Brussels, June 20 - The European Commission (EC) issued a formal notice on Thursday demanding Italy collect more than a decade's worth of fines from dairy farmers for exceeding European production quotas. The EC claims that between 1995 and 2009, Italian farmers committed quota-violations worth an estimated 1.42 billion euros in fines - still largely uncollected. The EC also accuses Italy of still having no measures in place to collect fines from farmers who exceeded their quotas, despite the EC's repeated requests. Sums due must be directed to state coffers to prevent Italian taxpayers from shouldering the consequences, the EC wrote. The law-enforcement effort is also needed to prevent unfair competition for other European and Italian dairy farmers who respected their quotas or paid fines, the EC continued. The EC added that failure to recoup the fines undermined Europe-wide efforts to stabilise the dairy market. The EC notice is the first step in the European infraction process, and Italy has two months to respond. The European milk-quota system was instituted in 1984, when EU predecessor European Economic Community (EEC) decided to contain milk production in order to reduce inventory and stockpiling costs due to surplus production. The high cost of warehousing surplus butter and powdered milk weighed particularly on central and northern European partners in the EEC. The European Council of Ministers has determined that the milk-quota-system will end in 2015.