C-216/86

Mr President, 'provisions of a Community agricultural Members of the Court, regulation which comprise a price system applicable at the production and wholesale stages leave Member States free . . . to take appropriate measures relating to price formation at the retail and consumption I — 1. The question which has been stages, on condition that they do not referred to the Court is not entirely new. It jeopardize the aims or functioning of the involves an assessment of the scope of the common organization of the market in 'residual' powers of the Member States question, in particular its price system'.3 concerning agricultural prices when a regu- lation instituting a common organization of the market based on a common price system already exists. The Court's extensive case-law suggests a solution to this problem, the basic principles of which were set out in the Galli1 judgment and which since that 2. The Italian Corte suprema di cassazione time have been consistently reaffirmed. (Court of Cassation), which has requested Thus, in the Kefer and Delmelle judgment, the preliminary ruling, referred expressly to which concerned-the price system resulting the abovementioned judgments. The precisely from the two regulations in national court considered however that the question in the present case,2 the Court Tasca4 and Sadam5 decisions left some reiterated that doubts as to what criteria were applicable. It questions in a general way whether the existence of a Community system of agri- cultural prices at the wholesale or the production stage is of itself sufficient to 'in sectors covered by a common organ- preclude any power on the part of Member ization of the market and a fortiori when States concerning prices at the same stages this organization is based on a common price or whether the compatibility of a national system, Member States can no longer take price system with Community rules merely action, through national provisions adopted depends on whether or not it is likely to unilaterally, affecting the machinery of price jeopardize the objectives or the functioning formation as established under the common of the system instituted by the common organization', organization irrespective of the marketing stage concerned. . Moreover, the national court asks particularly whether the fact that the Italian system of freezing prices in question, quite apart from being of a while also specifying that temporary nature, included a specific clause enabling revision of these prices by * Translated from the French. 1 — Case 31/74 [1975] ECR 47. reference to Community prices, is of any 2 — Regulation No 121/67/EEC of the Council of 13 June 1967 (Official Journal, English Special Edition 1967, p. 46) 3 — Joined Cases 95 and 96/79 [1980] ECR 103, paragraph 8, and Regulation (EEC) No 805/68 of the Council of 27 June 1968 on the common organization of the market in emphasis added. beef and veal (Official Journal, English Special Edition 4 — Case 65/75 [1976] ECR 291. 1968 (I), p. 187): 5 — Joined Cases 88 to 90/75 [1976] ECR 323.

II — 3. The Court's case-law draws a basic 'The unilateral fixing by a Member State of distinction according to whether the rules of maximum prices for the sale of sugar, national law govern the same marketing stage whatever the marketing stage in question, is as that governed by the common organ- incompatible with Regulation No 1009/67 ization, in other words, under the regu- [on the common organization of the market lations in question, the production stage and in the sugar sector] once it jeopardizes the the wholesale stage, or whether they have objectives and the functioning of this organ- their effect at a different stage, that is to say ization 7 and in particular its system of the retail stage.

In reality, the reverses the presumption that a national problem with that reference to the system having its effect on the same distinction was that in the case in point the marketing stage is compatible. In other questions asked by the national court made words, while the existence of a Community 'no distinction between the different price system at the wholesale stage does not marketing stages', as the Court observed. affect the power of Member States as The Court was therefore obliged, as the regards the stage of sale to consumers, Commission precisely pointed out, to deal provided certain conditions are respected, in general terms with the problem of the none the less it prohibits Member States conformity with Community law of a from unilaterally adopting, at the same stage national system for controlling, in other and for the same products, a price system words without drawing any distinction which differs from the Community system. according to the marketing stage The Tasca and SADAM judgments do not concerned.9 seem to be at variance with this solution in principle.

OPINION OF MR DARMON —CASE 216/86

8. In view of the interaction between retail determine whether such a risk exists. and wholesale prices and also the risk of conflict which may result from the co-existence of national and Community agricultural price systems, the Court ruled 10. This analysis is confirmed by the later that any national price system which case-law of the Court. Thus, in the Danis undermined the objectives and the func- judgment the Court has held that rules insti- tioning of the common organization was tuting price controls are contrary to the incompatible with the regulation instituting regulation instituting the common organ- the common organization.

ization'. 12 9. None the less, if the national system in question particularly concerns production prices and wholesale prices of products The Toffoli decision given on the same day falling within a Community system of prices is even clearer. On the basis of the principle fixed at the same marketing stage, its whereby Member States, within the unilateral character cannot but interfere framework of a price system instituted by a with and adversely affect the common common organizaton, character of the system resulting from the 11 — Case 114/77 Decbmam [1978] ECR 1573, Opinion of Mr Advocate General Mayras at p. 1591. 10 — Case 65/75, supra, paragraphes 12 and 14, and Joined 12 — Cases 16 to 20/79 Danis [1979] ECR 3327, paragraph 10, Cases 88 to 90/75, supra, paragraphes 12 and 14. emphasis added.

'can no longer take action, through national one hand, a basic price or guidance price provisions taken unilaterally, affecting the and, on the other, an intervention price if machinery of price formation at the the need should arise, 15 and applying at the production and marketing stages established production and wholesale stages. under the common organization', the Court held that 'national legislation designed to promote and encourage, by any method, the establishment of a uniform producer price for milk, by agreement or by authority, at the national or regional level is, by its 13. It should therefore be stated that, even nature, outside the bounds of the powers if they are of limited duration, national rules given to Member States and runs contrary freezing production and distribution prices to the principle... of attaining a target of pigmeat and beef and veal, which are producer price for the milk sold by covered by Council Regulations Nos 121/67 Community producers during the milk year and 805/68 respectively, must be presumed on the Community market and on external to be incompatible with the price system markets'. 13 resulting from those two regulations, in so far as those national rules interfere with the price formation resulting from the common organization of the market and thereby jeopardize not only the objectives which the organization is pursuing for the whole of 11. These decisions underline that the the Community with a view to instituting a extent to which Member States may single market under the terms of Articles 39 intervene depends in such cases on the and 40 of the EEC Treaty, but also its func- original distribution of powers in Article 39 tioning. et seq. of the EEC Treaty, as defined in a particular case by the adoption of the regu- lation instituting a common organization of the market. Under that distribution of powers, Member States are normally precluded from adopting a price freeze at I V — 1 4 . This conclusion is not altered by the production and wholesale stages where the existence of a clause providing for the Community rules fix the prices applicable revision of domestic prices by reference to for the same products at those same stages. the Community prices determined within the framework of the common organization. In no circumstances may such a clause justify unilateral action by a Member State within a sector where the Community has exclusive legislative power. The Italian 12. This is precisely the objective pursued Government has clearly indicated in its by Regulations Nos 121/67 and 805/68. As observations that the application of the the Court expressly pointed out in the Refer clause was subject to prior administrative and Delmelle judgment, u those regulations authorization. Such a system therefore are intended to create a single market for makes the applicability of Community regu- the products to which they are applicable lations, which should be immediate and and are based on the establishment of a uniform, dependent on the decision of a common price system consisting of, on the national authority, in this particular case

16 — Case 50/76 Amsterdam Bulb [1977] ECR 137, paragraphs 5 and 6. 17 — Case 50/76, supra, paragraph 7.