1 BY AN ORDER OF 28 NOVEMBER 1978 , RECEIVED AT THE COURT ON 19 JANUARY 1979 , THE TRIBUNALE AMMINISTRATIVO REGIONALE PER IL VENETO REFERRED A QUESTION TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY FOR A PRELIMINARY RULING ON THE INTERPRETATION OF REGULATION NO 804/68 OF THE COUNCIL OF 27 JUNE 1968 ON THE COMMON ORGANIZATION OF THE MARKET IN MILK PRODUCTS ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 176 ).
2 THE QUESTION WAS RAISED IN THE COURSE OF AN APPLICATION LODGED BY CERTAIN ITALIAN UNDERTAKINGS IN THE MILK AND MILK PRODUCTS SECTOR SEEKING TO OBTAIN IN PARTICULAR THE ANNULMENT OF A DECISION TAKEN ON 11 APRIL 1978 UNDER ARTICLE II OF ITALIAN LAW NO 306 OF 8 JULY 1975 ( GAZZETTA UFFICIALE NO 194 OF 23 JULY 1975 ) BY A COMMISSION APPOINTED BY THE CHAIRMAN OF THE GIUNTA REGIONALE OF VENETO , FIXING THE REGIONAL PRODUCER PRICE FOR COW ' S MILK UNTIL 31 DECEMBER 1978 AT LIT 260 PER LITRE INCLUSIVE OF VAT .
3 BEFORE THE COURT EXAMINES THE ACTUAL TERMS AND PURPORT OF THE QUESTION RAISED IT IS APPROPRIATE TO RECAPITULATE THE ESSENTIAL FEATURES OF , FIRST , THE COMMUNITY REGULATIONS AND , SECONDLY , THE NATIONAL RULES ON THE SUBJECT .
4 ACCORDING TO ARTICLE 3 ( 1 ) OF REGULATION NO 804/68 A TARGET PRICE FOR MILK IS FIXED FOR THE COMMUNITY BEFORE 1 AUGUST OF EACH YEAR IN RESPECT OF THE MILK YEAR BEGINNING IN THE FOLLOWING CALENDAR YEAR . THIS TARGET PRICE IS , ACCORDING TO ARTICLE 3 ( 2 ), THE PRICE FOR MILK 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 . IN ACCORDANCE WITH THE PROCEDURE LAID DOWN IN ARTICLE 43 ( 2 ) OF THE TREATY IT IS APPLICABLE TO MILK CONTAINING 3.7% FAT , DELIVERED TO DAIRY ( ARTICLE 3 , ( 3 ) AND ( 4 ).
5 SINCE THERE ARE NO DIRECT INTERVENTION MEASURES IN RELATION TO MILK THE PRINCIPAL MEANS OF SUPPORTING THE PRICE FOR THIS PRODUCT IS A SYSTEM OF INTERVENTION PRICES , INTRODUCED BY ARTICLE 5 , FOR CERTAIN DERIVED PRODUCTS , NAMELY BUTTER , SKIMMED-MILK POWDER AND GRANA PADANO AND PARMIGIANO REGGIANO CHEESES . THE AIM OF THESE INTERVENTION PRICES IS TO ENSURE THAT THE TARGET PRICE FOR MILK IS ATTAINED UNDER THE CONDITIONS SET OUT IN ARTICLE 3 , THAT IS TO SAY , ESSENTIALLY , AS DICTATED BY MARKET FORCES WITHIN THE COMMUNITY . TO THAT END THE REGULATION INCLUDES ALSO A SYSTEM OF PROTECTIVE MEASURES AT COMMUNITY FRONTIERS , COMPRISING IN THE MAIN LEVIES INTENDED TO COMPENSATE FOR THE DIFFERENCE BETWEEN THE THRESHOLD PRICE AND THE FREE-AT-FRONTIER PRICE FOR ANY PARTICULAR MILK PRODUCT . THESE PRICES ARE FIXED FOR EACH OF THE ' ' PILOT PRODUCTS ' ' REFERRED TO IN ARTICLE 14 OF REGULATION NO 804/68 AND LISTED IN ANNEX I TO REGULATION NO 823/68 OF THE COUNCIL OF 28 JUNE 1968 DETERMINING THE GROUPS OF PRODUCTS AND THE SPECIAL PROVISIONS FOR CALCULATING LEVIES ON MILK AND MILK PRODUCTS ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 199 ). IT SHOULD ALSO BE MENTIONED THAT REGULATION NO 804/68 ALLOWS FOR THE GRANTING OF EXPORT REFUNDS WHICH ARE UNIFORM FOR THE WHOLE COMMUNITY BUT VARY ACCORDING TO DESTINATION IN THE CASE OF NON-MEMBER COUNTRIES .
6 FOR THE MILK YEAR WHICH IS CONCERNED IN THE MAIN ACTION THE TARGET PRICE FOR MILK WAS FIXED BY COUNCIL REGULATION NO 998/78 OF 12 MAY 1978 ( OFFICIAL JOURNAL NO L 130 OF 18 MAY 1978 , P . 5 ) AS FROM 22 MAY 1978 AT 17.70 UNITS OF ACCOUNT PER 100 KG ( LIT 204.26 PER KG ), AND THIS WAS AFTER THE 1977/1978 MILK YEAR HAD BEEN EXTENDED UNTIL 21 MAY 1978 BY COUNCIL REGULATION NO 910/78 OF 27 APRIL 1978 ( OFFICIAL JOURNAL NO L 117 OF 29 APRIL 1978 , P . 84 ) AND THUS ALSO THE TARGET PRICE FOR MILK FIXED FOR THAT YEAR BY COUNCIL REGULATION NO 872/77 OF 26 APRIL 1977 ( OFFICIAL JOURNAL NO L 106 OF 29 APRIL 1977 , P . 17 ).
7 THE FILE ON THE CASE SHOWS THAT THE ITALIAN LAW OF 8 JULY 1975 , WHICH INCLUDES INTER ALIA RULES FOR DETERMINING THE PRODUCER PRICE FOR MILK , PROVIDES IN ARTICLE 2 THAT THE PRODUCTION AND SALE OF MILK BY PRODUCERS ASSOCIATIONS SHALL BE SUBJECT TO THE RULES AND PROCEDURES LAID DOWN BY THE ASSOCIATION . IN ADDITION MEMBERS OF THE ASSOCIATION ARE OBLIGED TO SELL THE MILK THROUGH IT . THE PRODUCER PRICE FOR MILK , FOR WHATEVER USE THE MILK IS INTENDED , IS FIXED ACCORDING TO ARTICLE 8 FOR EACH AGRICULTURAL YEAR AND FOR EACH REGION BY MEANS OF COLLECTIVE NEGOTIATION WITH THE PARTICIPATION OF THE VARIOUS PARTIES AFFECTED ( PRODUCERS , ASSOCIATIONS , PROCESSORS AND DAIRY CENTRES ) AND IN ACCORDANCE WITH THE CRITERIA LAID DOWN BY ARTICLES 8 AND 9 . BY VIRTUE OF ARTICLE 10 THE AGREEMENT BETWEEN THE PARTIES , REACHED IF NECESSARY BY MEANS OF THE INTERVENTION OF THE ECONOMIC COMMITTEE FOR THE REGION REFERRED TO IN ARTICLE 3 , IS PUBLISHED BY THAT COMMITTEE IN THE REGIONAL OFFICIAL GAZETTE AND IS BINDING ON THE PARTIES . WHEN THE AGREEMENT REFERRED TO IN ARTICLE 10 HAS NOT BEEN REACHED BETWEEN THE PARTIES WITHIN 30 DAYS OF THE START OF THE AGRICULTURAL YEAR THE PRODUCER PRICE FOR MILK IS FIXED , PURSUANT TO ARTICLE 11 , BY A COMMISSION APPOINTED BY DECREE OF THE CHAIRMAN OF THE REGION . THIS COMMISSION COMPRISES THE REGIONAL ' ' ASSESSORE ' ' ( INSPECTOR ) FOR AGRICULTURE OR HIS APPOINTEE ACTING AS CHAIRMAN , FIVE REPRESENTATIVES OF THE MILK PRODUCERS , TWO REPRESENTATIVES OF THE CO-OPERATIVES FOR DAIRY PRODUCTS , FOUR REPRESENTATIVES OF THE PROCESSING INDUSTRIES , ONE REPRESENTATIVE OF THE DAIRY CENTRES AND TWO SPECIALISTS IN THE FIELD OF MILK PRODUCTS . THE DECISION OF THE COMMISSION IS ADOPTED BY A MAJORITY VOTE AND IS BINDING ON THE PARTIES IMMEDIATELY ON PUBLICATION IN THE OFFICIAL GAZETTE .
8 AS HAS ALREADY BEEN SHOWN IT IS A DECISION WHICH WAS ADOPTED UNDER ARTICLE 11 OF THE LAW OF 8 JULY 1975 WHICH IS AT THE ROOT OF THE MAIN ACTION .
9 IN SUPPORT OF THEIR APPLICATION IN THE NATIONAL COURT THE APPLICANTS IN THE MAIN ACTION CLAIM THAT THE ABOVE-MENTIONED LAW IS INCOMPATIBLE WITH REGULATION NO 804/68 OF THE COUNCIL . IN REPLY THE REGIONE VENETO , THE DEFENDANT IN THE MAIN ACTION , MAINTAINS THAT THERE IS NO SUCH CONFLICT BECAUSE IN THE FIRST PLACE SO LONG AS THE COMMUNITY BODIES HAVE NOT TAKEN CONCRETE MEASURES TO PUT THE PROVISIONS OF THE REGULATION INTO EFFECT THERE CAN BE NO QUESTION OF A CONFLICT BETWEEN THE NATIONAL LAW AND THE COMMUNITY REGULATION , AND IN THE SECOND PLACE BECAUSE IF AND WHEN THE TARGET PRICE IS FIXED BY THOSE BODIES THIS IS TANTAMOUNT TO A GUIDELINE WHICH DOES NOT DEPRIVE THE NATIONAL LEGISLATURE OF THE POWER TO INTERVENE IN THE ACTUAL FIXING OF THE PRICE .
10 BY AN ORDER OF 28 NOVEMBER 1978 THE NATIONAL COURT STAYED THE PROCEEDINGS AND REFERRED THE FOLLOWING QUESTION TO THE COURT FOR A PRELIMINARY RULING : ' ' DO COMMUNITY RULES , IN PARTICULAR REGULATION NO 804/68 ON THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS READ TOGETHER WITH THE SECOND PARAGRAPH OF ARTICLE 189 OF THE EEC TREATY , PREVENT THE ITALIAN STATE FROM CONFERRING BY LAW UPON ITS ADMINISTRATIVE AUTHORITIES POWER TO FIX THE PRODUCER PRICE FOR MILK EVEN IF THE COMMUNITY HAS NOT FIXED THE TARGET PRICE FOR MILK PURSUANT TO ARTICLE 3 OF REGULATION NO 804/68? ' '
11 AS EXPLAINED ABOVE ONE OF THE PRINCIPAL OBJECTIVES OF THAT ORGANIZATION IS TO ENSURE THAT MILK PRODUCERS CAN OBTAIN A PRICE FOR THAT PRODUCT IN THE REGION OF THE TARGET PRICE . THE MECHANISMS INSTITUTED BY THE REGULATION AND DESIGNED TO ACHIEVE THAT END , WHICH HAVE ALREADY BEEN DESCRIBED , ARE SUBJECT TO THE EXCLUSIVE JURISDICTION OF THE COMMUNITY .
12 IN SECTORS COVERED BY A COMMON ORGANIZATION OF THE MARKET , A FORTIORI WHEN THAT ORGANIZATION IS BASED ON A COMMON PRICE SYSTEM , MEMBER STATES CAN NO LONGER TAKE ACTION , THROUGH NATIONAL PROVISIONS TAKEN UNILATERALLY , AFFECTING THE MACHINERY OF PRICE FORMATION AT THE PRODUCTION AND MARKETING STAGES ESTABLISHED UNDER THE COMMON ORGANIZATION . IT FOLLOWS 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 THE NATIONAL OR REGIONAL LEVEL IS , BY ITS NATURE , OUTSIDE THE BOUNDS OF THE POWERS GIVEN TO MEMBER STATES AND RUNS CONTRARY TO THE PRINCIPLE ESTABLISHED BY REGULATION NO 804/68 , IN PARTICULAR ARTICLE 3 THEREOF , OF ATTAINING A TARGET PRODUCER PRICE FOR THE MILK SOLD BY COMMUNITY PRODUCERS DURING THE MILK YEAR ON THE COMMUNITY MARKET AND ON EXTERNAL MARKETS . IT SHOULD ALSO BE NOTED THAT THE ABSENCE OF SANCTIONS FOR FAILURE TO COMPLY WITH THE PRICE LAID DOWN IN ACCORDANCE WITH SUCH LEGISLATION DOES NOT AFFECT THE INCOMPATIBILITY OF THE LEGISLATION WITH THE COMMON ORGANIZATION OF THE MARKET .
13 IT SHOULD , HOWEVER , BE NOTED THAT THE PREMISE ON WHICH THE QUESTION WHICH HAS BEEN REFERRED TO THE COURT IS BASED , NAMELY THAT THE COMMUNITY DID NOT FIX THE TARGET PRICE FOR MILK FOR THE PERIOD IN QUESTION , DOES NOT REFLECT THE SITUATION WHICH EXISTED WITHIN THE COMMUNITY . IN FACT , EVEN THOUGH ACCORDING TO THE TERMS OF THE REGULATIONS IN FORCE THE PREVIOUS MILK YEAR HAD COME TO AN END ON 31 MARCH 1978 , THE TARGET PRICE WAS STILL APPLICABLE , IN ORDER TO AVOID A BREAK IN CONTINUITY PENDING THE ENTRY INTO FORCE OF COUNCIL REGULATION NO 910/78 OF 27 APRIL 1978 FORMALLY EXTENDING THE PRECEDING YEAR UNTIL 21 MAY 1978 , WHICH WAS THE DATE AS FROM WHICH THE TARGET PRICE FOR MILK WAS FIXED BY THE PROVISIONS OF COUNCIL REGULATION NO 998/78 OF 12 MAY 1978 .
14 THE REPLY TO THE QUESTION WHICH HAS BEEN REFERRED TO THE COURT MUST THEREFORE BE THAT IT IS INCOMPATIBLE WITH THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS FOR A MEMBER STATE TO FIX DIRECTLY OR INDIRECTLY THE PRODUCER PRICE FOR MILK .