Opinion of mr advocate general Reischl

Mr President,

Members of the Court,

The two references for preliminary rulings upon which I am speaking today relate to the common organization of the market in cereals as laid down in Regulation No 120/67/EEC of the Council of 13 June 1967 (Official Journal, English Special Edition 1967, p. 33).

This organization of the market aims to guarantee a certain income for producers in the Community. For this purpose target prices are fixed and market prices are intended to stabilize at the level of those target prices. They are fixed for Duisburg at the wholesale stage, goods delivered to warehouse, not unloaded. In order to protect the Community price level imports from third countries are increased to the Community level by means of levies. For this purpose what are known as threshold prices are derived from the target prices; the threshold prices are no other than target prices related to Rotterdam, the chief place of impon. They are reached by deducting from the target prices the transhipment charges at Rotterdam, the transport costs from Rotterdam to Duisburg and a trading margin for the importer. The levy is then equal to the difference between the c.i.f. price calculated for Rotterdam and the threshold price (Article 13 of Regulation No 120/67/EEC). This applies to cereals produced in the Community.

Since no target prices are fixed for other products which are not widely or not produced at all in the Community and which, as for example sorghum, are in competition with Community products, the relevant threshold prices upon which the levy depends cannot be determined by the derivation described. On the contrary, Article 5 (2) of Regulation No 120/67/EEC provides that the threshold prices for such products are fixed in such a way that the prices for the cereals produced in the Community which are in competition with those products reach the target prices on the Duisburg market. In the case of sorghum this means that its threshold price must be fixed in such a way that the market in barley and maize in Duisburg is not disturbed.

The main actions concern the question whether the threshold price fixed for common wheat in Regulation (EEC) No 1173/75 of the Council of 28 April 1975 (Official Journal 1975 L 117 of 7 May 1975, p. 6) and the threshold price fixed for sorghum in Regulation (EEC) No 1427/74 of the Council of 4 June 1974 (Official Journal 1974 L 151 of 8 June 1974, p. 1) have been correctly calculated. This matter is of interest to the plaintiff in the main action because in August 1975 it obtained import licences for common wheat with advance fixing of the levy for the months of August, September and October 1975 (Case 131/78) and in July 1974 it obtained import licences for sorghum with advance fixing of the levy for the months of July, August and September 1974 (Case 150/78). It takes the view that in both cases the threshold prices were fixed at too high a level because insufficient account had been taken of the preliminary costs (Vorkosten) mentioned in the recitals of the preambles to both the above-mentioned regulations (the most advantageous transport costs between Rotterdam and Duisburg, transhipment charges at Rotterdam and the trading margin for the importer). It therefore lodged objections against the notices of assessment to the levy and when these had been rejected brought proceedings before the Hessisches Finanzgericht. That court stayed the proceedings by orders of 3 May and 6 June 1978 and referred to the Court of Justice under Article 177 of the EEC Treaty the following questions for a preliminary ruling:

I adopt the following viewpoint with regard to these questions:

I — As regards the validity of Regulation No 1173/75 in so far as it fixes the threshold price for common wheat

1. I shall preface the examination of this question with a short summary of the relevant case-law so that it is clear which principles may already be regarded as established.

2. The plaintiff in the main action considers that in fixing the threshold price for common wheat in 1975 the marketing costs which must, according to case-law, be taken into consideration, were incorrectly determined as regards the cost of transport from Rotterdam to Duisburg, the transhipment charges at Rotterdam and the importer's trading margin which also includes a series of smaller items such as charges for customs formalities, costs of the security lodged and expenses with regard to the inspection on receipt. In this connexion it is necessary to state the following:

3. As a whole it is therefore necessary to state that no reasons have become apparent in the procedure which might enable doubts to be raised as to the validity of Regulation No 1173/75.

II — As regards the validity of Regulation No 1427/74 in so far as it fixes the threshold price of sorghum

The plaintiff has put forward fundamentally the same arguments in the context of Case 150/78 on this question as those which it put forward on the regulation on the fixing of the threshold price for common wheat. I therefore consider that the plaintiff's criticism regarding the fixing of the threshold price for sorghum is likewise unfounded, as regards both its general reference to the need to take into consideration the foreseeable inflationary developments and as regards the calculation of the transport costs between Rotterdam and Duisburg by dividing up the route and calling in aid the German directive on aid to freight as well as the transhipment charges at Rotterdam and the trading margin.

Moreover it is also impossible to consider — Case 150/78 concerns an earlier marketing year — that it has been shown that higher freight rates applied in the 1974/75 marketing year than in the subsequent marketing year. In this connexion the preparatory document for the meeting of May 1974 which has already been mentioned containing references to Italian and Danish conceptions of the freight rates is just as inadequate as the certificate from Rhenus AG produced by the plaintiff according to which in the case of annual contracts for the transport of cereals from Rotterdam to Duisburg the ship's freight rates for consignments of 300 to 500 tonnes were approximately DM 6 per tonne at the beginning of 1974.

In the final analysis however this question can remain undecided for reasons connected with the principles used for the calculation of the threshold price for a cereal such as sorghum (Article 1 (a) of Regulation No 120/67/EEC), which is not produced in the Community.

As I have already stated at the outset no target prices are fixed for such cereals because no income guarantee is necessary; nor for this reason does a so to speak mathematical derivation from the target prices apply in the case of the threshold prices as for example in the case of common wheat. On the contrary, the threshold price is in this instance fixed according to Article 5 (2) of Regulation No 120/67/EEC in such a way that, in the case of fodder cereals produced in the Community such as maize and barley, which are, because of their similar nutritive value, in competition, the target price is reached in Duisburg so that the price of those cereals is not brought down and their sales markets are not jeopardized. There is therefore clearly room for discretion regarding economic policy in this case.

It is however in my opinion impossible to perceive any indications that this discretion was not exercised correctly. In this connexion the Commission stated before this Court at the hearing that when it made the proposals adopted by the Council it guided itself by the competitive relationships between sorghum on the one hand and barley and maize on the the other as reflected in the prices on the world market and the c.i.f. prices determined for Rotterdam. In the case of sorghum some of these prices were below and some above the prices of barley and maize; they varied between 83 % and 107 % of those prices. Accordingly it was absolutely justified to fix the threshold price for sorghum above the level applicable to barley and maize. In fact however in the 1974/75 marketing year the threshold price of maize was 106.60 units of account and that of barley was 107.55 units of account whilst only the more advantageous value of 105.55 units of account applied to sorghum.

In these circumstances it is in fact impossible to state that the threshold price for sorghum in Regulation No 1427/74 was not fixed in accordance with the principles laid down in Article 5 (2) of Regulation No 120/67/EEC.

III —. I can therefore only propose that the questions referred to the Court for a preliminary ruling by the Hessisches Finanzgericht should be answered to the effect that in the procedure no reasons have become apparent which might give rise to doubts as to the validity of Regulations (EEC) Nos 1173/75 and 1427/74.

1 Translated from the German