C-40/75

JUDGMENT OF THE COURT 21 JANUARY 1976 1

SOCIÉTÉ DES PRODUITS BERTRAND SA

v Commission of the European Communities

Case 40/75

In Case 40/75

SOCIÉTÉ DES PRODUITS BERTRAND SA, Grigny, Rhone, France, represented by Edouard Brisac, Advocate at the Cour de Paris, with an address for service in Luxembourg at the Chambers of Georges Margue, 20 rue Philippe-II,

Registrar: A. Van Houtte

gives the following

1 — Language of the Case: French:

JUDGMENT OF 21. 1. 1976 - CASE 40/75

JUDGMENT

Facts

The aid thus granted for 1974 may be assessed at Lit. 27 000 000 000 which, I — Facts and procedure taking account of the annual consumption of pasta made from durum wheat in Italy (15 000 000 quintals), In the context of its counter-inflation corresponds to a subsidy amounting to policy the Italian Government decided, 6 % of the price free-factory. by Decree-law No 427 of 24 July 1973, which became Law No 496 of 4 August On 14 September 1973 the French 1973 (Gazzetta Ufficiale No 189 of 24 association of manufacturers of pasta July 1973 and No 216 of 22 August products drew the attention of the 1973), to freeze the prices of a certain appropriate Directorates-General of the number of widely-consumed foodstuffs, Commission to the situation brought in particular, the prices of dry pasta about by the Italian aid which, according products (which, under the Italian rules to the association, enabled Italian must contain only durum wheat). The manufacturers to sell pasta products in Azienda di Stato per gli Interventi nel France at lower prices than the French Mercato Agricolo (the National Body for cost prices. Thus in January 1974 Italian Intervention on the Agricultural Market, pasta products in packets of 500 g were hereinafter referred to as 'the AIMA') was put on sale on the French market at enabled — by a ministerial order — to prices varying between FF 2·385 and 'stabilize' the wheat market by buying 2·505 per kg for quantities of 5 metric and stocking (in the Community and in tons whilst the selling prices of French third countries) and by re-selling on the manufacturers, which only included a domestic market on conditions deter­ very small profit margin, were between mined by the Comitato Interministeriale FF 3·08 and 3·20 per kg at the same per la Programmazione Economica (the period. Inter-Ministry Committee for Economic Planning, hereinafter referred to as 'the The Director of the Directorate-General CIPE'). After September 1973 the AIMA for Industrial, Technological and thus acquired 10 500 000 quintals of Scientific Affairs of the Commission wheat, principally on the world market, intimated on 31 October 1971 that the at an average price of $ 290 that is to say, appropiate departments 'were in the Lit. 18 500 per quintal. process of considering the file', and on 5 November 1973 that he initiate unable to From September 1973 to April 1975 the state 'the measures which the AIMA sold to Italian manufacturers of Commission might adopt'. semolina and of pasta made with durum wheat 8 500 000 quintals at prices which At the same time the Association from December 1973 were almost 30 % requested the French Minister for lower than the quotations on the Italian Agriculture and the Office National

number of times: first on receiving a Upon hearing the report of the delegation of semolina manufacturers on Judge-Rapporteur and the views of the 15 March 1974, secondly in the course of Advocate-General, the Court decided to meetings of the Management Committee open the oral procedure without a for Cereals and of the working party on preparatory inquiry. competition in agriculture and thirdly by discussions between officials of the Commission and of the Italian II — Conclusions of the parties Government and by the request made to the latter on 24 December 1974 to The applicant claims that the Court supply a statement of the buying and should: selling prices adopted by the AIMA and 1. declare the application admissible and a statement of the Italian exports of pasta well-founded; products to other Member States. 2. order the European Economic Community, in the person of the The Italian Government put forward Commission, to pay to it the sum of arguments and facts designed to show FF 250 000 in compensation for the that neither could competition have been damage suffered by it by reason of the distorted nor could trade between wrongful act or omission of the Member States have been affected by Commission in failing to initiate the those measures; they may be summarized procedure laid down by Article 93 (2) as follows. of the EEC Treaty, and in tailing to use the powers Confronted with a considerable increase conferred upon the Commission by in the prices of durum wheat on the Articles 93 (2) 155 and 169 of the said Italian market and the world market, and Treaty to ensure that the Italian State taking account of the maximum price, abolished the aid granted by it to the so-called 'administrative price' Italian manufacturers of semolina and prescribed by the Decree-law in July pasta products, thereby infringing 1973, the AIMA merely ensured that Article 92 of the EEC Treaty; durum wheat was made available to the 3. alternatively, order the Community, in Italian manufacturers at the average the person of the Commission, to pay price, the 'reference price' calculated by to it the sum of FF 1 as provisional the CIPE. Thus, taking account of the damages and appoint such expert as selling prices, the tonnages of durum the Court may think fit with the task wheat sold to each manufacturer made of establishing the amount of the good the loss actually incurred owing to damage suffered by the applicant; his sales of pasta products on the 4. order the applicant to bear the entire domestic market. costs.

The defendant contends that the Court 1971 (Lütticke v Commission, Case 4/69, should: [1971] ECR), an action for damages 1. dismiss the application as unfounded; initiated under Article 178 and the 2. order the applicant to bear the costs. second paragraph of Article 215 of the Treaty may be founded on the failure of the Commission to comply with Articles III — Submissions and argu 93 (2), 155 and 169 of the Treaty.

It is fallen. With regard to the quantity of impossible to determine how the aid 66 594 quintals of Italian pasta products complained of caused the applicant to imported into France at the end of suffer a loss of earnings or profit. March 1974, in comparison with 56 814 Although it is unnecessary to consider quintals at the end of March 1973, the whether an individual may institute defendant puts forward the French proceedings against the Commission for customs figures for the whole of the year damages on the ground of its failure to 1973, that is, 22 200 metric tons and for use the powers conferred upon it by the whole of the year 1974, that is, Article 169 it is quite unnecessary for the 22 900 metric tons. applicant to invoke this article in the context of the present application: the The applicant states that although the question of its applying that Article only Commission was initially alerted in arises if the Member State in question September 1973 by the French trade has failed to comply with a decision of association it waited until December the Commission adopted under Article 1974 before requesting information from 93 (2); this could not possibly happen the Italian Government; against this the since such a decision has not been defendant refers to the frequent contacts adopted and if, moreover, such a decision carried out within Community had been taken it would have given authorities and the fact that a certain concrete form to the provisions of Article period of observation was necessary 92 (1) which would have had an effect in before finding an overall loss to the the legal system of the Member States so AIMA on the quantities bought by it, to that they could be invoked before the be charged to 'State resources and which national courts, in accordance with the would provide grounds for concluding judgment of 19 June 1973 (Capolongo, that there was an aid within the meaning Case 77/72, [1973] ECR 611).

PRODUITS BERTRAND v COMMISSION

This The defendant replies that although the slight increase is to be explained by the re-sales complained of were indeed of imposition of Community levies in order such a nature as to 'favour certain to discourage exports to third countries undertakings or the production of certain as a result of the shortage of durum goods' through 'State resources' according wheat on the world market and by the to the wording of Article 92 (1), they did weak position of the lira. Italian export not affect trade between Member States prices increased, as compared to 1972, by and were consequently compatible with 25 % in 1973 and 75 % in 1974, which the Common Market in terms of the said was comparable with the average Article 92 (cf. the first subparagraph of increases in the price of durum wheat in Article 93 (2)). The AIMA only supplied Italy. durum wheat at reduced prices to Italian manufacturers of pasta and semolina It is clear from the general scheme of produced from durum wheat and Articles 92 and 93 that such an aid may distributed on the domestic market in only be granted or continued if the order to compensate them for their loss Commission considers that it is recorded on that market as a result of the compatible with Article 92.

The affect imports into Italy from Member application under the second paragraph States of pasta produced from durum of Article 215 is thus the only means, of wheat without egg since such imports redress. In the present case, however, for were always virtually non-existent: 79 the reasons set out above, the defendant metric tons in 1972, 147 metric tons in found that the aid complained of was not 1973 and 189 metric tons in 1974 as incompatible with Article 92. opposed to the Italian production of 1 500 000 metric tons per annum. Italian The Commission has not been guilty of law prohibits the sale of pasta products any wrongful act or omission arising containing common wheat on the from negligence in the application of domestic market.

JUDGMENT OF 21. I. 1976 - CASE 40/75

The figures show a continuing fall in The Commission rejoins that the domestic consumption in France since applicant failed to make any serious 1970, despite the general increase in the attempt to put forward facts and figures standard of living and in the contradicting those it had itself consumption of foodstuffs, accompanied submitted. It asks how the difference by a continuing fall in domestic mentioned in the Delaval circular could production since that year. The be imputed to the aid complained of progressive increase in imports was also since it was in fact in the first quarter of ascertained well before the period during 1974 that this difference was reduced in which the aid complained of was granted favour of the French pasta products, in and the increase from 1972 to 1974 was relation to the previous quarter, and only 4·4 %. It was even found that there indeed in relation to the first three was a fall in imports for 1973. After the quarters of 1973. The increase in the aid was adopted prices of such pasta price of exported Italian pasta products products increased more than the prices was even greater for the years 1973 to of French pasta products.

PRODUITS BERTRAND v COMMISSION

Law

1 By an application lodged on 17 April 1975 the applicant claims compensation for the damage suffered by it by reason of a wrongful act or omission on the part of the Commission in failing to initiate the procedure laid down by Article 93 (2) of the EEC Treaty, and in failing to use the powers conferred upon it by Articles 93 (2), 155 and 169 of the said Treaty to ensure that the Italian State abolished the aid granted by it in contravention of Article 92 of the Treaty, to Italian manufacturers of semolina and pasta products.

2 This aid was granted by the Italian Government within the framework of its counter-inflation policy to freeze the prices of a certain number of widely-consumed foodstuffs, in particular, the prices of dry pasta products

JUDGMENT OF 21. 1. 1976 - CASE 40/75

(Decree-law No 427 of 24 July 1973 which became Law No 496 of 4 August 1973 [Gazzetta Ufficiale No 189 of 24 July 1973 and No 216 of 22 August 1973]).

3 The Azienda di Stato per gli Interventi nel Mercato Agricolo (the AIMA) which was charged with stabilizing the wheat market by buying and stocking as well as re-selling on the domestic market, sold to Italian manufacturers of semolina and of pasta made with durum wheat 8 500 000 quintals of wheat at prices which were on average 30 % lower than the quotations on the domestic market.

9 Although the applicant claims that its sales dropped in the south-east of France it has not established that this fall was caused by the Italian measures which it disputes.

10 It is clear from statistics that the export of Italian pasta products to France had already registered an increase in 1971, that is to say, before the aid complained of was granted.

11 Subsequently, during the period when this aid was in operation, as slight increase in exports to France (4·4 % in 1974 as compared with 1972) coincided with the imposition of Community levies on exports to third countries following the shortage of durum wheat on the world market and the weakness of the lira.

12 The difference between the prices free-factory of French pasta products and the free-at-frontier prices of Italian pasta products was indeed diminished in the first quarter of 1974 (FF 0·063 per kg) in relation to the previous quarter (FF 1 per kg) and indeed in relation to the three previous quarters for 1973 (on average FF 0·65 per kg).

13 Additional evidence that the applicant's argument is erroneous may be deduced from the fact that the prices of Italian exports increased in relation to 1972 by 25 % in 1973 and by 75 % in 1974, that is to say, in proportion to the average increase in the price of durum wheat in Italy.

14 The applicant does not examine these figures and merely states that the prices of Italian pasta products exported to France were lower than those of French pasta products and that in 1974 it lost sales to the extent of 670 metric tons in the south-east of France and in contracts for supplying the provisioning service of the armed forces, but without establishing a causal connexion between the aid granted in Italy and those circumstances.

THE COURT

hereby:

1. Dismisses the application;

2. Orders the applicant to bear the costs.

Lecourt Monaco Kutscher

Donner Mertens de Wilmars Sørensen O'Keeffe