C-83/78

JUDGMENT OF 29. 11. 1978 — CASE 83/78

In Case 83/78

REFERENCE to the Court pursuant to Article 177 of the EEC Treaty by the Resident Magistrate, County Armagh (Northern Ireland), for a pre­ liminary ruling in the proceedings pending before that court between

Pigs Marketing Board (Northern Ireland)

and

Raymond Redmond , a pig producer,

on the interpretation of a number of provisions of the EEC Treaty and of regulations on the common organization of the market in pigmeat having

JUDGMENT

I — Facts and issues cattle lorry containing 75 bacon pigs (pigs weighing more than 77 kg). In Northern Ireland marketing of pigs is The lorry driver was unable to produce a governed by the Pigs Marketing Scheme transport authorization issued in (Northern Ireland) 1933, which is pursuance of Article 4 of the Movement administered by the Pigs Marketing of Pigs Regulations (Northern Ireland) Board (Northern Ireland) under the Agri­ 1972, by the Pigs Marketing Board. cultural Marketing Act (Northern Ireland) 1964. In particular the system The lorry and its contents were seized requires producers not to sell pigs and proceedings were commenced on 28 weighing over 77 kg live weight (or over January 1977 before the Resident Magis­ 56.5 kg dead weight), known as "bacon trate, County Armagh. On 7 July 1977 pigs", except to or through the agency of within the context of those proceedings a the Pigs Marketing Board. This summons, followed by an application for provision is implemented by the forfeiture, was issued by the Pigs Movement of Pigs Regulations Marketing Board against the owner of the pigs, Raymond Redmond. (Northern Ireland) 1972, which prohibit any transport of bacon pigs otherwise Mr Redmond claimed before the than to one of the Board's purchasing Resident Magistrate that the provisions centres, a destination for which the of national law on the basis of which he producer must be in possession of a was being prosecuted were contrary to document authorizing transport. Any various provisions of the EEC Treaty offence against the regulations is pun­ and of regulations adopted for its ishable by a term of imprisonment not implementation relating to the exceeding three months and/or a fine of production of and trade in agricultural £200; the pigs may be forfeit. products, more particularly in the On 12 January 1977 a police officer at pigmeat sector. Maytone near Markethill in Country In his judgment, delivered on 19 Armagh (Northern Ireland) stopped a September 1977, the Resident Magis-

trate, County Armagh, having regard to decision of the Common Market the defence put forward by Mr Commission relating to the Redmond, took the view that he ought exemption of the Board from the to ask the Court of Justice whether the operation of Article 85 of the Treaty defendant's conviction under the of Rome. Northern Ireland legislation would be (3) If it is a "State monopoly of a compatible with Community law. He commercial character", does it fall therefore decided in pursuance of Article within the meaning of Article 37 (1) 177 of the EEC Treaty to defer a of the Treaty of Rome so as to gain decision and to submit the question for a the protection of Article 44 of the preliminary ruling to the Court of Treaty of Accession which provides Justice. for a transition period up to 31 December 1977? In the body of the judgment the Resident Magistrate indicated that the following (4) If it is a "State monopoly of a questions arose with regard to the commercial character" within Article provisions of Community law pleaded 37 of the Treaty of Rome and the before him: period of grace for adjustment does Is the Pigs Marketing Board (Northern not expire until 31 December 1977, does this save it from the immediate Ireland) "an undertaking"? Is it a effect of Articles 85 and 86 until that "national market organization"? Is it a "State monopoly of a commercial date? Or can it be argued that character"? Is it all three or is it a "undertakings" within the meaning of Article 85 and 86 can be combination of anv two? construed to include State (1) If it is an "undertaking" is it an monopolies? Counsel for the Board undertaking within the meaning and argued that the term "undertakings" intention of Articles 85 and 86? If it is not defined but is used as distinct is, then in view of the provisions of from "State monopolies". its Scheme the Board's activities (5) Do the Board-'s activities fall within clearlv violate these articles — parti­ the provisions of Article 85 (3) so as cularly Article 85 (1) (a), (b) and (c). to exempt it from the provisions of (2) If it is a "national market organiz­ paragraph (1)? This point was not ation", does it fall within Article 2 of raised. If the Board is exempt from Regulation No 26 so as to be in a the application of Article 85 by the position to attract the exemptions operation of paragraph (3) it has no provided for there? In my opinion need to fall back on the "transitional this particular regulation only applies period" argument. to national market organizations (6) And what about Article 8 or the which are established by agreement Treaty of Rome which provides that and about which there is nothing compulsory. The Board administers "(1) the Common Market shall be its Scheme by compulsion and progressively established during restrictions e.g. "A producer who is a transitional period of 12 neither a registered producer nor a years; and person exempt from registration shall not sell any pigs." But even if the (2) to each stage there shall be Board falls within the meaning and assigned a set of actions to be intention of Article 2 of Regulation initiated and carried through No 26, no evidence has been concurrently." — produced, nor has research on my Does this provision affect the present part been able to throw up any case?

By a letter of 10 March 1978 the measure to buy every pig Resident Magistrate informed the Court regulated bv the Scheme? that the facts of the case and the 5. Does imposition of the aforesaid questions arising as set out in his obligations relating to the total regu­ judgment of 19 September 1977 also lation of numbers of pigs produced, incidentally raised the following sales and controlled prices, constitute questions: infringement of Community law in so 1. Are Articles 30, 31, 32, 34, 37, 40, 41, far as they may represent measures 42, 43, 85, 86 and 90 of the Treaty having an effect equivalent to a establishing the European Economic quantitative restriction on exports, Community directly applicable so as bearing in mind that the Northern to confer on individuals rights Ireland legislation in question has as enforceable by them in the courts of one of its main aims and effects the the United Kingdom? prevention of exportation of pigs to 2. Are Regulations Nos 121/67, the Republic of Ireland? 2759/75 and all other regulations on 6. Was the United Kingdom covered on the common organization of the the date of accession by a common market in pigmeat adopted in organization of the market in so far accordance with the Treaty as agriculture was concerned, and in establishing the European Economic relation in particular to pigmeat and Community directly applicable so as live pigs, and if so did it apply from 1 to confer on individuals rights February 1973? enforceable by them in the courts of 7. Was the United Kingdom the United Kingdom? Government entitled to introduce the 3. Is the Pigs Marketing Scheme in Movement of Pigs Regulations Northern Ireland, upon the proper (Northern Ireland) 1972 in the month interpretation of the articles and regu­ of May 1972? lations alone, or any relevant Community law, in contravention of The Resident Magistrate's judgment of the rules of Community law? 19 September 1977 and his letter of 10 4. Under the above articles, regulations March 1978 were lodged at the Court or any relevant Community law can a Registry on 16 March 1978. Member State be authorized: In pursuance of Article 20 of the Protocol on the Statute of the Court of (a) to continue a national organiz­ ation of the market at a time Justice of the EEC written observations when the common organization were submitted on 31 May 1978 by the of the market is in force? Commission of the European Communities, on 9 June by Raymond (b) to compel producers within its Redmond, the defendant in the main jurisdiction to become registered action, on 15 June by the Pigs Marketing producers with the Pigs Board (Northern Ireland), the Marketing Board (Northern complainant in the main action, and on Ireland) before they can sell pigs? 16 June 1978 by the Government of the (c) to compel producers within the United Kingdom of Great Britain and jurisdiction to enter into contracts Northern Ireland. with the Board and sell pigs solely On hearing the report of the Judge- to the Board at prices and in Rapporteur and the views of the numbers fixed by the Board? Advocate General, the Coun decided to (d) to permit the Board by way of an open the oral procedure without any express or implied intervention preparatory inquiry. It did however

invite the Government of the United exports. By reason of the difficulties Kingdom and the Pigs Marketing Board which it faces (absence of a substantial to reply before the hearing to a number home market, high primary productions of questions. This request was complied costs, remoteness from the principal with within the time specified. export markets, high shipping costs), it has been subject since 1933 to a system regulating marketing (the Pigs II — Written observations sub­ Marketing Scheme), re-enacted by the mitted to the Court Agricultural Marketing Act (Northern Ireland) 1964, as amended by the Agri­ The Pigs Marketing Board (Northern culture (Miscellaneous Provisions) Act Ireland), the complainant in the main (Northern Ireland) 1970. Over 80% of action, points out, as regards the pig production is cured and processed procedure, that many of the questions into bacon. The Scheme applies only to raised by the national court do not relate Northern Ireland and only to bacon pigs to the interpretation of Community law produced in Northern Ireland; it does but to the interpretation and validity of not affect either importation into provisions of national law or to the Northern Ireland or other types of pig. It application of the Treaty to a specific is administered by the Pigs Marketing case; the Court should refuse to answer Board, a body corporate consisting pre­ such questions. Moreover, by reason of dominantly of producers, controlled and certain special features of the procedure run by producers, subject to certain before the national court, the latter had powers retained by the Minister (now never had the whole picture with regard the Department of Agriculture Northern to the facts. Finally it would be ironical Ireland, through which Her Majesty's that the Court of Justice should be asked Secretary of State for Northern Ireland to pronounce upon the rights of the exercises executive responsibility in agri­ defendant in the main action under cultural matters). The Board keeps a Community law when, on the national register of pig producers in which every court's view, the Community itself was producer is entitled to be registered, almost certainly the potential victim of a persons who produce pigs other than fraudulent operation. The question also bacon pigs being exempt from arises whether rights under Community registration. Producers who are neither law can arise in favour of those who use registered nor exempt from registration such rights to defraud or attempt to may not sell any pigs. A registered defraud the Community; such rights may producer may sell bacon pigs only to or only be invoked by those who, to draw through the agency of the Board. The an analogy from equitable concepts, main operation of the Board is the "come with clean hands". buying and selling of pigs. The Board is In order fully to grasp the basic problems financed by a special fund and is self- raised by the questions submitted to it, financing; it receives no government aid. the Court of Justice should take a careful The Board has certain investments on the

fluctuations. The Board exercises no not extend to imports and does not cover influence on the level of pig production all pigs. The Treaty does not per se which is determined solely by prohibit a Member State from conferring considerations of profitability. Sales on an undertaking such special through the intermediary ofthe Board monopoly rights, subject to the are carried out on the basis of a schedule provisions of Article 37 if applicable. of producer prices which it publishes; Moreover, the questions put to the Coun these prices are dictated by the market. of Justice concern only Anicle 4 (1) of The Board attempts to regulate sales, to the Movement of Pigs Regulations reduce costs and to improve marketing

of pigmeat as set out in particular in with the Pigs Marketing Scheme. Regulation (EEC) No 2759/75 of the Council of 29 October 1975 (Official As far as trade within the Community is Journal No L 282, p. 1) the essential concerned, the most important feature of questions of Community law which arise the common organization set up by Regu in this case are as follows: lation No 2759/75 is the provision of a Community intervention system; in the (a) In the particular circumstances or the absence of a national intervention system present case, is there any for pigmeat in the United Kingdom, incompatibility with the working of there can be no incompatibility with the the common organization of the Community intervention system.

The Pig Contract account must be taken of the fact that Scheme is only an unexceptionable the Board is, within the meaning of endeavour to encourage producers to Article 90 (1) of the Treaty, an under make proper forecasts and to market taking to which a Member State has regularly and efficiently. Once it is granted a special right, but not an accepted that the Board operates in an exclusive right: the right to require open market environment, receiving and bacon pigs produced in Northern Ireland paying market prices, and that output is to be marketed through the Board does determined by individual producer

decisions, the working of the Marketing under the binding forms of private law Scheme cannot affect the common whilst the Board is constituted under organization in pigmeat for trade within public law with full democratic safe the Community. Moreover it has never guards, whilst still being run for been suggested that the Scheme has any producers by producers. In the absence effect as far as the trading system with of any Community legislation concerning non-Member countries is concerned. the form of agricultural associations in the pigmeat sector it would be wrong for

The Treaty small pan of the United Kingdom pig contemplates that Member States may industry, that the Scheme does not grant certain undertakings "special or consist of "a totality of legal devices", exclusive rights"; analogously they are that it does not involve any quantitative permitted to create monopolies subject to restriction on production, any national the provisions of Article 37. The grant of intervention system or sales levy, any a special right in the nature of a internal taxation system, any minimum monopoly over certain home-produced price system, any quota system, any State goods cannot, in itself, be regarded as a intervention on the market or any quantitative restriction on exports which measures restricting production. The is prohibited by Article 34; it is merely a Board's special marketing right does not "special right" within the meaning of give rise to a national organization of Article 90 (1).

PIGS MARKETING BOARD REDMOND

37 could not give rise to any individual prohibits the movement of pigs in rights capable of being enforced in the courts of the new Member States before Northern Ireland, directly affects the Treaty since its primary object is to 1 January 1978. prohibit the export of pigs from As regards the third question arising in Northern Ireland to the Republic of the main action it is clear that the rules Ireland. on competition, referred to in Articles 85 Article 4 (3) of Regulation (EEC) No and 86 of the Treaty, have no 2759/75 provides for intervention application to the Movement Regu lations. agencies and it follows that the Pigs Marketing Board in Northern Ireland

This national undertaking, is not as such organization has been retained in spite of incompatible with Regulation No the setting up of a common organization 2759/75 or, as such, incompatible of the market. The legislation applicable with Article 34 of the Treaty. in Northern Ireland compels producers (b) A national measure in the pigmeat to become registered with the Board sector which forms an integral part before they can sell pigs and compels them to enter into contracts with the of a State monopoly of a commercial character in a new Member State is Board and sell pigs solely to the Board at not capable of infringing the Treaty prices and in numbers fixed by the so as to give rise to individual rights Board. It is therefore a supplementary which national courts must protect measure prohibited, by implication, by until after 1 January 1978. the regulations on the common organiz ation of the market in pigmeat. (c) Articles 85 and 86 of the Treaty have no application to the provisions The legislation applicable in Northern referred to by the national court. Ireland is also contrary to other

JUDGMENT OF 29. 11. 1978 — CASE 83/78

The Scheme ducing any new measure which is therefore conflicts with Article 86 of the contrary to the principles laid down in EEC Treaty. paragraph (1) or which restricts the The defendant in the main action scope of the articles dealing with the abolition of customs duties and submits that by enforcing the Pigs Marketing Scheme in Northern Ireland quantitative restrictions between Member the United Kingdom has also enacted or States; the latter provision prohibited the maintained in force measures contrary to introduction in 1972 of legislation such Article 90 of the EEC Treaty. as the Movement of Pigs Regulations. The Board is in fact subject to the more The Government of the United Kingdom specific provisions of Title II of the points out that the Pigs Marketing Board - Treaty, in particular those of Article 89 (Northern Ireland) is one of ten agri dealing with the common agricultural cultural marketing boards in the United

PIGS MARKETING BOARD v REDMOND

movement of pigs is one of the matters With regard to the second question it is which may have to be adjusted. irrelevant although the direct As regards the questions submitted to the applicability of the regulations cannot be doubted. Court, it must be noted that the problem which arises in the main action is a The third question is a question of comparatively narrow one and that many application not of interpretation and of the issues raised by the Resident goes far beyond the necessities of the Magistrate do not actually arise from the main action.

JUDGMENT OF 29. 11. 1978 — CASE 83/78

(b) of the provisions of the EEC Treaty fixed by the Ministry. Prices are fixed by regarding the elimination of agreement between the Board and the quantitative restrictions between Ulster Curer's Association. The Ministry Member States; and of Agriculture is involved in the Board's (c) of the rules in the EEC Treaty on activities in various ways: it appoints three of the 11 members of the Board; competition. the various committees include at least

PIGS MARKETING BOARD v REDMOND

excessive. Whatever the point of view lation of the market in the products in from which they are considered, these question under the control of the public mechanisms are to be regarded as a sup authority"; according to the Court, an plementary system of control and price organization operating in only part of a Member State can nevertheless constitute support which derogates from the common organization and which, far a national organization of the market. It from springing from a purely voluntary was therefore for the Community association of producers, originates in authority alone to decide upon the pro and is enforced by measures adopted by visional maintenance of any national the national authorities. system of organization, intervention or supervision; for pigmeat the Community Even if it were possible to recognize the has in no way decided to maintain, even Board as a trade organization within the provisionally, the existing system in meaning of Article 2 of Regulation No Northern Ireland. 2759/75, the system which it applies is nevertheless purely national and does not The Court has also ruled that, once the result from Community provisions or Community has, pursuant to Article 40 encouragement. of the Treaty, legislated for the establishment of the common organiz The system of restricting sales of pigs by ation of the market in a given sector, producers moreover amounts to a Member States are under an obligation measure having an effect equivalent to a to refrain from taking any measure quantitative restriction on exports, which might undermine or create prohibited between Member States by exceptions to it".

The Pigs Marketing Scheme, in conjunction with the coupled with the Board's extensive Movement of Pigs Regulations, denies interests in curing and processing, mean that the Board will tend to act in such a independent access to any internal or external outlet for the producer; he may way as to protect employment in the not export directly, nor apparently may processing industry in Northern Ireland he even sell into intervention in the event by restricting exports of live animals at a of the Community authorities' deciding time when its registered producers might upon buying in by intervention agencies. receive better prices from such exports. As regards prices, market prices in the Under Article 42 of the Act of Accession Community may be rendered measures having an effect equivalent to

1 By a judgment of 19 September 1977 enclosed with a covering letter of 10 March 1978 and received at the Court on 16 March the Resident Magistrate, Armagh, referred to the Court in pursuance of Article 177 of the Treaty a number of questions concerning the interpretation of Regulation No 2759/75 of the Council of 29 October 1975 on the common organization of the market in pigmeat (Official Journal No L 282, p. 1) and a number of provisions of the Treaty relating to the abolition of quantitative restrictions (Article 30 et seq.) to the common agricultural policy (in particular Article 40), to the provisions relating to State monopolies and undertakings having special or exclusive rights (Articles 37 and 90) as well as to the rules of competition (Articles 85 and 86) and to Regulation No 26 of the Council of 4 April 1962 applying certain rules of competition to production of and trade in agricultural products (Official Journal, English Special Edition 1959-1962, p. 129).

2 These questions were raised in the context of the prosecution of a pig producer for offences against local legislation in force in Northern Ireland

PIGS MARKETING BOARD v REDMOND

relating to the marketing of pigmeat, setting up the Pigs Marketing Scheme, administered by the Pigs Marketing Board (hereinafter referred to as "the Board")) created by the same legislation, which is composed partly of producers and partly of representatives of the Department of Agriculture and supervised by the Department.

3 It appears from the information contained in the judgment referring the matter to the Court of Justice that this scheme applies to fat pigs, known as "bacon pigs", defined by the relevant legislation as being pigs weighing over 77 kg live weight.

JUDGMENT OF 29. 11. 1978 — CASE 83/78

10 At the same time the Board claimed the forfeiture of the goods but sub­ sequently withdrew the claim as the defendant had for his part agreed to plead guilty.

11 The defendant argued in his defence before the Resident Magistrate that the provisions of the Pigs Marketing Scheme and the Movement of Pigs Regu­ lations under which he was charged were incompatible with the provisions of Community law, in particular with the regulations on the common organiz­ ation of the market in pigmeat and the provisions of the Treaty with regard to competition.

12 The Board claimed that the Pigs Marketing Scheme was compatible with the Common Market and referred to Article 37 of the EEC Treaty dealing with State monopolies of a commercial character and to Article 44 of the Act of Accession which prescribes a period expiring on 31 December 1977 for the adjustment of such monopolies to the requirements of the Common Market.

13 In view of this conflict of arguments the Resident Magistrate took the view that as the complaint was brought before him on the basis of criminal legislation the application of which might involve for the defendant a fine or imprisonment or both it was important to know whether or not such a conviction would be compatible with Community law.

14 With a view to clarifying this question the Resident Magistrate, in a judgment of 19 September 1977, decided to refer the matter to the Court of Justice in pursuance of Article 177 of the EEC Treaty for a ruling as to whether the conviction of the defendant in accordance with the legislation applicable in Northern Ireland would be compatible with Community law.

(4) If it is a 'State monopoly of a commercial character’ within Article 37 of the Treaty of Rome and the period of grace for adjustment does not expire until 31 December 1977, does this save it from the immediate effect of Articles 85 and 86 until that date? Or can it be argued that 'undertakings' within the meaning of Articles 85 and 86 can be construed to include State monopolies? Counsel for the Board argued that the term 'undertakings' is not defined but is used as distinct from 'State monopolies'.

(5) Do the Board's activities fall within the provisions of Article 85 (3) so as to exempt it from the provisions of paragraph (1)? This point was not raised. If the Board is exempt from the application of Article 85 by the operation of paragraph (3) it has no need to fall back on the 'transitional period' argument.

(6) And what about Article 8 of the Treaty of Rome which provides that —

(1) The Common Market shall be progressively established during a transitional period of 12 years; and

(2) To each stage there shall be assigned a set of actions to be initiated and carried through concurrently.'?

Does this provision affect the present case?

2. Are Regulations Nos 121/67, 2759/75 and all other regulations on the common organization of the market in pigmeat adopted in accordance with the Treaty establishing the European Economic Community directly applicable so as to confer on individuals rights enforceable by them in the courts of the United Kingdom?

3. Is the Pigs Marketing Scheme in Northern Ireland, upon the proper interpretation of the articles and regulations alone, or any relevant Community law, in contravention of the rules of Community law?

4. Under the above articles, regulation or any relevant Community law can a Member State be authorized:

(a) to continue a national organization of the market at a time when the common organization of the market is in force?

PIGS MARKETING BOARD v REDMOND

(b) to compel producers within its jurisdiction to become registered producers with the Pigs Marketing Board (Northern Ireland) before they can sell pigs?

20 It claims that, on the one hand, the questions included in the judgment of 19 September 1977 are for the most pan not just questions of interpretation but questions relating to the application of Community law and that as such they cannot be decided by the Court of Justice.

21 On the other hand, the questions formulated in the covering letter of 10 March 1978, which are described by the Magistrate himself as having arisen only "incidentally", cannot be considered as having been validly conferred to the Court.

JUDGMENT OF 29. 11. 1978 — CASE 83/78

22 In the face of the large number of questions raised and having regard to the complexity and the importance of the case the United Kingdom Government states that it has difficulty in identifying the legal problems arising in the context of the proceedings pending before the Resident Magistrate.

23 For this reason the Government has asked the Court, in order to permit it to work out its position for the oral hearing, to indicate before hand the questions which it regards as relevant.

24 At this stage, only an examination of Articles 34 and 37 of the Treaty, relating respectively to quantitative restrictions on export and the system of State monopolies, appears to the Government to be necessary for the solution of the problems raised before the national court.

PIGS MARKETING BOARD v REDMOND

Resident Magistrate has not properly exercised his discretion with regard to the legal questions raised and the necessity of referring them to the Court of Justice.

29 In any event a comparison with the judgment of 19 September 1977 shows that the purpose of the supplementary questions is merely to explain and render more precise the questions previously submitted.

30 It is thus appropriate to read the two series of questions together so as to extract the problems of interpretation raised in the context of the prosecution before the Resident Magistrate.

31 As regards the difficulty mantioned by the United Kingdom Government of identifying within the broad complex of questions raised by the Resident Magistrate those which are to be considered as decisive, it has not seemed possible to the Court to give a prior indication at the request of one of the parties to these proceedings without incurring the risk of seeming to commit itself to a definite position in advance of a final judgment and, what is more, without compromising the other parties' opportunities to put their case.

The classification of the Pigs Marketing Scheme under the provisions, of the Treaty and secondary legislation

36 It is common ground that this common organization of the market was applicable on the whole of the territory of the United Kingdom, by virtue of the general provisions of the Act of Accession and of the specific rule contained in Article 60 (1) of the Act, as from 1 February 1973.

37 It follows from Article 38 (2) of the EEC Treaty that the provisions of the Treaty relating to the common agricultural policy have precedence, in case of any discrepancy, over the other rules relating to the establishment of the Common Market.

38 The specific provisions creating a common organization of the market therefore have precedence in the sector in question over the system laid down in Article 37 in favour of State monopolies of a commercial character.

39 Consequently the special time-limit laid down by Article 44 of the Act of Accession cannot be relied on so as to cover national rules and the action of a national body such as the Board, relating to a sector for which a common organization of the market exists.

40 It is therefore irrelevant whether the Pigs Marketing Scheme and the Board have the character of a "State monopoly" within the meaning of Article 37, as the application of that provision was in any case excluded as from 1 February 1973 by the effect of the extension to the United Kingdom of the common organization of the market in pigmeat.

PIGS MARKETING BOARD v REDMOND

47 As the Court had occasion to emphasize in its judgment of 10 December 1974 in Case 48/74, Charmasson ([1974] ECR 1383), national market organ­ izations were only accepted provisionally and the intention is to replace them, in accordance with Article 43 (3), by the institution of common organ­ izations of the market.

JUDGMENT OF 29. 11 1978 — CASE 83/78

48 Except for the products in respect of which there is a reservation under Article 60 (2) of the Act of Accession, this replacement took effect for the United Kingdom by virtue of the same act on 1 February 1973, as has been indicated above.

49 As regards the reference to national market organizations in Regulation No 26, it should be pointed out that the provisions of that regulation, which is dated 4 April 1962, take account of the conditions prevailing during the transitional period and that in the fifth recital in the preamble to that regu­ lation the position as regards the subsequent development of a common agri­ cultural policy is fully safeguarded.

so Accordingly the question whether the Pigs Marketing Scheme (Northern Ireland) might be classified as a "national market organization" is equally irrelevant.

The position of the Pigs Marketing Scheme vis-à-vis the common organization of the market in pigmeat

55 It follows that, having regard to the structure of Regulation No 2759/75, which is now in force, the provisions of the Treaty relating to the abolition of tariff and commercial barriers to intra-Community trade and in particular Articles 30 and 34 on the abolition of quantitative restrictions and of all measures having equivalent effect on imports and exports are to be regarded as an integral part of the common organization of the market.

56 As the Court has stated in its judgment of 18 May 1977 in Case 111/75 Officier van Justitie v Van den Hazel ([1977] ECR at p. 909) once the Community has, pursuant to Article 40 of the Treaty, legislated for the establishment of the common organization of the market in a given sector, Member States are under an obligation to refrain from taking any measure which might undermine or create exceptions to it.

57 With a view to applying that statement in the case of the Pigs Marketing Scheme it should be borne in mind that the common organization of the market in pigmeat, like the other common organizations, is based on the concept of an open market to which every producer has free access and the functioning of which is regulated solely by the instruments provided for by that organization.

58 Hence any provisions or national practices which might alter the pattern of imports or exports or influence the formation of market prices by preventing producers from buying and selling freely within the State in which they are established, or in any other Member State, in conditions laid down by Community rules and from taking advantage directly of intervention measures or any other measures for regulating the market laid down by the common organization are incompatible with the principles of such organ­ ization of the market.

63 In this respect account be taken of Article 2 of Regulation No 2759/75 which lays down a series of measures intended to encourage action by trade and joint trade organizations to facilitate the adjustment of supply to market requirements by reason in particular of a better organization of production, processing or marketing of the products in question.

64 However, that provision makes possible the institution of such measures only within the framework of a Community procedure intended to guarantee that the general interests of the Community are safeguarded and that the objectives laid down by Article 39 of the Treaty are observed.

65 The questions referred to the Court by the Resident Magistrate should therefore be answered to the effect that a marketing system on a national or regional scale set up by the legislation of a Member State and administered by a body which, by means of compulsory powers vested in it, is empowered

PIGS MARKETING BOARD v REDMOND

to control the sector of the market in question or a part of it by measures such as subjecting the marketing of the goods to a requirement that the producer shall be registered with the body in question, the prohibition of any sale otherwise than to that body or through its agency on the conditions determined by it, and the prohibition of all transport of the goods in question otherwise than subject to the authorization of the body in question are to be considered as incompatible with the requirements of Articles 30 and 34 of the EEC Treaty and of Regulation No 2759/75 on the common organ­ ization of the market in pigmeat.

JUDGMENT OF 29. 11. 1978 — CASE 83/78

71 The Board, for its part, also emphasizes the connexion existing between this aspect of the Pigs Marketing Scheme and the suppression of smuggling.

72 It is not possible to accept that a prohibition on transport which is incompatible both with freedom of trade between Member States and with the common organization of the market in pigmeat is justified by reason of the fact that such a restriction might incidentally facilitate frontier controls and the campaign against certain fraudulent operations.

73 Such abuses, if not abolished by the removal of their monetary cause, can only be dealt with by means compatible with the normal functioning of the Common Market.

74 Considerations affecting the repression of fraud cannot therefore be relied upon to justify the scheme which is the subject of the proceedings before the Resident Magistrate.

75 In view of the foregoing it does not appear necessary to reply to the questions by the Resident Magistrate regarding the interpretation of Articles 85 and 86 of the Treaty and the relationship of those provisions with Article 37.

in answer to the questions referred to it by the Resident Magistrate, Armagh, by judgment of 19 September 1977 and by letter of 10 March 1978, hereby rules:

1. A marketing system on a national or regional scale set up by the legislation of a Member State and administered by a body which, by means of compulsory powers vested in it, is empowered to control the sector of the market in question or a part of it by measures such as subjecting the marketing of the goods to a requirement that the producer shall be registered with the body in question, the prohibition of any sale otherwise than to that body or through its agency on the conditions determined by it, and the prohibition of all transport of the goods in question otherwise than subject to the authorization of the body in question are to be considered as incompatible with the requirements of Articles 30 and 34 of the EEC Treaty and of Regu­ lation No 2759/75 on the common organization of the market in pigmeat.

2. The provisions of Articles 30 and 34 of the EEC Treaty and of Regu­ lation No 2759/75 are directly applicable and confer on individuals rights which the courts of Member States must protect.

3. The effects described above applied, according to the terms of the Act of Accession and in particular of Articles 2, 42 and 60 (1) thereof, to the whole of the territory of the United Kingdom as from 1 February 1973.

Kutscher Mackenzie Stuart Donner

Pescatore Sørensen O'Keeffe Bosco