IV —

Although it concludes that the system introduced by the Belgian authorities is ‘capable of hindering, directly or indirectly … intra-Community trade’ within the meaning of the Dassonville judgment ([1974] ECR 837) the Commission takes the view that the rules are required for the attainment of priority objectives and that they are justified ‘in the general interest’ and by ‘mandatory requirements’. The Commission refers to the judgment of the Court of 20 February 1979, Rewe (paragraphs 8 and 14) by its use of those terms. But I myself do not see in what manner the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer, which were invoked by the German Government in that case, can constitute ‘mandatory requirements’ such as to justify the rules in question. The Commission also refers to Article 2 of the Treaty, which gives the Community the task, in particular, of promoting ‘an increase in stability’. But a reference as vague as this cannot justify every national price control measure. Thus I prefer to conclude that the Commission is referring, as does the Government of the United Kingdom expressly in its observations, to the battle against inflation and the conjunctural policies which are the subject-matter of Article 103 of the Treaty. However, the Court has held (paragraph 22 of the judgment in Dechmann of 29 June 1978, [1978] ECR at p. 1584) that Article 103 ‘does not relate to those areas already subject to common rules, such as the organization of agricultural markets’. The cost of the raw materials used in making the feeding-stuffs marketed by the accused in the main action represents almost 80o/o of their cost price. However, almost all those materials (and most of the animal products for which they are ultimately used: pigmeat, etc.) are agricultural products subject to a common organization of the market and the power which Member States have to intervene in order to control the prices of agricultural products, and the products obtained by processing them, may only be exercised on condition that they do not prejudice the objectives and functioning of the common organizations of the market. Similarly, it cannot therefore be said that Article 103 leaves intact the power of Member States to adopt whatever measures they wish relating to price formation. It requires mutual consultation between the Member States and with the Commission and presupposes that the Council will adopt the appropriate measures and directives concerning the method of applying them. In addition, Article 103 is to be applied without prejudice to the other provisions in the Treaty, and national measures adopted as part of conjunctural policy may not erode the fundamental principle which prohibits discrimination. In any event Member States are bound, when they apply their rules on the prices of processed agricultural products, to take into account fluctuations which occur at Community level in respect of basic products and to authorize the manufacturers of processed products to pass on those fluctuations in their own prices. If, in the national context, it is hardly permissible for the authorities responsible for controlling prices to establish limits with regard to one variety only of a product and for it to determine a uniform price for different products, when one of those products is subject to a higher cost price, there would seem to be no possibility at the Community level that the national administrative authorities may apply preferential treatment in respect of goods produced domestically. That would amount to an affront, in the guise of identical treatment, to the principle that traders must be accorded equal treatment in respect of the economic rules of the Community. As regards the balance of payments policy (Articles 104 to 109 of the Treaty) I shall merely recall that in a judgment of 10 December 1969, Commission v French Republic and French Republic v Commission, the Court held (paragraph 17, [1969] ECR at p. 540) that ‘the exercise of reserved powers cannot … permit the unilateral adoption of measures prohibited by the Treaty’. Finally, in an alternative argument, the Commission declares that the constraints and other effects which are to the disadvantage of the traders concerned are inherent in the system and do not go beyond what appears to be necessary in the interests of its proper operation. However, I have grave doubts as to this statement; the system of notification of price increases was not indispensable, nor was it the only possible system, for, since the spring of 1975, the administration has had recourse to the system of ‘programme contracts’ [contrats de programme]. Moreover, the Court held in its judgment in van Tiggele, cited above, (paragraph 19, [1978] ECR at p. 40) that in the similar field of the ‘fixed minimum price’, ‘the requirements that importers and traders must comply with the administrative formalities inherent in such a system may in itself constitute a measure having an effect equivalent to a quantitative restriction’.