C-347/87

1. In this action brought under the second paragraph of Article 173 of the EEC Treaty, Triveneta Zuccheri and other Italian sugar traders (hereinafter referred to as 'the applicants') request the Court to declare void Commission Decision No 87/533/EEC on an Italian Government aid scheme to support Italian sugar traders (hereinafter 2. In determining whether the action is referred to as 'the contested decision'). ' admissible and well founded the following factors are of relevance. In the Italian Decision No 39/1984 of 24 October 1984, mentioned above, provision is primarily made for a reduction in the maximum prices for sugar with effect from 30 October 1984. The reduction of maximum prices covers The contested decision declares that an sales by retailers, wholesalers and/or Italian measure, contained in the decision of 6 importers, and producers. As a secondary the comitato interministeriale per la matter and as a transitional provision, the programmazione economica (Interminis­ decision then provides for the grant of aid terial Committee for economic planning) of 2 to producers and to traders for sugar held 11 October 1984 and in Decision No 7 3 in storage on 29 October 1984. In the 39/1984 of 24 October 1984 and Decision 4 contested decision the Commission refers No 41/1984 of 16 November 1984 of the exclusively to the aid granted to 'Italian comitato interministeriale prezzi (Intermin­ sugar traders', without making clear who isterial Committee on prices), is incom­ falls under this term (solely the intermediate patible with the common market within the traders or also the producers?). In its meaning of Article 92 of the EEC Treaty preliminary objection submitted to the and does not qualify for one of the Court on 25 March 1988, in which it exceptions provided for in Article 92. More claimed that the present action was inad­ particularly, the Commission's decision missible, the Commission did state that the relates to the grant of aid to Italian sugar contested decision related to the aid traders in the amount of LIT 37.12 per kg provided for in paragraph 7(b) of the Italian

Admissibility of the action First, the Italian storage aid measure is said to be merely intended to compensate for the damage suffered by traders on account of the application of national rules which are 4. The defendant to the action, the incompatible with Community law. The Commission, does not dispute that the applicants describe the maximum price rules contested decision is 'of direct and indi­ applicable at the three levels mentioned vidual concern' to the applicant. The above (production, wholesale and / or Court's case-law cited by the applicants importation, retail) as national rules which u does in fact warrant this view . The action are incompatible with Community law. The damage arises in their view as follows: 10 — LIT 40 for the retail price. before the maximum prices were reduced, 11 — In its judgment of 17 September 1980 in Case 730/79 Philip Morris v Commission [1980] ECR 2671, which also there was a difference of LIT 43.27 per kg related to a decision addressed to a Member State on the between the maximum sale and purchase basis of Article 92, the Court disposed of the admissibility issue at paragraph 5 of its judgment as follows: 'The prices for traders; the LIT 43.27 per kg Commission does not dispute the applicant's right as a formed the traders' profit margin since the potential recipient of the aid referred to in the decision to bring an action for a declaration that the decision is void maximum prices were also the actually even though it is addressed to a Member State.' Nor could 9 the Commission contest admissibility, regard being had to applicable prices; as a result of the the criterion laid down in the judgment of 15 July 1963 in Case 25/62 Plaumann v Commission [1963] ECR 95, where it was stated that the Commission's 'decision affects them 8 — In this light, the phrase 'in respect of which the sovrapp- by reason of certain attributes which are peculiar to them prezzo has been paid' (see above, at the end of paragraph 1 or by reason of circumstances in which they are differen­ and footnote 5 hereof) must be regarded as a passage tiated from all other persons and by virtue of these factors included as a result of an oversight. In paragraph 7(b) of distinguishes them individually just as in the case of the the Italian decision, which relates to aid to traders, this person addressed'. In a case such as the present one, which condition is not mentioned. deals with aid for stocks which were held at a well- determined date in the past, that criterion is, in my view, 9 — At the hearing, it was stated by the applicant's represen­ satisfied since an aid scheme of that kind (and the tative, who on this point was not contradicted by the contested decision relating thereto) concerns a closed defendant's representative, that the various maximum category of individuals. Whether it is a large or small prices imposed by the authorities are in every day number of persons concerned seems to me to be of no economic reality also the market prices, that is to say that importance. sales below the maximum prices rarely take place.

In the Commission's view, this demonstrates 5. A second ground of admissibility raised that the applicants are guilty of a 'misuse of by the Commission merits closer inspection. procedure' and that, consequently, the From the considerable attention which is application should be held inadmissible. devoted in the application to the alleged incompatibility with the Treaty of the Italian price rules in the sugar sector, the Commission concludes that the applicants are in fact seeking to elicit a declaration by 6. The applicants reject the plea of inad- the Court on this question: the challenge missiblity raised by the defendant: they made against its decision is really only a point to the indissoluble link between the roundabout way of bringing an action Commission's contested decision and the against it for failure to act on the ground Italian price rules for sugar. This link is that, contrary to Community law, it omitted to bring proceedings against Italy under 13 — See Anicie 169 and the third paragraph of Article 173 of the EEC Treaty. Article 169 in connection with the price 14 — Case 48/65 [1966] ECR 19 and the Opinion of Mr Advocate General Gand. 12 — Sec footnote 1 15 — ECR 291, paragraphs 11 and 12 of the judgment.

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OPINION OF MR VAN GERVEN — CASE C-347/87

7. I agree with the Commission that these proceedings for a declaration that a Commission decision relating to the grant of aids is void cannot be used by the 8. I would point out first of all that the applicants as a means of bringing an action applicants do not appear to be contesting against the Commission for failure to act the Commission's decision in so far as it is owing to its decision not to institute infringement proceedings against a Member 18 — This does not mean that it is not open to individuals, such State. The latter right of action occupies a as the applicants, to challenge national provisions before national courts as conflicting with (secondary) special place in the system of remedies Community law. In the examination of questions raised in that way national courts must be guided by the Court's provided for in the Treaty because, as the case-law and refer any further questions of interpretation Court underlined in the aforementioned of Community law under the Article 177 procedure (see, 7 for example, the judgment of 9 October 1984 in Joined Star Fruit Company case, ' it confers a Cases 91 and 127/83 Heineken [1984] ECR 3435, paragraph 10). At the hearing, it was moreover announced by the applicants' representative that a case is pending 16 — In part II. 1. of the contested decision the Commission before the tribunale di Roma between (some of) the quotes its own letter to the Italian Government of 23 applicants and the Italian authority in connection with the November 1984 in which it 'related' (in the authentic claim by the Italian authority for the return of the amounts Italian version 'subordinato') its view to its conclusions of aid in implementation of the contested decision of the with regard to the principle of fixing sugar prices at the Commission. The case has been stayed pending the Court's national level. The decision regarding the entire pricing decision in the present case. system then followed on 18 December 1985 to the effect 19 — I shall therefore express no opinion on the arguments that the national rules were compatible with Community deployed by the applicants, on the basis of the Court's price rules, whereafter, on 7 May 1986, the Italian abundant case-law, in order to demonstrate the incompati­ Government was informed that proceedings under Article bility, certainly at wholesale level, of the Italian price rules 93(2) were being introduced. with Community law, and merely state that no concrete 17 — Judgment of 14 February 1989 in Case 247/87, mentioned answer has been given by the Commission to the question above in footnote 15, and see the Opinion of Advocate why the rules in question are, in its view, compatible with General Lenz, particularly at paragraphs 17 and 18. the common market.

Both judgments concerned claims for the Restitution of damage repayment of undue amounts consisting of charges levied in breach of Article 13 of the EEC Treaty. This case concerns aid paid by a Member State as compensation for loss of profit which was the result of a measure 9. The applicants' first argument for forming part of a system of price rules refuting the Commission's view in this which is claimed to be in conflict with regard is, as has already been indicated, that Community law. Quite irrespective of the the contested aid is not unauthorized aid other differences, the comparison between because it does no more than provide the cases cited and the present case only (almost complete) restitution to traders holds good if the Italian system of prices in holding stocks of sugar on 29 October 1984 the sugar sector is considered to be incom­ for the damage they had sustained as a patible with the Treaty. However, for the result of the reduction of maximum prices reasons mentioned above (at paragraph 7), as from 30 October 1984. this point is not at issue in this case.

In reply to this argument the Commission If one considers on its own the argument points out that the loss of a profit margin that the aid scheme is intended to be rest­ on stocks is not the same as a genuine loss itution of damage, it must be stated in any so that it cannot be regarded as 'damage'. event that such an objective cannot be brought within one of the exceptions mentioned in Article 92(2) and (3) of the Treaty.

Article 40(3) of the Treaty, between traders 29 October 1984 at the expense of their who held, and those who did not hold, competitors in the other Member States sugar in storage on 29 October 1984 which trade in sugar and who have sought 24 (wherever the sugar in storage originated to market sugar after that date'. As far as within the Community: in practice, 20 % of the second condition is concerned, the it came from other Member States). The scheme 'also affects trade in sugar between discrimination lay in the fact that the first Italy and the other Member States from group had their profit margin on their sugar which it imports the product: as from 30 stocks reduced to nothing, the second did October 1984, economic operators in those not. States will have found it more difficult to export to Italy because Italian traders will have preferred, as from that date, first to dispose of the stocks of sugar which they held on 29 October 1984 — for which they can receive aid at the rate of LIT 37.12 per 12. The Commission shifts the discussion of kg — before selling imported sugar, which possible discrimination — in my view, 22 has received no aid from the other Member rightly — to the relevant issue in this case: 25 States'. After therefore coming to the the compatibility of the contested decision conclusion that the Italian aid satisfies the with Community law, and in particular with conditions of Article 92(1), the Commission Article 92 of the Treaty. Consistently with examines and rejects the applicability of the its contested decision, the Commission exceptions provided for in Article 92(2) attaches much importance to the fact that and (3). only traders who held sugar in storage in Italy were to receive the aid of LIT 37.12 per kg, which placed competitors from other Member States who held no sugar in storage in Italy at a disadvantage. It seems to me that the criteria for the application of Article 92(1), namely the distortion of competition and effects on trade between 14. It is for the Court, even of its own Member States, two conditions which, as motion, to examine any deficiencies in the the Court has stressed, are closely intercon­ statement of reasons which would make the 23 nected, are concerned here. examination by the Court more difficult. 26

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TRIVENETA ZUCCHERI AND OTHERS v COMMISSION

Italy, with sugar in storage there who the contested aid. It is true that conclusive received aid, were placed at an advantage evidence of an actual reduction or compared with their competitors from other deflection of trade in relation to the Member States, for whom the new lower situation which would have existed in the maximum prices were also applicable, absence of the aid is not required — on the whenever they should wish to sell in Italy assumption that it would be possible to their previously acquired stores of sugar prove. Nevertheless, in its decision the 28 after 29 October 1984. It seems to me that Commission must indicate sufficient factual this is a statement of reasons which makes it and legal elements and, in so far as they sufficiently clear that competition was being are not obvious, explain its working distorted, or was likely to be distorted, assumptions and conclusions, so that the within the meaning of Article 92(1), 'by Court may examine whether the favouring certain undertakings or the requirement that trade is being affected is production of certain goods', which the satisfied. 30

applicants have not challenged with any convincing argument.

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(even if at a loss), and that they would first It seems to me that the Commission, by not sell the oldest stocks. Furthermore, it seems giving any kind of answer to these questions to be the case that the stocks also include in its decision, has fallen short of its obli­ quantities of sugar imported earlier (said to gation to state its reasons, in regard to an amount to 20%) — in any event they are essential criterion for the application of not excluded from the Italian aid Article 92(1) of the Treaty on which the 32 scheme — so that it is not clear, at any contested decision is based. rate it is not explained in the contested decision, to what extent intra-Community trade is supposed to be affected by the aid. Nor, finally, is it made clear to what extent the contested aid may have a detrimental effect on intra-Community trade which does 16. In these circumstances I need not go not already exist as a result of the (previous) further into the reasons given in the decision reduction of maximum prices, which also (in my view, well founded) for the applies to sugar imported from other non-applicability of the exceptions provided Member States. for in Article 92(2) and (3).

Conclusion

17. On the basis of the foregoing considerations I propose that the Court should declare Commission Decision No 87 / 533 / EEC void on the ground that it does not contain an adequate statement of reasons and that the defendant should be ordered to pay the costs of the proceedings .

32 — Paragraph 6, in particular the second subparagraph m ßne, and particularly paragraph 7, first subparagraph, under (a), first part of the sentence, expressly refer to imported sugar. In the first subparagraph or paragraph 7, at (b), sugar in general which is free of production tax is referred to. In contradistinction to the possible alternative formulation 'on which production tax has been paid', the expression used does not permit the conclusion that imported sugar (on which no production tax is payable) does not fall under its terms.