C-59/83

JUDGMENT OF 6. 12. 1984 — CASE 59/83

with that of stabilizing markets, which Consequently, the fact that subsidies the Commission sought to achieve are granted in respect of skimmed- when it laid down the rules for milk powder, which plays a part in implementing measures for reducing supporting the common organization stocks of skimmed-milk powder, is of the market in milk and milk only partially attained, it is not products, whilst they are not provided possible to conclude that the legis- for in respect of whey, which is only lation enacted by the Commission was a waste product of cheese-making unlawful vis-à-vis Article 39 of the which must be eliminated, may not be Treaty since the legality of a measure regarded as discrimination. can be adversely affected only if the 4. An action for damages brought under measure is manifestly unsuitable for Article 215 of the Treaty for unlawful achieving the aim pursued. legislative action cannot succeed 3. As a specific expression of the general unless the damage alleged by the principle of equality, the prohibition applicant exceeds the limits of the of discrimination laid down in the economic risks inherent in operating second subparagraph of Article 40 (3) in the sector concerned. That of the EEC Treaty does not prevent principle would have to be applied a comparable situations from being fortiori if the concept of liability treated differently if such difference without fault were accepted in in treatment is objectively justified. Community law.

In Case 5 9 / 8 3

SA BIOVILAC N V , having its registered office in L e u z e , Belgium, represented b y H a n s G. K e m m l e r , Barbara R a p p - J u n g a n d Alexander Böhlke, Rechtsanwälte, Frankfurt am M a i n , with C h a m b e r s at 223-225 R u e de la Loi, Brussels, a n d with an address for service in L u x e m b o u r g at t h e C h a m b e r s of Ernest A r e n d t , 34B R u e Philippe-II, applicant,

Advocate General : Sir G o r d o n Slynn Registrar: J. A. P o m p e , D e p u t y Registrar

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of the processed, namely butter and skimmed- proceedings and the conclusions, sub- milk powder. missions and arguments of the parties may be summarized as follows:

The excessive level of stocks of skimmed-milk powder held by the intervention agencies in 1982 led the I — Facts Commission to bring back into force through the adoption of Regulation (EEC) No 1753/82 of 1 July 1982 (Official Journal 1982, L 193, p. 6) various "special measures" within the 1. Relevant legal provisions meaning of Article 7 (2) of Regulation (EEC) No 804/68 of the Council (Official Journal, English Special Edition 1968 (i), p. 176) which had previously The common organization of the market been adopted to deal with an identical in milk and milk products, one of the situation where stocks were high and aims of which is to ensure a fair income market capacity low, namely Com- for Community producers, provides to mission Regulation (EEC) No 368/77 of that end for the fixing of a single target 23 February 1977 on the sale by tender price for milk, which is guaranteed on of skimmed-milk powder for use in feed the domestic market mainly through the for pigs and poultry (Official Journal national intervention agencies' buying in 1977, L 52, p. 19) and Commission the principal products into which milk is Regulation (EEC) No 443/77 of 2

March 1977 on the sale at a fixed price Regulations Nos 368/77 amnd 443/77, of skimmed-milk powder for use in feed as amended by Regulations Nos 1753/82 for pigs and poultry (Official Journal and 2923/82, on the ground that those 1977, L 58, p. 16). regulations introduced sales of skimmed- milk powder at reduced prices by the intervention agencies and that the dena- Having found that the formulae for turing formulae for the skimmed-milk denaturing skimmed-milk powder listed powder sold in that way did not prevent in the Annex to Regulation No 368/77 that product from being used in piglets allowed that product to be used in piglet and poultry-feed. feed, the Commission, which wanted to reduce the selling price of skimmed-milk powder sold by the intervention agencies under Regulations Nos 368/77 and 443/77 and prevent skimmed-milk II — W r i t t e n p r o c e d u r e powder sold under those regulations from being substituted for skimmed-milk powder sold at a higher price under On 11 April 1983 the applicant brought Regulation (EEC) No 1725/79 (Official an action under the second paragraph of Journal 1979, L 199, p. 1), adopted Article 215 of the EEC Treaty against Regulation (EEC) No 2923/82 of 29 the EEC, represented by the Com- October 1982 (Official Journal 1982, mission, for compensation for the L 304, p. 64) by which it adjusted the damage which it allegedly suffered as denaturing formulae laid down in Regu- a result of the enactment and im- lations Nos 368/77 and 443/77 by plementation of Commission Regulations replacing them with new formulae for Nos 368/77 and 443/77, as amended by denaturing skimmed-milk powder which Regulations Nos 1753/82 and 2923/82. were intended to prevent that product from being used for feeding piglets. The written procedure follewed the normal course. 2. The facts At the Commission's request the case was assigned to the full Court in In 1974 the applicant, SA Biovilac NV a accordance with Article 95 (2) of the Belgian undertaking, began to develop Rules of Procedure. high-quality basic animal feedingstuffs which were particularly suited for pro- ducing compound feedingstuffs for Upon hearing the report of the Judge- poultry and piglets. Since 1978 it has Rapporteur and the views of the marketed Kulactic and since 1980 Advocate General, the Court decided to Bioblanca; these are two products made open the oral procedure without any from whey which compete with skim- preparatory inquiry. However, the Court med-milk powder as basic feedingstuffs requested the parties to reply in writing for piglets and poultry. to a number of questions before the hearing and to produce certain documents. The parties were also It attributes the appreciable reduction in requested to concentrate their sub- sales of its products since November missions at the hearing on specific points 1982 and the drastic reduction in its sales and to appear before the Court with since 1 March 1983 to Commission their experts.

The Commission contends that the Court should: In the applicant's view, the denaturing 1. Dismiss the action as inadmissible or formulae inserted into Regulations Nos at any rate as unfounded; 368/77 and 443/77 by Regulation No 2923/82 which were intended to prevent 2. Order the applicant to pay the costs. skimmed milk sold under those regu- lations from being substituted for skimmed milk being sold at higher price under Commission Regulation No 1725/79, does not prevent the skimmed- IV — S u b m i s s i o n s and a r g u m e n t s milk powder sold by the intervention of t h e p a r t i e s agencies from being used in feed for piglets. The basic animal feed obtained by the application of the denaturing A — In its application the applicant formulae needs only to be extended by states that compound feedingstuffs for adding certain substances in order to piglets and poultry can be manufactured make compound feedingstuffs suitable from many different partially inter- for piglets. In this regard the applicant changeable basic feedingstuffs and that points out that skimmed-milk powder their composition depends on the prices denatured in accordance with Formula at which the manufacturers are able to IK laid down in Regulation No 2923/82 buy the individual staple foods required has been on the Belgian market since 8 to make them. November 1982 and is offered at a price

JUDGMENT OF 6. 12. 1984 — CASE 59/83

3. Infringement of the right to carry on Claim for damages in respect of an an established business and of the unlawful act right to the protection of property

The applicant contends that the measures The applicant points out that in its adopted by the Commission are unlawful judgment of 13 December 1979 in Case because they infringe (i) Article 39 of the 44/79, Hauer v Land Rheinland-Pfalz, EEC Treaty, (ii) the prohibition of [1979] ECR 3727 the Court recognized discrimination laid down in the second that the right to property is guaranteed paragraph of Article 40 (3) of the EEC in the Community legal order in Treaty and (iii) the right to carry on an accordance with the ideas common to established business and the right to the the constitutions of the Member States protection of property. and argues that the right to carry on an established business, which is recognized in particular in German law, also forms 1. Breach of Article 39 (1) (c) of the part of the corpus of fundamental rights EEC Treaty existing in Community law. The measures adopted by the Commission are According to the applicant, the measures akin to an expropriation of property are unlawful because they are inappro- since they deprive the applicant's priate for achieving the aim of stabilizing property and business of all commercial markets referred to in Article 39 of the value.

BIOVILAC / EEC

In the Commission's view, a preventive Preventive action for damages action for damages in respect of lawful legislative action is inadmissible in any case. On this question the Commission contends in particular that determining Action in respect of an unlawful act whether and to what extent com- pensation is to be awarded on account of The Commission takes the view that the a lawful act depends very much on the action brought by the applicant is a nature and extent of the damage preventive action for damages limited suffered. The person concerned should to obtaining a declaration that the therefore wait until the nature and extent Community is liable to pay damages. of the damage are clearly established before bringing his action. Whilst acknowledging that in its judgment of 2 June 1976 in Joined Cases 56 to 60/74, Kampffmeyer v Commission Action against national measures and Council, [1976] ECR 711 and of 2 March 1977 in Case 44/79, Milch-, Fett- und Eier-Kontor GmbH v Council Relying in particular on the Court's and Commission, [1977] ECR 393 the judgment of 12 December 1979 (in Case Court admitted preventive actions 12/79, Wagner V Commission, [1979] provided that the damage was imminent ECR 3657, of 27 March 1980 in Case and foreseeable with sufficient certainty, 133/79, Sucrimex v Commission, [1980] the Commission considers that a ECR 1299 and of 10 June 1982 in Case

JUDGMENT OF 6. 12. 1984 — CASE 59/83

Claim for damages in respect of an unlawful act The decision on the fixing of prices, in which the Commission has a wide discretion, depends on a number of The Commission argues that, according factors: the price of the products to a consistent line of decided cases competing with skimmed-milk powder, (judgment of 25 May 1978 in Joined the level of stocks and storage costs, Cases 83 and 94/76, 4, 15 and 40/77, future trends in supply and demand, the Bayerische HNL v Council and Com- costs arising from special operations and, mission, [1978] ECR 1209 and of 5 De- finally, alternative ways of dealing with cember 1979 in Joined Cases 116 and the problem of surpluses. The dis- 124/77, Amylum v Council and Com- turbingly high level of stocks, the mission, [1979] ECR 3497), a right to impossibility of increasing exports owing compensation for damage caused by to the keen competition from the other Community legislative action involving milk-product exporting States (United choices of economic policy arises only States of America, New Zealand, if the institutions have committed a Australia), the Council's inaction with sufficiently serious breach of a superior regard to the Commission's proposals to rule of law for the protection of the reduce the surpluses and the particularly individual and thus manifestly and low prices of vegetable feedingstuffs gravely disregarded the limits on the competing with skimmed-milk powder exercise of their powers, provided that which were imported into the Com- the applicant proves that there is a causal munity (the price of soya imported from link between the infringement and the the United States of America was damage actually suffered. between 17 and 18 ECU per tonne)

Infringement of Article 39 of the EEC Treaty As far as the way in which the sales were effected and the aids granted is concerned, the Commission states that, after learning that heavily-subsidized In the Commission's view, it follows milk powder under Regulation No from its arguments that the contested 1725/79 was being used to feed piglets, measures are consistent with the aims of it did what it could to prevent it from Article 39 of the EEC Treaty. Besides, being used for that purpose in future. the applicant may not rely on those Furthermore, it adopted that legislation general aims as rules of law affording it in the financial interests of the protection. Community and not out of a duty to certain producers not to subsidize piglet- feed more than was necessary. The difficulty in adopting such a measure is Infringement of Article 40 (3) of the that it is necessary to prevent the product EEC Treaty in question from being used for feeding to piglets whilst ensuring that it remains suitable for feeding to pigs. It is not easy to make a clear distinction between pigs and piglets on the basis of their age The Commission contends that the and weight. Therefore, the denaturing applicant has not been treated any less measures adopted could not have been favourably than other comparable pro- designed to prevent for certain milk ducers of piglet and poultry-feed. powder disposed of pursant to special measures from being used, directly or in mixtures with other products, to feed large piglets or even young pigs. The main products used as a denaturing Causal link agent are mustard and cellulose. Adding mustard to milk powder gives it a slightly pungent smell which invariably results in a considerable reduction in food intake Referring to its submissions on the and therefore in a much slower rate of admissibility of a preventive action for growth in piglets of up to 7 kg in weight damages in respect of an unlawful act, and in the case of piglets weighing more the Commission submits that the ap- than about 10 to 12 kg in a loss of plicant has failed to establish a causal appetite which involves certain risks for link between the measures adopted and the breeder. Adding cellulose causes the damage which it allegedly suffered. It diarrhoea in young piglets, which has not adequately explained how the involves considerable risks for their measures are supposed to have brought health and growth. As with the addition its business to a standstill now — in of mustard, the larger the animal the contrast to the position in 1978.

Although the Commission accepts that Admissibility of the action the Court has not yet decided whether and in what circumstances the in- stitutions may incur liability for lawful acts, it takes the view that in this case Preventive action for damages there is no obligation to pay com- pensation. The applicant explains that at the time when it lodged its application it did not The applicant's reference to fundamental have precise details of the extent of rights to establish such liability is inap- the damage suffered which could be propriate. This case does not involve expressed in monetary terms. It could expropriation of property or a restriction only prove that, one after the other, its on the use of property. A change in the major customers, with reference to the basic legal and economic conditions does cut-price sales of skimmed-milk powder, not amount to an infringement of the reduced the quantities they purchased, applicant's right to property. demanded a price reduction or entirely ceased to purchase the applicant's products. In its application it estimated The fact that the applicant ought to have its loss of sales, on 30 June 1983, at expected the special sales at reduced probably 540 tonnes a month. Taking prices to be "brought back into force" into account the price of its products, the at any time in view of the situation on Commission could imagine the damage it the milk-powder market excludes any suffered. The applicant was unable to question of compensation. When the quantify that loss in precise monetary applicant extended its business, the terms when it brought its action because provisions authorizing such sales were it did not have any details of costs based suspended only temporarily. Referring to on its accounts for 1982 which had not the Court's judgment of 4 February 1975 been drawn up by then. The Commission in Case 169/73, Compagnie Continentale is therefore wrong to describe its action France V Council [1975] ECR 117, as a preventive action for damages in

respect of an unlawful act or as a The market in piglet-feed has been preventive action for compensation in fundamentally destabilized by the im- respect of a lawful act. plementation of Regulations Nos 1725/79 and 2923/82. The price of skimmed-milk powder for feeding to Action against national measures piglets varies between 18.50 ECU per 100 kg and approximately 84.23 ECU per 100 kg, depending on whether it is sold under subsidy under Regulations The applicant states that it considered Nos 368/77 and 443/77 or whether it is the possibility of bringing an action sold under subsidy under Regulation No against the national authorities but in the 1725/79. The Commission itself admits circumstances of the case decided that that it has not succeeded in preventing such a procedure would have been too skimmed-milk powder sold pursuant to long for it to survive. Moreover, it the special measures from being used as seemed impossible to choose the Member piglet-feed, although Regulation No State in which to institute proceedings. 2923/82 states that the substituting of skimmed-milk powder denatured in accordance with its provisions for Substance skimmed milk sold under Regulation No 1725/79 "should not be permitted". The Commission justified that fact by pointing out that the "aim" of the new Claim for damages in respect of an denaturing methods was not infallibly to unlawful act prevent denatured skimmed-milk powder from being used for feeding to "large piglets" weighing between 10 and 12 kg The applicant emphasizes that it has no or even "young pigs" weighing less than objection to Regulations Nos 804/68 30 kg and that when it referred to piglets and 1285/70 on the basis of which the or piglet-feed in its policy for regulating Commission adopted Regulations Nos the market it meant only small piglets 368/77, 443/77 and 1844/77; its weighing less than 7 kg. That argument complaint is that the Commission acted is purely defensive and does not unlawfully in implementing those regu- correspond to the reality of pig-breeding lations. and of the pig-trade since it is clear from a number of publications that the term "piglet" means young pigs weighing up Breach of Article 39 (1) (c) of the EEC to 30 kg and not, as the Commission Treaty and o£ fundamental rights. claims in this case, animals aged between five to six weeks weighing up to 7 kg or animals weighing up to approximately 10 The applicant takes the view that the to 12 kg. Commission ought at least to have attempted to comply with the injunction "to stabilize markets" contained in Article 39 (1) (c) of the Treaty. The measures adopted by the Commission Finally, with regard to the Commission's and the explanations given by it only contention that it has not proved that suggest an almost fanatical effort to deal a legal rule protecting it has been with one aspect of the organization of infringed, the applicant refers to the the market in milk, namely the reduction submissions it made in its application of surpluses at any price. concerning the infringement of the

Causal link Damage

The Commission's assertion that the The applicant gives details of the damage selling prices of skimmed-milk powder which it suffered from October 1982 to charged by the intervention agencies 30 June 1983 and quantifies it at BFR between 1977 and 1979 were already 7 101 377. It estimates that the damage it lower than the selling prices of its own has suffered or will suffer as from 1 July products is incorrect. The lowest 1983, in so far as it is foreseeable and Commission price during that period (at calculable, is BFR 1 847 467 a month, the end of 1977) was 11.5 ECU per 100 which corresponds to a monthly loss of kg or BFR 567.50 per 100 kg. The 500 tonnes. It also indicates the method lowest price at which it sold Kulactic was by which it quantified its loss. BFR 650 per 100 kg in the second half of 1978. At that time the price of skimmed-milk powder sold by the intervention agencies was between BFR Future damage, which cannot yet be 666 and 790 per 100 kg. precisely calculated, will arise mainly from its closing-down and the dismissal of its workforce. It provisionally Since it is established that the applicant's estimates the compensation due to it in products and skimmed-milk powder the event of its business closing down to were in competition and that there was a be at least BFR 200 million.

DIOVILAC / EEC

Claim for damages in respect of a lawful must be regarded as inadmissible because act the applicant is primarily contesting measures adopted by the intervention agencies (sales of skimmed-milk powder The applicant states that it does not in at fixed prices), even though those any way owe its business to the measures are based on Community law. legislative and economic framework However, as it has already stated, certain established by the Community. The equitable grounds might nevertheless Commission cannot criticize it for hav- suggest that the action should be ing sought, in 1974, possible ways of admitted. upgrading whey from which it manu- factures its products and which can be obtained in the Community at a moderate price. Preventive action for damages

JUDGMENT OF 6. 12. 1984 — CASE 59/83

otherwise many applicants would de- evidence be heard by the Court on this liberatly refrain from producing their point. main evidence until the reply stage in order to restrict the other party's oppor- tunity to defend itself. Causal link

BIOVILAC / EEC

JUDGMENT OF 6. 12. 1984 — CASE 59/83

product on the much larger market in than other producers and traders in a pig and poultry-feed. comparable situation. The Commission's measures are not arbitrary and affect all Infringement of Article 39 (1) of the those producing or dealing in substitutes EEC Treaty for powdered milk in the same way.

In view of its submissions the Com- mission considers that there has been no Claim for compensation in respect of a breach of Article 39 of the EEC Treaty lawful act or of Article 7 (2) of Regulation No 804/68 since it adopted the only means The Commission submits that for the available to it to stabilize the markets Community to be liable for the con- and took into account all relevant sequences of a lawful act — provided interests. In any case, the afore- that such liability is covered by Article mentioned provisions do not constitute 215 of the EEC Treaty — there must not rules for the protection of individuals. only be a serious interference with the property of the person concerned but the Infringement of the right to property and interference must also occur in circums- of the right to pursue a business activity tances which are not within in the general conditions laid down by the legal The Commission considers it ques- system for the exercise of economic tionable whether the protection of the activity. In this case there was no inter- right to exercise a business activity ference with the applicant's property afforded by Community law under the since it ought to have anticipated special second paragraph of Article 215 of the sales at particularly low prices. EEC Treaty is as wide as under German law to which the applicant refers. In any event, it did not deprive the applicant of any property or restrict the use of its property in any way or impose the V — Oral procedure slightest restriction on the pursuit of its business activity. The parties presented oral argument at the sitting on 7 June 1984. Breach of Article 40 (3) of the EEC Treaty The Advocate General delivered his The applicant has not shown how it has opinion at the sitting on 18 September been arbitrarily treated less favourably 1984.

2 The applicant contends that the alleged damage — an appreciable reduction in the sales of its products since November 1982 and a drastic reduction in those sales since 1 March 1983 — was caused by Regulation (EEC) No 368/77 of 23 February 1977 on the sale by tender of skimmed-milk powder for use in feed for pigs and poultry (Official Journal 1977, L 52 p. 19) and by Regulation (EEC) No 443/77 of 2 March 1977 on the sale at a fixed price of skimmed-milk powder for use in feed for pigs and poultry (Official Journal 1977, L 58, p. 16), as amended by Regulation No 1753/82 of 1 July 1982 (Official Journal 1982, L 193, p. 6) and by Regulation No 2923/82 of 29 October 1982 (Official Journal 1982, L 304, p 64). Regu- lation No 1753/82 brought back into force Regulations Nos 368/77 and 443/77 on the sale at a reduced price by the intervention agencies of skimmed-milk powder for feeding to pigs and poultry. Regulation No 2923/82 inserted into those two regulations new denaturing formulae for skimmed-milk powder sold at reduced prices. According to the applicant, those formulae do not prevent skimmed-milk powder sold by the intervention agencies from being used as basic feed for piglets, although that is contrary to their intended purpose.

3 The applicant's action is primarily based on the alleged illegality of the measures adopted by the Commission. Only in the alternative, in case those measures should be regarded as lawful, does it contend that the Community is still liable because the general scheme introduced by the Commission imposed a "special sacrifice" on the applicant.

6 It must be observed with regard to that objection that in its application the applicant does not challenge the measures adopted by the national authorities to implement Community law but the Commission's measures, themselves since it is clear from its arguments that it complains that by enacting Regu- lation N o 1753/82 the Commission brought back into force Regulations Nos 368/77 and 443/77 and secondly that in enacting Regulation N o 2923/82 it failed to insert into those regulations denaturing formulae which would have effectively prevented the skimmed-milk powder sold by the intervention agencies from being substituted for powder sold under Commission Regu- lation N o 1725/79 of 26 July 1979 (Official Journal 1979, L 109, p. 1) for use as feed for piglets. According to the applicant, the establishment of that scheme by the Commission caused the damage for which it claims compensation.

7 It follows from the above observations that the Court has jurisdiction in this case and that it must therefore examine the question whether the enactment of those regulations may give rise to liability on the part of the Community by virtue of its legislative action. The objection of inadmissibility based upon the failure to have recourse to national remedies must therefore be rejected.

The objection that the action is preventive

8 The second ground on which the Commission contests the admissibility of the action is that it is preventive. It contends that, in so far as the action is based on the alleged illegality of the regulations adopted by the Commission, the applicant has not provided sufficient evidence that at the time when proceedings were instituted damage due to certain measures adopted by the Community was foreseeable with sufficient certainty. As regards the contention that the Community is liable even in the absence of any illegality, it argues that the very nature of such an action requires that the nature and extent of the damage should be clearly established at the time when it is brought.

10 As the Court confirmed once again in its judgment of 17 Deccember 1981 (in Joined Cases 197 to 200, 243, 245 and 247/80, Ludwigshafener Walzmühle v Council and Commission [1981] ECR 3211, at p. 3246), in order for the Community to incur non-contractual liability for an unlawful act a number of conditions must be met as regards the unlawfulness of the conduct alleged against the institutions, the existence of damage and the existence of a causal link between that conduct and the alleged damage; if the legislative act in question involves choices of economic policy, liability is not incurred unless a sufficiently serious breach of a superior rule of law for the protection of the individual has occurred. In this regard the Court has stated, in particular in its judgment of 25 May 1978 (in Joined Cases 83 and 94/76, 4, 15 and 40/77, Bayerische HNL Vermehrungsbetriebe GmbH & Co. KG and Others v Council and Commission, [1978] ECR 1209, at p. 1224, that it is necessary to establish, having regard to the relevant principles of the legal systems of the Member States, that the institution in question has manifestly and gravely disregarded the limits on the exercise of its powers.

1 1 To support its contention that the measures adopted by the Commission are unlawful, the applicant puts forward four submissions: first, that the aim "to stabilize markets" referred to in Article 39 (1) (c) of the EEC Treaty and

JUDGMENT OF 6. 12. 1984 — CASE 59/83

defined more specifically in Article 7 (2) of Regulation N o 804/68 of the Council of 27 June 1968 on the common organization of the market in milk and milk products (Official Journal, English Special Edition 1968 (I), p. 176) was disregarded; secondly, that the prohibition of discrimination laid down, in Article 40 (3) of the Treaty was contravened; thirdly, that the right to property and the right to carry on an established business was infringed and fourthly that the principle of the protection of legitimate expection was disre- garded. The applicant contends that all those rules are superior rules of law which the Commission must observe when enacting regulations.

1 3 The Commission responds by contending that, in view of the large surpluses of skimmed-milk powder and the limited means put at its disposal by the Council for reducing the large stocks held by the intervention agencies, it took the only course open to it by bringing back into force Regulations Nos 368/77 and 443/77 on the sale at a reduced price of skimmed-milk powder for use as pig and poultry-feed and that its action was intra vires since the second subparagraph of Article 7 (2) of Regulation N o 804/68 empowers it to adopt special measures to dispose of skimmed-milk powder which cannot be marketed on normal terms during a milk year. The particularly low price of products competing with skimmed-milk powder on the market in pig and poultry-feed, especially the price of soya imported from the United States, which was approximately 17 to 18 ECU per tonne, justified the fixing of the price of skimmed-milk powder for feeding to pigs and poultry at approxi- mately 20 ECU per tonne.

BIOVILAC / EEC

i4 After learning some time after the bringing back into force of Regulations Nos 368/77 and 443/77 that, owing to the denaturing formulae laid down in those regulations, skimmed-milk powder sold under them was being in- creasingly used as a substitute for skimmed-milk powder subsidized under Regulation No 1725/79, it adopted Regulation No 2923/82 by which new denaturing formulae were inserted into Regulations Nos 368/77 and 443/77 with the intention of preventing such skimmed-milk from being used in feed for piglets.

i6 The submission that the aim referred to in Article 39 (1) (c) and described more particularly in the first subparagraph of Article 7 (2) of Regulation No 804/68 was disregarded cannot be upheld. In this regard it need only be observed first of all that, as the Court has stated on numerous occasions, the institutions must reconcile the various aims laid down in Article 39, which does not allow any one of those aims to be pursued in isolation in such a way as to make the attainment of other aims impossible. Regulation No 1753/82 was adopted pursuant to the general policy applied to milk products. One of the main aims of that policy is to ensure that Community milk producers in accordance with Article 39 (1) (b) of the EEC Treaty receive a reasonable income through the fixing of a target price for milk which is guaranteed by intervention buying of the principal products into which milk is processed, namely butter and skimmed-milk powder; in that

JUDGMENT OF 6. 12. 1984 — CASE 59/83

regard the regulation constitutes a supplementary measure for attaining that aim.

BIOVILAC / EEC

and the market-supporting role it consequently plays in the common organi- zation of the market in milk and milk products, whilst whey does not have those characteristics. The latter product is a waste produce obtained in the making of cheese and normally must be eliminated by the cheese manufac- turers concerned.

20 T h e different treatment of those two products is therefore based on objective differences arising from the economic circumstances underlying the common organization of the market in milk and milk products and cannot therefore be regarded as discriminatory.

21 As its third submission the applicant contends that the regulations in question have infringed its right to property and its right to carry on an established business. The latter right, which is recognized in particular by German law, is, like the right to property of which it is a corollary, one of the fundamental rights guaranteed by the Community legal order. In their substance or scope those two rights form absolute limits on the action of Community institutions. The measures adopted by the Commission amount to unlawful expropriation because they reduce the profitability of its business to such an extent as to place its very existence in jeopardy.

22 That argument cannot be accepted. The measures adopted by the Commission do not deprive the applicant of its property or of the freedom to use it and therefore do not encroach on the substance of those rights. Even though those measures may, as the applicant maintains, have a detrimental effect on sales of its products, that negative effect cannot be regarded as an infringement of the substance of those rights, particularly where, as in this case, the detrimental effect is merely an indirect consequence of a policy with which aims of general public interest are pursued which vary greatly, depending on the economic factors affecting market trends and on the general direction of the common agricultural policy.

27 T o support its alternative claim the applicant relies o n the G e r m a n law concept of " S o n d e r o p f e r " [special sacrifice] and the French law concept of " r u p t u r e de l'égalité devant les charges publiques" [unequal discharge of public b u r d e n s ] ; it contends that, even in the absence of any illegality, the C o m m u n i t y is nevertheless liable, u n d e r the second p a r a p r a p h of Article 215 of the E E C T r e a t y , t o m a k e g o o d any loss of p r o p e r t y w h i c h an individual suffers in consequence of general measures which are lawful in themselves if he is particularly affected and h a r m e d by them, namely if he is affected in a different w a y a n d m u c h m o r e seriously t h a n all other traders a n d producers.

28 In this regard it need only be observed that the Court has held in a consistent line of decisions that an action for damages brought under Article 215 of the Treaty for unlawful legislative action cannot succeed unless the damage alleged by the applicant exceeds the limits of the economic risks inherent in

BIOVILAC / EEC

30 It follows from the foregoing considerataions that the alternative claim must also be dismissed.

Costs

3i Article 69 (2) of the Rules of Procedure provides that the unsuccessful party is to be ordered to pay the costs.

32 As the applicant has failed in its submissions, it must be ordered to pay the costs.

OPINION OF SIR GORDON SLYNN — CASE 59/83

On those grounds,

For the Registrar D. Louterman A. J. Mackenzie Stuart Administrator President

O P I N I O N OF ADVOCATE GENERAL SIR G O R D O N SLYNN DELIVERED O N 18 SEPTEMBER 1984

My Lords, allegedly suffered or will suffer as a result of sales of skimmed-milk powder In the present proceedings the Applicant, from Community intervention stocks. Biovilac seeks recompense from the It claims in the alternative damages Commission under Article 215 (2) of the flowing from an unlawful act by the EEC Treaty for damage which it has Commission, and compensation to which