POA v Commission (Order) [2015] EUECJ T-584/15

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(Application for interim measures — Publication of an application for registration of a protected designation of origin — ‘Halloumi’ or ‘Hellim’ — Application for suspension of operation of a measure — No urgency)

Pagkiprios organismos ageladotrofon Dimosia Ltd (POA), established in Latsia (Cyprus), represented by N. Korogiannakis, lawyer,

European Commission, represented by A. Lewis and J. Guillem Carrau, acting as Agents,

APPLICATION for suspension of operation of the measure adopted by the Commission dated 28 July 2015 entitled ‘Publication of an application pursuant to Article 50(2)(a) of Regulation (EU) No 1151/2012 of the European Parliament and of the Council on quality schemes for agricultural products and foodstuffs’ (OJ 2015 C 246, p. 9),

1 The applicant, Pagkiprios organismos ageladotrofon Dimosia Ltd, is an organisation of producers of cow’s milk, established and registered in 2004, which has 157 members, which corresponds to approximately 75% of the total number of Cypriot cow’s milk producers. On average, 54 million litres of that milk is used, per year, in the process for the production of the cheese known as ‘halloumi’. This is a particular type of Cypriot cheese, which is made in a certain way and which has a particular taste and texture, and particular cooking properties. The applicant is the main Cypriot producer of cow’s milk used in the production of halloumi. It also produces that cheese through a wholly-owned subsidiary.

2 In 2012, various Cypriot companies and organisations active in the cheese production sector, in particular, of halloumi, filed an application with the Cypriot authorities for registration of halloumi as a protected designation of origin. That application was based on the Cypriot production standard of 1985 (‘the 1985 standard’) and sought to have that standard interpreted as requiring halloumi producers to use more than 50% ewe’s or goat’s milk. In other words, when cow’s milk is used in addition to ewe’s or goat’s milk or a mixture thereof in the production of halloumi, the proportion of cow’s milk must not be greater than the proportion of ewe’s or goat’s milk or the mixture thereof.

3 The application for registration of halloumi is governed by Regulation (EU) No 1151/2012 of the European Parliament and of the Council of 21 November 2012 on quality schemes for agricultural products and foodstuffs (OJ 2012 L 343, p. 1). Under that regulation, the procedure for the registration of protected designations of origin (PDO) consists of two stages. The first stage concerns specifically the Member State in which the agricultural product or foodstuff in question originates. That Member State initiates the procedure by means of an application for registration and the preparation of the necessary documentation establishing the link between the product covered and the protected area; in addition, it must provide for a national opposition procedure enabling any resident on its territory to oppose the application. This is followed by a second stage, carried out by the European Commission, in which the criteria in the application for registration are checked and verified. This involves an examination of the application and its publication, for the purposes of a possible cross-border opposition procedure.

4 In the present case, the application for registration was published in November 2012 in the Episimi Efimerida tis Kipriakis Dimokratias (Official Journal of the Republic of Cyprus); the applicant raised objections, in accordance with Article 49 of Regulation No 1151/2012, under the national opposition procedure, criticising the prohibition on the use in the production of halloumi of a greater proportion of cow’s milk than the proportion of ewe’s or goat’s milk. The applicant thus submits that, under the 1985 standard, it is considered to be traditional and legal for halloumi to be produced using a preponderant proportion of cow’s milk, as long as non-negligible quantities of ewe’s or goat’s milk are used. Following the rejection of those objections by the Cypriot authorities in July 2014, the applicant brought an appeal before the Anotato Dikastirio tis Kipriakis Dimokratias (Supreme Court of the Republic of Cyprus). Those legal proceedings are still pending.

5 On 17 July 2014, the Cypriot authorities filed application CY/PDO/0005/01243 with the Commission, seeking registration of halloumi as a PDO, and specifying that, under the specification, the composition of milk required referred to a predominance of ewe’s and goat’s milk. Having examined the application for registration, the Commission found that it was justified, in that it satisfied the conditions of Regulation No 1151/2012, in accordance with Article 50 thereof. Consequently, on 28 July 2015, it adopted the measure entitled ‘Publication of an application pursuant to Article 50(2)(a) of Regulation (EU) No 1151/2012 of the European Parliament and of the Council on quality schemes for agricultural products and foodstuffs’ (OJ 2015 C 246, p. 9, ‘the contested measure’), which summarises the specification submitted by the Cypriot authorities for the purposes of the registration of halloumi as a PDO. The second stage of the administrative procedure, namely the cross-border opposition procedure provided for in Article 51 of Regulation No 1151/2012, was initiated by that publication.

6 By application lodged at the Court Registry on 7 October 2015, the applicant has sought the annulment of the contested measure by which the Commission accepted the Cypriot authorities’ application CY/PDO/0005/01243 as meeting the conditions set out in Regulation No 1151/2012. In support of that action, the applicant complains that the Commission, inter alia, made a manifest error of assessment as to the conformity of application CY/PDO/0005/01243 with Regulation No 1151/2012, in particular, as regards the content of milk used in the process for the production of halloumi.

7 By separate document lodged at the Court Registry on 8 October 2015, the applicant submitted the present application for interim measures, in which it claims, in essence, that the President of the General Court should:

– suspend the operation of the contested measure, including the initiation of the opposition procedure provided for in Article 51 of Regulation No 1151/2012, or any other subsequent decision on the registration of halloumi as a PDO under Article 52 of that regulation;

8 In its observations on the application for interim measures lodged at the Court Registry on 22 October 2015, the Commission contends that the President of the General Court should dismiss the application for interim measures and reserve the costs. The Commission contends, first and foremost, that the main action to which the present application relates is manifestly inadmissible, since the contested measure is of a purely preparatory nature and does not produce legal effects capable of affecting the applicant’s interests by bringing about a distinct change in its legal position or procedural rights for the purposes of Article 263 TFEU.

9 The applicant replied to the Commission’s observations by submissions of 4 November 2015. The Commission adopted a final position on those submissions in further observations of 12 November 2015.

10 In accordance with Article 278 TFEU and Article 279 TFEU, read in conjunction with Article 256(1) TFEU, the judge hearing an application for interim measures may, if he considers that the circumstances so require, order that the operation of a measure challenged before the General Court be suspended or prescribe any necessary interim measures. Nevertheless, Article 278 TFEU establishes the principle that actions do not have suspensory effect, since acts adopted by the institutions of the European Union are presumed to be lawful. It is therefore only in exceptional cases that the judge hearing an application for interim measures may order the suspension of operation of a measure challenged before the General Court or prescribe interim measures (see order of 11 November 2013 in CSF v Commission, T‑337/13 R, EU:T:2013:599, paragraph 21 and the case-law cited).

11 Furthermore, Article 156(3) of the Rules of Procedure of the General Court provides that applications for interim measures must state the subject-matter of the proceedings, the circumstances giving rise to urgency and the pleas of fact and law establishing a prima facie case for the interim measures applied for. Accordingly, the judge hearing an application for interim measures may order the suspension of operation of an act, or other interim measures, if it is established that such an order is justified, prima facie, in fact and in law and that it is urgent in so far as, in order to avoid serious and irreparable harm to the interests of the party seeking those measures, it must be made and produce its effects before a decision is reached in the main action. Those conditions are cumulative, so that an application for interim measures must be dismissed if any one of them is absent (see order in CSF v Commission, cited in paragraph 10 above, EU:T:2013:599, paragraph 22 and the case-law cited).

12 In the context of that overall examination, the judge hearing the application for interim measures enjoys a broad discretion and is free to determine, having regard to the specific circumstances of the case, the manner and order in which those various conditions are to be examined, there being no rule of law imposing a pre-established scheme of analysis within which the need to order interim measures must be assessed. Where appropriate, the judge hearing such an application must also weigh up the interests involved (see order in CSF v Commission, cited in paragraph 10 above, EU:T:2013:599, paragraph 23 and the case-law cited).

13 Having regard to the documents in the case, the President of the General Court considers that he has all the information needed to rule on the present application for interim measures without there being any need first to hear oral argument from the parties.

14 In the circumstances of the present case, it is appropriate to examine first whether the condition relating to urgency is satisfied.

15 In that context, the applicant claims, in the application for interim measures, that the circumstances giving rise to urgency relate to the immediate effects on its economic activity of the publication of the contested measure in the Official Journal of the European Union. It claims that, on account of that publication, its foreign customers will no longer consider the applicant’s products to be traditional halloumi, since that name is henceforth reserved, under the new interpretation of the 1985 standard, to cheese made of at least 50% ewe’s or goat’s milk. At the same time, Cypriot producers of that cheese to whom the applicant supplies cow’s milk produced by its members will take account of the contested measure published, and will begin to reduce significantly the demand for cow’s milk, anticipating the decrease in demand for a product that is only ‘tolerated’ during a transitional period, namely halloumi that has cow’s milk as its main ingredient. The applicant states that supply contracts with retailers are annual in the milk sector, and claims that the contracts coming into force on 1 January 2016 will relate to significantly lower volumes of cow’s milk if the operation of the contested measure is not suspended.

16 The applicant states that foreign retailers have already started to call into question the conformity of products containing cow’s milk as the main ingredient. It expects that they will switch to purchasing halloumi that complies with the new interpretation of the 1985 standard and that is made of at least 50% ewe’s or goat’s milk. In order to satisfy domestic and foreign customers, domestic producers of cheese will have to change their production method. The applicant states that such commercial strategies have already been implemented because of the need to keep up with competition by using at least 50% ewe’s or goat’s milk in the production of that cheese. The applicant adds that, through its wholly-owned subsidiary, it is also affected as a producer of halloumi, since its commercial partners, retailers that are mainly located abroad, no longer wish to be supplied with a ‘tolerated’ product, but rather with a product that is ‘legal and traditional’.

17 In order to adapt to the new situation, the applicant claims that it will have to make enormous investments because the machinery and installations necessary to produce ewe’s milk are completely different from those used to produce cow’s milk. In point of fact, machinery worth several million euros will become redundant and will have to be replaced, buildings and other installations will have to be replaced or abandoned, the supply chain for feed will have to change, etc. Consequently, should the contested measure not be suspended, the majority of the applicant’s members will be forced to cease their economic activity and, at the conclusion of the main proceedings, the applicant will no longer be present on the market.

18 In addition, since milk production depends on livestock, a milk producer cannot immediately adapt to the new circumstances. Consequently, although the production of cow’s milk can be reduced through the mass and costly slaughter of redundant animals, even if the applicant survived its disastrous financial situation, it could not return — in the event the contested measure is annulled — to the previous level of production of cow’s milk and to the sales volumes of previous years because its members would only be able to re-establish gradually the same number of herds of milk-producing animals. The applicant notes also that if the contested measure produces its effects for a period of three to five years, that is to say, the time necessary for the dispute in the main proceedings to be decided, consumer habits will have evolved, with the result that it will lose its current customers permanently. Therefore, it will be impossible to return to the previous situation and there is a risk that the applicant will never be able to regain the same level of commercial activity.

19 Lastly, in its submissions of 4 November 2015, the applicant claims that the main effect of the contested measure is the expected decrease in demand for cow’s milk. Even if the only damage suffered by the applicant is financial in nature, it would still be urgent to grant the interim measures sought because the operation of the contested measure will imperil its financial viability or substantially affect its market share in the light, inter alia, of the size and turnover of its business and the characteristics of the group to which it belongs.

20 The Commission contends, on the other hand, that the applicant has not succeeded in establishing the urgency of the suspension of operation sought.

21 In the present case, the damage which the applicant claims would be caused to its cow’s milk producer members and to its subsidiary that produces and markets halloumi must be excluded from the outset. Suffice it to recall that, according to settled case-law, the party seeking interim measures is required to show that the grant of those measures is urgent in the sense that it cannot await the conclusion of the main proceedings without personally suffering damage which will have serious and irreparable consequences for it in its individual capacity. Urgency is thus a specific question which must be examined separately for each applicant (see, to that effect, orders of 24 March 2009 in Cheminova and Others v Commission, C‑60/08 P(R), EU:C:2009:181, paragraphs 35 and 36; 15 December 2009 in Dow AgroSciences and Others v Commission, C‑391/08 P(R), EU:C:2009:785, paragraph 44; and 12 June 2014 in Commission v Rusal Armenal, C‑21/14 P-R, ECR, EU:C:2014:1749, paragraph 51). However, since neither the applicant’s cheese producing subsidiary nor any cow’s milk producer member of the applicant is participating in the legal proceedings brought before the General Court, the damage claimed with regard to them cannot, a fortiori, be taken into account in examining urgency.

22 Next, it should be recalled that the urgency of an application for interim measures must be assessed in relation to the need for interim measures in order to avoid serious and irreparable damage being caused to the party seeking interim relief. It is for the party seeking such relief to adduce sound evidence that it cannot await the conclusion of the main action without personally suffering damage of that kind. While it does not have to be established with absolute certainty that the damage claimed is imminent, its occurrence must nevertheless be foreseeable with a sufficient degree of probability (see orders in CSF v Commission, cited in paragraph 10 above, EU:T:2013:599, paragraph 31 and the case-law cited, and of 27 November 2014 in SEA v Commission, T‑674/14 R, EU:T:2014:1009, paragraph 54 and the case-law cited). Purely hypothetical harm, based on future and uncertain events, cannot justify the granting of interim measures (see, to that effect, order of 27 February 2015 in Spain v Commission, T‑826/14 R, ECR, EU:T:2015:126, paragraph 33 and the case-law cited). In addition, the suspension of operation of an act of the European Union is justified only where the act in question constitutes the decisive cause of the alleged serious and irreparable harm (see, to that effect, order of 7 March 2013 in EDF v Commission, C‑551/12 P(R), ECR, EU:C:2013:157, paragraph 41 and the case-law cited).

23 It should be added that, in order to determine whether the harm alleged is serious and irreparable, the judge hearing the application for interim measures must have specific and precise information, supported by detailed, certified documentary evidence, which shows the situation in which the party seeking the interim measures finds itself and enables the probable consequences, should the measures sought not be granted, to be assessed. It follows that that party, in particular when it relies on the occurrence of financial damage, must produce, with supporting documentation, an accurate overall picture of its financial situation (see, to that effect, order in SEA v Commission, cited in paragraph 22 above, EU:T:2014:1009, paragraph 55 and the case-law cited).

24 In the present case, in so far as the applicant fears suffering not only pecuniary damage but also damage associated with the loss of market share, customers and contracts relating to the sale of cow’s milk used for the production of halloumi, such loss is clearly of a financial nature. The market share held by an undertaking indicates only the percentage of all the products present on the market in question which have been sold by that undertaking, by contractual agreement, to its customers over the course of a given reference period. Consequently, the loss of that market share consists in the loss of the profits that may be realised in the future on sales of the product in question. A market share can thus clearly be represented in financial terms, as the holder of that market share can benefit from it only in so far as it generates profit for it (see, to that effect, order in CSF v Commission, cited in paragraph 10 above, EU:T:2013:599, paragraph 41 and the case-law cited).

25 It follows from settled case-law that damage of a purely financial nature is normally not irreparable, since financial compensation for that damage can be obtained subsequently, unless it appears that the party seeking the interim measures would find itself, without those measures, in a position that could imperil its very existence before final judgment in the main proceedings is given or its market share would be substantially affected, having regard to, inter alia, the size and turnover of its business and the characteristics of the group to which it belongs, directly or indirectly, through its shareholders (see, to that effect, order of 13 July 2006 in Romana Tabacchi v Commission, T‑11/06 R, ECR, EU:T:2006:217, paragraph 111; and orders in CSF v Commission, cited in paragraph 10 above, EU:T:2013:599, paragraph 31, and SEA v Commission, cited in paragraph 22 above, EU:T:2014:1009, paragraph 54).

26 In the present case, the applicant has clearly not submitted, in the application for interim measures, any specific information, supported by evidence, from which it could be concluded that it would in fact be exposed to the risk, in the event that that application is rejected, of finding itself in a position that could imperil its very existence or of its market share being substantially affected. The applicant has not provided any information whatsoever on the size, characteristics of production and total turnover, in respect of all products, of its business as an organisation of Cypriot producers of cow’s milk.

27 Instead of supplying relevant details providing an accurate overall picture of its financial situation, the applicant contents itself with mentioning, in paragraph 62 of the application for interim measures and in Annex 2 thereto, general figures concerning the use of cow’s milk in the process for the production of halloumi in Cyprus in 2009, 2010 and 2011. It is true that, in its submissions of 4 November 2015, it stated that the proportion of cow’s milk used in the production of that cheese was 69.11% in the 2009/2010 trading period and 68.33% in the 2010/2011 trading period, which — according to the applicant — represents the average proportion of cow’s milk used in halloumi produced from the three types of milk that may be used. However, those figures bear no specific relation to the applicant’s particular financial situation.

28 In particular, the applicant has remained silent on the complete range of milk products that it currently places on the market having processed the cow’s milk supplied by its producer members or that it would, or would not, be in a position to produce and market, where relevant to new outlets, should its fear that its economic activities relating to halloumi might suddenly decrease be confirmed. It has thus not informed the judge hearing the application for interim measures of the percentage of cow’s milk used for the production of halloumi as compared to that used, or capable of being used, for the production of other milk products intended for human consumption (raw milk; pasteurised milk, condensed milk, etc.; cream; butter; yoghurts; cheese other than halloumi), or for animal feed (powdered milk, whey, etc.). Such information was all the more necessary since it indicated, in its submissions of 4 November 2015, referring to Annex 18 to the application for interim measures, that overall production of cow’s milk in Cyprus amounted to 150 million litres in 2014, and stated that that milk ‘is used for the production of other cheeses’. It may therefore be concluded that, even if the applicant is focused on the processing of cow’s milk supplied by its producer members, its economic fate should not necessarily be linked to the production of halloumi alone.

29 In the absence of relevant information providing an accurate overall picture of its financial situation, the assertions made by the applicant to illustrate the damage it fears suffering describe only the most disastrous potential consequences of the immediate operation of the contested measure, in the form of the least favourable scenarios that might arise (see, to that effect, orders of 23 December 2008 in AES-Tisza v Commission, T‑468/08 R, EU:T:2008:621, paragraph 49, and 10 July 2009 in TerreStar Europe v Commission, T‑196/09 R, EU:T:2009:270, paragraph 55), without those assertions being substantiated by numerical evidence showing the occurrence of the serious and irreparable damage claimed.

30 Furthermore, it is not disputed that the Cypriot authorities established a transitional period of 10 years during which operators, such as the applicant, are allowed to produce halloumi using a preponderant proportion of cow’s milk of up to 80%.

31 In that context, the applicant claims that, as soon as the contested measure was published, retailers started to contact the applicant calling into question its products’ compliance with the new interpretation of the 1985 standard. It claims that, as a result, not only have the prices and production of cow’s milk started to be affected, but the applicant’s image has also suffered significant damage, since it is regarded as a producer of cheeses that are only ‘tolerated’, but not compliant with the 1985 standard. That non-pecuniary damage will become irreparable because, in the future, retailers will turn to other producers without taking account of the transitional period. In addition, even if the applicant could switch its production in order to satisfy demand under the new interpretation of the 1985 standard, retailers will no longer trust the applicant because they will take the view that, up to that point, they have not been supplied with traditional halloumi, in compliance with that standard.

32 Suffice it to state that the applicant’s argument in that regard is based on an exchange of e-mails (included as Annex 22 to the application for interim measures) with a single British retailer, which sets out certain concerns following the publication of the contested measure. The documents before the court therefore do not establish that the applicant is at risk of facing a mass general reaction on the part of its foreign customers that would seriously adversely affect its financial interests and reputation. Moreover, even as regards that exchange of e-mails, the applicant has not explained, and still less substantiated by evidence, the economic impact of the British retailer in question on its business in terms of turnover.

33 Consequently, the President of the General Court must conclude that that the applicant has, again, presented only the most unfavourable potential consequences of the immediate operation of the contested measure and that it appears to underestimate the effects on its business of the transitional period, which enables it to adapt over a period of 10 years to the new rules governing the composition of the cheese, whilst also providing appropriate information to its customers regarding the transitional regime. It follows that the establishment of such a transitional period is, on its own, such as to exclude the imminence of damage, both financial and non-pecuniary, of the seriousness claimed by the applicant.

34 It should be added that, in its submissions of 4 November 2015, the applicant complains that the contested decision ‘has the effect to endorse the manifestly erroneous new interpretation of the Standard of 1985 that “Halloumi” must be produced with cow milk used as having a ceiling of 49.99%’. The applicant appears thereby itself to concede that the decisive cause of the financial and non-pecuniary damage claimed is not the contested measure, but the action of the Cypriot authorities, who, at national level, provided the new official interpretation of the 1985 standard, the application for registration reflecting that action having been published in November 2012 in the Episimi Efimerida tis Kipriakis Dimokratias.

35 It appears in fact that, if the applicant’s customers were to choose to stop purchasing the applicant’s products on the sole ground that they have lost their traditional character and are only ‘tolerated’ on a transitional basis, responsibility for this rests mainly with the Cypriot authorities. The applicant’s professional customers will be aware that a PDO may be registered by the Commission only if the Member State concerned has submitted an application to it for that purpose having checked that it is justified, matters which, to a large extent, require detailed knowledge of matters particular to the Member State concerned, and which the competent authorities of that State are best placed to check (see, to that effect, judgment of 6 December 2001 in Carl Kühne and Others, C‑269/99, ECR, EU:C:2001:659, paragraph 53).

36 Moreover, the applicant has brought proceedings before the competent Cypriot court with a view to obtaining a ruling that the Cypriot authorities’ new interpretation of the 1985 standard is unlawful, and those legal proceedings are still pending. Consequently, it is possible that, in the relatively near future, the national court may require those authorities to amend the specification they submitted to the Commission for the purposes of the registration of halloumi as a PDO on the basis of the new interpretation of the 1985 standard. Such a development at national level might lead the Commission to reject the application for registration, under Article 52 of Regulation No 1151/2012, or, if already registered, might lead to amendment of the specification or cancellation of the registered PDO, under Articles 53 and 54 of that regulation.

37 It follows that the combined effects of the transitional period and the legal proceedings pending at national level do not make it possible to establish, at this stage of the proceedings, the irreparable nature of the damage claimed. For the sake of completeness, it should be added, in that context, that the applicant’s fear that the main proceedings may take three to five years is unfounded. The average length of proceedings before the General Court was less than two years in 2014 and 2015.

38 It follows from all the foregoing that the application for interim measures must be dismissed for lack of urgency, there being no need to examine the condition relating to a prima facie case, or to weigh up the interests involved. There is, accordingly, likewise no need to rule on the question of admissibility raised by the Commission.

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