive? (2) If Directive 79/373 permits the member-states not merely to maintain but also to introduce an obligation of that kind in regard to labelling: (a) is such an obligation a 'measure having equivalent effect' to a quantitative restriction on imports within the meaning of Article 30 EEC? (b) if it is such a measure, can the contested markings be regarded as necessary in the interest of consumer protection? (c) if the contested markings are to be regarded as necessary in the interest of consumer protection, are they the method which results in the least hindrance to the free movement of goods? (3) If any hindrance to the free movement of goods caused by the contested markings cannot be justified under Article 30 EEC, can the restrictions on trade be justified as an exception under Article 36 on grounds of the protection of human and animal health? In the grounds of the order making the reference, the national court specifies, with respect to the first question, that both the wording of Article 5(4) and (7) of Directive 79/373 and the conclusion a contrario to be drawn from Article 8 of the directive constitute arguments in *602 favour of the lawfulness of introducing the requirement to make a semi-open declaration. It adds that the introduction of the requirement stricter than those already existing in the national legislation when the directive entered into force would appear to be compatible with the purpose of the harmonisation, in accordance with Article 100 EEC, of labelling provisions

8 for the purposes of consumer protection. However, it remains to be determined whether the fifth recital in the preamble to the directive would, interpreting the directive in the light of its purpose, allow the choice open to the member-states to be confined purely to maintaining obligations to declare the ingredients which were already laid down by national law when the directive entered into force. In the second preliminary question, the national court asks whether, taking account of the consistent case law of the Court: see Case 178/84, E.C. Commission v. Germany, [FN7] the restriction on commercial trade resulting from the requirement for the semi-open declaration may be justified by the mandatory requirements relating to, inter alia, consumer protection. In that respect, it must be determined, in the first place, whether that protection requires the ' semi-open declaration' to be made and, next, whether it constitutes the means which has least effect on trade between member-states. One of the reasons why the national legislature required an indication as to the composition of the mixture was to provide breeders with information concerning the type and quantity of the raw materials (percentage of cereals, etc.) of compound feedingstuffs. FN7 [1987] E.C.R. 1227, [1988] 1 C.M.L.R Regarding the third preliminary question, the national court takes the view that the E.C. Council, acting under Article 100 EEC, has laid down exhaustive rules concerning the protection of human health with regard to additives and undesirable substances. The national court infers from Case 5/77, Tedeschi [FN8] that, where directives provide for the harmonisation of the measures necessary to ensure the protection of animal and human health and establish Community procedures to check that they are observed, recourse to Article 36 EEC is no longer justified. The Bundesverwaltungsgericht (Federal Administrative Court), in a judgment of 5 June 1986, [FN9] explained that it was not possible to have recourse to Article 36 EEC because of the harmonisation which had taken place with regard to feedingstuffs. FN8 [1977] E.C.R. 1555, [1978] 1 C.M.L.R. 1. FN9 74 BVerwGE 241. Opinion of the Advocate General (M. Marco Darmon) The questions which have been referred to the Court by the Verwaltungsgerichtshof Baden-Württemberg for a preliminary ruling *603 invite the Court to set the requirements of the free movement of goods, as recognised by the EEC Treaty, against the necessities of the harmonisation of the national laws, in particular regarding labelling. The facts are straightforward. Denkavit Futtermittel GmbH (hereinafter referred to as 'Denkavit'), a company incorporated under German law, has as its main activity the importation and sale on the German market of compound feedingstuffs coming from other member-states of the Community and, in particular, from the Netherlands. It wished to import animal feedingstuffs from

9 that State without complying with the obligation, laid down by section 13(2) of the fifth German regulation amending the Futtermittelverordnung (Feedingstuffs Regulation), [FN10] to indicate the percentage of all the ingredients used (the 'detailed' declaration). The Netherlands apparently does not require the ingredients used in animal feedingstuffs to be indicated. [FN11] The Land Baden- Württemberg refused to allow those products to be marketed. Denkavit claimed, before the Verwaltungsgericht (Administrative Court) Stuttgart, that section 13(2) was contrary to Directive 79/373. [FN12] That court granted Denkavit's application. FN10 Regulation of 2 January 1987 ( [1987] I BGB1. 94 and 423). FN11 Observations submitted by Denkavit, p. 5 of the French translation. FN12 Council Directive on the marketing of compound feedingstuffs: [1979] O.J. L86/30 amended, for the first time, by Council Directive 86/354; those amendments have no bearing on the present case. An appeal against that decision was brought before the Verwaltungsgerichtshof (Higher Administrative Court), Baden-Württemberg, which held that the amendments to the German legislation were applicable to the proceedings. Ever since the Sixth Regulation amending the Futtermittelverordnung of 22 June 1988 [FN13] section 13(2) has required that the ingredients used must be indicated in descending order of their proportion (the 'simplified' declaration). Denkavit contended before that court that the new version of section 13(2) was also contrary to the provisions of Directive 79/373 or, at the very least, to those of Article 30 EEC. FN13 [1988] I Bgb As a result, the national court has referred to this Court three questions for a preliminary ruling first, on the interpretation of the relevant provisions of Directive 79/373, secondly, on the compatibility of that directive with regard to Article 30 EEC, and, finally, should the case arise on the question whether the directive can be justified, where appropriate, by recourse to the provisions of Article 36. I shall now examine these questions in turn. The first question refers to Article 5 of Directive 79/373. According to paragraph (4) of that article, 'Member-States may require all or some of the following particulars only to be indicated:...; (b) the ingredients.' Pursuant to paragraph (7) of the same Article, 'where particulars of the ingredients are given, all the ingredients present shall *604 be listed, either by giving the quantities of each ingredient or in descending order of their proportion in the compound feedingstuff.' The national court is essentially asking the Court of Justice whether these provisions introduce a 'standstill' clause which does not allow the member- States to maintain an obligation to indicate the ingredients unless an obligation of that kind already existed under their domestic law when the directive entered into

10 force. It appears that German law had undergone a period during which the indication of the ingredients was not required. [FN14] FN14 Denkavit, written observations, p. 7 of the French translation. The observations submitted to the Court by the various participants in the proceedings are somewhat at variance with each other as regards the reply to be given to the first question. The Council, [FN15] the Land Baden-Württemberg and the Italian Government consider that the clear and unambiguous provisions of Article 5 of the directive do not in any way restrict the possibility for a member- State to introduce into its domestic law an obligation to indicate the ingredients in descending order of their proportion, even where that obligation did not exist in its national law when the directive entered into force. On the other hand, Denkavit and the Commission maintain that it follows from the objectives, the general scheme and the grounds of the directive, and especially the fifth recital in the preamble thereto, that Article 5 must be interpreted as introducing a 'standstill' obligation. FN15 Written observations, para. 12. Before addressing that problem, it should be pointed out that the directive at issue is part of a process of harmonising national laws which is designed to bring about gradually the free movement within the Community of compound feedingstuffs. It cannot be regarded as constituting the last stone of the edifice. On the one hand, Article 5 of the directive allows the member-states to introduce additional mandatory indications or not to do so, and, on the other hand, Article 15 expressly provides that [n]ot later than three years following notification of this directive the Commission shall, on the basis of experience acquired, forward to the Council proposals for the amendment of this directive such as to achieve free movement of compound feedingstuffs and to eliminate certain disparities concerning the use of ingredients and labelling in particular. The Council shall act on these proposals not later than five years following notification of this directive. This indicates the incomplete nature of the harmonisation that the directive was intended to carry out. A further step in that harmonisation became possibly only with the adoption of Directive 90/44, [FN16] in the second and third recitals of which it is stated that 'under present Community legislation member-states may, in certain cases, *605 waive the Community rules, particularly as regards labelling and the choice of ingredients;... with a view to the completion of the internal market, all national derogations liable further to inhibit free movement of compound feedingstuffs or creating unequal conditions of competition should be eliminated.' Thus the new Article 5 of Directive 79/373, as amended by Directive 90/44, obliges the member-states to require [FN17] the ingredients to be shown in descending order by weight. [FN18] If these particulars are not shown the products may not be marketed. [FN19]

11 FN16 Council Directive amending Directive 79/373 on the marketing of compound feedingstuffs: [1990] O.J. L27/35. FN17 Save in respect of compound feedingstuffs for pets other than dogs or cats for which the indication is optional (Article 5(3)(g) and 1(d)). FN18 The new Article 5c 2(a) of Directive 79/373. FN19 The new Article 5(1) of Directive 79/373. I must, therefore, mention the two essential features of Directive 79/373, having regard to its place in the process of harmonisation: it is incomplete and it is temporary. Let us therefore consider whether it follows from its objectives, its general scheme on the reasons which led to its adoption that Article 5 must be construed as having introduced a 'standstill' obligation, given--and this is not disputed by the participants in the proceedings--that a reading of Article 5 shows that such an obligation cannot be inferred from the mere wording of that provision. The objectives of the directive, as they emerge, in particular, from the third and tenth recitals in the preamble thereto, are to protect human health and the health of animals and to achieve--gradually, as I have just stated-- free movement of compound feedingstuffs within the Community. The fifth recital in the preamble, to which both Denkavit and the Commission refer, does not, on a proper reading, have the meaning which they believe they can attribute to it. It is said in that recital that pending the adoption of further provisions, it is necessary, given the existing practices in certain member-states, to provide temporarily for national administrations to require a fuller declaration of the composition of feedingstuffs, with regard to both analytical constituents and ingredients;... such declarations may be required only as provided for in this directive. That text does not establish the necessary link between 'existing practices in certain member-states' and the possibility of requiring a declaration of the composition of the feedingstuffs. It merely finds that certain States require that declaration and that others do not, and from this infers that it is necessary, in those circumstances, to leave the member-states free to choose whether or not to lay down such an obligation. Finally, the word 'temporarily' may mean that the possibility of introducing such a requirement into national law will subsequently be abrogated; on the other hand, it may mean that it will later cease to be an option and become a requirement. The general scheme of Directive 79/373 also militates against the *606 argument put forward by Denkavit and the Commission. Thus Article 8 of the Community measure provides that [i]n so far as their national laws so provide at the time of adoption of this directive, member-states shall be authorised to limit the marketing of compound feedingstuffs to those: -- obtained from certain ingredients, or

12 -- free from certain ingredients. Besides the fact that that article clearly shows how a 'standstill' clause is drafted, it enables the general scheme of the directive to be understood. With regard to the ingredients which may be utilised, the protection of the health of humans and animals leads to permitting the exclusion of the marketing of certain compound feedingstuffs, a measure which is more restrictive of trade than an obligation concerning labelling, but which is compensated for by the existence of a 'standstill' clause. On the other hand, with regard to the requirements on labelling, which, by their nature, have a less restrictive effect on trade, it is not necessary to provide for such a clause. Furthermore, to accept that there was in this case a 'standstill' clause would lead to an absurd result. Germany would, since the entry into force of Directive 79/373, have been prohibited from providing for such an obligation, whereas, as from the date laid down in Directive 90/44, it will be required to introduce such an obligation into its domestic law. Finally, the Commission considers that it cannot be ruled out that, where the disparities between national laws are made worse by a Council directive, this may constitute a ground for declaring the directive to be invalid. The Commission also suggests that the Court should interpret the directive as meaning that it has introduced a 'standstill' obligation in order to make the Community text necessarily compatible with Article 30, if need be by having recourse to the principle according to which provisions are to be construed in a manner consistent with the Treaty. According to the case law of the Court, when the wording of secondary Community law is open to more than one interpretation, preference should be given to the interpretation which renders the provision consistent with the Treaty, rather than the interpretation which leads to being incompatible with the Treaty. [FN20] FN20 Case 218/82, E.C. Commission v. E.C. Council: [1983] E.C.R. 4063, [1984] 2 C.M.L.R. 350, Para. [15]; See also Case 104/75, De Peijper: [1976] E.C.R. 613, [1976] 2 C.M.L.R. 271; Case 179/78, Rivoira: [1979] E.C.R. 1147, [1979] 3 C.M.L.R It seems to me, however, that the text of Article 5 of Directive 79/373 is not 'open to more than one interpretation.' The Commission itself recognises that the existence of a 'standstill' clause may not be inferred from the words of that provision alone. Accordingly, it does not seem to me that the Court's case law must be applied here. All of the above factors lead me to propose that the Court reply to the first question to the effect that Article 5(4) and (7) of Directive 79/373 *607 does not prevent a member-state from introducing into its national legislation an obligation to indicate the ingredients used in the manufacture of compound feedingstuffs in descending order of their proportion. I shall examine the second and third question together, in so far as the first of these refers to Article 30 EEC and the second to Article 36, the connection

13 between the two articles being so obvious. Before doing so, I shall examine the case law of the Court as regards setting the necessities of harmonisation against the requirements of the free movement of goods. In the first place, it is indisputable that the prohibition of quantitative restrictions on exports and of all measures having equivalent effect applies... not only to national measures but also to measures adopted by the Community institutions. [FN21] FN21 Case 15/83, Denkavit Nederland: [1984] E.C.R. 2171, para. [15], where Article 34 EEC was invoked; See also Joined Cases 80-81/77, Commissionnaires Reunis v. Receveur des Douanes: [1978] E.C.R. 927, Para. [35]. Does this mean that the rules concerning the free movement of goods, as they are interpreted regarding national measures, must be applied according to identical rules in respect of harmonisation directives adopted by the Council? I do not think so. In Case 10/73, Rewe Zentrale, [FN22] where the issue was the compatibility of monetary compensatory amounts with Articles 8, 9, 12 and 13 EEC, the Court held that, although the monetary compensatory amounts did constitute a partitioning of the market, they had a corrective influence on the variations in fluctuating exchange rates, that diversion of trade caused solely by the monetary situation could be considered more damaging to the common interest, that those amounts were conducive to the maintenance of a normal flow of trade under the exceptional circumstances created temporarily by the monetary situation, and finally that they were not levies introduced by some member-state unilaterally and that they were intended to prevent the disruption of the intervention system set up under Community regulations. [FN23] FN22 [1973] E.C.R FN23 At para. [20]. It appears that the Court had regard in particular to the temporary and uniform nature [FN24] of the measure, to its objectives, as well as to the general interest of the Community, a criterion in respect of which the Court carried out a 'balancing test' between the disadvantages of the monetary compensatory amounts and the advantages which were meant to be obtained from their establishment. FN24 For another application of that criterion, see Case 5/77, Tedeschi: [1977] E.C.R. 1555, [1978] 1 C.M.L.R. 1, Paras. [51] to [57]. In Bauhuis, [FN25] the Court examined the compatibility of Council *608 Directive 64/432, [FN26] harmonising the measures relating to health inspections of

14 certain animals, in the light of the principle of the free movement of goods, and held that the organisation of these inspections by the exporting State has been made obligatory so that inspections at the frontier organised unilaterally by the importing member-state become unnecessary, [FN27] FN25 Case 46/76, [1977] E.C.R. 5. FN26 Directive on animal health problems affecting intra-community trade in bovine animals and swine: [1963-4] O.J. Spec. Ed FN27 At para. [27]. that these measures are not laid down unilaterally by each member-state, but have been made obligatory and uniform in the case of all the products in question, [FN28] FN28 At para. [29]. and that they are not prescribed by each member-state... but by the Council in the general interest of the Community, [FN29] FN29 At para. [28]. and concluded that they cannot therefore be regarded as unilateral measures which hinder trade but rather as operations intended to promote the free movement of goods, in particular by rendering ineffective obstacles to this free movement which might be created by the measures for veterinary and public health inspection adopted pursuant to Article 36. [FN30] FN30 At para. [30]. Here again the Court took into consideration the uniform nature [FN31] of the measure, its objectives and the general interest of the Community. [FN32] FN31 On that point, see Case 251/78, Denkavit Futtermittel: [1979] E.C.R. 3369, [1980] 3 C.M.L.R. 513, Para. [11], From Which It Emerges That the Same Measure Will be Assessed Differently According to Whether It Is Unilateral or Whether It Is the Result of A Harmonisation Directive. FN32 This case law has been applied, Mutatis Mutandis, to inspection fees established by the United Nations international agreement on the protection of vegetables of 6 December 1951; Case 89/76, E.C. Commission v. Netherlands:

15 [1977] E.C.R. 1355, [1978] 3 C.M.L.R Finally, in a more recent judgment, [FN33] the Court had to consider whether Council Directive 77/93, [FN34] which partially harmonised protective measures against harmful organisms of plants, was compatible with Article 30. FN33 Case 37/83, Rewe-Zentrale: [1984] E.C.R. 1229, [1985] 2 C.M.L.R FN34 Directive on protection measures against the introduction into the member- States of organisms harmful to vegetables or vegetable products: [1977] O.J. L26/20. After pointing out that the Community institutions are themselves required to have due regard to the freedom of trade within the Community the Court stated: It must be stated that Directive 77/93 is not intended to hinder intra- Community trade. On the contrary, it seeks to achieve the gradual elimination of measures which were adopted unilaterally by the member-states *609 and were, at the time, justified in principle by Article 36 EEC... At the same time, the Directive seeks to strengthen, in the general interest of the Community, the protection of agricultural products against the substantial damage which may be caused by harmful organisms. [FN35] FN35 At para. [19], emphasis added. The Court added that in the exercise of the powers conferred on them in this respect by Articles 43 and 100 EEC, the Community institutions have a discretion in particular with regard to the possibility of proceeding towards harmonisation only in stages and of requiring only the gradual abolition of unilateral measures adopted by the member-states. In view of the particular nature of the problem as described in the recitals in the preamble to the directive and in view of the very incomplete nature of the harmonisation effected thereby, it has by no means been shown that the Council, by permitting in the contested provision inspection by sampling of up to one-third of consignments, has exceeded the limits of its discretionary power. [FN36] FN36 At para. [20], emphasis added. Alongside the criteria which I have already mentioned, the Court had regard, in that decision, to the incomplete nature of the harmonisation in question. However, it may be argued that that criterion is, in a way, a different formulation from that derived from the temporary nature of the measure, a criterion which the Court used with respect to the monetary compensatory amounts. [FN37] FN37 For an identical opinion, see Curral, J., 'Some Aspects of the Relation between Articles and Article 100 of the EEC Treaty, with a Closer Look at

16 Optional Harmonization' (1984) Yearbook of European Law 169, At P Some commentators take the view, moreover, that, while the Community institutions must observe the principle of the free movement of goods, the Court's case law none the less recognises that they have a wider discretion than the member-states. [FN38] It may also be observed that, while the Court never takes into account the objectives of national legislation when considering its compatibility with the rules of the Treaty on the free movement of goods, it does have particular regard to objectives when a Community measure is called into question. [FN39] FN38 Oliver, P., Free Movement of Goods in the EEC, 1988, 2nd ed., 46, At Para FN39 To the criteria to which I have referred, academic legal writers add observance of the principle of proportionality (Oliver, P., Op. Cit., p. 51, 4.16; Curral, J., Op. Cit., p. 194) and equality of treatment between the member-states (Curral, J., Op. Cit., p. 194); certain writers take the view that the burden of proof should be reversed to the advantage of Community measures, which would be presumed to be compatible (with Community law), while national measures which create obstacles to intra-community trade would be presumed to be unjustified (Oliver, P., Op. Cit., P. 51, 4.17). However, while it appears to me that the system established by Article 30 may not necessarily have to obey, vis-à-vis Community harmonising measures, the same rules as those which govern the Court's case law regarding national measures, the fact remains that it is *610 not possible to harmonise failures by the member-states to fulfil their obligations, and that a measure which is made mandatory in all the member-states or which is temporarily left to the discretion of those States must be justified by one of the objectives of Article 36 or by the imperative requirements in the Court's 'Cassis de Dijon' decision. [FN40] Although the Court, in Rewe-Zentrale [FN41] and Bauhuis, [FN42] referred only to the fact that the harmonising measure at issue in each of those cases was intended to promote the free movement of goods, that was plainly because that measure was being questioned in the light of the prohibition of charges having equivalent effect, a prohibition laid down in Articles 9 and 12 EEC, which do not include provisions similar to those of Article 36 or to those which the 'Cassis de Dijon' judgment inferred from Article 30. On the other hand, in Rewe-Zentrale, the Court took care to hold that the inspection measures temporarily maintained by Directive 77/93 were justified by Article 36 EEC. [FN43] FN40 Case 120/78, Rewe-Zentrale: [1979] E.C.R. 649, [1979] 3 C.M.L.R FN41 Case 10/73, Above. FN42 Case 46/76, Above.

17 FN43 Case 37/83, Above, Para. [19]. In his Opinion in De Peijper [FN44] Mayras A.G. had stated on that point that the residuary powers, which are moreover important, left to the member-states by Article 36 in the case of public health cannot be extended by means of directives adopted pursuant to the approximation of laws (Article 100). Directives adopted in application of this article... can only coordinate the measures in force in the member-states; they cannot have any effect on the scope of Article 36. [FN45] FN44 Case 104/75, Above. FN45 See p. 653 (E.C.R.), p. 300 (C.M.L.R.). It follows that the questions submitted by the national court in fact cover two problems. On the one hand, is the requirement that the ingredients be indicated on the label of compound feedingstuffs justified having regard to Article 36 or imperative requirements? On the other hand, is the option given to the member- States of maintaining or introducing such a requirement, and of thus allowing disparities between national laws to remain, in conformity with Article 30? These two points will be examined in turn. In the first place, it is indisputable that the requirement that certain particulars be shown on a product is, in the sense that it may possibly force a manufacturer or importer to alter the presentation of the product, of such a nature as to make its marketing more difficult in certain member-states and, accordingly, has a restrictive effect on intra-community trade. The court's case law is very clear on that point. [FN46] FN46 Case 27/80, Fietje: [1980] E.C.R. 3839, [1981] 3 C.M.L.R. 722, Paras. [8] to [10] *611 ; Case 94/82, De Kikvorsch: [1983] E.C.R. 947, [1984] 2 C.M.L.R. 323, Para. [10]. Secondly, it goes without saying that the measure at issue is applicable without distinction to national products and to imported products. In the third place, it is necessary to consider whether that obligation to indicate the ingredients which go to make up compound feedingstuffs may be justified by one of the objectives referred to in Article 36 or by one of the imperative requirements. The Court has already stated, in Case 28/84, E.C. Commission v. Germany, [FN47] that Directive 79/373 formed part of the framework of the common agricultural policy and at the same time that of the harmonisation of legislation capable of directly affecting the functioning of the common market, FN47 [1985] E.C.R

18 and that its purpose was to contribute specifically in the area in question to achieving the free movement of goods. [FN48] FN48 At para. [11]. In a judgment given some months earlier, [FN49] also concerning Directive 79/373, the Court held that that directive did not purport to lay down rules with regard to health inspections on compound feedingstuffs [FN50] FN49 Case 73/84, Denkavit Futtermittel: [1985] E.C.R. 1013, [1986] 2 C.M.L.R FN50 At para. [12]. and that that task continued to be the responsibility of the member-states. The Court referred to Article 3 of the measure in question, according to which member-states shall prescribe that compound feedingstuffs may be marketed only if they are wholesome, unadulterated and of merchantable quality. They shall also prescribe that compound feedingstuffs may not represent a danger to animal or human health and may not be presented or marketed in a manner liable to mislead, and concluded that that provision merely imposes on member-states a general obligation to adopt all appropriate measures... to enforce compliance with certain rules relating to quality, to ensure that health inspections are carried out on feedingstuffs and to guarantee fair trading regardless of the origin of the applicable rules. [FN51] FN51 At para. [12], emphasis added. Thus, the Court has already held that the objectives of Directive 79/373 were concerned simultaneously with the requirement of fair trading and with the protection of the health and life of humans and animal which is referred to in Article 36 EEC. It appears, however, that the particular measure constituted by the obligation to indicate the ingredients essentially responds to the need to ensure fair trading and consumer protection. It may be considered that the obligation to indicate the ingredients enables consumers to *612 know which substances (in particular cereals, meats and vegetables) go to make up the product and to take account of them for the purposes of feeding their animals. It is to no avail that Denkavit here refers to Parfumerie-Fabrik 4711 v. Provide. [FN52] In that case, the directive in question did not permit the ingredients of cosmetic products to be shown. The Court stated, in that respect, merely that '[b]ecause of the implied obligation to modify the packaging in which the products are legally marketed in certain

19 member-states, such a requirement is likely to hinder trade within the Community. [FN53] As I have just pointed out, it is indisputable that a requirement that certain particulars be indicated on a product has a restrictive effect on trade within the Community. However, in Provide the Court never intended to hold that no obligation concerning labelling could ever be justified by imperative requirements or by the objectives referred to in Article 36 EEC. FN52 Case C-150/88, [1989] E.C.R. 3891, [1991] 1 C.M.L.R FN53 At para. [18]. Denkavit indicates, moreover, the factual reasons which appear to form the basis of its hostility to the measure at issue. As a specialist in feedingstuffs for young animals, which are more susceptible to disease than others, Denkavit had incurred substantial expense, following costly scientific research in perfecting those feedingstuffs. Thus, according to Denkavit, the obligation to indicate the ingredients runs counter to the protection of business secrets. It states, however, in the exposition of its interpretation of Directive 90/44 that the new Article 5c(3) allows the indication of the ingredients to be replaced by an indication of 'categories grouping several ingredients,' which, in its view, protects industrial and commercial property. [FN54] It fails to point out, however, that in Article 5(7) Directive 79/373 already authorises the member-states to 'group ingredients together by category or maintain existing categories and permit particulars of ingredients to be replaced by those relating to categories.' The argument put forward is therefore irrelevant. FN54 It will be recalled that Denkavit also refers to Article 36 EEC. Finally, the Community institutions, when they carry out the harmonisation of national laws necessary in order that the establishment of the internal market, and in particular the free movement of goods, may be ensured, must be allowed a wide discretion [FN55] in the choice of measures for ensuring the protection of the objectives referred to in Article 36 or of imperative requirements, subject, obviously, to the observance of the principle of proportionality. I would note, furthermore, that Article 100a(3) of the Treaty, introduced by the Single European Act, requires the Commission, in its proposals regarding, in particular, consumer protection, to take as a base a 'high level of protection.' Thus the Community institutions may legitimately take the view that the *613 indication of the ingredients of cosmetic products must be prohibited, since it does not actually enable users to assess the effects of the product, while, on the other hand, such an indication is useful in the case of compound feedingstuffs, since the stock farmer is in a position to judge the interest of a product for his business. FN55 Cases 10/73, 46/76 and 37/83, above. The measure at issue, to conclude on this point, thus appears to be one of those

20 which are justified having regard to the imperative requirements of fair trading and consumer protection. I shall now consider the compatibility of Directive 79/373 with Article 30 with respect to the allegations that that directive has 'aggravated' the disparities between national laws. That difficulty is, no doubt, in the case in point, easier to resolve. In the first place, the measures harmonised are, as I have just stated, justified on the basis of imperative requirements. Those measures, in the absence of harmonisation, would have also been justified had they been adopted by national legislature. Accordingly, even though the directive allows certain disparities between national laws to remain and permits certain member-states whose domestic law did not provide for that obligation to introduce it, it still remains that, to adopt the actual terms used in the court's case law, obstacles to movement within the Community resulting from these disparities must be accepted in so far as those provisions may be recognised as being necessary in order to satisfy mandatory requirements relating in particular to... the fairness of commercial transactions and the defence of the consumer. [FN56] FN56 Case 120/78, Above, at Para. [8]. In the second place, it may seriously be disputed that the effect of the directive in question has been to 'aggravate' the disparities between laws. Article 5(4) gives an exhaustive list of particulars that the member-states may require, in addition to those made compulsory by Article 5(1). Harmonisation has thus essentially related to the number and the nature of the particulars, while the very principle of requiring the particulars to be shown is still left, temporarily, to the discretion of the member-states. In practice, an economic operator is henceforth aware of the entire range of the particulars which may be required by any given member- State, and, by choosing to include all of them on his products, may therefore be assured that those products will be able to move freely throughout the Community. It is no longer necessary for him to carry out tiresome research into the requirements laid down by the various laws of the member-states and he is no longer at the mercy of any amendments to those laws. The exhaustive nature of the particulars which are authorised enables him to take the necessary *614 steps regarding the packaging of his products with complete security. In this sense Directive 79/373 clearly promotes the free movement of goods. Finally, the fact that incomplete harmonisation is obviously less satisfactory for the establishment of an internal market than a measure of complete harmonisation, such as that brought about by Directive 90/44, is none the less justified, according to Rewe-Zentrale, [FN57] by the possibility given to the Community institutions of proceeding towards harmonisation only in stages and of requiring only the gradual abolition [FN58] FN57 Case 37/83, Above.