C-197/80

LUDWIGSHAFENER WALZMÜHLE v COUNCIL AND COMMISSION

In Joined Cases 197 t o 200, 243, 245 and 2 4 7 / 8 0 ,

LUDWIGSHAFENER WALZMÜHLE ERLING K G , having its registered office at Bremen a n d operating a durum wheat mill at Ludwigshafen am Rhein (Case 197/80),

PARK-MÜHLEN G M B H , having its registered office at M a n n h e i m , where it operates a durum wheat mill (Case 198/80),

M Ü H L E RÜNINGEN A G , having its registered office at Riiningen- Braunschweig, where it operates a durum wheat mill (Case 199/80),

PFÄLZISCHE MÜHLENWERKE G M B H , having its registered office at M a n n h e i m , where it operates a durum wheat mill (Case 2 0 0 / 8 0 ) ,

ÉTABLISSEMENTS JOSEPH SOUBRY SA having its registered office at Roeselare, where it operates a durum wheat mill, and

N.V. BLOEMMOLENS A N T . COPPENS, having its registered office at T u r n h o u t , where it operates a durum wheat mill,

both represented by A. F. de Savornin Lohman, of the Brussels Bar, with an address for service in Luxembourg at the Chambers of Lambert H . D u p o n g , 14a Rue des Bains,

interveners,

JUDGMENT OF 17. 12. 1981 — JOINED CASES 197 TO 200, 243, 245 AND 247/80

V

all three represented by Lise Funck-Brentano, of the Paris Bar, with an address for service in Luxembourg at the Chambers of Joseph Hansen and Marlyse Neuen-Kauffmann, 21, Rue Philippe II, interveners,

APPLICATIONS seeking damages pursuant to the second paragraph of Article 215 of the EEC Treaty,

LUDWIGSHAFENER WALZMÜHLE v COUNCIL AND COMMISSION

T H E COURT (Second Chamber) composed of: O. Due, President of Chamber, P. Pescatore and F. Grévisse, Judges, Advocate General: P. VerLoren van Themaat Registrar: H. A. Rühl, Principal Administrator gives the following

JUDGMENT

Facts and Issues

JUDGMENT OF 17. 12. 1981 — JOINED CASES 197 TO 200, 243, 245 AND 247/80

— a reference price for common wheat for common wheat of bread-making of bread-making quality, quality, on the one hand, and

LUDWIGSHAFENER WALZMÜHLE v COUNCIL AND COMMISSION

monthly increases phased over all or part prices, but that it was advisable to ensure of the marketing year in order to take that that ratio was respected so far as into account, inter alia, warehouse possible in the Community because of charges and interest for the storage of the interchangeability of those two cereals in the Community and also the products. It was stated in Regulation No need for a flow of stocks consonant with 1143/76 that in view of the rise in the needs of the market (Article 6 as Community production of durum wheat amended). it was no longer justified to grant uniform aid to all producers but, with a view to encouraging an increase in Article 10 (as amended) of the regulation productivity and an improvement of the provides that aid is to be granted for the quality of that product, it was appro- production of durum wheat in the priate to maintain aid for its benefit; that Community. aid could be confined to certain regions and to durum wheat having certain qualitative and technical characteristics The amount of such aid is to be fixed making it suitable for the manufacture of per hectare of land sown and harvested pasta products. and is to be equal throughout the marketing year. However, the aid may be differentiated according to the region of production and confined to certain The single intervention prices, the production regions; it is to be granted reference price for common wheat of only for durum wheat having specified bread-making quality and the target qualitative and technical characteristics. prices were fixed by the Council for the 1978/79 marketing year by Regulation No 1255/78 of 12 June 1978 (Official The possibility of granting aid for Journal 1978, L 156, p. 2), and for the Community production of durum wheat 1979/80 marketing year by Regulation was justified, in Regulation No 2727/75, No 1548/79 of 24 July 1979 (Official by the conclusion that it might prove Journal, L 188, p. 2). impossible to give producers of durum wheat sufficient guarantees by fixing a price which takes into account the ratio In particular those prices were fixed for existing normally on the world market common wheat and durum wheat as between durum and common wheat follows:

Marketing year 1979/80 (in ECU per tonne)

Common wheat Durum wheat

Single intervention price 149.17 249.12

Reference price, minimum bread-making quality 168.06 —

Target price 201.42 277-37

The threshold prices for cereals and for Regulation (EEC) No 1594/79 of 26 certain classes of flour, groats and meal July 1979 (Official Journal 1979, L 189, were fixed for the 1978/79 marketing p. 44). year by Commission Regulation (EEC) No 1408/78 of 26 June 1978 (Official In particular the threshold prices were Journal 1978, L 170, p. 28) and for the fixed at the following rates for common 1979/80 marketing year by Commission wheat and durum wheat:

II — W r i t t e n p r o c e d u r e joined cases in support of the submissions of the applicants. The applicant companies, on 7 October The written procedure followed its 1980 (Cases 197/80, 198/80, 199/80 and normal course. 200/80), on 30 October 1980 (Case 243/80), on 5 November 1980 (Case On hearing the report of the Judge- 245/80) and on 6 November 1980 (Case Rapporteur and the views of the 247/80), brought actions for damages, Advocate General, the Court decided to pursuant to Article 178 and the second open the oral procedure without any paragraph of Article 215 of the EEC preparatory inquiry. Treaty, against the EEC, represented by the Council and the Commission. However, it invited the parties to reply in writing, before commencement of the By order of 3 December 1980, the Court oral procedure, to a number of decided to join the seven cases questions; the applicants, the Council mentioned above for the purposes of the and the Commission responded to that procedure and judgment. invitation within the prescribed periods. By orders of 21 January 1981, 4 By order of 1 July 1981, the Court, February 1981, 18 February 1981 and 11 pursuant to Article 95 (1) and (2) of the March 1981 the Court, having heard the Rules of Procedure, decided to assign views of the Advocate General, decided, the joined cases to the Second Chamber. pursuant to Article 37 of the Statute of the Court of Justice of the EEC and to Article 93 of the Rules of Procedure, to allow the Comité Français de la III — C o n c l u s i o n s of the p a r t i e s Semoulerie Industrielle, the Government of the Italian Republic, the Syndicat des The applicants claim that the Court Industriels Fabricants de Pâtes Alimen- should: taires de France and the Association Générale des Producteurs de Blé et — Order the Community to pay them Autres Céréales to intervene in all the by way of damages DM 1 786 047.50 joined cases, in support of the sub- (Case 197/80), DM 1 087 692.80 missions of the defendants. (Case 198/80), DM 910 850.73 (Case 199/80), DM 1 020 524.00 (Case By order of 8 April 1971, the Court, 200/80), DM 2 204 106.30 (Case having heard the views of the Advocate 243/80), DM 260 172.78 (Case General, decided to allow Établisse- 245/80) and DM 967 750.00 (Case ments Joseph Soubry S.A. and N.V. 247/80), Bloemmolens Ant. Coppens to intervene in Case 247/80, in support of the together with interest in all cases at submissions of the applicant. the rate of 6% from the date of judgment; By a further order of 8 April 1981, the Court, having heard the views of the — Order the Community to pay the Advocate General, rejected an appli- costs in all the cases. cation from Gewerkschaft Nahrungs- Genuß-Gaststätten (Union of General, The Council claims that the Court Fine Food, and Catering Establish- should declare the applications to be ments), affiliated to the Deutscher inadmissible, or alternatively declare Gewerkschaftsbund (the German Trades them to be unfounded, and in any event Union Congress) to intervene in all the order the parties to pay the costs.

The intervening parties, with the (b) The Court has held, in particular in exception of the Government of the its judgments of 5 December 1979 Italian Republic, do not submit any (Joined Cases 116 and 124/77, Amylum. formal conclusions. [1979] ECR 3497; Case 143/77, Scholten-Honig [1979] ECR 3583) that, The Government of the Italian Republic if an individual takes the view that he is claims, in support of the conclusions injured by a Community legislative submitted by the Commission and the measure which he regards as illegal, he Council, that the Court should : has the opportunity, when implemen- tation of the measure is entrusted to — Declare the applications to be national authorities, to contest the inadmissible; validity of the measure at the time of its implementation, before a national court — In the alternative, dismiss the in an action against the national applications as unfounded; authority; that court may, or even must, in pursuance of Article 177 of the — Order the applicants to pay the costs. Treaty, refer to the Court of Justice a question on the validity of the Community measure concerned. The IV — S u b m i s s i o n s and a r g u m e n t s procedure under Article 177 constitutes of the p a r t i e s in the c o u r s e an effective means of protection for the of the w r i t t e n p r o c e d u r e individual; recourse to Article 215 is therefore not necessarily appropriate, or even available. A — Admissibility In this case, recourse to Article 177 is all The Council considers that all the the more appropriate, even for the applications are inadmissible on several applicants, since review by the Court of grounds. Justice is, according to its own case-law, subject to more severe constraints in proceedings pursuant to Article 215 than (a) The applicants have clearly in those pursuant to Article 177; thus, an regarded the Community threshold price action based on Article 215 presupposes system for durum wheat as illegal since a serious breach of a superior rule of law the 1974/75 marketing year, their for the protection of the individual. reasoning in respect of the 1979/80 marketing year being applicable to the prices for every year since 1973. In this case, Article 177 is the proper According to the case-law of the Court, means of legal protection. an action for damages which are fore- seeable but not yet quantifiable is admissible as being a way "to prevent (c) The actions are artificial in even greater damage". The conduct of character — the applicants have put the applicants is in outright conflict with together claims for damages for the

purposes of these proceedings whereas in wheat, which is regarded as incorrect. reality they do not seek compensation The applicants do not seriously seek to but a total change in the price policy for obtain from the Community compen- the durum wheat sector. They intend sation for any damage; in reality they securing cancellation of certain prices seek only to bring pressure to bear on fixed by regulation and even the fixing the Community to induce it to change of new prices; they call in question the the existing provisions.

directly. By availing themselves of the of agricultural policy. procedure under Article 177 of the EEC Treaty, they could have brought about a (d) The regulations mainly objected to review of the compatibility of the by the applicants are those by which the threshold price for durum wheat with the Commission fixed the threshold prices superior rules of Community law; they for common wheat and durum wheat. could even, had their argument been Logically therefore the action for upheld, have prevented the occurrence of damages should have been brought only the damage which they claim to have against the Commission; at the very suffered. least, the applicants should have stated the reasons for which their actions are Since the periods for appeals prescribed brought also against the Council. by German legislation on administrative The threshold prices fixed by the procedure, with regard to this matter, Commission are in fact derived prices, are very short, the decisions on the levies ascertained on the basis of those fixed by have become definitive.

as rapidly as possible and without going In the Commission's view, the actions are through the national courts, a judgment inadmissible because they do not fulfil on the legality of the fixing of threshold the formal requirements applicable to prices for durum wheat; they have actions for damages. therefore deliberately waived the rem- edies available to them through the (a) The true object of the actions is to national courts which might have change the ratio between the threshold enabled them to avoid the occurrence of prices of common wheat and durum any damage.

In its judgment of 12 December 1979 The applicants consider that the (Case 12/79, Wagner [1979] ECR 3657), objections of inadmissibility raised by the the Court dismissed as inadmissible an defendants and the Italian Government action for damages against the cannot be upheld. Commission on the grounds that a national measure adopted to implement provisions of Community law had not been contested by the applicant. The (a) The applications are genuinely same reasoning should apply in this case. intended to secure rectification of an incorrect ratio between the threshold price of common wheat and that of durum wheat in the Community; the applicants are not however to be re- (c) According to the case-law of the proached for hoping that, in addition to Court, it is not possible to claim directly compensation, by the award of damages, from the Community reimbursement of for loss suffered in the past, the loss charges which have been collected by should not be repeated in the future. national authorities on the basis of Future rectification of the incorrect price Community regulations whose applica- ratio is a logical consequence of a bility is contested. That, however, is the judgment ordering the Community to aim of these actions, since the applicants pay damages. have submitted their claims merely in the guise of an action for compensation whereas in fact, albeit indirectly, they are In that sense, any action for damages prosecuting an action for reimbursement. which is successful constitutes a "means of exerting pressure" on the Community institutions; however, such means of exerting pressuring is legitimate. By The Government of the Italian Republic means of the legal protection provided also takes the view that the applicants' by the Court, that pressure should actions are appropriate only in form to persuade the Community institutions to Article 215 of the EEC; in substance adopt a lawful attitude. they are seeking to secure from Community institutions a reduction in the threshold price for durum wheat. The actions do not involve any "abuse of That fact alone renders the actions legal process", particularly since the inadmissible. applicants' claims are unequivocally intended to seek payment of damages of a specified amount, so as to compensate them for the loss suffered during a specific period in the past. Moreover, the applicants, to avoid coming into conflict with the judgments delivered by the Court in a similar matter on 13 November 1973 (Joined Cases 63 (b) The loss for which the applicants to 69/71, Werhahn Hansamühle and seek compensation was not incurred by Others [1973] ECR 1229) and on 2 June reason of a decision of national auth- 1976 (Joined Cases 56 to 60/74, Kamp- orities but exclusively by measures ffmeyer Mühlenvereinigung and Others adopted by Community institutions, [1976] ECR 711) are endeavouring, in namely the incorrect fixing by the appearance only and not in substance, to Council of the target price for durum place the same question in a new wheat and the threshold price which the perspective. Commission based on it. When fixing the

The durum wheat imported from non- The German durum wheat mills have member States was delivered to the been obliged to cause the price of durum applicants' mills by several importers. wheat meal to reflect, at least in part, the The orders to pay the levy were excessive threshold price of durum addressed only to them; only they were wheat. In consequence, the German in a position to contest those measures pasta-products industry has been obliged before the national courts. to react by substituting common wheat for durum wheat; the percentage of common wheat in the wheat component B — Substance of pasta produced in Germany has risen from between 8 and 10% at the end of Certain matters of fact the sixties to 43.2% in 1978/79.

The applicants point out that, in view of The applicant in Case 247/80 lays the proceedings leading to the emphasis on the fact that the German judgements of 13 November 1973 and pasta-products industry is suffering, by 2 June 1976, the Court is familiar with reason of determination of the threshold the problems of the Community market price for durum wheat at an excessive

JUDGMENT OF 17. 12. 1981 — JOINED CASES 197 TO 200, 243, 245 AND 247/80

The partial substitution of common The Council considers that its action falls wheat for durum wheat is due only in within the scope of the responsibilities part to changes in the price of durum vested in it by the Treaty and of its wide wheat; increasing improvements in the powers of discretion which have been cultivation of certain varieties of consistently recognized, with regard to common wheat have enabled it to be its decisions on economic policy, by the used more extensively in the manufacture case-law of the Court. There are no of pasta products. grounds for alleging that it has acted arbitrarily or committed any wrongful The Syndicat des Industriels Fabricants act. Moreover, there is no direct causal de Pâtes Alimentaires de France, an link between the damage alleged by the intervener in these proceedings, denies applicants and the provisions contested that there is a clear world-wide variance by them. between the prices of durum wheat and common wheat; on the world market The Commission takes the view that the prices are free and fluctuate very Community institutions have not acted

LUDWIGSHAFENER WALZMÜHLE v COUNCIL AND COMMISSION

JUDGMENT OF 17. 12. 1981 — JOINED CASES 197 TO 200, 243, 245 AND 247/80

additional means of action provided for that of common wheat affects producers, by Community provisions, that is to say millers of durum wheat, manufacturers aid, would be much more appropriate of pasta products and consumers in the than the fixing of prices at a high level. Member States to different degrees.

LUDWIGSHAFENER WALZMÜHLE v COUNCIL AND COMMISSION

Prices should also have a market In order to realize the objective of function too; the price system should ensuring a fair standard of living for also enable the flow of products to be the producers of durum wheat, the controlled. Community has at its disposal an instrument more appropriate than an excessive threshold price, namely the aid The aim of stabilizing markets and the provided for by Article 10 of Regulation market function of prices were not No 2727/75. An increase in threshold respected when the excessive threshold prices and in intervention prices favours

JUDGMENT OF 17. 12. 1981 — JOINED CASES 197 TO 200, 243, 245 AND 247/80

costly by the Commission. The effect of excessive threshold prices of durum the refusal to increase aid — an increase wheat, which is neither designed for nor which is intrinsically necessary — and of appropriate to that end. the maintenance of excessive prices fixed by regulation for durum wheat is that the burden, which in fact is the concern of all citizens of the Community, must be With regard to the ratio between the borne exclusively by the consumers of prices for durum wheat and common products based on durum wheat, namely wheat as reflected in particular by the the manufacturers of pasta products and world prices, it should be noted that, in the millers of durum wheat. Budgetary the longer term, the ratio to which the considerations do not justify the failure applicants refer recurs periodically and to use the most appropriate means, regard should be had to the established namely aid, or the imposition of a fact, based on experience, that durum burden on a small group of Community wheat is supplanted by common wheat citizens, within which the applicants are on the Community market when that included. price ratio is departed from otherwise than on an exceptional and temporary

The first regulations on the common organization of the market in cereals accepted that ratio, which was The Commission itself has admitted that moreover strictly applied from 1967/68 the new ratio between the prices fixed by until 1973/74 inclusive. The Council and regulation for durum wheat and the Commission then decided to take common wheat has, by reason of the advantage of the unique and temporary excessive variance, led, in the non- situation created by the profound producing Member States without a Law disturbance of price ratios on the world on purity requirements, to an increasing food market so that they could realize substitution of common wheat for durum more rapidly, to the detriment of the wheat and has affected the wheat durum wheat processing industry and processing industry, in particular in the

The production level of the two varieties of wheat is very different; a surplus of The Council is of the opinion that none common wheat is produced and there is of the applicants' complaints has any a shortfall of durum wheat. It is foundation. therefore inappropriate, or even imposs- ible, and in any event very burdensome for the Community strictly to respect the price ratio ascertained on the world (a) The applicants' decision to attack market. That alignment, in the existing the threshold prices for durum wheat situation, would in no way guarantee and common wheat on the basis of the that the same price ratio would be price levels for the 1978/79 and 1979/80 reflected in the sale prices, which are marketing years is totally arbitrary; the decisive factors as far as the substitution variance to which the applicants object of common wheat for durum wheat is was much greater during the 1974/75 concerned. marketing year and the difference between the two prices has gradually diminished. Application of the ratio advocated by the applicants would lead to indefensible results and would totally upset the policy The ratio to which the applicants refer, followed by the competent institutions 100 : 110, is not laid down by any article with regard to the Common Agricultural in the basic Regulation No 2727/75. It is Policy; an alignment upwards of prices merely stated in the recitals in the would totally destroy the system of preamble thereto that it is appropriate to "fluidity" for common wheat and would respect the ratio existing normally on the considerably increase the guarantees world market between durum wheat and given to producers for production which common wheat prices; moreover, that is already in surplus; an alignment statement is subject to a very clear reser- downwards would destroy the protection vation ("so far as possible"). It is a vis-à-vis non-member countries with question of ensuring that respect for that regard to durum wheat and would ratio is not rendered impossible by the unjustifiably diminish the minimum economic context in which it is intended guarantees given to producers. to operate; the regulation does not therefore restrict the considerable discret- ionary power vested in the Council with regard to the Common Agricultural The applicants also fail to mention the Policy. substantial change made to the system by Regulation No 1143/76, the object of which was precisely to remedy certain distortions. In order to improve fluidity It would be inappropriate, even of the cereals market, the Council impossible, to adhere closely to the price increased the difference between the

target price, on the basis of which the constitutes infringement of the rules of level of protection is determined, and the the Treaty on competition. intervention price; the reason for that increase was essentially to enhance protection of the Common Market and not to reduce considerably guarantees The assumption made by the applicants given to producers. that Italian and French millers are able to obtain supplies of durum wheat produced in their own countries and, to a large extent, at the intervention price, The 100 : 120 ratio, derived from a which is considerably lower than the comparison of the costs prices, is no threshold price at which the German more convincing; it depends in particular millers are obliged to purchase all on the varieties of wheat used, the yield their durum wheat from non-member obtained, the level of wage costs and countries, is incorrect in several respects. other factors. In any case, the higher cost There is also a shortfall in the prices for the production of durum production of durum wheat in Italy and wheat constitute only one of the many France and imports into those countries factors which the Council must take into are also made at the threshold prices. consideration pursuant to Article 39 (1) Durum wheat produced in a Member of the Treaty. State does not always remain in the producing country; Italian purchase prices were in fact, during the four marketing years from 1973/74 to (b) Any discrimination against the 1977/78, distinctly higher than the applicants in relation to the French or intervention prices and were at target- Italian durum wheat processing industry price level. is not in any case attributable to the common organization of the market in the cereals sector, at least since the sub- Such economic advantage as may accrue stantial change made to that organiz- to the millers in the south of the ation in 1976, or to the rules relating to Community as a result of the difference prices or aid for durum wheat for between the threshold price and the implementation thereof. The common intervention price is reduced to nothing organization of the market in cereals is or even outweighed by the transport based on two essential factors: the free costs. movement of cereals and Community preference. The simultaneous application of those two principles must guarantee free access to all Community traders, on the same terms, both to durum wheat (c) The Council's refusal to increase produced in the Community and to aid for durum wheat is justified by the durum wheat imported from non- case-law of the Court, according to member countries. If the millers in the which the use of Community aids is north of the Community did not in fact unlawful when it is not necessary for the have access to the cereals market of the attainment of the objectives laid down in south, that situation could only have Article 39 of the Treaty; this applies in arisen in consequence of the conduct of the case of aid granted to all producers the producers of durum wheat, and not and for all qualities and quantities of as a result of the common organization products. The applicants do not of the market; such conduct is contrary demonstrate the economic justification to the Community system and moreover for a reduction in the level of protection,

entailing increased competition from In any case, Regulation No 2727/75 durum wheat from non-member does not contain superior rules of law countries, for the introduction of for protection of the applicants; the generalized aid or for a substantial fixing of specific threshold prices is reduction of the intervention price. intended to afford protection to Community producers of durum wheat, Substitution of common wheat for not to protect undertakings engaged in durum wheat to a certain extent does not processing at later stages. appear detrimental to the proper functioning of the common market in Furthermore, the threshold prices fixed cereals, since a surplus of common wheat for wheat are constantly maintained is produced in the Community and subs- within what appear to be reasonable and tantial quantities of durum wheat require appropriate limits in relation to the to be imported. reasons on which Regulation No 2727/75 is based. Regionalization of the threshold prices is contrary to the concept of unity of the market and adversely affects the free It may be seen from the wording thereof movement of cereals. that the Council did not intend to confine itself to reflecting directly the relationship existing between the prices The Commission denies that in this case on the world market in the ratio between there has been any breach of a superior the threshold prices for the two products. rule of law for the protection of the The effect of such a practice would have applicants. been to reduce excessively the discret- ionary power vested in the legislature for the adoption of economic policy (a) Regulation No 2727/75 does not decisions regarding the fixing of the impose upon the Community institutions threshold price and would have specific substantive criteria on the basis prevented it from taking into account the of which the various regulated prices fact that the cost of durum wheat must be fixed; in particular, it does not production is, within the Community, lay down any rule limiting the discretion considerably greater than that of of the legislature, by virtue of which the common wheat. In its judgment of 13 ratio between the threshold price of November 1973, the Court approved a durum wheat and that of common wheat difference of 20 % between the cost must correspond to the ratio between prices of durum wheat and common those two varieties of wheat on the wheat; the Council had to take that ratio world market. into account when fixing the threshold prices for durum wheat and common wheat, as well as the fact that the From the purely formal point of view, a threshold price for durum wheat must, in recital in the preamble to a regulation relation to the world price, reflect a pref- cannot constitute a superior rule of law; erence for the benefit of Community in view of the nature of the decisions production. regarding prices, which are intended to attain objectives of economic policy which are likely to change, the Council In general, the only valid ratio between and the Commission are precluded, on the threshold prices of durum wheat and substantive grounds, from committing common wheat is one which reflects to themselves in the long term by virtue of an appropriate extent considerable any particular regulation. variances, exceeding 20 %, between the

cost prices of durum wheat produced in common wheat are not fundamentally the Community and those of common different from those found in the other wheat, differences of quality, which are Member States. often considerable, between durum wheat originating in a non-member country and durum wheat produced in The German manufacturers of durum the Community, and the principle of wheat meal can also obtain supplies of Community preference. The ratio durum wheat in France and Italy. The between the threshold prices of fact that German imports of durum 100 : 138.8 for 1979 takes those factors wheat meal coming from other Com- sufficiently into account whereas the munity countries, particularly France, ratio regarded as correct by the have undergone a considerable reduction applicants certainly does not. since 1975 reflects an improvement in the competitive position of German manu- facturers of durum wheat meal. Where measures to regulate the market must be taken, fiscal requirements deserve the same attention as the other The transparency of national markets objectives of economic policy laid down has, in general, become greater in recent in the Treaty. The Council and the years. Thus, a not insignificant part of Commission are rightly requested to German production of durum wheat exercise care in the allocation of the meal has not been used by the national limited financial resources of the pasta-products industry but has been Community, in particular in the payment exported. of direct aid to certain categories of undertakings. The growth in German imports of Italian Substitution of common wheat for pasta-products is essentially the result of durum wheat on a small scale is not Italian immigration into that country. necessarily detrimental to the interests of There is no support for the applicants' the Community; it provides an extra affirmation that the durum wheat millers outlet for the surplus production of in the producing countries have the common wheat. opportunity to purchase the bulk of their raw material at the intervention price, which is significantly lower; on the The substitution of common wheat for contrary, the amended system has made durum wheat carried out by German producers in the countries where durum manufacturers of pasta products is not wheat is grown more aware of their sales motivated only by price considerations; it opportunities, having regard to the fact is to a considerable extent the result of that there is a shortage of supply in consumer habits and specific attitudes of France and Italy as well. German consumers.

(d) The principle of proportionality, as The principle whereby the common price a criterion for assessing legislative policy must be based on uniform measures, does not preclude a power of methods and adopt common principles discretion on the part of the legislature does not mean that, within the regarding the evaluation of objectives framework of their price policy, the and the choice of means and procedures. Community institutions have no power In this case, the course of action to establish and to change, according to followed by the Community institutions the prevalence of one or other of the in fixing threshold prices for durum objectives laid down in Article 39 of the wheat, combined with a revised aid Treaty, price ratios between the various system, has been correct. Regionalization products which fall within the com- of the threshold price would have mon organization. Rather than mere compromised the achievement of a single implementation of laws, the policy market, called in question the principle provides for the development of ideas of free movement and involve a degree and changes in the decision-making of partitioning of the national wheat process on the part of those who shape markets. An increase in direct aid to the policy; in the case of price formation producers would have involved an extra in the cereals sector, whenever the and disturbing burden upon the objectives of the economic policy are Community budget and have endangered changed, the criteria for fixing the prices the stability of the Community market in of the various varieties of cereals in durum wheat; aids cannot, or can only relation to each other are also subject to with great difficulty, compensate for the change. disappearance or reduction of the protective function of the threshold price for durum wheat. The unfavourable effects of the aid system on the flexibility of the market have been known to the In any event, neither the criteria laid Court since the earlier cases brought down in the third subparagraph of before it. Article 40 (3) of the Treaty nor the criteria for price formation in the cereals sector imply specific legal protection for certain specific undertakings. The Government of the Italian Republic, an intervener in these proceedings, does not regard the applicants' arguments as Any distortions of competition and the relevant, either in fact or in law. substitution of common wheat for durum wheat in Germany are essentially attri- butable not to the fixing of prices but to the disparity between national laws; in (a) The production costs of durum certain countries the substitution would wheat are undeniably 20 % higher than to a considerable extent be prevented by those of common wheat; on that basis the "purity requirement" (the require- alone, the determination of the world- ment to use exclusively durum wheat), market ratio as 110 : 100 is without any whereas in Germany the only limits on foundation.

That ratio was moreover calculated arbi- products on the world market or, alter- trarily by the applicants; it was natively, to ensure that Community determined by reference to a temporary durum wheat production is maintained situation lacking in significance by means of the grant of aids to (confined to the year 1979) and to data producers. On the contrary, the in respect of non-comparable items Community legislature is invested with (varieties of common wheats which are discretionary powers for the fixing of very close, as regards quality and price, threshold and intervention prices. to durum wheat and which are not extensively represented on the Community market; failure to apply corrective factors to account for quality). In fact the logical function of the recital in the preamble to Regulation No 2727/75 relied upon by the applicants is to furnish justification for the creation of the aid mechanism for In fact, during the 1975/76 to 1979/80 durum wheat production and not to marketing years the world price of impose a specific price ratio between durum wheat imported into the common wheat and durum wheat in the Community varied, in relation to Community. common wheat, between a minimum ratio of 123.74 : 100 and a maximum ratio of 141.17 : 100; the c.i.f. average for the five years is 134.10. That ratio is very close to the ratio of 138 : 100 which (c) The aim of increasing Community is contested by the applicants, but far production of durum wheat having been removed from the ratio of 110 : 100 achieved, the Commission considered advocated by them. that it was appropriate to amend its policy by changing from generalized production aid for all Community growers to specialized aid for specified areas, within the framework of a true (b) The very wording of the preamble regional policy, and therefore to to Regulation No 2727/75 clearly shows introduce territorially limited and that respect for the ratio between the selected aids constituting productivity prices of durum wheat and common aids. The considerable variance in the wheat on the world market is only a Community ratio between the prices of desirable condition and not an obligation durum wheat and common wheat and on the competent Community insti- that ratio on the world market is a tutions. Regulation No 2727/75 does not consequence of the acute drop in prices impose upon the Community legislature recorded on the world market during the any rigid criteria or, still less, absolute years 1973/74. Considerations of a rules of superior law, which must be financial nature precluded a reduction of respected when the various cereals prices the ratio of prices between common are fixed; the Council is certainly under wheat and durum wheat achieved by no obligation to bring the ratio between reducing the price of durum wheat and the Community threshold prices for still less one achieved by increasing durum wheat and common wheat, fixed production aid. by various supplementary Community regulations for each marketing year, totally into line with the fluctuating ratio, which is susceptible of manipu- The applicants' argument regarding the lation, between the prices of those substitution of common wheat for durum

wheat and the difficulty of competing (a) The applicants' arguments are, in felt by certain concerns in countries not their entirety, based on a false premise: producing durum wheat seeks to the ratio between the prices of durum override the rule of Community pref- wheat and common wheat on the world erence; the Community institutions may market is not 110 : 100. not be compelled to adopt a policy which would eliminate the natural geographical advantages of the French millers or of There is certainly no single normal ratio the Italian pasta-products industry. between a single price for durum wheat and a single price for common wheat on the world market, but rather a very large number of price ratios, according to the The action taken by the Community types of wheat, and the places and times institutions is in no way discriminatory; of reference; moreover, external short- differences of treatment based on term economic factors, such as inter- objective criteria, such as those deriving national tension and developments in the from regional specialization, are lawful. money markets, exercise a considerable influence on the prices of most varieties of wheat. Regionalization of import threshold prices would jeopardize the unity of the In particular, the applicants disregard the market; a multiplicity of threshold prices matter of quality and overlook a would compromise the freedom of trade fundamental factor, namely differences between Member States. of price determined by the quality of the wheat; they calculate the variance between the prices of durum wheat and common wheat on the world market on (d) In any event, it should be noted the basis of a variety of common wheat that Regulation No 2727/75 is of exceptional quality, which is accord- ingly particularly expensive, on the one manifestly devoid of any rules, and a hand, and of a durum wheat close to fortiori of any superior rules of law, standard quality, without application of which protect durum wheat millers and the coefficient of equivalence, on the manufacturers of pasta products as such; other hand. the fixing of threshold prices for durum wheat is designed, in the interests of the Common Market, to afford a minimum There is no "world variance", but as level of protection for producers. many variances as there are varieties. It is not acceptable to compare the ratio of 100 : 138 between the threshold prices of The Comité Français de la Semoulerie wheats of European quality with the Industrielle, the Syndicat des Industriels ratio of 100:110 which existed at a Fabricants de Pâtes Alimentaires de France particular time on the world market, and the Association Générale des between durum wheat and common Producteurs de Blé et Autres Céréales, wheat of qualities differing considerably intervening parties, take the view that the from the European qualities. applicants have not demonstrated either the unlawful character of the measure Moreover, the applicants made their allegedly causing them damage or, still calculation on the basis of the world less, a sufficiently serious breach of a prices for products delivered in Europe, superior rule of law for the protection of incorporating transport costs from the their interests. United States of America, which further

reduces the relative difference between That difference moreover does not in the prices; as regards the period used as any way discriminate against the a reference by the applicants, there was applicants. during that chosen a very small variance between the prices of durum wheat and Not all the durum wheat grown in the common wheat, whereas at other times producing countries is used by the the situation was totally different. national industries in those countries; more than 50% of the durum wheat used by the French milling industry is In 1979, the reference year in these imported; imports of French durum cases, the ratio between the world prices wheat into the Federal Republic of of durum wheat and common wheat, far Germany are not insignificant and were from being 110:100, was at a level indeed very large, for qualitative reasons, between 126 : 100 and 133 : 100 for in 1976 and 1977 (almost 45% of total products in respect of which the quality imports); German millers are able to and other factors were comparable. Over secure access to the French market on a long period, that ratio is extremely the same terms as their French variable; it may fall to a very low level competitors; the costs of transporting but may also exceed 140 : 100. imported durum wheat from non- member countries to the mills is lower in Germany than in France. (b) The disputed provisions concerning the price of wheat do not infringe Article (d) Differential threshold prices detract 40 of the Treaty; in particular they do from the principle of free movement of not disregard the objective of stabilizing products within the Community and the markets. Such stabilization is insepar- from the principle of Community pref- able from orientation of production. In erence. that respect, it should be noted that Community policy with regard to durum wheat is intended to ensure the To reduce the variance between the Community's self-sufficiency, that the prices of durum wheat and common production costs for durum wheat are wheat would encroach upon the considerably higher than those for Community guarantee of fair prices for common wheat and that it is therefore producers and lead to an abandonment necessary to set a higher price for durum of durum-wheat growing in a large wheat in order to expand and maintain number of regions of the Community, its production and that the prices on the giving rise to an increase in the volume world market fluctuate to a very great of imports; moreover, that course of degree. The aim of the Common Agri- action would place an excessive burden cultural Policy is to protect the on the Community budget. Community market from such fluc- tuations; agricultural prices should not therefore reflect them. 2. Liability of the Community

consequences of their price policy necessary, having regard to the case-law regarding durum wheat. It is a question of the Court, to establish any obligation in the present case therefore of a on the part of the Community to pay conscious breach of superior rules of compensation. law. The trade associations which have Furthermore, the Council and the intervened in support of the submissions Commission have, in this case, manifestly of the defendants point out that if it and seriously exceeded the limits to were assumed, by way of hypothesis, which the exercise of their discretionary that the damage claimed by the powers is subject. applicants was a result of the regulation of durum wheat prices, the provisions The degree of discretion vested in them involved would be measures of economic does not extend to the actual determi- policy, adopted in an area in which the nation of economic data, in particular Community institutions enjoy discret- the price ratio on the world market ionary powers in the exercise of their between common wheat and durum legislative activity. The applicants have wheat, the ratio between the cost prices not however, in that regard, established of those two varieties of wheat and the either a manifest error or any misuse of substitution of common wheat for durum power, which are the only grounds on wheat in the production of pasta which the Community's liability can be products; for the most part, those data incurred. are not contested. As it is a question of the nature and the scope of the provisions to be adopted on the basis of 3. Damage such data, the limits of the discretionary powers have been exceeded in this case. No legally defensible consideration can The applicants seek compensation, justify the Council's refusal, since the together with interest, for the damage price rise which took place in 1974/75 caused them by the fixing of the no longer applies, to re-establish the threshold price for durum wheat at an price ratio between common wheat and excessive level. durum wheat which had existed for a long time; by allowing a considerable and disproportionate variance to develop (a) The applicants in Cases 197, 198, between the price of common wheat, 199, 200, 243 and 245/80 consider that which should be the reference price, and the damage they suffered in 1979 is a the price of durum wheat, the Council result of the difference between the has contravened the essential principle of correct threshold price and the equality. excessively high threshold price fixed by the Community institutions; from that difference should be deducted the sums The Community's liability has therefore which the applicants were able to pass on been incurred. to their purchasers by increasing the price of durum wheat meal produced by The Council considers that the them. Community's liability has not been incurred in this case, in the absence of The average monthly threshold price any breach of a superior rule of law. for common wheat was, in 1979, DM 572.29; the correct ratio being The Commission is of the opinion that 100 : 110, the correct threshold price for the actions do not meet the requirements durum wheat should therefore have

amounted in 1979 to DM 629.52 per the applicants should have been able to tonne. The actual threshold price for obtain per tonne of durum wheat meal, durum wheat amounted on average in account being taken of the actual cost 1979 to DM 785.07 per tonne; the price to be paid for the durum wheat by difference is therefore DM 155.55. That reason of the excessive threshold price difference between the correct threshold and levy, less the average actual proceeds price and the threshold price actually- from the sale of one tonne of durum paid in 1979 for durum wheat was wheat meal. reflected in the levy paid by the importers and in turn in the price of the On the basis of the quantities supplied by raw materials; it represents the notional the applicants to the German pasta- damage which the applicants have products industry for the year 1979, the suffered, as millers of durum wheat, for losses suffered by the applicants during each tonne of durum wheat processed. 1979, for which they should be able No account is taken, in this respect, of to obtain compensation, are respectively the loss caused to the applicants by the DM 1 786 047.50 (Case 197/80), drop in the volume of durum wheat DM 1 087 692.80 (Case 198/80), milled by them and in their sales of DM 910 850.73 (Case 199/80), durum wheat meal.

Because of the conditions of of the processing costs, and, on the other competition, the applicants were unable hand, the actual prices of durum wheat to pass on the full amount of the meal which the applicant had to pay to excessive increase in the threshold prices the German durum wheat mills. to their purchasers, the manufacturers of pasta products. If account is taken of the average yield of durum wheat meal from a specific unit The actual loss suffered by the applicants quantity of durum wheat, the generally may be determined by means of a calcu- accepted figure being 63.29%, and if this

LUDWIGSHAFENER WALZMÜHLE v COUNCIL AND COMMISSION

JUDGMENT OF 17. 12. 1981 — JOINED CASES 197 TO 200, 243, 245 AND 247/80

LUDWIGSHAFENER WALZMÜHLE v COUNCIL AND COMMISSION

increases applied by the German durum one hand to the absence of any 'Law on wheat millers, the applicants in the other purity requirements', which has induced cases, there is only one alternative — the German manufacturers to manu- either it should have (and could have) facture products at increasingly lower turned to other sources of supply prices, at the expense of quality, offering better financial terms or else involving a downgrading of the product such possibilities did not exist, in which in the eyes of the consumers, and on the case it is impossible to see how the other hand to the fact that the German measures adopted by the Community industry has not carried out the could have caused it any loss. necessary restructuring operations in a very competitive market.

The Advocate General delivered his As regards the position of the German opinion at the sitting on 19 November pasta-products industry, it is due on the 1981.

JUDGMENT OF 17. 12. 1981 — JOINED CASES 197 TO 200, 243, 245 AND 247/80

Decision

1 By applications received at the Court Registry on 7 October 1980, 30 October 1980, 5 November 1980 and 6 November 1980 respectively, the companies Ludwigshafener Walzmühle Erling KG, Park-Mühlen GmbH, Mühle Rüningen AG, Pfälzische Mühlenwerke GmbH, Kurt Kampffmeyer Mühlenvereinigung KG and Wilhelm Werhahn KG, durum wheat millers, and also the company Schwaben-Nudel-Werke B. Birkel Söhne GmbH & Co., a manufacturer of pasta products in the Federal Republic of Germany, brought actions pursuant to Article 178 and the second paragraph of Article 215 of the EEC Treaty seeking the award of the sums hereinafter specified as compensation for the damage caused them by the Council and the Commission as a result of the fixing of the threshold price for durum wheat imported from non-member countries during 1979 by comparison with the price fixed for common wheat.

2 It appears from the file on the case that the measures which, according to the applicants, have given rise to the alleged damage are four regulations fixing the price of cereals for the 1978/79 and 1979/80 marketing years, namely:

— Council Regulation (EEC) No 1255/78 of 12 June 1978 (Official Journal 1978, L 156, p. 2),

Treaty, of the legality of regulations and that, on the other hand, by bringing the matter before the Court by direct action they have failed to avail themselves of the rights of recourse open to them before their national courts.

Objection as to the misuse of the procedure under the second paragraph of Article 73

4 As to this objection, it is sufficient to note that, in a consistent line of decisions, the Court has held that the action for damages under Article 178 and the second paragraph of Article 215 of the Treaty was established as an autonomous form of action with a particular purpose to fulfil within the system of actions and the exercise of it is subject to conditions imposed in view of the specific objective thereof. That form of action is different from an action for annulment in that it does not seek the cancellation of a specified measure but compensation for damage caused by the institutions in the exercise of their functions; the conditions for actions for damages are laid down with that objective in mind and accordingly are different form those for an action for annulment (see judgment of 2 July 1974 in Case 153/73 Holtz & Willemsen [1974] ECR 675, paragraphs 2 to 5 of the decision).

5 It follows from the foregoing that, in order to be successful, any party who chooses to pursue an action for damages is obliged to establish fulfilment of all the conditions which must be fulfilled, pursuant to the second paragraph of Article 215 of the Treaty, if the liability of the Community is to be incurred. The fact that some of those conditions may coincide with those applicable to an action for annulment is not therefore a sufficient reason to describe an action by a party in reliance upon Article 178 and the second paragraph of Article 215 as a misuse of procedure.

9 In the circumstances, the applicants were not in a position to bring an action before the national courts regarding the levies collected on the imports of durum wheat intended for them. Accordingly no objection of inadmissibility may be based on their failure to avail themselves of a form of action in the national courts which was not in fact open to them.

10 The second objection of inadmissibility must therefore also be dismissed.

1 1 The Council also alleges inadmissibility on the ground that the applicants have claimed damages only for 1979, stating that the amounts claimed constitute only a fraction of the damage actually suffered by them. Having regard to the possibility that the applicants were thus preparing to extend their claims at a later stage, particularly to periods before 1979, the Council takes the view that the applications are inadmissible in so far as they relate only to possible damages.

1 2 It does not seem necessary to examine this argument of the Council regarding the admissibility of the actions. The Council's objections in fact concern one of the substantive pre-conditions for liability on the part of the Community, namely the existence of damage. They will therefore be considered when the substance of the case is examined.

LUDWIGSHAFENER WALZMÜHLE v COUNCIL AND COMMISSION

Objection regarding a document submitted by the intervening parties Soubry and Coppens

JUDGMENT OF 17. 12. 1981 — JOINED CASES 197 TO 200, 243, 245 AND 247/80

Substance

17 Before examining the applicants' arguments, it is appropriate to indicate the principles which, according to the case-law of the Court, govern the non-con- tractual liability of the Community.

18 In its judgment of 28 April 1971 (Case 4/69 Lütticke [1971] ECR 325), which has since been confirmed on numerous occasions (see in particular the judgment of 2 July 1974, Holtz & Willemsen, cited above, paragraph 7 of the decision), the Court made clear that under the second paragraph of Article 215 and the general principles to which that provision refers, Community liability depends on the coincidence of a set of conditions as regards the unlawfulness of the acts alleged against the institutions, the fact of damage and the existence of a direct link in the chain of causality between the wrongful act and the damage complained of.

19 The measures which, according to the applicants, gave rise to the alleged damage are legislative measures. With regard to such measures, according to a similarly consistent series of decisions of the Court, the Community does not incur liability unless a sufficiently serious breach of a superior rule of law for the protection of the individual has occurred (judgment of 2 December 1971, Case 5/71 Zuckerfabrik Schöppenstedt[197\] ECR 975).

20 Regard must be had to these requirements when the actions are examined. Accordingly, it is appropriate to examine separately, on the one hand, the question whether the fixing, by measures adopted by the Council and the Commission, of the threshold price for durum wheat for the period in question is vitiated by illegality in the light of the criteria indicated above, and on the other hand, whether the applicants are able to prove damage causally related to the contested measures.

22 They state that, in the past, the import price for durum wheat was close to the price of common wheat until, in 1974, a considerable price rise on the world market led the Council to raise the threshold price for durum wheat considerably, the ratio between the price of common wheat and that of durum wheat being at that time 100 : 151.2. Despite the fact that the prices have since drawn closer on the world market, the ratio between them not exceeding approximately 100 : 110, the Council has reduced only very slowly the gap between the two prices which, at the time in question, was 100 : 138.5 in the Community. This disparity of prices gave rise, in the manufacture of pasta products, to a tendency to substitute common wheat for durum wheat, leading in consequence to a considerable reduction in the volume of production of durum wheat mills and a deterioration in the quality of pasta products, resulting in a weakening of the competitive position of the German manufacturers in the market. This tendency was accentuated by the fact that the German manufacturers encountered increasingly strong competition in their market from pasta manufacturers of other Member States, and in particular Italian manufacturers, whose production centres, being near to the growing areas of durum wheat in the Community were able to obtain the supplies at prices close to the intervention price, whereas the German manufacturers obtained supplies of durum wheat meal of exclusively American origin, imported at the threshold price.

23 From the legal point of view, the applicants rely upon four grounds, namely disregard of the price policy embodied in the basic Regulation (EEC) No 2727/75 of the Council of 29 October 1975 on the common organization of the market in cereals (Official Journal 1975, L 281, p. 1), breach of the principle of non-discrimination embodied in the second subparagraph of Article 40 (3) of the Treaty, breach of the principles for the fixing of agri- cultural prices as laid down in the third subparagraph of Article 40 (3) and, finally, breach of the principle of proportionality.

26 What is required in this case, in accordance with the above statements of the Court, is to define the "fair" price ratio between durum wheat and common wheat; according to the principles recognized in the recitals in the preamble to the basic Regulation No 2727/75, that ratio should, as far as possible, be set at the level of the ratio ascertained on the world market.

27 In the second place, the applicants state that the fixing of the threshold price for durum wheat at an excessive level involves an infringement of the second subparagraph of Article 40 (3) of the Treaty, in the terms of which the common organization of the market "shall exclude any discrimination between producers or consumers within the Community". By fixing the threshold price for durum wheat at an excessively high level, the Council has created such discrimination against millers and against manufacturers of pasta-products in the Member States which do not produce durum wheat; those producers have had to import all their durum wheat requirements from non-member countries, whereas the millers of durum wheat and the manu- facturers of pasta-products in the countries which grow that wheat, France and Italy, are able to obtain their raw material locally, at a considerably lower price.

LUDWIGSHAFENER WALZMÜHLE v COUNCIL AND COMMISSION

28 In the third place, the applicants state that the fixing of the threshold price for durum wheat at an excessively high level breaches the principles governing the fixing of prices, as laid down in the third subparagraph of Article 40 (3) of the Treaty, in the terms of which in the common price policy "shall be based on common criteria and uniform methods of calcu- lation". They also refer, in that context, to Article 39 (1) (c), which states that the object of the common agricultural policy is, inter alia, " t o stabilize markets". Those provisions place an obligation on the Council to fix the prices in accordance with "rational views" and not to determine them in an arbitrary fashion on the basis of purely political considerations with the aim of favouring certain groups of producers within the Community at the expense of other groups, such as that which includes the applicants.

favouring development of durum wheat production, by an appropriate price policy, whilst maintaining the production of common wheat to a reasonable extent.

32 As regards the complaints of discrimination and infringement of the rules relating to the fixing of agricultural prices, laid down in the second and third subparagraphs of Article 40 (3), the defendant institutions draw attention to the fact that the fixing of cereal prices takes place within the context of free circulation both of raw materials and of secondary products and that therefore, from the Community point of view, there is nothing to prevent German producers from obtaining supplies in other Member States of the Community. They draw attention to the fact that neither the French market nor the Italian market is self-sufficient and that producers in those States must also, to a considerable extent, use durum wheat imported from non- member countries, a circumstance which has given rise to a tendency in the producing States for the prices of the indigenous product to move towards the threshold price and not, as asserted by the applicants, towards the interventions price.

33 As regards the alleged breach of the principle of proportionality, the institutions draw attention to the fact that the options proposed by the applicants are impracticable; regionalization of threshold prices would be in direct conflict with unity of the Common Market, whereas extension of the aids system would impose new and intolerable burdens upon the Community budget.

34 Finally, the defendant institutions emphasize that the legal rules relied upon by the applicants are not in any case classifiable as "superior rules of law for the protection of the individual", a condition imposed by the case-law of the Court in cases of actions for damages in respect of legislative measures adopted by the Community.

39 As regards the economic objective pursued by the Council in fixing the variance between the threshold price for durum wheat and the price for common wheat, there is likewise nothing to indicate that the institutions have overstepped the limits of their discretionary powers in determining that variance, if it is borne in mind that there is chronic over-production of common wheat and a need to stimulate Community production of durum wheat. This choice having been made by the Council, in the legitimate exercise of its powers of discretion, its repercussions must be accepted by the manufacturers of secondary products, as they must by the various groups of producers concerned.

40 The fact that before the changes in the world-market conditions occurred in 1974 the Council applied a different policy for a long period does not confer upon the producers and processing undertakings involved any entitlement to preservation of such advantages as the established policy may have allowed them; nor does that fact impose any limitation on the freedom of the

JUDGMENT OF 17. 12. 1981 — JOINED CASES 197 TO 200, 243, 245 AND 247/80

Commission and the Council to adjust their policy in step with data reflecting the evolution of the market and with the objectives pursued. In this connection it is sufficient to refer to the judgments of 13 November 1973 (cited above, paragraph 12 of the decision) and 2 June 1976 (Joined Cases 56 to 60/74 Kampffineyer and Others [1976] ECR 711, paragraph 13 of the decision). In particular, the intention evinced in the eighth recital in the preamble to Regulation No 2727/75 is not to be regarded as the expression of a rule of law of which observance is therefore mandatory for the institutions.

LUDWIGSHAFENER WALZMÜHLE v COUNCIL AND COMMISSION

44 It should be pointed out in this connection that, in itself, recourse to dif- ferentiation of the various prices administered by the Community seems to be a method particularly well-suited to the general machinery of the market organization and to the objective pursued in this case, namely development of durum wheat growing with a view to improving the structure of Community production as a whole. The defendant institutions have stated correctly that the courses of action advocated by the applicants are un- acceptable, since one — namely differentiation of the threshold price as between the south and the north of the Community — is incompatible with unity of the market and the other — namely extension of aid for durum wheat growing — is contradictory in a market-economy system and, moreover, excessively onerous for everybody.

45 It is therefore appropriate to conclude that, far from having proved a "serious breach of a superior rule of law for the protection of the individual", the applicants have not succeeded in demonstrating any unlawful act whatsoever on the part of the Council or the Commission.

Damage and causal relationship

46 The applicants claim the following sums from the Community by way of damages:

DM 1786 047.50 (Case 197/80), DM 1087 692.80 (Case 198/80), DM 910 850.73 (Case 199/80), DM 1 020 524 (Case 200/80), DM 2 204 106.30 (Case 243/80), DM 260 172.78 (Case 245/80) and DM 967 750 (Case 247/80).

49 The defendant institutions regard this method of calculation as unacceptable because it is based on a factor — the "fair price" of durum wheat — which is chosen arbitrarily by the applicants. Moreover, and this point has been developed in greater detail by the associations which intervened in their support, they deny the existence of any causal relation between the alleged damage and the fixing of the prices by the Council and the Commission. They state that the true cause of any losses suffered by the applicants is to be found in the fact that unlike other Member States, in particular France and Italy, whose legislation prohibits the use of common wheat for the manu- facture of pastas (the so-called Law "on purity requirements"), such prohibition is unknown in the Federal Republic of Germany, so that the German manufacturers are free to substitute at will common wheat for durum wheat in the manufacture of pasta products. Since this substitution has the effect of lowering the quality of pasta products, as is recognized in a study produced by the applicants themselves, the effect of the absence of such legislation in the Federal Republic of Germany is to reduce the German industry's capability for competing with pasta products originating in countries where a Law on purity requirements exists.

so The Court is of the opinion that the applicants have indeed failed to provide any convincing evidence as to the actual occurrence of the damage which they claim to have suffered. It is sufficient to state that the method of calcu- lation adopted by them is based on one factor — the "fair price" of durum wheat — at which they have arrived on the basis of purely subjective economic considerations, glossing over the fact that they operate within an economic framework determined by a common organization of the market and not in the context of the world market. The calculations they have made on the basis of that initial factor moreover incorporate magnitudes which are dependent, for each of them, upon the individual conduct of their business, and as such cannot be verified.

55 The foregoing considerations are sufficient to show that the applicants have not established a relationship of cause and effect between the policy pursued by the Community institutions in fixing wheat prices, as embodied in the contested regulations, and the deterioration of their position on the durum- wheat or pasta-products markets.

56 It is evident from the foregoing analysis that the applicants have not sub- stantiated any of the conditions set out above upon fulfilment of which the liability of the Community depends. The applications must therefore be dismissed.

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Costs

57 Pursuant to Article 69 (2) of the Rules of Procedure, the unsuccessful party- is to be ordered to pay the costs.

58 The applicants and the interveners Soubry and Coppens, which supported the applicant Schwaben-Nudel-Werke B. Birkel Söhne GmbH & Co. are therefore jointly and severally ordered to pay the costs of the proceedings.

Delivered in open court in Luxembourg on 17 December 1981.

A. Van Houtte O. Due Registrar President