C-82/71

on the interpretation of Articles 37 and 90 of the EEC Treaty, Article 22 of Regulation (EEC) No 804/68 of the Council of 27 June 1968 on the common organ­ ization of the market in milk and milk products and of Article 2 of Regulation (EEC) No 2622/69 of the Council of 21 December 1969 amending Regulation (EEC) No 804/68, in relation to the Italian legislation on the distribution and sale of drinking milk,

THE COURT

composed of: R. Lecourt, President, J. Mertens de Wilmars and H. Kutscher, Presidents of Chambers, A. M. Donner, A. Trabucchi, R. Monaco and P. Pesca­ tore (Rapporteur), Judges,

Advocate-General : K. Roemer

Registrar : A. Van Houtte

gives the following

that which may be consumed 'untreated' During the criminal proceedings brought and which has been prepared in accord­ before the Pretore of the Bari district, the ance with certain rules contained in that legal representative of the SAIL under­ decree. taking claimed that Law No 851 which is Nevertheless, when the quantity of milk the legal basis of the offence with which treated in the centre is insufficient for local it was charged is contrary, on the one hand, consumption, milk may be imported from to the provisions of the EEC Treaty elsewhere, on condition that it is pasteur­ concerning quantitative restrictions, dis­ ized or that it has been subjected to crimination regarding the conditions under sufficient treatment in establishments ap­ which goods are procured and marketed proved for this purpose by the competent and restrictions on competition and, on the health authority. other hand, to the Community regulations Article 1 of Law No 851 of 16 June 1938 on the common organization of the on the establishment and operation of markets in milk. milk centres specifies that these may be By an order of 3 July 1971 the Pretore created in individual communes or groups decided to stay the proceedings until the of communes in which there is a recorded Court of Justice had given a preliminary daily consumption of drinking milk of at ruling on the interpretation of several least 100 hectolitres and that the object of provisions of Community law. the centres is to collect the milk intended In his order he states in particular that the for direct local consumption, ensure its Treaty contains rules which, to the extent natural qualities, subject it to a treatment to which they are directly applicable, are to ensure that it is wholesome and package such as to take precedence over earlier it for sale to the market in such a manner as national rules which are incompatible to prevent any adulteration or contamina­ with them and that the proper administra­ tion. tion of justice requires in the present Article 11 of Law No 851 provides that in instance that, without awaiting the ex­ communes or groups of communes which haustion of methods of appeal under have been authorized to establish a milk national law, the Court of Justice should centre, the Prefect shall by decree deter­ be asked for the interpretation of certain mine the boundary of the production area of those Community rules. reserved to the centre according to the Although the Court may not within the needs of the population. framework of such a procedure for a The centres must purchase the quantities of preliminary ruling give judgment upon the milk which they require from all the compatibility of rules of national law with producers in that area. Community law, it is desirable to know According to Article 13 of Law No 851, whether certain of the provisions of the the Prefect shall also lay down the bound­ latter confer upon those subject to Italian ary of the urban area in which it is pro­ law individual rights which they pay plead hibited, with some exceptions, to import before their courts in opposition to and sell milk which does not come from national legislation laying down restrictions the centre. on the sale and distribution of drinking Article 16 provides especially for penalties milk.

drinking milk in the areas reserved to The Court, after hearing the report of the them (zone di pertinenza)? Judge-Rapporteur and the views of the Advocate-General, decided to open the (b) Must Article 37 of the EEC Treaty be oral procedure without any preparatory interpreted as meaning that the bodies inquiry. through which a Member State super The SAIL undertaking, the Government vizes or appreciably influences imports of the Italian Republic, the Council of the between the Member States include the Communities and the Commission of the milk centres existing in the Italian Communities presented oral argument at

Republic by Adolfo Maresca, Minister tions on the importation and sale of Plenipotentiary, assisted for the purposes milk in view of Articles 5 and 37 of of the written procedure by Pietro Pero the Treaty? nacci and for the oral procedure by Giorgio Zagari, both Sostitute at the Avvocatura (d) Do the provisions of Article 90(2) Generale delle Stato, the Council of the of the Treaty preclude the duty to Communities by Daniel Vignes, Adviser, abolish the restrictions in question?

as follows: The SAIL undertaking, the legal representa The order making the reference was tive of which is charged in the main entered at the Court Registry on 20 Sep proceedings, points out that the finding tember 1971. of a conflict between a national rule and In accordance with Article 20 of the a Community rule presupposes that the Protocol on the Statute of the Court of national court has interpreted the former Justice of the EEC, written observations and that the latter has been interpreted were submitted on 29 November 1971 by by the Court of Justice. the SAIL undertaking, on 3 December by the Council of the Communities on 4 (a) In the present case, with regard to the December by the Commission of the EEC Treaty, it is essentially the interpreta Communities and on 13 December by the tion of Article 37, considered in relation Government of the Italian Republic. to the provisions concerning quantitative By an order of 20 January 1972 the Presi restrictions and measures having equiva dent of the Court appointed Mr Karl lent effect (Article 30 et seq.), dominant Roemer as Advocate-General in the positions (Article 86) and public under-

takings (Article 90), which is necessary 37 requires must finally be abolished, are for the solution of the dispute in the main fundamentally incompatible with that proceedings. provision. The only remedy lies in the abolition of the legal monopoly enjoyed With regard to Article 37, it should be by the Italian milk centres or, at least, in stated that : the non-application of the rule which legalizes it. — the monopoly enjoyed by the milk Since an agricultural product is involved, centres in Italy is of a commercial paragraph (4) of Article 37 does not lead character; to a different conclusion.

the Member States to abolish the pro — it is of real importance in that trade hibited discrimination, it merely advises (the 44 centres put on sale 19 000 them, when the monopoly has rules which hectolitres of pasteurized milk daily). are designed to make it easier to dispose of agricultural products or abtain for them The discrimination resulting from the the best return, to make provision, in monopoly of the centres is twofold: favour only of the producers concerned, Italian or foreign producers situated out for equivalent safeguards for their em side the areas reserved to the centres are ployment and standard of living.

804/68 of the Council of 27 June 1968 on rence, at the end of the transitional period, the common organization of the market in of discrimination which may stem from milk and milk products (OJ English certain special powers which those monop Special Edition 1968(I), p. 176) to the olies have in particular with regard to the Italian Republic for the retention of the importation and marketing of certain system of milk centres and from the products. In the present case the reserva justification given by Regulation (EEC) tion of wide areas of the Italian market No 2622/69 of the Council of 21 December for the produce of certain national 1969 amending Regulation (EEC) No undertakings constitutes discrimination 804/68 (OJ English Special Edition 1969 to the detriment of the producers of the (II), p. 615) for the extension of that other Member States. Monopolies which, period until 31 March 1970. like that of the Italian milk centres, Moreover, to the extent to which the Court constitute an end in themselves because has jurisdiction to decide upon the their sole purpose and their sole effect is question whether the milk centres con to prevent trade under normal conditions stitute a national organization of the of competition and to ensure the mainte market, it should be stated that the sales nance of the discrimination which Article monopoly from which they benefit and

States. That time-limit was extended until 31 Lastly, the centres cannot be regarded as March 1970 by Article 2 of Regulation undertakings entrusted with the operation (EEC) No 2622/69 of the Council; the of services of general economic interest legality of this extension appears arguable within the meaning of Article 90(2) of in view of Article 37 of the Treaty. the Treaty. In any case, the abolition of On 3 July 1971 Regulation (EEC) No their monopoly of procuring and marketing 1411/71 of the Council of 29 June 1971 does not frustate the performance of laying down additional rules on the com­ their tasks under a system of free com­ mon organization of the market in milk petition. and milk products for products falling The infringement of Article 37 of the within tariff heading No 04.01 of the Com­ Treaty following from the retention after mon Customs Tariff was published (OJ the expiry of the transitional period of English Special Edition 1971 (II), p. 412). the monopoly granted to the milk centres Because of its date the Pretore di Bari is concomitant with the infringement of could not take account of this regulation Articles 5 and 90(1). in his order for reference. The Court The incompatibility, even potential, of the cannot, however, disregard it in relation monopoly of the Italian milk centres with to the questions of interpretation which Article 37 of the Treaty is indivisible. Its are put to it. Article 9(2) of Regulation illegality may be invoked not only by (EEC) No 1411/71 authorizes the Italian nationals of the other Member States but Republic to maintain as from 31 March also to the same extent and with the same 1972 (according to the second paragraph effect by nationals of the State in which of Article 10) and until 31 March 1973 such a rule or such a system exists con­ the provisions applying on 31 March 1970 trary to the Treaty; if this were not so, to the milk centres.

That provision cannot have a retroactive suggests that the Court should reply as effect. It follows therefrom that in any follows to the questions which have been case there is no doubt of the incompati referred to it: bility of the system of the centres with regard to the period between 1 April 1970 — the sales monopoly granted to the and 31 March 1972 during which the matter milk centres in Italy by Law No 851 occurred which gave rise to the main of 16 June 1938 causes by the very fact action. of its existence discrimination regarding Furthermore, Article 9(2) of Regulation the conditions under which goods are (EEC) No 1411/71 may be interpreted as produced and marketed which are authorizing the maintenance of the centres, finally and irrevocably prohibited as but not the re-establishment of their legal from 1 January 1970 under Article 37 monopoly of sale, that being, since the or if necessary any other provision of end of the transitional period, finally the Treaty, and neither Article 2 of incompatible with fundamental rules of Regulation (EEC) No 2622/69 nor the Treaty; an analogous interpretation Article 9(2) of Regulation (EEC) No may be given to Article 2 of Regulation 1411/71 can prevent this. (EEC) No 2622/69.

requirement of the Treaty. On the other with Article 22(2) of Regulation (EEC) hand Article 9(2) of Regulation (EEC) No 804/68 and with Article 189 of the No 1411/71 cannot be acknowledged to Treaty. have had uninterrupted retroactive scope as from 31 December 1969, so that from 1 — Article 2 of Regulation (EEC) No January 1970 to 31 March 1973 the mo

The Government of the Italian Republic fringement of individual rights) and by points out that, since it has been asked for misuse of procedure. a preliminary ruling in application of Article 177 of the EEC Treaty, the Court (c) In conclusion the SAIL undertaking must give judgment only on the abstract

milk, and secondly that Community law To the extent to which the centres may be has accepted, particularly in Articles 38(2), regarded as undertakings entrusted with 42 and 45 of the Treaty and in the regula­ the operation of services of general tions of the Council on the common economic interest, the rules of the Treaty organization of the market in milk, the are only applicable to them, in accordance principle that national organizations of with Article 90(2), in so far as that agricultural markets remain valid in all application does not obstruct the per­ respects as long as they are not replaced formance, in law or in fact, of the particular by European organizations. There is at tasks assigned to them. present no common organization of the As for Regulations (EEC) Nos 804/68 and market in drinking milk, since supple­ 2622/69, it must be stated that their mentary measures relating to the products provisions authorizing the retention of the within heading 04.01 of the Common system of Italian milk centres do not con­ Customs Tariff have not yet been laid stitute true legal rules. They only state a down. It follows from this that the rules situation following from the Treaty itself, of the Treaty relating to the elimination of that is to say, the retention of a national quantitiative restrictions between the Mem­ organization of the agricultural market so ber States are no obstacle to the retention long as a common organization has not of the Italian organization of the market been set up for the same product. The in milk and, more especially, of the period laid down by these provisions in measures governing the supply of certain fact fixes for the Council of the Com­ areas with drinking milk. munities, a period, furthermore, purely Furthermore the Italian rules concerning indicative, for the establishment of a drinking milk in no way establish a common organization of the markets in monopoly within the meaning of Article 37 drinking milk. Any duty which the Italian of the EEC Treaty: on the one hand the Republic may have to adjust the national quantities of whole milk delivered by the system of distribution and sale of that

product is linked to the establishment of of the market in milk were divided into a such an organization. The Community has basic regulation and a supplementary not yet established a common organization regulation for drinking milk. The Council, of the market in drinking milk. because of the size of the problems to be Regulation (EEC) No 1411/71 did not, solved in respect of the drawing up of a moreover, extend that period. It repealed definition of drinking milk was not able a transitional provision of Regulation to adopt the transitional measures provided (EEC) No 804/68 for which it substituted for by Regulation (EEC) No 804/68.

Further fresh, not concentrated or sweetened, more, it authorized the Italian Republic to which come under tariff heading 04.01 retain until 31 March 1973 the system of the Common Customs Tariff); applicable to milk centres as it was applied on 31 March 1970. Nevertheless, the — the application until that date of provisions of Regulation (EEC) No transitional provisions ; 1411/71 are intended to be implemented only at the time when, without prejudice — the authorization for the Member to the requirements relating to the pro States to retain, until the implementa tection of public health, the general rules tion of those transitional provisions, to be laid down by the Council on the quantitative restrictions and measures conditions concerning quality, composi having equivalent effect; tion and sales of drinking milk are appli cable and not later than 31 March 1972. — the authorization for the Federal Thus the Council has not yet at present Republic of Germany and the Italian regulated the movement of drinking milk. Republic to maintain until 31 December From the legal point of view, a distinction 1969 certain special systems of distribu should be drawn between the situation tion, in particular, for Italy, the meas thus created on 31 March 1970 and that ures regulating the supply of drinking following from the application of Regula milk to certain areas. tion (EEC) No 1411/71.

expired the final period during which, regards the setting up of the common according to Article 22(2) of Regulation policy, from Articles 40(2)(b), 43(3) and (EEC) No 804/68 as amended by Article 2 37(4) and, as regards the optional nature of Regulation (EEC) No 2622/69, the of the expiry of the transitional period, Italian Republic could retain the measures from Articles 42, 44(6) and 45 of the EEC governing the supply of drinking milk to Treaty.

milk centres cannot be recognized as tion of hygiene and public health which having retroactive effect so that there was were at the basis of their establishment no interval between the expiry of Regula were not fulfilled in another manner. Since tion (EEC) No 2622/69 and the entry into they are measures having an effect equiv force of Regulation (EEC) No 1411/71: alent to quantitative restrictions, they are on the one hand, such retroactive effect is contrary to Article 36 of the Treaty; since not expressly provided for by the regulation they are monopolies within Article 37, their and on the other the provisions of Regula adjustment must be carried out in accord tion (EEC) No 1411/71 have not yet been

— Or the system of milk centres considered The application of rules protecting public in a purely agricultural framework amounts health fell in the first place to the Member to a national organization of the market States. It was only from the time when the which consists of a body of machinery and Council announced its firm intention legal devices on the basis of which the rapidly to adopt rules concerning the competent authorities endeavour to super conditions of quality and sale of drinking vise and regulate the market. In this case milk and proposed to unify those necessary it should be stated that the time-table for for the protection of public health that it the abolition of obstacles to the free was entitled, in consequence of the adop movement of agricultural products is not tion of those rules, to provide for the governed by exact dates, but is left to the abolition of the milk centres for the discretion of the Council; that follows, as maintenance of which there was no longer

any justification. That is the object of legislation on milk centres. Such is not, Article 9(2): it granted them a period of however, the purpose of Article 177 of the one year as from the final date on which EEC Treaty. These questions must there the regulations in question were made to fore be rephrased in order to elicit there transform themselves. from the problems of abstract inter Thus, as regards Italy where the national pretation bearing upon the present case. organization of the market in drinking They may be worded as follows: milk and the health rules were closely interwoven, the Council indiscriminately — Must Article 37 of the EEC Treaty be authorized their retention until March interpreted as meaning that national

bodies? (c) In any event it should be accepted, as regards the present case, that even if the — Does the exclusive right of sale granted system of Italian milk centres were abol to these organizations amount in ished milk would not circulate freely in the trinsically to discrimination within the Community. Difficulties concerning public meaning of Article 37? health conditions and control would stand in its way since several Member States — In the case referred to by the second have very strict public health rules, part of the last subparagraph of Article difficulties regarding the determination of 22(2) of Regulation (EEC) No 804/68, conditions of quality and sale and, lastly, does the expiry of the period laid down difficulties presented by the price system, by that article and extended by Article as several Member States practise a system 2 of Regulation (EEC) No 2622/69 of maximum prices for social reasons. involve the duty to abolish the measures The Commission of the Communities points contrary to the principles set out in out first of all that the Pretore di Bari Article 37 and in particular, if the second appears wrongly to accept that any con question is answered in the affirmative, flict between provisions of national law the exclusive right of sale? and provisions of Community law may be settled by applying the principle of the As for the interpretation of the rules relied priority of the most recent provision: upon, the Commission submits the follow Community law must in any case take ing observations : precedence over national provisions, even if they are adopted later, and national (a) As regards Article 37 of the EEC courts must always, because of the pre

JUDGMENT OF 21.3.1972 — CASE 82/71

exports between Member States. An and the same person. activity concerning trade in the product Put into its context, that is to say, within on the internal market alone of a Member the framework of the provisions of the State is capable of having an influence on Treaty devoted to the free movement of trade and this may be influenced appre goods and, more especially, to the abolition ciably by an activity confined to one part of quantitative restrictions and measures alone of the national territory. It is having equivalent effect between the Mem necessary in each case to assess whether ber States, the sole object of the rules the economic activity concerned relates to provided for in Article 37 for products a product capable by virtue of its nature sold by national monopolies is to ensure and the technical or international require for these products conditions of movement ments to which it is subject, of taking an analogous to those which result from the effective part in imports or exports abolition of customs duties, quantitative between nationals of the Member States. restrictions and charges and measures The concept of national monopoly in having equivalent effect with regard to cludes on the one hand a 'State monopoly' products, trade in which is not reserved to and on the other a monopoly delegated or the State and which are the subject of free granted de jure to bodies other than the competition. State itself but which carry out their Because of the very fact that it is exercised activities under its supervision or the by the State in the widest sense and supervision of its local organizations; it although it does not intrinsically amount includes not only monopolies which carry to actual discrimination, the exclusive out their activities throughout the national right of sale of a product is liable in itself territory but also those the activities of to cause discrimination within the meaning which concern only certain areas of that of Article 37.

Since an and marketed between the nationals of the exclusive right constitutes the very meaning Member States. Consequently, the ex of a monopoly, the removal of that right clusive right of a national monopoly of would amount to the abolition of the a commercial character to sell a particular monopoly. product cannot be regarded as intrinsically Within the framework of the present case constituting discrimination if the existence it is not necessary to enquire whether in of that right, considered independently practice it is still possible to reconcile the of the manner in which it is exercised, various requirements of Article 37, and in displays, as regards nationals of the particular the need to free intra-Com-

munity trade on the one hand and the one of the forms of common organization interests of the Member States in retaining provided for by Article 40(2). A national certain useful instruments of their econ monopoly in trade in an agricultural omic policy on the other. In fact the product must be regarded as a national exclusion of all discrimination between the organization of the market within the nationals of the Member States regarding meaning of the Treaty if it ensures the sale the conditions under which goods are of national products at stable and remuner procured and marketed is not in any event ative prices. possible where the exclusive right of sale The recogniton of the right of the Member is granted to a body which itself produces, States to retain their national organiza processes or packages the product in tions pending the institution of a common

to 46. Article 43(31 and Article 45 therefore (b) As regards Regulations (EEC) Nos take precedence over Article 37; in respect 804/68 and 2622/69: of agricultural products subject to a commercial monopoly, they permit the The performance of the duty which results retention of discriminatory measures which from the first paragraph of Article 37 may form an integral part of the national rules however be hindered by safeguard clauses. until the establishment of a common Thus Article 43(3) and Article 45 of the organization. This precedence of Article Treaty establish by implication the prin

JUDGMENT OF 21.3.1972 — CASE 82/71

centres to sell milk intended for con compatible with that conclusion, for it sumption in the area which is reserved to does not take precedence over the pro them. visions of the Treaty concerning agriculture. The centres in themselves are not contrary It cannot be accepted that the derogations to Article 37, that is to say, as collection from the rules laid down for the establish centres and establishments supplied with ment of the common market are applicable equipment for the treatment and packaging to all agricultural products subject to a of milk, but certain particular features national organization of the market, and of their operation, in particular their ex not to those which are subject to a national clusive right of sale, the duty to obtain

applies not to agricultural products prop (c) As regards Article 90 of the EEC erly so-called but to processed products. Treaty: No doubt, according to Article 40(1) the common agricultural policy should have Article 90(2) exempts certain undertakings, been established at the latest by the end especially undertakings entrusted with the of the transitional period. However, since operation of services of general economic the Community was not in a position to interest, from the duty to conform to the establish a common organization within rules contained in the Treaty, in particular that period, the expiry of the transitional the rules on competition if the application period does not prevent the retention of of the latter compromises the performance, national organizations of the market or of in law or in fact, of the particular tasks certain of their components. assigned to them. That exemption how The retention of measures which prevent ever applies only in so far as the develop the free movement of goods cannot how ment of trade is not thereby affected to ever be accepted in the absence of an such an extent as would be contrary to the express authorization by the Community, interests of the Community. since a common organization exists, even The definition of the concept of 'services if it is incomplete. of general economic interest' must take It therefore fell to the Council, when the account of the various situations peculiar common organization of the market in to each Member State.

Later, stating that it taking account on the one hand of the

nature of the duties assigned to the under evolved, paragraph (1) of Article 37 also taking and on the other of the relevant became directly applicable, in principle, rules of the Treaty. Since it is an ex at the end of the transitional period. ceptional provision, Article 90(2) must in Paragraph (2) of Article 37 differs from any case be interpreted restrictively. paragraph (1) only as regards the date on The particular task of the Italian milk which the duty imposed on the Member centres is more to guarantee the qualities States to avoid all discrimination between of the milk which they distribute than to their nationals regarding the conditions supply drinking milk to certain local areas. under which goods are procured and The performance of that task cannot be marketed became absolute.

and life of humans. Since Article 37 only cases not coincide with the end of the renders concrete the detailed rules for the transitional period. Therefore the period application of Articles 30 to 34 of the laid down by the Council within the frame Treaty to particular cases, the exception work of the rules on the common organiza contained in Article 36 may also be tion of the market for the products in invoked against the duties which follow question determines the date from which from Article 37. the provisions of Article 37(1) have, as Since it is an exceptional provision, regards their fundamental scope, direct Article 36 can however justify only effect. In the present case the provisions measures contrary to the principle of the of Article 37(1) produced their effects free movement of goods which are with regard to individuals as from 31 genuinely and strictly necessary for the March 1970. protection of the health or the life of The Council, it is true, once more author humans. ized the Italian Republic by Regulation In view of the current technical conditions (EEC) No 1411/71 to retain the measures for the treatment and packaging of drinking in question until 31 March 1973.

The Court has already held paragraph (2) (f) In conclusion, the Commission suggests of Article 37 to be directly applicable. On that the various questions be given the the basis of the criteria which it has following answers :

JUDGMENT OF 21. 3. 1972 — CASE 82/71

1. Article 37 of the EEC Treaty must be 3. In the case mentioned in the second part interpreted as meaning that national of the last subparagraph of Article 22(2) monopolies of a commercial character or of Regulation (EEC) No 804/68, the the bodies through which a Member State expiry of the period laid down by that supervises or appreciably influences trade article, as extended by Article 2 of Regula­ between the Member States covers bodies tion (EEC) No 2622/69 included the duty to abolish measures contrary to the — to which a Member State grants and principles set out in Article 37(1). ensures the exclusive right to sell a consumer product within the boundary 4. Neither the provisions of Article 90(2) of limited areas of the national territory, nor those of Article 36 of the EEC Treaty precluded that duty. — the management of which is conducted and supervised by local public bodies, 5. The provisions of Article 37(1) pro­ duced direct effects in the legal system of — if the product in question may be the the Member States as regards their fun­ subject of trade and if the activities of damental scope as from 1 January 1970. those bodies as regards trade in that Nevertheless in the case which comes within product may have an actual effect on the application of the second part of the intra-Community trade. last subparagraph of Article 22(2) of Regulation (EEC) No 804/68 those pro­ 2. The exclusive right of sale may lead to visions did not produce a direct effect in discrimination between the nationals of the relationships between the State con­ the Member States regarding the conditions cerned and those subject to its jurisdiction, under which goods are procured and creating for the latter rights which the marketed if it is reserved to bodies which national courts must protect, until the themselves have interests in the production, expiry of the period laid down by Article treatment or packaging of the product 2 of Regulation (EEC) No 2622/69. in question.

4 The Government of the Italian Republic also regards the questions as inadmissible because it could be that the answers to be given by the Court would influence the application of the criminal law of a Member State.

5 Article 177, which is worded in general terms, draws no distinction according to the nature, criminal or otherwise, of the national proceedings within the frame­ work of which the preliminary questions have been formulated. The effectiveness of Community law cannot vary according to the various branches of national law which it may affect. The Court therefore has jurisdiction to reply to the questions submitted.

The substance of the case

6 The national court has been requested to apply Italian criminal law to conduct described as a contravention of the legal provisions granting the 'milk centres' the exclusive right of supply and sale within certain geographical limits. In order to resolve that dispute, that court has on the one hand referred questions on the interpretation of Articles 37 and 90 of the Treaty and on the other requested the interpretation of certain provisions of Regulations (EEC) Nos 804/68 and 2622/69.

7 The Council and the Government of the Italian Republic consider that because of its special nature the system of 'milk centres' must be assessed not in the light of Articles 37 and 90, but within a purely agricultural framework, in so far as this

JUDGMENT OF 21.3.1972 — CASE 82/71

11 (b) Under Regulation (EEC) No 2622/69, the Council, taking the view that it did not seem appropriate to abolish, in the course of the milk year, the special national provisions of the Italian Republic, extended to 31 March 1970 the period laid down in the last subparagraph of Article 22(2) of Regulation (EEC) No 804/68.

12 (c) No action was taken by the Council by 31 March 1970 on a proposal to authorize the Italian Republic to retain the provisions in force regarding the milk centres temporarily for a further period until 31 March 1972 which was submitted by the Commission to the Council on 17 March 1970. (OJ C 43, 1970, p. 5).

PUBBLICO MINISTERO ITALIANO ν SAIL

15 On the other hand by the terms in which it granted the Italian Republic an exten­ sion for three months of the period originally laid down by Regulation No 2622/69, the Council has shown that it only considered the authorization granted as a measure of an essentially temporary nature intended to make the abolition of the sales monopoly coincide with the end of the then current milk marketing season. Although it is possible to elicit from Regulation (EEC) No 1411/71 the intention of the Community legislature to grant Italy a certain additional period to enable the 'milk centres' to be re-structured, nevertheless at the time of the events sub­ mitted to the national court, the only provision in force concerning the system of these centres was Regulation (EEC) No 2622/69, Article 2 of which fixed 31 March 1970 as the end of the concessionary period granted. It follows from this that at the time of the events submitted for consideration by the national court, there was a specific provision of a regulation which implied the abolition of the exclusive right of sale granted to the 'milk centres' and, in consequence, the inapplicability of the national legislative provisions granting that exclusive right.

16 Under those circumstances the second subparagraph of Article 40(3) of the Treaty had to be applied in full at that time, from which it follows that whatever the

JUDGMENT OF 21.3.1972 — CASE 82/71

form chosen for the common organization of the agricultural markets, that organization must in any case be understood to exclude 'any discrimination between producers or consumers within the Community'.

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the SAIL undertaking, the Government of the Italian Republic, the Council and the Commission of the European Communities ; Upon hearing the opinion of the Advocate-General ; Having regard to the Treaty establishing the European Economic Community, especially Articles 37, 38, 40 and 177; Having regard to Regulation No 13/64 of the Council of 5 February 1964 on the progressive establishment of a common organization of the market in milk and milk products, Regulation (EEC) No 804/68 of the Council of 27 June 1968 on the common organization of the market in milk and milk products, Regulation (EEC) No 2622/69 of the Council of 21 December 1969 amending Regulation (EEC) No 804/68 and Regulation (EEC) No 1411/71 of the Council of 29 June 1971 laying down additional rules on the common organization of the market in milk and milk products for products falling within tariff heading 04.01 of the Common Customs Tariff; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities,

THE COURT

in answer to the questions referred to it by the Pretore of the district of Bari by Order of 3 July 1971,

hereby rules:

PUBBLICO MINISTERO ITALIANO ν SAIL

The expiry of the period laid down in Article 22(2) of Regulation (EEC) No 804/68 of the Council of 27 June 1968 and extended by Article 2 of Regulation (EEC) No 2622/69 of the Council of 21 December 1969, implied, at the time of the events submitted for consideration by the national court, the abolition of the exclusive sales right laid down within the framework of the 'system of collection and distribution areas for milk in the Italian Republic' referred to by the said provisions, and that consequently all provisions of national legislation granting that exclusive right were inapplicable.

Mr President, consumption of drinking milk is at least Members of the Court, 100 hectolitres. These centres have the task of collecting the milk intended for direct The SAIL undertaking, an Italian company local consumption, ensuring its purity, having its registered office at Bari, operates subjecting it to treatment to ensure that it a dairy at Gioia del Colle. On 17 April is safe and packaging it for sale to con­ 1971 it delivered through its licensee sumers so as to prevent any adulteration. 'Perle', homogenized, pasteurized whole They are set up on the request of the milk to a dairyman at Bari. These facts communes concerned, by means of an were established by the public health authorization which the Prefect grants authorities and gave rise to criminal after agreement by the Ministry concerned. proceedings before the Pretore di Bari. Originally it was intended that the com­ In that respect I must discuss some aspects munes would entrust the establishment and of Italian law, the following particulars of the management of these milk centres to which must be known. Article 1 of Law corporate professional associations. Since No 851 of 16 June 1938 (Gazzetta Ufficiale, the professional associations and the No 147) permits the establishment of milk corporate economic system had however centres in communes where the daily ceased to exist at the end of the Fascist era,

1 — Translated from the French version.