Opinion of Mr Advocate-General Reischl

Mr President,

Members of the Court,

To counteract rising prices on the domestic market the Italian Government on 24 July 1973 issued Decree-law No 427 which on 4 August 1973 became Law No 496. As a result the prices of producers, wholesalers and retailers of certain important foods, including pasta products from durum wheat, were temporarily frozen at the level at which they were on 16 July 1973 and increases were allowed only in December 1973 and September 1974. On the other hand the said Law provided that the Italian State intervention agency for agricultural products, the AIMA, could with ministerial consent intervene to control the Italian cereal market by purchases, storing and sale, the conditions for the sale on the domestic market being determined by an interministerial committee.

In application of these provisions the AIMA purchased on the world market as from September 1973 considerable quantities of durum wheat at an average price of 18500 lire per 50 kg. The greater part of this durum wheat was sold with the consent of the Interministerial Committee in various stages between September 1973 and April 1975 to Italian manufacturers of semolina and pasta. The prices lay between Lit. 11000, 13000 and 13600 per 50 kg, whereas the price on the Italian market at the period in question lay between Lit. 11500, 18500 or even 20000 per 50 kg.

These facts gave rise to criticism from competitors of the Italian manufacturers of pasta in other Member States. Thus the French association of pasta manufacturers, which took the view that the Italian action to keep prices down was to be regarded as an unlawful aid under the EEC Treaty, sent a telegram to this effect in September 1973 to the departments of the Commission. This protest was repeated in a telegram in October 1973.

Although the Italian measures were not notified in accordance with Article 93 of the Treaty, the Commission nevertheless, as it said in the proceedings, had already initiated a review in September 1973. In this connexion there were discussions between departments of the Commission and a delegation of the semolina manufacturers; the Management Committee for Cereals was involved as well as the Working Party on Questions of Competition in Agriculture; there were explanations by the Italian Government and repeated talks between the officials of the Commission and the officials of the Italian Government.

The Commission came to the view that there was no distortion of competition and no prejudice to trade between Member States, that the contested measure could not be regarded as incompatible with Article 92 and that therefore there was no cause to start proceedings under Article 93 of the EEC Treaty, because the nature of the Italian rules was such that only pasta which was intended for domestic consumption was affected by the action to keep prices down.

The undertaking Bertrand, a French manufacturer of pasta with its registered office in Grigny (Rhone), considers this view to be wrong. In its opinion the Italian measures to keep the price of durum wheat down benefited exported products also and there was therefore an aid incompatible with Article 92 of the EEC Treaty since trade between the States was affected and there was distortion of competition to the prejudice of producers in other countries. The plaintiff argues that the Italian exports of pasta to France had increased during the period in question while French consumption had remained the same. In particular it was shown that in January 1974 Italian manufacturers of pasta had effected sales in France at prices which were below the French selling prices. In this way Bertrand had lost a share of the marked of some 670 metric tons and had been compelled to approximate its prices to the Italian prices and thus suffer loss of profit. Up to 1 August 1974 there had been in total damage which could be set at FF 250000.

The applicant brought an action before the Court on 22 April 1974 on the grounds that the Commission ought to have intervened against the Italian measures and required their abolition, failure to do so being a breach of official duty and claimed that the Commission should pay the sum of FF 250000 together with interest at the discount rate of the Bank of France from the bringing of the action as compensation for the alleged damage. Alternatively it is claimed that the Commission should pay FF 1 as provisional damages and that an expert should be appointed to establish the amount of the damage suffered by the applicant. My opinion on these claims, which the Commission asks you to reject, is as follows:

1 Translated from the German.