Court of Justice of the European Communities (including Court of First Instance Decisions)

1 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKET - PRICE FORMATION - NATIONAL MEASURES - INCOMPATIBILITY WITH COMMUNITY RULES - CRITERIA ASSESSMENT - JURISDICTION OF NATIONAL COURT
2 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKET - BEEF AND VEAL - TRANSFER TO AN INTERVENTION AGENCY OF FROZEN BEEF AND VEAL - SALE PRICE TO CONSUMER - UNILATERAL FIXING BY MEMBER STATE CONCERNED - PERMISSIBILITY - CONDITIONS
( COUNCIL REGULATION NO 2453/76 )
3 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKET - BEEF AND VEAL - SALE PRICE TO CONSUMER - UNILATERAL FIXING BY A MEMBER STATE - PERMISSIBILITY - CONDITIONS

1 . IN SECTORS COVERED BY A COMMON ORGANIZATION OF THE MARKET , AND A FORTIORI WHEN THIS ORGANIZATION IS BASED ON A COMMON PRICE SYSTEM , MEMBER STATES CAN NO LONGER TAKE ACTION , THROUGH NATIONAL PROVISIONS ADOPTED UNILATERALLY , AFFECTING THE MACHINERY OF PRICE FORMATION AS ESTABLISHED UNDER THE COMMON ORGANIZATION . HOWEVER , THE PROVISIONS OF A COMMUNITY AGRICULTURAL REGULATION WHICH COMPRISE A PRICE SYSTEM APPLICABLE AT THE PRODUCTION AND WHOLESALE STAGES LEAVE MEMBER STATES FREE - WITHOUT PREJUDICE TO OTHER PROVISIONS OF THE TREATY - TO TAKE THE APPROPRIATE MEASURES RELATING TO PRICE FORMATION AT THE RETAIL AND CONSUMPTION STAGES , ON CONDITION THAT THEY DO NOT JEOPARDIZE THE AIMS OR FUNCTIONING OF THE COMMON ORGANIZATION OF THE MARKET IN QUESTION .

IN EVERY CASE IT IS FOR THE NATIONAL COURT TO DECIDE WHETHER THE MAXIMUM PRICES WHICH IT IS CALLED UPON TO CONSIDER PRODUCE SUCH EFFECTS AS TO MAKE THEM INCOMPATIBLE WITH THE COMMUNITY PROVISIONS IN THE MATTER . IN THIS RESPECT IT IS NECESSARY TO TAKE ACCOUNT OF THE SPECIFIC NATURE OF THE ORGANIZATION OF THE MARKET IN QUESTION .

2 . COUNCIL REGULATION NO 2453/76 ON THE TRANSFER TO THE ITALIAN INTERVENTION AGENCY OF FROZEN BEEF AND VEAL HELD BY THE INTERVENTION AGENCIES IN OTHER MEMBER STATES , IN CONJUNCTION WITH THE REGULATIONS IMPLEMENTING IT , MUST BE INTERPRETED AS MEANING THAT THE ITALIAN GOVERNMENT IS AUTHORIZED TO FIX BY NATIONAL MEASURES RETAIL PRICES FOR SUCH MEAT ON CONDITION THAT THE RETAILERS ' MARGIN OF PROFIT IS NOT SO SMALL AS TO HINDER THE MARKETING OF THE PRODUCTS IN QUESTION .

3 . OUTSIDE THE SCOPE OF REGULATION NO 2453/76 THE UNILATERAL FIXING BY A MEMBER STATE OF MAXIMUM PRICES FOR FROZEN BEEF AND VEAL AT THE RETAIL STAGE IS INCOMPATIBLE WITH THE COMMON ORGANIZATION OF THE MARKET IN BEEF AND VEAL ONLY TO THE EXTENT TO WHICH IT ENDANGERS THE OBJECTIVES OR THE OPERATION OF THAT ORGANIZATION .

IN CASE 223/78
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE PRETORE , PADUA , FOR A PRELIMINARY RULING IN THE CRIMINAL PROCEEDINGS PENDING BEFORE THAT COURT AGAINST
ADRIANO GROSOLI

ON THE INTERPRETATION OF THE COMMUNITY PROVISIONS RELATING TO FREE MOVEMENT OF GOODS AND THE COMMON ORGANIZATION OF THE MARKET IN BEEF AND VEAL WITH A VIEW TO A DECISION ON THE COMPATIBILITY OF THOSE PROVISIONS WITH A NATIONAL SYSTEM OF MAXIMUM RETAIL PRICES ,

1 BY ORDER DATED 15 JULY 1978 , RECEIVED AT THE COURT ON 5 OCTOBER 1978 , THE PRETORE , PADUA , REQUESTED THE COURT UNDER ARTICLE 177 OF THE EEC TREATY ' ' TO GIVE A RULING AS TO THE COMPATIBILITY WITH THE COMMUNITY RULES OF A BINDING SYSTEM OF PRICES LAID DOWN BY THE AUTHORITIES AND LIMITED TO THE RETAIL SECTOR ALONE , TAKING INTO ACCOUNT THE FACT THAT IN SUCH A CASE THE QUESTION OF THE CONSTITUTIONALITY OF THE LEGISLATIVE MEASURES ON PRICES ADOPTED BY THE ITALIAN STATE IS SAID TO BE JUSTIFIED IN RELATION TO ARTICLE 3 OF THE CONSTITUTION OF THE ITALIAN REPUBLIC ' ' .

2 THIS QUESTION CONCERNS ON THE ONE HAND ORDER NO 35/1977 ADOPTED BY THE ITALIAN COMITATO INTERMINISTERIALE DEI PREZZI ( INTERDEPARTMENTAL COMMITTEE ON PRICES ), HEREINAFTER REFERRED TO AS ' ' THE PRICE COMMITTEE ' ' , ON 26 JULY 1977 IN RELATION TO THE MAXIMUM CONSUMER PRICES FOR FROZEN BEEF AND VEAL ( GAZZETTA UFFICIALE DELLA REPUBBLICA ITALIANA NO 207 OF 29 SEPTEMBER 1977 ) AND ON THE OTHER HAND THE COMMUNITY RULES ON THE COMMON ORGANIZATION OF THE MARKET IN BEEF AND VEAL . THE QUESTION AROSE IN CRIMINAL PROCEEDINGS AGAINST THE LEGAL REPRESENTATIVE OF A COMMERCIAL MEAT UNDERTAKING FOR INFRINGING THE AFORESAID ORDER .

3 WITHIN THE FRAMEWORK OF PROCEEDINGS BROUGHT UNDER ARTICLE 177 OF THE TREATY , IT IS NOT FOR THE COURT TO GIVE A RULING ON THE COMPATIBILITY OF RULES OF INTERNAL LAW WITH THE PROVISIONS OF COMMUNITY LAW . ON THE OTHER HAND , THE COURT HAS JURISDICTION TO SUPPLY THE NATIONAL COURT WITH ALL THE CRITERIA FOR INTERPRETATION COMING WITHIN COMMUNITY LAW SO AS TO ENABLE THAT COURT TO DETERMINE WHETHER SUCH RULES ARE COMPATIBLE WITH COMMUNITY RULES .

4 THE THIRD REFERENCE IN THE PREAMBLE TO ORDER NO 35/1977 OF THE PRICE COMMITTEE REFERS TO COUNCIL REGULATION ( EEC ) NO 2453/76 OF 5 OCTOBER 1976 ON THE TRANSFER TO THE ITALIAN INTERVENTION AGENCY OF FROZEN BEEF AND VEAL HELD BY THE INTERVENTION AGENCIES OF OTHER MEMBER STATES ( OFFICIAL JOURNAL L 279 , P . 3 ). ACCORDING TO THE SECOND RECITAL TO THAT REGULATION THE REASON FOR THE TRANSFER MEASURE WAS THE ECONOMIC SITUATION IN ITALY AT THE TIME , IN PARTICULAR THE VERY HIGH RATE OF INFLATION AND THE TRANSFER WAS INTENDED TO HELP TO STABILIZE CONSUMER PRICES . THE SALE OF THE MEAT TRANSFERRED TO THE ITALIAN INTERVENTION AGENCY WAS MADE AT FLAT RATE PRICES FIXED IN ADVANCE BY THE COMMISSION AND ONLY RETAILERS OR THEIR AUTHORIZED AGENTS WERE ALLOWED TO MAKE APPLICATIONS TO PURCHASE ( ARTICLES 3 AND 8 OF COMMISSION REGULATION NO 2793/76 OF 18 NOVEMBER 1976 ON THE DETAILED ARRANGEMENTS FOR IMPLEMENTING REGULATION NO 2453/76 ( OFFICIAL JOURNAL L 319 , P . 24 )).

5 ALTHOUGH THE CONSUMER PRICE OF THIS MEAT WAS NOT LAID DOWN BY THE COMMUNITY RULES , THE LATTER MUST NEVERTHELESS , IN VIEW OF THEIR ANTI-INFLATIONARY OBJECTIVE , BE INTERPRETED AS AUTHORIZING THE ITALIAN GOVERNMENT TO FIX THE PRICES BY MEANS OF NATIONAL PROVISIONS , PROVIDED THAT THE PROFIT MARGIN ALLOWED TO RETAILERS SHOULD NOT BE SO LOW AS TO HINDER THE DISPOSAL OF THE PRODUCTS IN QUESTION .

6 ASSUMING THAT PRICE COMMITTEE ORDER NO 35/1977 MUST BE INTERPRETED AS APPLICABLE NOT ONLY TO THE MEAT TRANSFERRED TO ITALY UNDER REGULATION NO 2453/76 BUT TO ALL FROZEN MEAT AT THE RETAIL STAGE , THE QUESTION PUT BY THE PRETORE , PADUA , RAISES THE MORE GENERAL PROBLEM OF THE POWERS OF MEMBER STATES IN RELATION TO PRICES APPLICABLE TO AGRICULTURAL PRODUCTS COVERED BY A COMMON ORGANIZATION OF THE MARKET .

7 AS THE COURT HAS HELD IN A CONSISTENT SERIES OF JUDGMENTS - THAT OF JANUARY 1975 ( CASE 31/74 GALLI ( 1975 ) 1 ECR 47 ) AND THOSE OF 26 FEBRUARY 1976 ( CASE 65/75 TASCA AND JOINED CASES 88 TO 90/75 SADAM ( 1976 ) 1 ECR 291 AND 323 ) AS WELL AS IN THE JUDGMENT OF 29 JUNE 1978 ( CASE 154/77 DECHMANN ( 1978 ) ECR 1573 ), IN SECTORS COVERED BY A COMMON ORGANIZATION OF THE MARKET , AND A FORTIORI WHEN THIS ORGANIZATION IS BASED ON A COMMON PRICE SYSTEM , MEMBER STATES CAN NO LONGER TAKE ACTION , THROUGH NATIONAL PROVISIONS ADOPTED UNILATERALLY , AFFECTING THE MACHINERY OF PRICE FORMATION AS ESTABLISHED UNDER THE COMMON ORGANIZATION . IT WAS HELD IN THE SAME JUDGMENTS THAT PROVISIONS OF A COMMUNITY AGRICULTURAL REGULATION WHICH COMPRISE A PRICE SYSTEM APPLICABLE AT THE PRODUCTION AND WHOLESALE STAGES LEAVE MEMBER STATES FREE - WITHOUT PREJUDICE TO OTHER PROVISIONS OF THE TREATY - TO TAKE THE APPROPRIATE MEASURES RELATING TO PRICE FORMATION AT THE RETAIL AND CONSUMPTION STAGES , ON CONDITION THAT THEY DO NOT JEOPARDIZE THE AIMS OR FUNCTIONING OF THE COMMON ORGANIZATION OF THE MARKET IN QUESTION .

8 THE COURT STATED IN THE SAME JUDGMENTS THAT IN EVERY CASE IT IS FOR THE NATIONAL COURT TO DECIDE WHETHER THE MAXIMUM PRICES WHICH IT IS CALLED UPON TO CONSIDER PRODUCE SUCH EFFECTS AS TO MAKE THEM INCOMPATIBLE WITH THE COMMUNITY PROVISIONS IN THE MATTER . IN THIS RESPECT IT IS NECESSARY TO TAKE ACCOUNT OF THE SPECIFIC NATURE OF THE ORGANIZATION OF THE MARKET IN QUESTION .

9 AS REGARDS THE CHARACTERISTICS OF THE COMMON ORGANIZATION IN BEEF AND VEAL IT SHOULD BE REMEMBERED THAT IT INCLUDES A PRICE SYSTEM AND A SYSTEM OF TRADE . THE PRICE SYSTEM IS BASED ON A GUIDE PRICE FIXED ANNUALLY BY THE COUNCIL FOR ADULT CATTLE . INTERVENTION MEASURES ARE PROVIDED IN THE EVENT OF THE MARKET PRICES ' FALLING A CERTAIN EXTENT BELOW THE GUIDE PRICE . THE FRESH OR CHILLED MEAT PURCHASED AS A RESULT OF INTERVENTION MEASURES IS FROZEN AND STORED BY THE INTERVENTION AGENCIES . THE SALE OF THE MEAT SO STORED MUST BE DECIDED AT THE COMMUNITY LEVEL AND MUST BE MADE AT PRICES ESTABLISHED BY TENDER OR FIXED AT A FLAT RATE IN ADVANCE BY THE COMMISSION . THE SYSTEM OF TRADE WITH NON-MEMBER COUNTRIES INVOLVES IN PARTICULAR LEVIES AND REFUNDS . THE BASIC LEVY IS DETERMINED EACH MONTH SEPARATELY FOR ADULT CATTLE AND FOR FROZEN MEAT . FLAT-RATE COEFFICIENTS APPLICABLE TO THE LEVIES ON ADULT CATTLE ARE USED TO CALCULATE THE LEVY ON FRESH OR CHILLED MEAT . AS A RESULT OF VARIOUS INTERNATIONAL AGREEMENTS CERTAIN DEROGATIONS HAVE BEEN MADE FROM THE SYSTEM .

10 IT IS APPARENT FROM THE OBSERVATIONS AND FIGURES GIVEN DURING THE PROCEEDINGS BEFORE THE COURT THAT FROZEN MEAT ON THE ONE HAND AND FRESH OR CHILLED MEAT ON THE OTHER DO NOT FULLY COMPETE WITH ONE ANOTHER ON THE COMMUNITY MARKETS . CONSUMER PREFERENCE MAY TO A CERTAIN EXTENT PREVENT A RIGID AUTOMATIC CONNEXION BETWEEN THE PRICES OF THE TWO CLASSES OF MEAT . THE DIFFERENCES IN PRICES OF THE DIFFERENT CUTS , WITH OR WITHOUT BONE , MAY BE ANOTHER SOURCE OF UNCERTAINTY . THESE ARE DETAILS OF THE COMMON ORGANIZATION OF THE MARKETS IN BEEF AND VEAL WHICH THE NATIONAL COURT IS FREE TO TAKE INTO ACCOUNT , ALONG WITH OTHER FACTORS IN THE ORGANIZATION , TO DECIDE WHETHER A NATIONAL MEASURE JEOPARDIZES ITS OBJECTIVES OR FUNCTIONING .

11 IN THE ORDER FOR REFERENCE THE PRETORE , PADUA , EXPRESSES MISGIVINGS IN FOLLOWING THE JUDGMENT OF THE COURT IN SO FAR AS IT LEAVES THE NATIONAL COURT THE TASK OF DECIDING IN EVERY CASE WHETHER THE MAXIMUM PRICES LAID DOWN BY THE NATIONAL AUTHORITIES PRODUCE SUCH EFFECTS AS TO MAKE THEM INCOMPATIBLE WITH THE COMMUNITY PROVISIONS . IN THE PRETORE ' S VIEW THIS CRITERION IS NOT ACCEPTABLE IN CRIMINAL PROCEEDINGS SINCE BY FORMALLY PERMITTING THE MAINTENANCE OF THE PRICE SYSTEM IT LEAVES ITS APPLICATION IN DOUBT AND THUS CREATES INEQUALITY BETWEEN TRADERS WHO DECIDE TO COMPLY AND THOSE WHO CONSIDER THEY ARE NOT SUBJECT TO IT .

12 THIS OBJECTION HOWEVER CANNOT BE REGARDED AS DECISIVE . THE TASK OF THE NATIONAL COURT IN THE DIVISION OF JURISDICTION BETWEEN THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES AND THE NATIONAL COURTS IN NOT BASICALLY DIFFERENT FROM THE ASSESSMENT OF THE ECONOMIC FACTORS WHICH THE NATIONAL COURT HAS OFTEN TO UNDERTAKE IN APPLYING ITS MUNICIPAL LAW . FURTHER THERE CAN BE NO INEQUALITY BETWEEN TRADERS AS ALLEGED SINCE THE NATIONAL LEGAL SYSTEM OFFERS INDIVIDUALS THE NECESSARY RECOURSE TO ENSURE UNIFORMITY IN THE APPLICATION OF THE LEGAL RULES .

13 IT FOLLOWS FROM THE FOREGOING THAT THE QUESTION SHOULD BE ANSWERED TO THE EFFECT THAT OUTSIDE THE SCOPE OF REGULATION NO 2453/76 THE UNILATERAL FIXING BY A MEMBER STATE OF MAXIMUM PRICES FOR FROZEN BEEF AND VEAL AT THE RETAIL STAGE IS INCOMPATIBLE WITH THE COMMON ORGANIZATION OF THE MARKET IN BEEF AND VEAL ONLY TO THE EXTENT TO WHICH IT ENDANGERS THE OBJECTIVES OR THE OPERATION OF THAT ORGANIZATION .

COSTS
14 THE COSTS INCURRED BY THE GOVERNMENT OF THE ITALIAN REPUBLIC AND BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE AND AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTY CHARGED IN THE MAIN PROSECUTION IS CONCERNED , IN THE NATURE OF A STEP IN THE PROCEEDINGS PENDING BEFORE THE NATIONAL COURT , THE DECISION ON COSTS IS A MATTER FOR THAT COURT .

ON THOSE GROUNDS ,
THE COURT
IN ANSWER TO THE QUESTION SUBMITTED TO IT BY THE PRETORE , PADUA , BY ORDER OF 15 JULY 1978 , HEREBY RULES :
( 1 ) COUNCIL REGULATION NO 2453/76 OF 5 OCTOBER 1976 ON THE TRANSFER TO THE ITALIAN INTERVENTION AGENCY OF FROZEN BEEF AND VEAL HELD BY THE INTERVENTION AGENCIES IN OTHER MEMBER STATES , IN CONJUNCTION WITH THE REGULATIONS IMPLEMENTING IT , MUST BE INTERPRETED AS MEANING THAT THE ITALIAN GOVERNMENT IS AUTHORIZED TO FIX BY NATIONAL MEASURES RETAIL PRICES FOR SUCH MEAT ON CONDITION THAT THE RETAILERS ' MARGIN OF PROFIT IS NOT SO SMALL AS TO HINDER THE MARKETING OF THE PRODUCTS IN QUESTION .

( 2)OUTSIDE THE SCOPE OF THAT REGULATION THE UNILATERAL FIXING BY A MEMBER STATE OF MAXIMUM PRICES FOR FROZEN BEEF AND VEAL AT THE RETAIL STAGE IS INCOMPATIBLE WITH THE COMMON ORGANIZATION OF THE MARKET IN BEEF AND VEAL ONLY TO THE EXTENT TO WHICH IT ENDANGERS THE OBJECTIVES OR THE OPERATION OF THAT ORGANIZATION .