Opinion of mr advocate general Reischl

Mr President,

Members of the Court,

The reference for a preliminary ruling on which I am giving my opinion today concerns the common organization of the market in milk and milk products as established by Regulation No 804/68 of the Council of 27 June 1968 (Official Journal, English Special Edition 1968 (I), p. 176).

Article 3 of that regulation provides that each year a target price for milk shall be fixed for the Community. This target price is the price which it is aimed to obtain for the aggregate of producers' milk sales, on the Community market and on external markets, during the milk year. It is fixed for milk containing 3.7 % fat, delivered to dairy.

This price was fixed for the 1978/79 marketing year, which is the year involved in the main action, by Council Regulation No 998/78 of 12 May 1978 (Official Journal No L 130 of 18 May 1978, p. 5) after Council Regulation No 910/78 of 27 April 1978 extending the 1977/78 milk year (Official Journal No L 117 of 29 April 1978, p. 84) had extended the 1977/78 marketing year until 21 May 1979 and hence the target price laid down for that marketing year by Regulation No 872/77 fixing the target price for milk and the intervention prices for butter, skimmed-milk powder and Grana Padano and Parmigiano Reggiano cheese for the 1977/78 milk year (Official Journal No L 106 of 29 April 1977, p. 17). Accordingly the target price after 22 May 1978 amounted to17.70 units of account per 100 kg or — expressed in lire — Lit 204.26 per kg.

The plaintiff in the main action claims that Italian Law No 306 of 8 July 1975 is incompatible with these rules. It provides, on the one hand, that sales of milk by members of an association may only be effected through the association and in accordance with the rules laid down by it. On the other hand the Law contains provisions concerning the fixing of the selling price for milk at the production stage. On the basis of these the milk price is laid down for each region and each marketing year, in accordance with the criteria laid down in the Law, by agreement between the groups of traders involved (producers, associations, processors, dairy centres). This price is published in the Bollettino Ufficiale Regionale [Regional Official Gazette] and thereby becomes binding on the parties to the agreement. If no agreement can be reached in this way, the Chairman of the Giunta Regionale [Regional Council] appoints a commission presided over by an official of the administration and composed of five representatives of milk producers, four representatives of processors, one representative of dairy centres and two representatives of the dairy and cheese associations. This commission then determines the price which, as laid down in Article 11 of the Italian Law — becomes binding on the parties (vincolante tra le partie) immediately after publication in the Bollettino Ufficiale Regionale.

This procedure came to be applied in the spring of 1978 because no agreement could be reached between the trading groups involved. A commission set up by a decree dated 7 March 1978, to which, however, no representative was apparently nominated by the organization of buyers and consumers, issued a decision on 11 April 1978, published in the Bollettino Ufficiale on 17 April 1978, according to which the milk price up to the end of the year 1978 was to be Lit 260 per litre inclusive of VAT — apparently based on milk with a fat content of 3.5%.

A large number of undertakings in the milk sector have lodged a complaint against that decision in the Tribunale Amministrativo Regionale per il Veneto [Regional Administrative Court for Veneto]. They consider, as has been indicated, that the decision should be annulled because the legal provision on which it is based (Article 11 of the Italian Law) is incompatible with Regulation No 804/68, and it follows that the national legislature no longer possesses the appropriate powers.

The defendant region contested this. In its opinion there is no conflict with Community law as long as the Community bodies have not adopted concrete measures of application for the regulation — apparently an allusion to the belated fixing of target price for the 1978/79 marketing year. It also puts forward the argument that the Community target price amounts to no more than a guideline, which does not deprive the national legislature of the power to take part in determining the actual price.

The Court seised of the case stayed the proceedings by order of 28 November 1978 and referred the following question to the Court for a preliminary ruling under Article 17 of the EEC Treaty:

Before I examine it I would just like to mention that in August 1978 an agreement within the meaning of Article 8 of the Italian Law was in fact reached. It applied to the second half of the year 1978; according to the agreement the producer price for milk was fixed at Lit 270 per litre inclusive of VAT.

In addition the Commission has initiated the procedure under Article 169 of the EEC Treaty in relation to the Italian Law which is at issue in this case. It set out its opinion in a letter of 28 July 1977 and requested the Italian Government to state its position. This was done in a note of 4 November 1977, after the original time-limit had been extended. However, there has not yet been any reasoned opinion of the Commission within the meaning of Article 169 nor have legal proceedings been instituted.

1. Two preliminary comments should at once be made concerning the question which has been referred to the Court in order to enable the problems which have been raised to be dealt with in logical sequence.

2. There has been much argument in the proceedings as to whether the Italian Law at issue in fact represents an authoritative fixing of the producer price for milk, that is to say — or so we must understand the point that is being made — whether in fact clarification of the question which has been referred to the Court by the Tribunale Amministrativo Regionale per il Veneto is required.

3. I think it would also be useful in investigating the problem raised in the present proceedings — the compatibility of national price measures taken by a government with the price system applied in a common organization of the market — to present a summary of important points which have been decided in the relevant case-law.

4. It is therefore important in investigating the present case to review the main features of the organization of the milk market, especially its price mechanism.

5. It should not be particularly difficult to find the appropriate answer to the question which has been referred to the Court if these essential features are borne in mind, particularly the fact that the objective in the Community is to attain a certain price level at the producer stage with the aid of special mechanisms in such a way as to bring about as unified a market as possible, and if the basic reasoning contained in the relevant case-law is applied.

6. I would suggest, therefore, in conclusion, that the question which has been referred to the Court by the Tribunale Amministrativo Regionale per il Veneto be answered to the effect that under the system of the common organization of the market in milk, as described in Regulation No 804/68, a Member State may not itself fix the producer price for milk at the national level, or allow it to be so fixed. As the situation is governed by a directly applicable Community regulation, which takes precedence over any national laws, even those passed subsequently, it follows that conflicting national laws must be inapplicable, without there being any need for the national constitutional court to confirm it in the particular instance.

1 Translated from the German.