1.

The first question consists of two parts which must be treated in conjunction. It deals on the one hand with the problem whether Article 2 of Regulation No 1643 (i.e. the obligation upon importers only to effect imports at prices which respect the minimum prices laid down in Regulation No 1643) offends against Article 40 (3) in conjunction with Article 30 (1) (c) of the EEC Treaty because the Regulation cannot be regarded as a measure necessary for attaining the objectives of Article 39 (in this context, for stabilizing the market). On the other hand, the question is asked whether the said Regulation offends against Article 1 (1), first sentence, where the reference is to measures which are appropriate for the purpose of dealing with market disturbances by reason of imports. In this connection one may assume, having regard to the fact that the Council itself by its Regulation No 1428 of the same date defined the measures got out in Regulation No 1427 and therein also referred to the minimum price system which has been criticized before you, that the second part of the question is to be understood as inquiring whether the said Council regulation can be reconciled with the principles of the Treaty. As the Commission has rightly observed, the questions are to be seen in the light of the plaintiffs' complaint in the national proceedings, that a system which imposes an obligation to effect purchases in an exporting country at prices higher than the market prices ruling in that country was in the light of the natural profit motive of traders, positively conducive to provoke malpractices. In the plaintiffs' view there existed undoubtedly many possibilities of circumvention, both legal and illegal. Thus one could, pro forma, agree to the payment of higher prices in the exporting country, but on actual payment of such prices the exporter could by way of adjustment make a repayment without the same being entered in the books; or it could be an adjustment taking the form of a price reduction on delivery of other goods. One could also from a legal point of view, incorporate subsidiary companies in the exporting country or in a third country and via these effect imports, all the time respecting minimum prices, the subsidiary company meanwhile purchasing at market prices in the exporting country and the profit accruing to the parent company. In all the abovementioned cases it would be possible, whilst pretending to respect the minimum price regulations in fact to sell the imported goods in the Community at low prices and thus to prevent the desired effect of market stabilization. One therefore ought to deny the measures any suitability ab initio for achieving the objects aimed at. If we now consider what weight to attach to this argument — which at first sight appears impressive — there is first of all an important objection, which has been raised by the Commission. We cannot get away from the fact that the Treaty itself by Article 44 provides for such a minimum-price system, that the Agreement with Greece has adopted the wording of Article 44 and in addition refers to the principles of Article 44 (2) and (3), that such systems — as we have been assured by the Commission — also have a place in agreements with other third countries and that previously they had already been customary in foreign trade — even outside the Community. We further have to bear in mind, that in the Decision of the Council of Ministers on minimum prices dated 4 April 1962, there was even accorded a certain measure of priority to the system criticized by the plaintiff and further that the minimum price regulations (as demonstrated by the Commission in page 17 of its pleading) can frequently also be met with elsewhere in the Community law on the regulation of the market. After all this, there must be a natural inclination to say that the system which is so widespread cannot be termed incapable of application. Indeed it is difficult to imagine that all those experienced and expert organizations that participated in working out the minimum price regulations had succumbed to a basic error as to its suitability. At least, those who put forward this contrary view will have to accept that very strict tests are applied to their arguments. If one then examines whether the plaintiffs did indeed prove their argument, the following picture emerges: first of all one must certainly concede that the possibilities of illegal circumvention, as argued by the plaintiffs, do indeed exist and to a certain extent are probably also made use of. I cannot however accept that, in the case of the minimum price regulation for Greek tomato concentrates, these have become the rule, that the law-abiding merchant no longer exists in this context and that accordingly the system had to remain completely ineffective — only in that case after all can one speak of lack of suitability. I would rather go along with the Commission in assuming that supervising the observance of obligations provided for in Regulation No 1643 is not an impossibility and that strict application of the available local sanctions can, if only by their deterrent effect, render them sufficiently effective. As regards the legal possibilities of circumvention (the interpositioning of subsidiary companies incorporated in the exporting country or in third countries) one has to observe that these will not be so easy to accomplish, there might be difficulties on incorporation (one only has to think of the fiscal problems and expenses involved and also of the problems of disposing of profits realized by the subsidiary companies, if one bears in mind exchange control). One feels justified in thinking that in relation to protective measures such as before us today and which by their nature can only temporarily remain in force, it will not in fact come to legal attempts at circumvention to any large extent. Besides, the following is above all important: looking back today we find that a development which would correspond with the plaintiff's theory, did not in fact occur. If the plaintiff 's view that protective measures are wholly unsuitable, were in fact correct, then in line with the developments in preceding years, an increase in imports should have resulted. This however was not the case. In fact imports receded, indeed they have considerably receded. That emerges from official statistics, according to which imports in the period from August to December 1971 only amounted to about one half of those in the corresponding period of the previous year and on the basis of these statistics, this development continued during the first half of 1972. There are furthermore no real indications that the figures mentioned might be inaccurate, in the way the plaintiffs suspect, by inter alia referring to the data supplied by the exporting country. It therefore appears to me to be established that the protective measures did indeed relieve the pressure on the Community market and, looked at in this way, one cannot deny that they had a market stabilizing effect, which at the same time benefited the domestic tomato producers. As regards the development of prices within the Community after the promulgation of the protective measures, it is true that the Community prices for Italian tomato concentrates during the financial year from August 1971 and until the poor harvest of 1972, were below the minimum prices fixed by the Commission ('even though not to the extent mentioned by the plaintiffs and documented by some offers to sell, but taken on average to a smaller extent). Apparently, the causes for this are not quite clear. Perhaps an excessively generous calculation of minimum prices (to which I shall have occasion to refer) plays some part, perhaps circumventions occurred to some degree, perhaps there were increased imports at low prices, as a result of deliberations on the necessity of taking protective measures becoming known in advance of their coming into force. One thing is certain, as regards development of prices likewise, one cannot speak of a complete lack of effect of the protective measures, since it appears that, as has been explained by the Commission, there was in the course of time at least a strong approximation to the level of the minimum prices. And that one can certainly call market stabilization within the meaning of the protective measures that had been taken. We can therefor in relation to the first question adhere to the view that the plaintiffs' theory is not well-founded; there are no good reasons for saying that the protective measures were completely unsuited for achieving the purpose at which they were aimed and that the minimum price system of Regulation No 1643 could for that reason be termed invalid.