CJEU, 1st chamber, June 14, 2018, No C-169/17

THE COURT (First Chamber),

1 This request for a preliminary ruling concerns the interpretation of Articles 34 and 35 TFEU and Articles 3(1)(a) and 12 of Council Directive 2008/120/EC of 18 December 2008 laying down minimum standards for the protection of pigs (OJ 2009 L 47, p. 5).

2 The request has been made in proceedings between the Asociación Nacional de Productores de Ganado Porcino ('the Association') and the Administración del Estado (State Administration, Spain) concerning a royal decree adopted by the Spanish Government approving quality standards for meat, ham, shoulder ham and loin derived from Iberian pigs.

Legal context

EU law

3 Recitals 7 and 8 of Directive 2008/120 state:

'(7) There is therefore a need to establish common minimum standards for the protection of pigs kept for rearing and fattening in order to ensure rational development of production.

(8) Pigs should benefit from an environment corresponding to their needs for exercise and investigatory behaviour. The welfare of pigs appears to be compromised by severe restrictions of space.'

4 Article 1 of Directive 2008/120 reads as follows:

'This Directive lays down the minimum standards for the protection of pigs confined for rearing and fattening.'

5 Article 3(1)(a) of that directive provides:

'Member States shall ensure that all holdings comply with the following requirements:

(a) the unobstructed floor area available to each weaner or rearing pig kept in a group, excluding gilts after service and sows, must be at least:

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6 Pursuant to Article 12 of Directive 2008/120:

'Member States may, in compliance with the general rules of the Treaty, maintain or apply within their territories stricter provisions for the protection of pigs than those laid down in this Directive. They shall inform the Commission of any such measures.'

Spanish law

7 Article 1 of Real Decreto 4/2014 por el que se aprueba la norma de calidad para la carne, el jamón, la paleta y la caña de lomo ibérico (Royal Decree 4/2014 approving quality standards for meat, ham, shoulder ham and loin derived from Iberian pigs) of 10 January 2014 (BOE No 10 of 11 January 2014, p. 1569) is worded as follows:

'The purpose of this Royal Decree is to establish quality standards to be met by products derived from the cutting of Iberian pig carcasses that are either processed or marketed fresh, such as ham, shoulder ham and loin derived from Iberian pigs, and processed or marketed in Spain, in order to be able to use the sales designations provided for in this legislation, without prejudice to compliance with any other applicable general rules.

Products processed in Portugal shall likewise be accepted on the basis of the agreements concluded between the authorities of Spain and Portugal on the production, processing, marketing and control of products derived from Iberian pigs.

Furthermore, products registered under EU quality schemes (Protected Designation of Origin or Protected Geographical Indication) that wish to use the sales designations provided for in this legislation or any of the terms included therein must comply with its provisions.'

8 Article 3(1) of Royal Decree 4/2014 states:

'The sales designation of the products regulated by this Royal Decree must include three descriptions listed in the following order:

(a) Description of product type:

(i) For processed products: ...

(ii) For products obtained from the cutting of the carcass and marketed fresh: ...

(b) Description of animal feeding and handling:

(i) "De bellota": for products derived from animals slaughtered immediately after fattening exclusively with acorns, grass and other natural resources from dehesa oak forests ...

(ii) For products derived from animals whose feeding and handling, until reaching slaughter weight, does not fall within the definition in the previous point, the following descriptions shall be used:

1. "De cebo de campo": In the case of animals that have grazed in dehesa oak forests or pastures but have also been fed with feed consisting mainly of cereals and legumes and that have been kept on extensive or intensive outdoor fattening farms that may include a covered area ...

2. "De cebo": In the case of animals that have been fed with feed consisting mainly of cereals and legumes and reared in intensive fattening farms, in accordance with the provisions of Article 8.

(c) Description of breed ...

...'

9 Article 8(1) and (2), entitled 'Handling conditions for animals from which products bearing the "de cebo" description are derived', of Royal Decree 4/2014 states:

'1. Without prejudice to the rearing conditions set out in [Real Decreto 1135/2002, de 31 de octubre 2002, relativo a las normas mínimas para la protección de cerdos (Royal Decree 1135/2002 on minimum standards for the protection of pigs of 31 October 2002 (BOE No 278 of 20 November 2002)], production animals with a live weight of more than 110 kg and from which products bearing the "de cebo" description are derived must have a total unobstructed floor area of at least 2 m² per animal during the fattening stage.

2. The minimum age at slaughter is 10 months.'

10 The third additional provision of Royal Decree 4/2014 provides:

'The requirements laid down in relation to the quality standards are not applicable to products lawfully manufactured or marketed in accordance with other specifications in other Member States of the European Union, to products originating from countries of the European Free Trade Association (EFTA), to contracting parties to the Agreement on the European Economic Area (EEA), or to States party to a customs association agreement with the European Union.'

The dispute in the main proceedings and the questions referred for a preliminary ruling

11 The Association instituted ordinary administrative proceedings against Royal Decree 4/2014 before the referring court, the Tribunal Supremo (Supreme Court, Spain).

12 In support of that action, the Association claims that Royal Decree 4/2014 creates a distortion of competition at EU level by imposing higher costs on the production of Iberian pig products in Spain. Thus, the Association maintains that that decree constitutes a quantitative restriction on exports that is incompatible with Article 35 TFEU in so far as competing producers established in other Member States are not required to bear the costs resulting from a measure such as that imposed by the Spanish Government.

13 The Association also claims, before the referring court, that the decree at issue infringes Article 3(1)(a) of Directive 2008/120, read in conjunction with Article 12 of that directive, in so far as the objective of the measures introduced by that decree is to increase the price of Iberian pig products, not the protection of pigs.

14 In addition, the Association maintains that the objective of improving the quality of products, which is specifically stated in Royal Decree 4/2014, cannot be achieved by the measures enacted under that decree since, first, it has not been proven that doubling the total minimum unobstructed floor area per animal will increase the quality of Iberian pig products, and, secondly, setting the minimum age for slaughter at 10 months, whereas pigs reach the optimum slaughter weight at approximately 8 months, will result in the marketing of products that are too heavy. There is no demand for such products on the market and it will not be possible to sell them for a higher price that is proportional to the greater weight.

15 The referring court considers that Spanish producers of products bearing the designation 'ibérico de cebo' are at a disadvantage compared to other EU producers on account of having to bear higher production costs. It also considers that EU producers will be deterred from exporting their products to Spain since their products are not derived from pigs reared in accordance with the conditions laid down by Royal Decree 4/2014 and therefore cannot obtain that designation. Nevertheless, it acknowledges that, under the third additional provision of that decree, the marketing of products originating from other Member States and bearing similar, comparable or identical designations is to be permitted in Spanish territory, even if they were not produced in accordance with the provisions of that decree, provided that they comply with the quality standards of those Member States.

16 The referring court is also unsure as to whether Directive 2008/120 constitutes a valid legal basis for Royal Decree 4/2014, in so far as Article 12 of that directive permits the adoption of more stringent national measures only where they are intended to improve the protection of animals. However, the aim of that decree is not the protection of pigs, but rather the improvement of product quality. In any event, the referring court has doubts as to whether that decree is compatible with Article 12 of Directive 2008/120 in so far as that article only permits more stringent national measures that apply within the relevant territory.

17 In those circumstances, the referring court, the Tribunal Supremo (Supreme Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

'(1) Must Articles 34 and 35 TFEU be interpreted as precluding national legislation, such as Article 8(1) of [Royal Decree 4/2014], which makes the use of the term "ibérico" on products processed or marketed in Spain subject to breeders of Iberian pigs in intensive fattening farms (using animal feed), increasing the total minimum unobstructed floor area per live animal of more than 110 kg to 2 m², even if it were to be established, as the case may be, that the aim of that measure is to improve the quality of the products covered by the legislation?

(2) Must Article 3(1)(a) of [Directive 2008/120], read in conjunction with Article 12 of that directive, be interpreted as precluding national legislation, such as Article 8(1) of [Royal Decree 4/2014], which makes the use of the term "ibérico" on products processed or marketed in Spain subject to breeders of Iberian pigs in intensive fattening farms (using animal feed) increasing the total minimum unobstructed floor area per live animal of more than 110 kg to 2 m², even if the aim of that national legislation is to improve the quality of the products, and not specifically to provide better protection for pigs?

If the answer to the previous question is in the negative, must Article 12 of [Directive 2008/120], read in conjunction with Articles 34 and 35 TFEU, be interpreted as precluding a provision such as Article 8(1) of Royal Decree 4/2014 which requires producers of other Member States to comply with the same conditions for the rearing of animals as Spanish producers in order for the products derived from their pigs to be able to use the sales designations regulated by that decree - with the aim of improving the quality of products processed or marketed in Spain, not with the aim of providing better protection for pigs?

(3) Must Articles 34 and 35 TFEU be interpreted as precluding national legislation, such as Article 8(2) of [Royal Decree 4/2014], which imposes a minimum slaughter age of 10 months for pigs from which products in the "de cebo" category are derived, with the aim of improving the quality of those products?'

Consideration of the questions referred

The first and third questions

18 By its first and third questions, which it is appropriate to examine together, the referring court asks, in essence, whether Articles 34 and 35 TFEU must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which provides that the sales designation 'ibérico de cebo' may be granted only to products that comply with certain conditions imposed by that legislation.

Article 34 TFEU

19 As a preliminary point, the European Commission disputes the relevance of the question referred for a preliminary ruling relating to the compatibility of Royal Decree 4/2014 given that, first, the applicant in the main proceedings has not raised a plea for annulment on that basis before the Tribunal Supremo (Supreme Court) and, secondly, all aspects of the main proceedings are confined within a single Member State.

20 In that regard, first, it must be pointed out that it is solely for the national court, before which the dispute has been brought and which must assume responsibility for the judicial decision to be made, to determine, in the light of the particular circumstances of the case, both the necessity and the relevance of the questions that it submits to the Court (see judgment of 21 June 2016, New Valmar, C-15/15, EU:C:2016:464, paragraph 23 and the case-law cited).

21 Secondly, it must be noted that any national measure that is capable of hindering, directly or indirectly, actually or potentially, trade within the European Union must be regarded as a measure having an effect equivalent to quantitative restrictions within the meaning of Article 34 TFEU (see, to that effect, judgments of 18 October 2012, Elenca, C-385/10, EU:C:2012:634, paragraph 22 and the case-law cited), and of 6 October 2015, Capoda Import-Export, C-354/14, EU:C:2015:658, paragraph 39 and the case-law cited).

22 It is clear from the Court's settled case-law that that provision is intended to apply not only to the actual effects but also to the potential effects of legislation. It cannot be considered inapplicable simply because at the present time there are no actual cases with a connection to another Member State (judgment of 22 October 1998, Commission v France, C-184/96, EU:C:1998:495, paragraph 17 and the case-law cited).

23 Accordingly, it must be held that the question whether Article 34 TFEU precludes national legislation such as Royal Decree 4/2014 is relevant to the resolution of the dispute in the main proceedings and should therefore be answered.

24 In that regard, the Court has consistently held that national legislation that subjects goods from other Member States, where they are lawfully manufactured and marketed, to certain conditions in order to be able to use the generic designation commonly used for that product, and which thus in certain cases requires producers to use designations which are unknown to, or less highly regarded by, consumers, does not absolutely preclude the importation into the Member State concerned of products originating in other Member States. Nevertheless, it is likely to make their marketing more difficult and thus impede trade between Member States (judgment of 5 December 2000, Guimont, C-448/98, EU:C:2000:663, paragraph 26 and the case-law cited).

25 In the present case, it is apparent from the documents before the Court, first, that the national legislation at issue in the main proceedings does not relate to a generic designation commonly used in the territory of the European Union and, secondly, that that legislation does not contain any prohibitions on importing or selling Iberian pig products under designations other than those provided for in that legislation.

26 The legislation at issue in the main proceedings contains a provision that has been interpreted by the referring court as meaning that products derived from Iberian pigs and processed in accordance with the rules applicable in other EU Member States under designations similar, comparable or identical to those set out in Royal Decree 4/2014 may be imported and marketed in Spain under such designations, despite not fully satisfying the requirements laid down in that decree. That provision, so interpreted, ensures that the national legislation at issue in the main proceedings does not constitute an obstacle to trade between States (see, a contrario, judgment of 22 October 1998, Commission v France, C-184/96, EU:C:1998:495).

27 Moreover, as noted by the Commission, EU legislation displays a general tendency to emphasise the quality of products within the framework of the common agricultural policy, in order to promote the reputation of those products (see, to that effect, judgment of 16 May 2000, Belgium v Spain, C-388/95, EU:C:2000:244, paragraph 53, and of 8 September 2009, Budejovický Budvar, C-478/07, EU:C:2009:521, paragraph 109).

28 In those circumstances, it cannot be held that Article 34 TFEU precludes national legislation, such as that at issue in the main proceedings, which provides that the sales designation 'ibérico de cebo' may be granted only to products that comply with certain conditions imposed by that legislation, since that legislation permits the importation and marketing of products from Member States other than the State that adopted the legislation at issue, under the designations they bear pursuant to the rules of the Member State of origin, even if they are similar, comparable or identical to the designations provided for in the national legislation at issue in the main proceedings.

Article 35 TFEU

29 The Court has consistently held that a national measure applicable to all traders active in the national territory which has a greater effect on goods leaving the market of the exporting Member State than on the marketing of goods in the domestic market of that Member State is covered by the prohibition laid down by Article 35 TFEU (judgment of 21 June 2016, New Valmar, C-15/15, EU:C:2016:464, paragraph 36 and the case-law cited).

30 In the present case, it should be noted that the legislation at issue in the main proceedings does not distinguish between products destined for the domestic market and those destined for the EU market. All Spanish producers wishing to sell their Iberian pig products under the sales designations laid down in Royal Decree 4/2014 are required to comply with the requirements of that decree, regardless of the market on which they wish to sell their products.

31 Accordingly, it must be held that Article 35 TFEU does not preclude national legislation such as Royal Decree 4/2014.

The second question

32 By its second question, the referring court asks, in essence, whether Article 3(1)(a) of Directive 2008/120, read in conjunction with Article 12 of that directive, precludes national legislation, such as that at issue in the main proceedings, providing that the use of certain sales designations for Iberian pig products processed or marketed in Spain is subject to producers complying with conditions for the rearing of Iberian pigs that are more stringent than those laid down in Article 3(1)(a) as well as a condition imposing a minimum slaughter age of 10 months.

33 In answering that question, the Court points out that the objective of Directive 2008/120, as stated in Article 1 thereof, is to establish minimum standards for the protection of pigs confined for rearing and fattening. According to recital 7 of that directive, those standards are intended to guarantee the protection of pigs kept for rearing and fattening in order to ensure rational development of production. To that end, as stated in recital 8, the directive provides for various rules intended, inter alia, to ensure that pigs have an environment corresponding to their needs for exercise and investigatory behaviour.

34 However, it should be noted that the objective of the national legislation at issue in the main proceedings is not the protection of pigs, but rather the improvement of the quality of the products. Consequently, Royal Decree 4/2014 does not fall within the scope of Directive 2008/120.

35 Nevertheless, by increasing both the minimum unobstructed floor area available to each animal and the minimum slaughter age, that legislation is not liable to compromise the welfare of the animals and is therefore not incompatible with that directive.

36 In those circumstances, the answer to the second question must be that Article 3(1)(a) of Directive 2008/120, read in conjunction with Article 12 of that directive, must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, providing that the use of certain sales designations for Iberian pig products processed or marketed in Spain is subject to producers complying with conditions for the rearing of Iberian pigs that are more stringent than those laid down in Article 3(1)(a) as well as a condition imposing a minimum slaughter age of 10 months.

Costs

37 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (First Chamber) hereby rules:

1. Articles 34 and 35 TFEU must be interpreted as follows:

- Article 34 TFEU does not preclude national legislation, such as that at issue in the main proceedings, which provides that the sales designation 'ibérico de cebo' may be granted only to products that comply with certain conditions imposed by that legislation, since that legislation permits the importation and marketing of products from Member States other than the State that adopted the legislation at issue, under the designations they bear pursuant to the rules of the Member State of origin, even if they are similar, comparable or identical to the designations provided for in the national legislation at issue in the main proceedings.

- Article 35 TFEU does not preclude national legislation such as that at issue in the main proceedings.

2. Article 3(1)(a) of Council Directive 2008/120/EC of 18 December 2008 laying down minimum standards for the protection of pigs, read in conjunction with Article 12 of that directive, must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, providing that the use of certain sales designations for Iberian pig products processed or marketed in Spain is subject to producers complying with conditions for the rearing of Iberian pigs that are more stringent than those laid down in Article 3(1)(a) as well as a condition imposing a minimum slaughter age of 10 months.