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

JUDGMENT OF THE COURT (Fifth Chamber)

26 September 2000 (1)

(Agriculture - Common organisation of the markets - Milk and milk products - Milk-price - Article 3 of Regulation (EEC) No 804/68)

In Case C-22/99,

REFERENCE to the Court under Article 177 of the EC Treaty (now Article 234 EC) by the Pretura di Pinerolo, Italy, for a preliminary ruling in the proceedings pending before that court between

Cristoforo Bertinetto

and

Biraghi SpA

on the interpretation of Article 3 of Regulation (EEC) No 804/68 of the Council of 27 June 1968 on the common organisation of the market in milk and milk products (OJ, English Special Edition 1968(I), p. 176),

THE COURT (Fifth Chamber),

composed of: D.A.O. Edward, President of the Chamber, L. Sevón, P. Jann, H. Ragnemalm (Rapporteur) and M. Wathelet, Judges,

Advocate General: S. Alber,

Registrar: D. Louterman-Hubeau, Principal Administrator,

after considering the written observations submitted on behalf of:

- Biraghi SpA, by G.M. Giolito, of the Alba Bar,

- the Italian Government, by U. Leanza, Head of the Legal Department of the Ministry of Foreign Affairs, acting as Agent, and O. Fiumara, Avvocato dello Stato,

- the Commission of the European Communities, by A.M. Alves Vieira and F.P. Ruggeri Laderchi, of its Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Biraghi SpA, represented by F. Giuggia, of the Alba Bar, the Italian Government, represented by O. Fiumara, and the Commission, represented by F.P. Ruggeri Laderchi, at the hearing on 16 March 2000,

after hearing the Opinion of the Advocate General at the sitting on 11 May 2000,

gives the following

Judgment

1. By order of 15 January 1999, received at the Court on 1 February 1999, the Pretura di Pinerolo (Magistrate's Court, Pinerolo) referred for a preliminary ruling under Article 177 of the EC Treaty (now Article 234 EC) a question concerning the interpretation of Article 3 of Regulation (EEC) No 804/68 of the Council of27 June 1968 on the common organisation of the market in milk and milk products (OJ, English Special Edition 1968(I), p. 176).

2. That question has arisen in proceedings between Mr Bertinetto and the company Biraghi SpA ('Biraghi) concerning the price which Biraghi paid him for the supply of milk during the period from April 1991 to March 1992.

   The Community legislation

3. Article 3(1) and (2) of Regulation No 804/68, in force at the material time in the case in the main proceedings, provides:

   '1. Before 1 August of each year a target price for milk shall be fixed for the Community in respect of the milk year beginning in the following calendar year.

   ...

   2. The target price shall be that 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.

   The national legislation

4. Law No 88 of 16 March 1988 regulating inter-trade agreements and contracts for the cultivation and sale of agricultural products (Gazzetta Ufficiale della Repubblica Italiana (Official Journal of the Italian Republic) No 69 of 23 March 1988) ('Law No 88/88) governs inter-trade agreements designed to promote the production development and organisation of agricultural markets, in accordance with the broad aims and objectives of national planning in the agri-foodstuffs sector.

5. Article 1(2) of Law No 88/88, read in conjunction with Articles 6 and 8 thereof, defines inter-trade agreements as being agreements concluded between associations of agricultural producers, on one hand, and processing or marketing undertakings or their national associations, on the other, and which are intended to determine matters relating to the production and sale of agricultural products for processing or marketing, as well as to lay down the criteria and general conditions with which parties signing those agreements are required to comply.

6. Under Article 2(1)(d) of Law No 88/88, the purpose of the inter-trade agreements is to determine in advance the prices of the products or the criteria for determining those prices prior to fixing cropping programmes.

7. Article 5(1)(b) provides that inter-trade agreements are to define, in particular, the minimum price or, in the case of multiannual agreements, the criteria for determining that price.

8. If inter-trade agreements are not concluded within the prescribed periods, the Minister for Agriculture and Forests must, pursuant to Article 4 of Law No 88/88, call the parties together, should one of them so request, for the purpose of facilitating an agreement.

9. Under Article 7 of Law No 88/88, the regional delegate for agriculture is required to call the parties together, should one of them so request, for the purpose of facilitating the conclusion of additional agreements and, in the absence of agreements at national level or of negotiations in progress with a view to reaching such agreements, agreements at regional or interregional level.

10. Article 8(1) provides that the parties which are signatories to the agreements are to encourage the conclusion of cropping contracts and the sale of the products to which the agreements refer and requires them to verify that contracts concluded comply substantively with the agreements.

11. Article 12(1) of Law No 88/88 provides that aid for modernisation and restructuring within the agri-foodstuffs sector relating to processing and distribution is to be granted, as a matter of preference, to undertakings which have concluded cropping and sales contracts in accordance with the inter-trade agreements. Under Article 12(2), agricultural aid is, as a matter of preference, to be granted, in compliance with the priority criteria laid down by the legislation in force, to agricultural producers who are members of associations which have concluded cropping and sales contracts in accordance with the inter-trade agreements.

    The dispute in the main proceedings and the question submitted for preliminary ruling

12. Mr Bertinetto raises cattle and is a milk producer. He entered into a contract with Biraghi, a company manufacturing dairy products, to supply milk over the period from April 1991 to March 1992.

13. According to the order for reference, the price of the milk was not discussed between the parties. Biraghi applied a uniform price, based on market trends, to all of its suppliers. The amounts received by Mr Bertinetto sometimes corresponded to the target price fixed at Community level; they were, however, generally lower than the prices fixed in the inter-trade agreement concluded, pursuant to Law No 88/88, between Unalat (representing the associations of milk producers) and Assolatte (representing the user industries, including Biraghi).

14. Before the Pretura di Pinerolo, Mr Bertinetto made an application, for the period under consideration, for payment of the difference between the amounts paid to him by Biraghi and those corresponding to the price fixed in the inter-trade agreement. That application was contested by Biraghi.

15. Since it took the view that the decision in the case depended on the interpretation of Law No 88/88, and having doubts as to the compatibility of certain provisions of that Law with Community law, in particular Article 3 of Regulation No 804/68, the Pretura di Pinerolo decided to stay proceedings and to refer the following question to the Court for a preliminary ruling:

    'Does Article 3 of Regulation No 804/68 of the Council of 27 June 1968 preclude the Italian State from regulating by statute the terms of inter-trade agreements designed to fix milk prices in advance in accordance with the procedures and legal consequences provided for in Law No 88 of 16 March 1988?

16. By its question, the national court is asking, in essence, whether Article 3 of Regulation No 804/68 precludes national legislation, such as that at issue in the main proceedings, which is designed to promote and encourage the establishment of a uniform producer price for milk.

17. It should be noted in this regard that, at paragraph 12 of its judgment in Case 10/79 Toffoli and Others v Regione Veneto [1979] ECR 3301, 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 national or regional level falls, by its nature, outside the bounds of the powers reserved to Member States and conflicts with the principle established by Regulation No 804/68, in particular Article 3 thereof, of attainment of a target producer price for the milk sold by Community producers.

18. In the case in the main proceedings, it should be noted that, under Article 2(1)(d) of Law No 88/88, the purpose of inter-trade agreements is to determine in advance the prices of the products or the criteria for determining those prices. Article 5(1)(b) of that Law provides that those agreements are to define, in particular, the minimum price of products or, in the case of multiannual agreements, the criteria for determining that price.

19. Moreover, Law No 88/88 contains several provisions designed to promote the conclusion of inter-trade agreements. First, Articles 4 and 7 of that Law provide for the parties to be called together, should one of them so request, by the public authorities for the purpose of facilitating inter-trade agreements. Second, the parties which are signatories to those agreements must, under Article 8(1) of Law No 88/88, encourage the conclusion of cropping contracts and the sale of the products to which the agreements refer, and are required to verify that the contracts concluded comply substantively with the agreements. Third, Article 12provides, first, that aid for modernisation and restructuring within the agri-foodstuffs sector relating to processing and distribution is to be granted, as a matter of preference, to undertakings which have concluded cropping and sales contracts in accordance with the inter-trade agreements, and, second, that agricultural aid is to be granted, as a matter of preference, to agricultural producers who are members of the associations which have concluded such contracts.

20. In those circumstances, it must be held that Law No 88/88 is designed to promote and encourage the establishment of a uniform producer price for milk.

21. In view of the foregoing, the answer to the question submitted must be that Article 3 of Regulation No 804/68 precludes national legislation, such as that at issue in the main proceedings, which is designed to promote and encourage the establishment of a uniform producer price for milk.

    Costs

22. The costs incurred by the Italian Government and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT (Fifth Chamber),

in answer to the question referred to it by the Pretura di Pinerolo by order of 15 January 1999, hereby rules:

Article 3 of Regulation (EEC) No 804/68 of the Council of 27 June 1968 on the common organisation of the market in milk and milk products precludes national legislation, such as that at issue in the main proceedings, which is designed to promote and encourage the establishment of a uniform producer price for milk.

EdwardSevón Jann Ragnemalm Wathelet

Delivered in open court in Luxembourg on 26 September 2000.

R. Grass D.A.O. Edward

Registrar President of the Fifth Chamber

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1: Language of the case: Italian.