CHOOSE FOR EACH OF THEIR PRODUCTS ONE OF THE PUBLIC RESALE PRICES SHOWN IN THE SCALE , OR EVEN A PRICE NOT SHOWN WHICH IS THEN INCORPORATED INTO IT .
4 ON 13 NOVEMBER 1980 , PURSUANT TO THE FIRST PARAGRAPH OF ARTICLE 169 OF THE EEC TREATY , THE COMMISSION DELIVERED TO THE REPUBLIC OF ITALY A REASONED OPINION IN WHICH IT CLAIMED THAT THE LATTER HAD FAILED TO FULFIL ITS OBLIGATION TO ADJUST ITS MONPOLY ON SALES OF MANUFACTURED TOBACCO PRODUCTS TO COMPLY WITH ARTICLE 37 OF THE TREATY , NAMELY BY MAINTAINING CERTAIN PROCEDURES UNDER THAT MONOPOLY . AMONGST THE CONTESTED PROCEDURES , THE FIXING OF UNIFORM TRADING MARGINS WAS CITED . FURTHER TO THAT REASONED OPINION , THE ITALIAN GOVERNMENT AND THE COMMISSION AGREED ON A SERIES OF ADJUSTMENTS TO THE MONOPOLY . HOWEVER , THE ITALIAN GOVERNMENT REFUSED TO ABANDON THE SYSTEM OF UNIFORM MARGINS FOR RETAIL SALES .
5 THE COMMISSION THEREUPON BROUGHT THE PRESENT PROCEEDINGS , THE SCOPE OF WHICH IS LIMITED TO THE SINGLE QUESTION CONCERNING THE MAINTENANCE OF SUCH UNIFORM TRADING MARGINS , SEEKING A DECLARATION THAT THE SYSTEM IS CONTRARY TO ARTICLE 37 OF THE TREATY .
6 ARTICLE 37 ( 1 ) OF THE TREATY PROVIDES THAT ' ' MEMBER STATES SHALL PROGRESSIVELY ADJUST ANY STATE MONOPOLIES OF A COMMERCIAL CHARACTER SO AS TO ENSURE THAT WHEN THE TRANSITIONAL PERIOD HAS ENDED NO DISCRIMINATION REGARDING THE CONDITIONS UNDER WHICH GOODS ARE PROCURED AND MARKETED EXISTS BETWEEN NATIONALS OF MEMBER STATES ' ' .
7 THE COMMISSION CLAIMS THAT THE FIXING BY THE STATE , WHOSE MONPOLY ALSO INCLUDES THE PRODUCTION OF THE GOODS IN QUESTION , OF UNIFORM TRADING MARGINS FOR THE RETAIL TRADE IS A DISCRIMINATORY MEASURE . ON THE ONE HAND , THE STATE IS NECESSARILY INDUCED TO PREFER THE PRODUCTS OF ITS DOMESTIC MANUFACTURE TO THOSE OF FOREIGN COMPETITORS , AND TO FIX THE MARGIN AT A LEVEL WHICH FAVOURS THE MARKETING OF ITS OWN PRODUCTS . ON THE OTHER HAND , DISCRIMINATION ARISES FROM THE FACT THAT THE ITALIAN MONOPOLY , WHEN EXPORTING TO OTHER MEMBER STATES , MAY FREELY CHOOSE ITS SALES PROMOTION POLICY WHEREAS FOREIGN MANUFACTURERS SELLING TO ITALY ARE OBLIGED TO COMPLY WITH THE UNIFORM TRADING MARGIN FIXED BY THE STATE .
8 THE COMMISSION FURTHER CLAIMS THAT THE UNIFORM TRADING MARGIN IS LIABLE TO DISTORT COMPETITION AND TO PLACE IMPORTS FROM OTHER MEMBER STATES AT A DISADVANTAGE . THE UNIFORM MARGIN IS INTRINSICALLY HOSTILE TO COMPETITION IN ITS EFFECTS , INASMUCH AS IT MAKES IT IMPOSSIBLE FOR THE MANUFACTURERS OF FOREIGN PRODUCTS TO GRANT MARKETING PREMIUMS , AND COMPELS THEM TO ADOPT THE SAME MARKETING METHODS AS THE ITALIAN MONOPOLY ON PRODUCTION .
9 THE ITALIAN GOVERNMENT TAKES THE VIEW THAT THE SYSTEM OF UNIFORM TRADING MARGINS ENTAILS NO DISCRIMINATION . THE MEASURE IN QUESTION IS ONE WHICH APPLIES WITHOUT DISTINCTION TO ALL PRODUCTS , DOMESTIC AND FOREIGN ALIKE , AND WHICH IS DESIGNED TO PREVENT TOBACCONISTS FROM SUBJECTING CUSTOMERS AND