C-56/74

JUDGMENT OF 2. 6. 1976 — JOINED CASES 56 TO 60/74

In Joined Cases 56 to 60/74

FIRMA KURT KAMPFFMEYER MÜHLENVEREINIGUNG KG, Hamburg,

OFFENE HANDELSGESELLSCHAFT IN FIRMA WILHELM WERHAHN HANSAMÜHLE, Neuss am Rhein,

FIRMA LUDWIGSHAFENER WALZMÜHLE ERLING KG, Ludwigshafen/Rhein,

FIRMA HEINRICH AUER MUHLENWERKE KGAA, Cologne,

and

(2) The Commission of the European Communities, Brussels, represented by its Legal Adviser, Peter Gilsdorf, acting as agent, with an address for service in Luxembourg at the Chambers of Mario Cervino, Legal Adviser of the Commission of the European Communities, Bâtiment C. F. L., place de la Gare,

defendant,

Application for damages under the second paragraph of Article 215 of the EEC Treaty,

KAMPFFMEYER v COMMISSION AND COUNCIL

THE COURT

The facts, procedure, claims, submissions Article 10 of the regulation provides that and arguments of the parties may be this aid, of a uniform amount for the summarized as follows: whole Community, shall be equal throughout the marketing year to the difference between the guaranteed I — Facts and procedure minimum price and the intervention price at the beginning of the marketing (a) The objective of the application year.

Whereas there is a surplus production of Regulation (EEC) No 1528/71 of the common wheat in the Community, there Council of 12 July 1971 (OJ, English is generally a shortage of that of durum Special Edition 1971 (II), p. 522) provides wheat and moreover it is localized in for the fixing of a single derived certain areas of France and Italy. intervention price for durum wheat equal to the lowest price resulting from the The organization of the market in cereals application of Regulation No 120/67. comprising both common wheat and durum wheat is based on the following Regulation No 796/72 of the Council of prices system: Regulation No 120/67 of 17 April 1972 (OJ, English Special the Council of 13 June 1967 (OJ, Edition 1972 (I), p. 306) abolishes the English Special Edition 1967, p. 33) basic intervention price and replaces it provides for the annual fixing of a target by a single intervention price equal to price, basic intervention price, derived the lowest derived intervention price. intervention prices and a threshold price. With regard to durum wheat, the fixing Although there is a very great shortage in of a minimum guaranteed price is also the Community production of durum provided for as well as the possibility of wheat, the French and Italian durum granting production aids in order to wheat mills by reason of their more or encourage production. less close proximity to the production

areas can cover 80 % of their needs from German meal producers were indirectly the Community market. subject, by reason of the fact that their French competitors enjoyed an advantage This situation had already led the from this system, such an omission is German producers of meal from durum nevertheless not capable of rendering the wheat to bring an action for damages provisions in question illegal. under the second paragraph of Article 215 of the EEC Treaty against the In enacting them, the Council was at the Community (Cases 63 to 69/72). period in question and in the light of the

approaching the same by reason of the system of aids paid out of public funds. These new rules, it is claimed, have once again caused discrimination and damage This distortion of competition is said to to the German meal producers by reason have lost the applicants 20 % of the of the fact that the Community German market in cereals meal, a market institutions have pursued their previous made up of manufacturers of macaroni, policy which was already criticized in the spaghetti and similar products, the previous cases.

French and Italian durum wheat at too low a level or the threshold price for Since the French market is basically durum wheat imported from third closed to the German meal producers countries at too high a level. and they are as a matter of practice obliged to cover all their needs for In the judgment of 13 November 1973 durum wheat from third countries on the given in these cases ([1973] ECR 1229) basis of the threshold price or at the the Court of Justice dismissed the world market price, whereas their French applications on the grond that the rules competitors can obtain up to 80 % by in question did not involve illegality. purchasing homegrown wheat on the However, the Court in this judgment basis of the intervention price or at a observed that … 'if the Council omitted little higher level it was possible to to correct the disadvantages to which foresee with certainty that during the

The applicants draw attention to the fact guaranteed minimum price: 205·17 that both the German meal producers u.a./metric ton (Regulation (EEC) No and all the meal producers of the 2496/74 of the Council of 2 October Community sent protests to the 1974, Official Journal L 268, p. 1); Commission even before the Community institutions adopted the rules in question threshold price: 189·10 u.a./metric ton for the 1974/75 marketing year. (Regulation (EEC) No 2518/74 of the Commission of 4 October 1974, Official Moreover the German meal producers at an interview with the Commission set Journal L 270, p. 1.). out their position and stressed the impossibility of buying French durum (c) Procedure wheat and accordingly asked for the abolition of the difference provided for The applications dated 15 July 1974 between the intervention prices and the were registered at the Court Registry on target price of durum wheat. 25 July 1974.

By order dated 29 October 1975 the durum wheat meal made by Court decided to hear as witnesses: French meal producers or their 1. (A) Mr Pegler, manager of the under­ agents and those by German meal taking Kampffmeyer France, producers? Paris; (b) How large have these differences (B) Mr Wilhelm Klees, manager of been and what were the quantities of meal involved? the undertaking A. C. Toepfer, Hamburg; (c) Have you any evidence capable of (C) Mr Peter Schnitt, director of the explaining these differences? undertaking Getreide- und Futter­ mittel-Handelsgesellschaft mbH, As regards question 1 (b) in this order the Commission in a written statement Hamburg; (D) Mr Richard Zadow, manager of lodged on 19 November 1975, submitted the undertaking Wilhelm Wer­ evidence in rebuttal by producing hahn Hansamühle, Neuss; documents and proposing that witnesses should be heard. on the following questions: (a) Whether he has made any effort By order dated 20 November 1975 the since April 1974 to buy French Court decided to summon as witnesses: durum wheat of the 1974 harvest (A) Mr Hans Joachim Winkler, and what has been his experience administrator at the Directorate- in this respect. General for Competition of the (b) Whether he has any evidence to Commission of the European show that the French meal Communities, rue de la Loi 200, producers have been able to Brussels; acquire durum wheat at prices (B) Mr Andre Lacroix, manager, Grands lower than those which his firm Moulins de Strasbourg, 61 avenue de had to pay. Jena, Paris 16; (c) Whether there has been any (C) Mr Goldstein, Director, Semoulerie difference between the conditions de Normandie, 9 boulevard de under which French common Croisset, 76042 Rouen— Cedex wheat of the 1974 harvest has and to hear them on the abovementioned been exported to Germany and the conditions in respect of question. French durum wheat. At the request of the applicants the 2. (E) Mr Schulten, manager of the Court further heard as witness Mr Hans undertaking Birkel, Stuttgart- Werle junior, Einfuhrhandel, Mannheim. Endersbach; (F) Mrs Marianne Riehm, director of The evidence of the witnesses was given the pasta factory '3 Glocken before the First Chamber of the Court at GmbH', Weinheim; the hearing on 4 December 1975. (G) Mr Hubert Kohlschein, director of the undertaking 'Heinrich Auer Mühlenwerke KGaA'; II — Conclusions of the parties

for the damage which they have damage suffered by the applicants, suffered or pay to the applicants that is to say pay them reasonable compensation of an amount related to compensation for the damage which the damage which they have suffered they have suffered in the past over during the 1974/75 cereal marketing and above the amounts set out in year by reason of the price rules and paragraph 1 and further compensate aids relating to durum wheat in the for the damage which they will suffer Community contained in the during the 1974/75 marketing year in following regulations: the form of losses in production and (a) Regulation (EEC) No 1126/74 of on prices for processing durum wheat and for the sale of durum wheat meal the Council of 29 April 1974, Official Journal L 128, of 10 May as a result of the Community rules on 1974, p. 14; prices and aids relating to durum wheat provided for in the regulations (b) Regulation (EEC) No 1128/74 of mentioned in the application under the Council of 29 April 1974, (a) to (d) to which should be added Official Journal L 128, of 10 May 1974, p. 17; (e) Regulation (EEC) No 2496/74 of the Council of 2 October 1974, (c) Regulation (EEC) No 1427/74 of Official Journal L 268, p. 1; the Council of 14 June 1974, Official Journal L 151, of 8 June (f) Regulation (EEC) 2518/74 of the Commission of 4 October 1974, 1974, p. 1; Official Journal L 270, p. 1; (d) Regulation (EEC) No 1524/74 of the Council of 17 June 1974, 3. Order the defendants to bear the costs. Official Journal L 164, of 20 June 1974, p. 6. In the reply, paragraph 1 of this last 2. Order the defendant to bear the costs. application was amended in the following manner: In their written statement made in relation to the objection of inad­ The applicants claim that the missibility the applicants claim that the Community be ordered to pay Court should: (a) to the applicant in Case 56/74 1. Order the Community to pay compensation amounting to DM (a) to the applicant in Case 56/74 1 876 601·22

They asked the Court: their statement dated 4 November 1974 be dismissed as inadmissible; 1. To order the Community to pay (a) to the applicant in Case 56/74 an — that the original claims of the amount of DM 2 135 611·50 applicants be dismissed as inad­ missible, alternatively as unfounded; (b) to the applicant in Case 57/74 an amount of DM 261 747·00 In the second place: (c) to the applicant in Case 58/74 an — (in the event of the amendments to amount of DM 833 621·35 the claim being declared admissible) (d) to the applicant in Case 59/74 an — that the claims of the applicants as amount of DM 562 625·80 contained in the statement dated 4 (e) to the applicant in Case 60/74 an November 1974 be dismissed as inad­ amount of DM 773 934·92 missible, alternatively as unfounded; with interest at 8 % as from 1 August 1975 to all the applicants. in any event that the applicants be ordered to bear the costs. 2. To declare further that the Community is liable to compensate the applicants for the damage which III — Submissions and argu­ they have suffered or to pay the ments of the parties applicants as damages an amount related to the damage which they have Admissibility suffered during the 1974/75 cereal marketing year in addition to the In its written statement made under amount set out in paragraph 1 of the Article 91 of the Rules of Procedure the application by reason of the price Council raises an objection of rules and aids relating to durum wheat inadmissibility. An action for in the Community contained in the compensation for damages arising from regulations cited in the previous the fixing of prices for a marketing year claims as a result of losses at the is not possible before the marketing year production level and in respect of the begins. prices on processing durum wheat and on the sale of durum wheat meal; In so far as the applicants see in the 3. Order the defendants to bear the costs. action for a declaration (Feststellungs­ klage) in German law a procedural avenue giving them the possibility of The Commission and the Council in the obtaining in advance before the damage written statements made under Article 91 occurs the promise of compensation for of the Rules of Procedure ask the Court: the damage claimed, it is necessary to see 1 — to give a preliminary ruling on the whether it is possible to include this admissibility of the applications; procedural avenue in the proceedings 2 — to dismiss the application as in­ provided for in the EEC Treaty and in admissible; particular the action under Article 215.

215 refers to 'damage caused', the action absolutely certain that the damage will for a declaration is not concerned with occur. In the present case the damage the present results since the damage may claimed is not only uncertain but its be only a possibility. occurrence is even quite unlikely in view of the facts (the price situation on the These differences prevent the action for a world market). declaration being included in the Community legal system. Moreover, the applications made on 15 July 1974 refer to compensation for Finally, it may be doubted whether the damage which could only occur at the applicants' intention is to obtain earliest on 1 August 1974 (beginning of compensation. They do not hide the fact the cereal marketing year). The simple that their real concern is to encourage 'possibility' that the world prices of the institutions of the Community, by durum wheat might fall again below the the expedient of the declaration of an threshold price does not suffice to give obligation to compensate, to amend as rise to a right to compensation. Further, quickly as possible the rules in question it is unlikely that this possibility would (cf. p. 5 of the originating application). If occur in any event during the 1974/75 this were really the true intention of the marketing year. applicants it would give rise to another head of inadmissibility, that is to say of a Since the occurrence of future damage is misuse of procedure. not only hypothetical (even according to the applicants' statements) but even In the Commission's view there are such unlikely, there does not appear to be any fundamental objections that it appears legal ground for bringing an action. justified to ask for a preliminary ruling Thus, should an application comparable to the action for a declaration in German on the admissibility of the application. The applicants, in expressing their claims law in principle be accepted within the in the form of actions for a declaration framework of Article 215 of the EEC

JUDGMENT OF 2. 6. 1976 — JOINED CASES 56 TO 60/74

on the last day of the oral procedure. which have done nothing to offset the Accordingly it does not matter whether distortion in competition. the applications were inadmissible when they were brought because the rules in In the same way it is certain that the question had not yet entered into force. applicants will suffer damage until the At the present time it is not possible to end of the cereal marketing year: if the cite the date on which the application world market price for durum wheat is was brought against the admissibility of maintained above the guaranteed the application. Ex abundanti cautela it minimum price, the discrimination should, however, be pointed out that the created by the grant of the aid will have rules on prices and aids in respect of its full effect during the whole of the durum wheat have effect from the date of marketing year. If the world market price their publication which is prior to the falls below the threshold price, the date on which the applications were excessive difference between the inter­ brought. vention price and the target and threshold prices will cause harm to the Community law contains no provision German meal producers. on the admissibility or inadmissibility of an action for a declaration; in the same Under the rules in force since 1 August way the form of procedure in which an 1974 it is already established that the application for compensation may or applicants have suffered actual damage must be brought is not laid down. The resulting from the fact that the fixed application for a declaration as such is in amount of 30 u.a./metric ton as aid has line with the case-law of the Court and been granted. should be declared admissible when it enables the case to be more speedily With regard to the durum wheat meal dealt with or simplifies it and when by so sold during August and September 1974 doing peace and certainty in the law can the amount of the damage may be be re-established as quickly as possible. calculated on the basis of an abstract

KAMPFFMEYER v COMMISSION AND COUNCIL

regard to the restrictions existing in the If the applications of November 1974 legal systems of Member States, constitute such an amendment it is Community liability arising out of proper to accept it because this condition legislative acts can be taken into account is satisfied. only within narrow limits and subject to more restrictive conditions than liability In the rejoinder the defendants maintain arising out of executive measures. their objections relating to the admissibility of the applications in their If nevertheless such an action were original form, their amended form and in accepted in Community law it would be their present form. necessary to attach special importance to the necessity of substantially proving the They refer in particular to the strict future damage. conditions in Article 42 (2) of the Rules of Procedure relating to the raising of Otherwise the action for compensation fresh issues. The principle of clarity and would risk being misused to evade the of the certainty of the procedure requires conditions provided for in Articles 173 that the opposite party should not and 175 of the EEC Treaty. without good reason have repeatedly to face new issues.

JUDGMENT OF 2. 6. 1976 — JOINED CASES 56 TO 60/74

The German meal producers whose export of For durum wheat the difference between meal has also increased have covered their needs of durum wheat almost the intervention price and the target price has increased on average from 10 exclusively from third countries up to u.a./metric ton to 16 u.a./metric ton and 1973, apart from reduced imports from that between the intervention price and France (p. 22). the threshold price from 8·87 u.a./metric ton (1967/68 - 1970/71) to 13·17 The price movement of common wheat u.a./metric ton (1947/75). on the world market, after an unusual increase up to February 1974, inclines to As for the durum wheat production in a level below the threshold price.

KAMPFFMEYER v COMMISSION AND COUNCIL

increase in durum wheat has had circle are excluded. Only surpluses which repercussions on the prices on the Italian cannot be bought by these meal and French exchanges after the producers can come onto the exchanges beginning of the 1973/74 marketing and open markets. As a result the prices year, but this fact gives no indication on on the exchange and on the market do the subject of prices actually paid by the not reveal the prices at which the French French and Italian meal producers for and Italian meal producers buy durum the 1973 harvest. Only reduced wheat from the national production. quantities of the national production reached the exchanges and the markets. The fact that especially the mills of the It may accordingly be assumed that the Paris basin (during the 1971/72 and French meal producers and in particular 1972/73 marketing years) obtained those situated in the Paris basin have supplies on the basis of the intervention been able to cover their needs as in price or slightly higher price may be previous years before the beginning of indirectly inferred from the fact that they the cereal marketing year, that is to say proposed dumping prices for meal to the the spring of 1973, at prices around the German manufacturers of pasta. This intervention price when the increase on dumping involved a reduction of DM the world market had not yet had any 250 per metric ton on the offers of the effect on the Community market. German meal producers.

JUDGMENT OF 2. 6. 1976 — JOINED CASES 56 TO 60/74

Further, meal producers of the Community set under the new rules the difference in the out their position to the Commission price between common wheat and before the rules in question were durum wheat had considerably increased: adopted. the relationship for the intervention prices being henceforth 100 : 151·6 and In November 1973 the Union of 100 : 151·6 for the target prices. Associations of Meal Producers of the EEC informed the Commission that in Law the unanimous opinion of all the member associations the rules would lead Infringement of superior rules of law to distortion of competition and harm to the meal producers of the countries of According to the applicants the northern Europe and in particular the legislative measures of the institutions of Federal Republic of Germany and the the Community adopted to regulate Benelux countries. prices and aids in relation to durum wheat for the 1974/75 cereal marketing After the publication of the year constitute an aggravated violation of Commission's proposals for the 1974/75 the superior rules of law protecting marketing year there was a meeting individuals (discrimination, infringement between the representatives of the of the principle of proportionality). German meal producers and a representative of the Commission during The rules on prices and aids for the which the meal producers pointed out 1974/75 marketing year infringe the that it was not possible for them to buy objective of stabilizing markets provided French durum wheat. They also asked for for in Article 39 (1) (c) of the EEC Treaty, the abolition of the difference between that of assuring the availability of the intervention price and the target supplies (Article 39 (1) (d)) and ensuring price of durum wheat, which difference that supplies reach consumers at was not justified, in any event not to reasonable prices (Article 39 (1) (e)).

KAMPFFMEYER v COMMISSION AND COUNCIL

(d) the refund to producers, for meal German meal producers would be acting producers at a disadvantage, in economically in an artificial and harmful proportion to the durum wheat manner if they tried to cover their imported from third countries. requirement of durum wheat from France and Italy. Having regard to the The discretion of institutions of the fact that these mills are obliged to obtain Community in executing the Common supplies from third countries, the Community institutions must undertake Agricultural Policy is limited on the one hand by Article 40 (3) of the Treaty to give them the opportunity of which permits only the measures obtaining supplies at the same prices as required to attain the objectives set out in the French and Italian meal producers. Article 39. This obligation has not been respected in the price rules in question. Such limits arise likewise from recognized principles of political Since the institutions of the Community economy including the recognition of still justify the large difference between

JUDGMENT OF 2. 6. 1976 — JOINED CASES 56 TO 60/74

This distant surplus areas may likewise be sold compensation should take the form of a in the main areas of consumption. In payment of a refund to the meal addition to the fact that there is a producers of the Federal Republic of shortage of durum wheat, there is the fact Germany, the Benelux countries and the that the French and Italian meal new Member States for the amount of producers are close to the areas where durum wheat processed into meal and the wheat is grown. In view of these two sold to the pasta industry. facts it is not necessary and even ill-advised to ensure flexibility in the Further the applicants contest the claim sales of durum wheat so that that the damage to them has not been home-grown durum wheat may be sold caused by the Community price rules but everywhere in all the countries of the is due to the high prices on the world Community. market for which the Community institutions are not responsible.

Italy. This difference should of necessity logically be much less than that which is Among the possibilities coming within required in respect of the surplus market the framework of Article 39 of the Treaty in common wheat. It follows that the and Article 19 of Regulation No 120/67 price rules are contrary to the objectives the applicants (p. 102) propose rules of Article 39 of the EEC Treaty and allowing meal producers at a disad likewise to the principle of propor vantage to import a certain quantity of tionality. durum wheat from third countries against the export of a certain quantity of As regards in particular the level of the common wheat duty free. threshold price the applicants refer to the criteria laid down in Regulation No The applicants add that these last points 1968/73 of the Council of 19 July 1973 are not of decisive importance in the (OJ L 201, p. 10).

KAMPFFMEYER v COMMISSION AND COUNCIL

Nor must the damage caused by the German meal producers In the second place the applicants rely having had to align their prices with on the principle of the right to French competitors in order not to lose compensation for an unlawful an even larger share of the market be intervention — even if it were not overlooked. Since the Community negligent — of the Community institutions adhere to the system of price institutions equivalent to expropriation. rules in question it must be anticipated This principle comes within the scope of that the applicants will suffer losses the second paragraph of Article 215 of during the 1974/75 marketing year at the EEC Treaty which does not make the least as great as those of the previous Community's liability depend on the

price. It follows that the damage amounts to attain the objectives of Article 39 of to at least 10 u.a. per metric ton, a figure the EEC Treaty and the wellbeing of the at which the threshold price would be Community and because there are other too high (particulars on pages 92 and 93). means of fixing prices and promoting the cultivation of durum wheat in the Whilst accepting the abstract method of Community allowing the objectives of assessment, the applicants claim that the the organization of the market to be concrete method of assessment should be attained without distorting competition applied in respect of the damage which between the meal producers. they will suffer by reason of the loss of part of the market. The latter cannot be

JUDGMENT OF 2. 6. 1976 — JOINED CASES 56 TO 60/74

preference, that is to say to fix the Causal link

threshold price at such a level that Community production is not stifled by Even if there were damage, which is imports. This preference has, however, denied by the Council, there is no direct never gone too far. The preference link between this damage and the margin cannot be expressed in fixed Community rules in question in view of figures, as the applicants are doing, but the fact that the international prices of can only be a percentage. On examining durum wheat have consistently been the movement of the threshold and much higher than the intervention price intervention prices it must therefore be (first claim of the applicants). In the observed that for the 1971/72 marketing second claim (statement of 4 November year preference represented 10·22 % of 1974) it is not possible to find in the the threshold price whereas in 1974/75 it allegations of the applicants any factor was reduced to 7·31 %. showing that the Community system, and in particular the grant of aid is the At the same time aid to growers 'cause' of a difference of 30 u.a./metric decreased during this period not only in ton in the cost price of the French and absolute terms but also on a percentage German meal producers. basis: 28·31 % of the threshold price (1971/72) to 16·66 and even 15·86 % Damage subsequently in 1974/75 (cf. Annex).

KAMPFFMEYER v COMMISSION AND COUNCIL

Finally, the applicants' calculation, the endangering the positive results already method of which is contested by the achieved which are in the general Council, does not show why the amount interests of the Community: owing to the of aid, even supposing it is unlawful, is to system of aid Community production of the advantage of the French meal durum wheat has tripled in 10 years and producers. The direct beneficiary of the this is also to the advantage of the aid is the grower and there is no reason applicants. in a deficit market why the grower should give up the aid for the benefit of Since the exports of French meal to the meal producers. The applicants have Germany have also increased, the not furnished any of the factors required Community preference machinery has for a calculation of damage since there is been adapted to re-establish equilibrium. none. Community preference reflects a proper equilibrium between regard for the The wrongful action or omission on general interest of the Community and the part of the Community institutions the special interest of the applicants.

The original reasoning of the applicants The criterion of 'sufficiently flagrant is based in the Council's view on infringement of a superior rule of law numerous falsehoods, in particular that protecting the individual' does not apply the French meal producers obtained in the present case. Since a particularly supplies at the intervention prices. In the complex and delicate 'choice of light of the considerable increase in economic policy' is involved, the prices since 1973 this argument is responsible authority must be accorded completely wrong. sufficient discretion in so far as its choices are guided by regard for the As for the alleged difficulties of general interest, which is not contested penetrating the French market the in the present case. Council stresses that the applicants import 10 % of their supplies of durum C — Defence of the Commission wheat from France.

Since, according to the statement of the Even assuming that the French mills applicants of 4 November 1974, evidence prefer the national product only if it is of the damage is based on an alternative, cheaper it is not necessary that it should the Commission considers two cases: be 'significantly cheaper'. To be competitive with regard to the (a) If the world market price again falls production from third countries it is below the threshold price, the sufficient for French growers to offer difference between the intervention their goods at prices slightly lower than price and the threshold/target price those on the world market. would operate to the detriment of the applicants. Aid granted from public funds could at (b) If the world market price remains most exercise an influence of a above the minimum guaranteed psychological nature on the negotiation price, the discrimination caused by of prices between growers and meal the grant of aid would operate to the producers. Being assured of receiving aid full to the detriment of the applicants the grower could perhaps be tempted not throughout the year. to exploit fully the latitude in negotiation which the position in the market allows The first case him.

producers on the German market is not a Further, in any case the Community sound basis for determining whether and policy is not aimed at deflecting French to what extent the grant of aid during the durum wheat from the production areas; 1974/75 marketing year influenced the it is simply conceived in such a way as purchase prices of the French meal not to exclude trade patterns of this kind. producers. First they related to the To require from the Community previous marketing year (1973/74). It is measures which would directly lead to possible that the French mills acquired isolating national markets certainly does the 1973 harvest (contracts of spring not come within the criterion of 1973) at particularly favourable prices stabilizing the market. before the increase of prices on the world market. But if the German meal The aid is not sufficient to contribute of producers were in consequence at a itself to the development of meal exports disadvantage, the Commission cannot be to Germany; it is at most conceivable made liable for it. that this could happen indirectly through the cultivation of durum wheat being The calculation of the damage stimulated. In any event, the promotion of the cultivation of durum wheat in the The Commission considers the abstract Community does not conflict with the method used by the applicants for objectives of stabilizing the market. calculating the damage is unsatisfactory, quite apart from the question whether in Finally, considered in the long term, the international commercial law this policy of aid could lead to creating a new method is freely accepted. equilibrium in the market: if, owing to To calculate the damage correctly it is the Community measures of promotion, necessary to show that the difference French production attains and even between the prices (Case 1) or the aid exceeds French requirements this (Case 2) involved a loss of profit or losses development will definitely profit the and/or a loss of sales. German meal producers.

(c) The second subparagraph of Article inopportune not only because of the risk 40 (3) of the EEC Treaty and the of substitution but for other reasons: a principle of proportionality large reduction in the difference between the threshold price and the intervention With regard to the question of price could, in certain areas of the amendment to the system of prices and Community, lead to products from third aids the Commission observes first of all countries replacing local products. that the comparison of the intervention prices with the threshold and target Finally, the level of protection of durum prices in the application is not correct. wheat has been reduced in relation to that of common wheat (cf. the table on In respect of the 1970/71 marketing year p. 29). the applicants refer to the highest derived intervention price whereas As for the possibility of penetrating the reference ought to have been made to French market in durum wheat the the lowest intervention price. Commission observes that the French (Calculation of the Commission, p. 26). exports of durum wheat to the other Member States has continually increased Compared with the figures for 1971/72 (Annex 2) which shows that the French the difference in question has only market is not completely closed to slightly increased until the 1974/75 foreign meal producers. The export of marketing year. Having regard to the fact 26 500 metric tons to Germany that the increase in the target price and (according to the Commission's table) the threshold price plays a much more represents roughly 10 % of the whole of important part than that of the durum wheat processed each year by intervention price, it must be observed German meal producers. While that the values have declined relatively recognizing the difficult conditions it (Annex 3). should be observed that a slow and

KAMPFFMEYER v COMMISSION AND COUNCIL

damage claimed. The Commission refers the world market. on this point to the judgment of 14 May 1974 in Case 4/73 Nold v Commission The applicants' argument in favour of [1974] ECR 491. lowering the threshold price is not relevant. In particular it is not possible to In the present case the causal factor deduce the converse from the determined by the Community is not the Community rules adopted in the event of 'sufficient cause' of the consequences the threshold price being exceeded: these which have occurred or, in French legal special measures for limiting exports, terminology, this factor has not caused intended to prevent a shortage, ought not direct damage to the applicants. to follow the same criteria as permanent rules relating to import charges.

unchangeable. This condition has not does not appear absolutely necessary in been shown by the applicants. A process such circumstances. Accordingly it of loosening the inflexible market proposed to the Council to abolish it at structures has been going on for quite a least temporarily, but fiscal con long period and this trend did not stop siderations were also involved. when the prices were fixed. Accordingly it cannot be expected of the Community However, even if aid is not absolutely that it should at the time have combated necessary, this does not mean that it has

Having regard to all the circumstances Whatever the trend in prices until the considered there can be no question of end of the marketing year the present the particular rules being the result of position makes the arguments of the seriously arbitrary conduct or of their defendants relating to the level of world seriously infringing the rule of market prices devoid of purpose. proportionality. Even if the criterion of 'flagrant infringement' is interpreted as After having completed the figures revealing 'Sonderopfer' of 'special and relating to the trend in exports and serious damage' these criteria are not imports of durum wheat and durum satisfied. wheat meal between Germany and France (pp. 4/5) the applicants observe In the present case it is at most damage that these figures give only an imperfect which does not exceed the normal picture of the question. The heart of the proportions of results of decisions taken problem lies in the undercutting by the by the legislature in the sphere of French meal producers, at the time by economic policy. DM 100 to 125/metric ton of durum wheat meal, which probably increased The question of a wrongful act or after the fall in world market prices. omission

As regards the prices on the French The Commission does not consider it market the applicants contest in the first necessary to go into the question of a place the correctness of the table given wrongful act or omission in view of what by the Commission. Moreover, it has not has been said above. It observes, however, been shown that the French meal that in the context of an action under producers have bought from the Article 215 of the EEC Treaty some collecting centres and have paid the wrongful act or omission must be shown. prices listed in this table without taking

never shown the precise method of payment of the aid used in France and The argument in defence of the large Italy. If the aid is paid through accredited disparity between the intervention price collectors or even through the meal and the threshold price and the method producers, which is the most simple of calculating the aids shows the fear of method, it becomes largely a factor in the Community institutions that the calculation. French meal producers buy French durum wheat only when it is appreciably Finally, in calculating the amount of the cheaper than the durum wheat from third countries. As a result the aid so that the minimum guaranteed price is brought up to the level of the Community institutions should likewise intervention price the Community accept that French meal producers buy institutions have understood that aid may and have bought French wheat only influence the market price. It may when they could buy it on the basis of therefore be assumed that the latter will the intervention price (the world market come into line with the amount of the price being lower than the threshold intervention price. price) and when French wheat was appreciably cheaper than durum wheat The applicants state that during the from third countries (up to 30 u.a./metric ton at the time when the world market 1974/75 cereal marketing year they must, as previously, cover at least 90 % of their prices were higher than the minimum requirements of durum wheat from third guaranteed price). countries at the threshold price or at the The defendants' argument on this point higher world market price. For the 10 % is, however, irreconcileable with the of their requirements satisfied in France Commission's argument (defence p. 16) they had to pay the prices on the French that all that the French growers have to exchanges roughly corresponding to the do to be competitive with production world market prices when the latter were from third countries is to offer their above the threshold price or in any event goods at prices slightly less than world well above the intervention price. This market prices. 10 % represents an insignificant amount and the prices paid for this amount are If gentler measures sufficed to avoid well above the prices paid by the French jeopardizing sales outlets for Community meal producers. wheat both as regards the difference between the intervention price and the Law threshold price and also as regards the amount of aid it was. not therefore Unlawfulness necessary to adopt a measure which by creating different opportunities of In the present case the crucial question is purchase discriminated against the not whether and to what extent the German meal producers.

There are such possibilities within the Wrongful act or ommission framework of the Treaty and the common organization of the market. The wrongful act or omission of the Community institutions is obvious The causal link between the injury and because they have adopted the rules in the damage question with knowledge of all the circumstances and without adopting If, when the world market prices were measures to provide compensation. below the threshold price the difference between the intervention price and the Damage target price had been restricted to a minimum or if the amount of aid had The applicants say that they have been calculated so that the minimum suffered damage: guaranteed price had been brought up to — by reason of the diminution of their the target price or a little below it the share in the durum wheat meal opportunities for purchase by the French market in the Federal Republic of and German meal producers would have Germany; been almost indentical. By reason of the fact that a minimum price was — by reason of the undercutting by guaranteed to growers the French meal French meal producers and the producers ought in this event to have simple fact that they have had to buy paid a price which in any case would their wheat at a higher price than that at which the French meal have been slightly less than the target price and this would have been roughly producers could buy theirs owing to the equivalent of the threshold price. It the Community rules. follows that the rules on prices and aids were at the origin of the different With regard to the method of opportunities for purchase working to quantifying the damage the applicants the detriment of the applicants. adhere to the opinion which they set out in the application originating the Since the world market price was above proceedings. the minimum guaranteed price the aid Discussion of the method of calculation should have been abolished or limited to the difference between the minimum seems unnecessary in the present case price and the world market price to give since whether the damages are assessed the same opportunities of purchase. by the abstract or by the concrete During this period the rules on aid and method will make no great difference. its amount were thus at the origin of the advantage which the French meal The German meal producers should be producers enjoyed. The causal link put in the position in which they would

Even in assessing by the abstract method The Commission observes that the levies the damages caused by the existence of charged since January 1975 have been different opportunities of purchase, the relatively low and would have led to only calculation would be centred on the a moderate increase in the price of the objective value of the different product from third countries in relation opportunities, that is to say the extent to to the Community product. which the opportunities of the French meal producers were better than those of As for trade in durum wheat meal there the German competitors. This damage has been a 24·6 % decline in French assessed as general or as special amounts exports to Germany and an increase in to at least 30 u.a./metric ton of durum German exports to France. wheat meal sold to the German pasta industry as long as the world market Moreover, the Commission contests the price was above the minimum alleged undercutting by DM 100 to guaranteed price (up to 1 November 125/metric ton and all the other 1974). allegations of the applicants on the cost and sale prices of the applicants and For the subsequent period the damage in their French competitors. respect of the quantities sold is at least the amount for which aid was fixed at Law too high a level. On the basis of the argument that it sufficed to fix the aid at The irregular nature of the a level such that the mills could have Community rules bought 'slightly' below the target price this 'slightly' lower amount could be (a) Price rules: assessed at 11 u.a./metric ton, an amount provided for by the basic Regulation No The alleged irregular nature could have 19/62 to ensure that Community wheat caused damage to the applicants only should be purchased in preference to from the date at which the threshold wheat from third countries. price effectively began to fulfil its function, that is, from 18 January 1975. Assuming that it would have sufficed to fix the threshold price at 2 % above the There is no obligation on the single intervention price (cf. application Community institutions to preserve trade p. 92), the threshold price actually in patterns and they are not bound to shape force is at least 10·43 u.a./metric ton too their policy so that the natural much. The damage suffered since 1 geographical advantages of the French November 1974 in respect of the meal producers are nullifield. quantities sold is at least 1043 u.a./metric ton of durum wheat meal. As for the French market price of durum wheat the table given in the defence In the assessment for the two periods shows that in any event the intervention considered the applicants take into price in no way serves as a guide price as account a conversion rate between durum the applicants claim that it does. wheat and meal of 3 : 2 by reason of the fact that the advantage of the French Even if the French meal producers as a meal producers extends to only 80 % of result of long term agreements and large their requirements of durum wheat and supply contracts enjoy a favourable price, to allow an additional safety margin. it is not possible to imagine that the

prices actually paid differ so much from intervention price. On the other hand the market prices. the difference between the threshold price and the intervention price should In any event the alleged undercutting, by be fixed so that even Community wheat DM 100 to 125/metric ton, assuming harvested in less favoured areas has a that it actually exists, cannot be evidence chance of competing with the product of of French prices. First, the underbidding third countries. is explicable on other grounds and the amount alleged by the applicants is Finally, within the context of considering much higher than the difference of 10·43 whether there is 'arbitrariness' it is not a u.a./metric ton described as discrimi question of whether this or that natory. adjustment of the organization of the market would have been preferable, it is As for the alleged disregard of equality of simply whether the rules adopted were opportunity the Commission refers to obviously unreasonable in comparison the arguments relied on to dismiss the with other possible provisions.

In any event the individual Community preference. grower receives his own. statement of account which is quite independent of As for the 'irreconcileable contradiction' the sale price. The accredited collectors complained of in the reply (p. 29) the are subject to strict official control. Commission observes that it maintains the claim that the French meal producers The neutrality of the" aid cannot be give preference to the national product questioned either by arguments based on when this can be obtained at a price the 'readjustment' of the minimum price lower than that of the product from third to the level of the intervention price.

KAMPFFMEYER v COMMISSION AND COUNCIL

The Council of Ministers had in any intervention price. Since this wheat was event valid grounds for maintaining the purchased previously the prices actually system of aid for the 1974/75 marketing paid at the time would enter into year and the new fall in world market account.

prices has subsequently shown that it was right. As for the assessment for the period up to 1 November 1974, it appears The suggestion of the applicants that a incomprehensible that the aid should variable aid should be instituted adapted suddenly become completely lawful to the world market prices would have when the threshold of the minimum been extremely difficult to implement at price is reached. an administrative level.

According to the assessment of the Even assuming that the amount of aid Commission (cf. table p. 18) this was temporarily excessive, in order to threshold is irrelevant in this respect and moreover in a number of situations the speak of discrimination the applicants ought to have shown that the grant of highest amount of possible damage must excessive aid must necessarily favour the in any event be less than the 10.43 French meal producers to a u.a./metric ton claimed by the applicants. corresponding extent. Since the defectiveness of the method of

Damage calculation used by the applicants is obvious the Commission asks the Court,

In quantifying the damage claimed, the in the event of its recognizing that the method of which is contested by the Community is liable, to make only an defendants, the applicants treat the interlocutory order on liability and to diminution of their opportunities of order the applicants to furnish evidence purchase, inferred from a comparison of the amount of the damage suffered by with extreme and hypothetical factors, to showing exactly what effect the actual damage suffered on sale (loss of Community rules had on their losses on profit). The alleged undercutting in no prices and, where appropriate, on the fall in their sales. way supports the hypothetical assessment.

2 In statements lodged on 1 October 1974 the defendants, the Council and the Commission, raised an objection in accordance with Article 91 of the Rules of Procedure to the admissibility of the said applications.

They claim in particular that the applications brought before the beginning of the 1974/75 cereal marketing year constitute an action for a declaration or an application for a declaratory judgment (Feststellungsklage) intended to establish the Community's liability for damage which they may suffer.

Community law, it is alleged, recognizes only an action to establish liability to make good damage which has actually occurred so that actions for damages are premature if their only purpose is a declaration that Community rules are unlawful.

3 In their observations on the objection of inadmissibility the applicants developed their original claims and in addition to the declaration sought asked that the Community be ordered to pay specific sums representing the damage suffered by each of them from the beginning of the 1974/75 marketing year, a point which meantime had been reached.

4 The Council and the Commission objected that this amendment of the claims constituted an amendment of the application which is prohibited by Article 42 of the Rules of Procedure.

Further in so far as the claims are for specific amounts as damages insufficient grounds are given.

7 With regard to the defendant's claim that the prejudicial effect on the applicants of the rules adopted for the 1974/75 cereal marketing year was not clear solely because the level of prices in the common market has been very much exceeded by the world level of prices, the applicants could rely on the one hand on the judgment of 13 November 1973 given between the same parties in Joined Cases 63 to 69/72 [1973] ECR 1229 from which it appears that the Community rules for the 1971/72 cereal marketing year, which are basically the same as those for the 1974/75 year, were such as to cause them injury without however making the Community liable and on the other hand on their forecast, which indeed came true at the beginning of 1975, that world prices for durum wheat would fall before the end of the marketing year below the level of Community prices.

8 In these circumstances as soon as the Community rules in question were published and before they were put into effect the applicants were justified in bringing before the Court the question whether and to what extent these rules were such as to put them at a disadvantage in relation to their French competitors and if so whether these rules were for this reason contrary to the principle of equal treatment.

Since the damage which could result from the factual situation and the rules was imminent, the applicants could reserve the right to specify the amount of the damage which the Community would have eventually to make good and

JUDGMENT OF 2. 6. 1976 - JOINED CASES 56 TO 60/74

restrict themselves for the time being to asking for a finding of the Community's liability.

11 As a result of this aid the cultivation of durum wheat has very much increased in certain areas where its cultivation is possible, especially in Beauce, the south of France and southern Italy so that the needs of the French and Italian mills are to a large extent satisfied.

On the other hand the German and Benelux meal producers have in practive had to continue to obtain supplies of durum wheat from the traditional source, that is to say by import from third countries.

It is established that during the marketing years prior to that of 1974/75 this situation has worked to the disadvantage of the German meal producers such as the applicants since their French competitors are clearly able to obtain supplies of durum wheat locally at prices close to the intervention price

KAMPFFMEYER v COMMISSION AND COUNCIL

adopted for the cereal year whereas they themselves had to buy the product at prices determined by the threshold price and could obtain Community durum wheat only in small quantities.

12 The applicants consider that the Council and the Commission are liable for the damage which the situation described has caused them in view of the manner in which these institutions have applied Regulation No 120/67.

The concept of stabilization of the markets cannot cover the maintenance at all costs of positions already established under previous market conditions.

JUDGMENT OF 2. 6. 1976 - JOINED CASES 56 TO 60/74

By temporarily giving priority to some of the objectives of Article 39, as compared with the maintenance of established positions, the institutions did not infringe the provisions of the Treaty cited but have exercised their powers in the context of a common agricultural policy in a successful way for the policy has contributed to a considerable local increase in the production of durum wheat.

14 It is necessary however, to inquire whether in the planning of this policy of aid the regulation of the Council has not, as the applicants claim, wrongfully put the German meal producers at a disadvantage vis-à-vis their French competitors.

15 During the marketing years prior to 1974/75 durum wheat harvested in France has been marketed at prices consistently near the intervention price without ever approaching that of imported durum wheat.

This factor justifies saying that the rules in question have profited the purchasers of durum wheat, that is to say mainly the French meal producers, rather than the growers themselves.

temporarily to maintain the whole system in force.

In any event in view of the circumstances mentioned it is not possible to describe the postponement of amendment of the system to a subsequent date and the decision to maintain for 1974/75 the previous structures of the system as a sufficiently flagrant infringement of Articles 39 and 40 of the Treaty.

This conclusion is confirmed by the fact that as from the 1976/77 cereal year the system of aids has been amended so as to remedy the abovementioned discrimination.

17 Further in the exceptional conditions which governed the trend in prices of durum wheat harvested in France during 1974/75 it was not clear that the existence of the system of aids and their maintenance at the previous level could have any effect on this trend comparable to that observed in respect of the previous period.

18 The applicants, as they had already done in Joined Cases 63 to 69/72, complained further that the Community institutions did not reduce the margin between the intervention price fixed for durum wheat and the threshold price.

Where the product is in short supply on the market as in the present case there is no reason for a large margin between these two prices for it makes competition more difficult for those meal producers obliged to obtain supplies mainly on the world market in relation to those located in areas where Community durum wheat is cultivated.

20 Moreover in the perspectives of 1974/75 as they appeared to the Council when the relevant regulation was adopted the reduction of the threshold price in relation to the intervention price could appear only of academic interest since the level of world prices considerably exceeded that provided for by the Community rules.

In these circumstances it is not possible to complain that the institutions did not reduce the difference between the two prices save to the extent ultimately adopted.

Although it is true that as from the beginning of 1975 the world level of prices decreased and fell below the threshold prices fixed by the Community rules, the level of the threshold price cannot have seriously harmed the German meal producers, who, in so far as they needed still to obtain supplies, could at the time profit from a fall in the purchase prices of durum wheat harvested in France which were once again approaching the intervention price.

21 For reasons similar to those mentioned above it is not possible either to complain that the Community institutions did not take into account possible remedies suggested by the applicants such as a refund to the German meal producers of the import levy on durum wheat coming to the German mills from third countries.

KAMPFFMEYER v COMMISSION AND COUNCIL

It is understandable that these institutions consider that in respect of such an exceptional year as 1974/75 it would not have been wise to experiment with measures so difficult to implement.

It is proper therefore to order each party to bear its own costs and that the costs of preparatory inquiries be borne as to half by the applicants and as to the other half by the defendants.

On those grounds,

THE COURT

hereby:

1. Dismisses the applications;

2. Orders each party to bear its own costs;

Registrar President

OPINION OF MR ADVOCATE-GENERAL REISCHL DELIVERED ON 17 MARCH 1976 1

Mr President, This is not the first time that the Court Members of the Court, has been concerned with the problems which arise here. Similar proceedings The case on which I am giving my were brought by the same applicants in opinion today is concerned with claims 1972 (Joined Cases 63 to 69/72). I for damages brought by five German therefore do not need to go into all the mills against the Council and factual details which have been put Commission of the European before us in the lengthy proceedings. It Communities. suffices to say the following briefly:

These mills are situated in various parts The Council fixed the durum wheat of the Federal Republic of Germany, prices for the 1974/75 marketing year, namely on the Rhine, in Frankfurt, which is now in question, and the aids Hamelin and Berlin, and they grind for the growers of durum wheat in durum wheat into meal which is used in various regulations of 29 April, 4 June the production of pasta. In their view the and 17 June 1974. These provided that Community rules on the durum wheat from 1 August 1974 the target price was market are so drafted that the German 182-83 u.a./tonne, the threshold price mills are at a disadavantage in particular 180 u.a./tonne, the intervention price in relation to their French competitors. 166-83 u.a./tonne and the guaranteed

1 — Translated from the German.