3.

It is true that the considerations so far adumbrated provide no more than a provisional assessment. Now the question must be considered whether other considerations, as mentioned in the proceedings, may be set against the objections arising out of Community law and may justify -the Northern Irish Scheme. (a) Mention was made of the fact that the Board, which has the marketing monopoly, is largely made up of pig producers. This obviously brings to mind Article 2 of the common organization of the market in pigmeat (Regulation No 2759/75) which states that measures may be taken ‘in order to encourage action by trade and joint trade organizations to facilitate the adjustment of supply to market requirements’. Moreover, it is said to be significant that there are similar groups in other Member States. Thus in France 50 % of sales are made through co-operatives and in Denmark the importance of producer co-operatives which have their own slaughterhouses, export bureaux and stabilization funds, is even greater and involves some 90 % of production. Here, however, it is not possible to escape the view that in both the said Member States the producer groups are voluntary associations. Certainly the Board, which is a kind of compulsory cartel whose clutches no-one can escape, cannot simply be compared with them. Further, it is significant that in Article 2 of the common organization of the market in pigmeat mention is made of Community measures but not of national measures which are taken unilaterally and which are in question in the main case. (b) Reference was also made to the difficult position of Northern Ireland and to the importance of pig production and processing in that area. If this branch of the economy which is mainly engaged in export is to remain competitive in other markets, then, it is claimed, in view of the difficulties in relation to transport over great distances and high producer prices in Northern Ireland and also in view of the strong position of competitors who are partly favoured by monetary compensatory amounts and in respect of whom, as of the Danes, it might be said that they dominate the British market, processing and marketing of bacon pigs in Northern Ireland has to be as rational as possible. It is said that the monopoly is vital for this because it permits long-term planning and processing of great quantities; to maintain the effectiveness of the system it is not possible to allow producers to sell to processors because of a short-term benefit. I do not think we need now to go in detail into how far all this is true. In any case the rule is that where there is a common organization of the market unilateral national measures which conflict with it are basically not permissible and that in such situations only the Community authorities can decide on the maintenance of national organizations of the market or similar schemes. This is clearly apparent from the case-law in which, as I have shown, on the very question of the organization of the market in pigmeat it has been stressed that the latter has established the framework of organization calculated to meet all foreseeable situations. At the time in question there were no measures of the Community authorities capable of justifying the activities of the Board and even today there are none. We have heard only that talks have taken place with the Commission in relation to various boards in general, that is, without thoroughly going into the question of the Northern Ireland Pigs Board, and that in the spring of 1978 these led to the adoption of two regulations (Nos 1421 and 1422/78) in relation to the organization of the market in milk. There appear to be further talks still in progress on the Northern Ireland Bacon Pigs Board and according to the observations of the Commission's representative it is already clear that the marketing monopoly cannot be regarded as indispensable. It cannot thus certainly be said that economic and regional requirements cannot justify the Northern Ireland marketing monopoly. Further it would be my opinion, if this line of thought needs to be pursued in the present connexion, that no justification can be found either in the consideration that the effects of the marketing monopoly on the Common Market are minimal in that the sales of the Board make up less than one than one per cent of the total sales in the Common Market. To me it is obvious that this is irrelevant, for disturbances and infringements of a common organization of the market can naturally not be tolerated simply because they affect a limited and relatively small part of the Common Market. (c) As regards export into other Member States and in particular the Republic of Ireland, from which the marketing scheme excludes producers, it was further stated that the monetary compensatory amounts, which apply between the United Kingdom and the Republic of Ireland, because the former, in contrast to the latter, has not agreed to devalue the green pound, have for a long time made exports uneconomic. Thus, in January 1977 an export subject to a monetary compensatory amount into the Republic of Ireland produced £ 4.40 less than a sale at home and did not even cover the costs of production. It is claimed that exportation in circumvention of the monetary compensatory amount cannot be regarded as meriting protection. Because the frontier is difficult to control the only way to prevent it is by the Movement of Pigs Regulations. Only in this way can it be ensured that irregular exports to the Republic of Ireland do not cause the Northern Ireland processing industry serious damage. With regard to these submissions in my view it must first be said that the question of export and obstacles to it is only one aspect of the problem that concerns us here. Moreover the monetary compensatory amount is not a permanent system subject to no amendment but on the contrary is often liable to be altered at short notice quite apart from the fact that the trend in market prices may make export appear reasonable once again in spite of monetary compensatory amounts. Regarding the danger of circumvention of the monetary compensatory amounts and the prevention of phenomena which have at times been called rather colloquially U-turn pigs and O-turn pigs the Commission is certainly right in observing that this situation arising from the rejection of a devaluation of the British green pound does not justify other unilateral national measures having an effect equivalent to quantitative restrictions on exports. If exceptions to the principles of Community law are called for here then, where appropriate, measures to be adopted by the Community authorities are necessary instead. (d) Finally, reference has been made to Articles 90 and 37 of the EEC Treaty in relation to the fact that marketing of bacon pigs reared in Northern Ireland can take place only through the Board which thus has special rights or even a monopoly. (aa) My observations on this as regards the first of the said articles and the attempted justification related thereto can be quite brief. It should not be overlooked that even assuming that Article 90 allows Member States to grant special or exclusive rights to undertakings it also provides that Member States shall neither enact nor maintain in force any measure contrary to the rules contained in the Treaty. Thus Article 90 (1) cannot be used to justify the Northern Ireland measures. As regards, on the other hand, the application of Article 90 (2) to the present case, that is that the Board is an undertaking ‘entrusted with the operation of services of general economic interest’ which would allow certain exceptions to the provisions of the Treaty, nothing has been said in the proceedings to this effect and in view of all that we know it would appear quite wrong to consider it as such. (bb) As regards on the other hand Article 37 of the EEC Treaty and the State monopolies of a commercial character provided for in it, it is the Board's view that it comprises such a monopoly and that Article 44 of the Act of Accession allows until the end of 1977 for the adjustment of such monopolies. From this it follows that at the time the offence in question was committed, namely the beginning of 1977, Article 37 could not be said to apply directly in Northern Ireland or, in other words, that the Board's monopoly could continue to exist until 1 January 1978 even if it were not compatible in every respect with the rules of the Treaty. However attractive this view may appear at first sight, let me say at once it does not hold in the present case. It may well be doubted whether the Board is a ‘State monopoly of a commercial character’ within the meaning of Article 37. This is not because it does not have the characteristics of a public body (it has been possible to show that the Board's statute is one of public law; three of its members are appointed by the Secretary of State who has certain powers of control and the power to issue directives, not only vis-à-vis the Board, but he may also alter the Scheme.) The Court, however, was reminded in the proceedings that the United Kingdom declared during the negotiations for accession that there was no monopoly of a commercial character within the meaning of Article 37 in its territory and this was confirmed not only in the literature produced at the hearing but also in the fourth report of the Commission on the competition policy of the Community. It has also become clear that we are concerned only with a regional establishment and not with a complete monopoly, for the marketing scheme clearly applies only to bacon pigs reared in Northern Ireland and not to imported products. There is another consideration, which is in my view more significant, and this concerns the relationship of Article 37 to the provisions of the Treaty on agricultural policy. Article 38 (2), according to which Articles 39 to 46 are to be regarded as special rules, was rightly referred to. In the present case it has to be assumed on the one hand that the function of the marketing scheme which has been adopted under the Agricultural Marketing Act is above all to protect the interests of pig breeders by regulating and stabilizing the market. Whether or not the Board with its marketing rules is to be regarded as a national organization of the market it may certainly be assumed that like a national organization of the market it is intended to secure safe guards for the employment and standard of living of the producers concerned. On the other hand, it is equally clear that this function in particular has been taken over by the common organization of the market which in accordance with Article 43 of the Treaty had to replace the national organizations of the market and to take care of the equivalent safeguards for the employment and standard of living of the producers concerned. It is therefore apparent that with the creation of common organizations of the market not only is there no longer any room for national organizations of the market but that the same thing, that is, complete replacement, applies also to State monopolies of a commercial character within the meaning of Article 37 whose main functions correspond to those of a national organization of the market. Not least, it is also of interest in this connexion (and with this I complete my observations on Article 37) that in the judgment in Case 82/71, which has already been mentioned, the Italian milk centres in question at the time were considered not under Article 90 or Article 37 of the Treaty but exclusively within the context of the agricultural law of the Treaty.