Opinion of Mr Advocate General Lenz

Mr President,

Members of the Court,

The request for a preliminary ruling which falls for my consideration is a further link in the chain of cases dealing with the interpretation of Articles 37 and 95 of the EEC Treaty with regard to the German Branntweinmonopolgesetz [Law on the Monopoly in Spirits].

The facts can be summarized as follows :

From 1 to 17 March 1976 Sektkellerei C.A. Kupferberg & Cie. KG a. A., whose registered office is in Mainz, the plaintiff and respondent in the main proceedings (hereinafter referred to as the plaintiff), removed from its bonded warehouse several kinds of whisky from Great Britain, geneva and liqueur from the Netherlands, armagnac and pruneaux from France, sherry from Spain and port from Portugal, which it declared for the payment of duty. The defendant, the Hauptzollamt [Principal Customs Office], Mainz, the defendant and appellant in the main proceedings, assessed the monopoly equalization duty payable thereon at a uniform rate of DM 1500 per hectolitre of spirit.

In its action brought before the Finanzgericht Rheinland-Pfalz [Finance Court, Rhineland-Palatinate] on the basis of Paragraph 152 of the Law on the Monopoly in Spirits, Kupferberg seeks the application of monopoly equalization duty at a rate of DM 1430 per hectolitre of spirit. Its contention is that the rate should be calculated on the basis of the selling price actually applied in the period in question, namely DM 1683 per hectolitre of spirit, less the basic price for spirits in force at that time, namely DM 253 per hectolitre of spirit. The plaintiff assesses the total amount in dispute at DM 29033.07.

The selling price of DM 1683 per hectolitre of spirit was arrived at because, following the Court's judgments in Manghera, Rewe-Zentrale and Miritz, the Federal Monopoly Administration (Bundesmonopolverwaltung) cut the normal selling price (regelmässiger Verkaufspreis) of DM 1833 per hectolitre of spirit by DM 150 per hectolitre of spirit in order to remain competitive with imported alcoholic beverages. However, neither the reduced selling price of DM 1683 per hectolitre of spirit nor the normal selling price of DM 1833 per hectolitre of spirit was used to calculate the spirits surcharge (Branntweinaufschlag) levied on spirits not sold to the Federal Monopoly Administration or the monopoly equalization duty (Monopolausgleich) on imported spirits. Instead, by decision of the Federal Minister for Finance (circular No III A 2 — V 7030 — 32/76 of 23 March 1976) both the spirits surcharge and the normal monopoly equalization duty were fixed at the same level as the tax on spirits, that is to say at DM 1500 per hectolitre of spirit, as from 23 February 1976. That unusual state of affairs ended — less than four weeks later — on 18 March 1976 when the amendment to the Law on the Monopoly in Spirits, which has already been the subject of a judgment of the Court in the case of Hansen GmbH, entered into force and the tax on spirits was raised.

By judgment of 13 February 1978 the court making the reference found in favour of the plaintiff. On appeal on a point of law by the Hauptzollamt, the Bundesfinanzhof [Federal Finance Court], by a decision of 5 August 1980, quashed the judgment and remitted the matter to the Finanzgericht for a fresh ruling. The Bundesfinanzhof held, inter alia, that the selling price of DM 1683 per hectolitre of spirit which was actually applied on,23 February 1976 was not the normal selling price for spirits to be used to determine the amount of the normal monopoly equalization duty within the meaning of Paragraph 152 of the Law on the Monopoly in Spirits. The normal selling price for spirits continued to be DM 1833 per hectolitre of spirit, with the result that the aforementioned calculation method yielded a normal monopoly equalization duty of DM 1580 per hectolitre of spirit. It found that the levying of equalization duty of DM 1500 per hectolitre of spirit was proper under national law. In addition, the Bundesfinanzhof considered that Articles 9, 12, 13 and 37 of the EEC Treaty had not been infringed and that, in view of the extensive case-law of the Court of Justice, it was not necessary to apply to the Court for a preliminary ruling. Nevertheless, it considered that it was possible that Article 95 of the EEC Treaty together with Article 3 of the Agreement between the EEC and Spain and the first paragraph of Article 21 of the Agreement between the EEC and the Portuguese Republic had been infringed in so far as the Finanzgericht might find that comparable domestic spirits not subject to the requirement to be sold to the Federal Monopoly Administration had received concessionary treatment under Paragraphs 79 (2) and 79a of the Law on the Monopoly in Spirits.

When the case came before it again, the Finanzgericht took the view that the Bundesfinanzhof had not ruled on the question whether reducing the selling price for spirits by DM 150 by defacto administrative action while at the same time retaining the former selling price for the purpose of calculating the monopoly equalization duty on imported spirits was compatible with Articles 37 and 95 of the EEC Treaty and with the corresponding provisions of the Agreements with Spain and Portugal. Accordingly by order of 6 October 1983 the Third Senate of the Finanzgericht stayed the proceedings and, referring to the Court's judgment in Pabst & Ricbarz which had since been delivered submitted the following question to the Court for a preliminary ruling under Article 177 of the EEC Treaty:

2.1. Consideration from the point of view of the EEC Treaty

My views on that question are as follows:

I consider it appropriate to deal first with the question of the taxation of the products originating in other Member States of the Community from the point of view of Articles 95 and 37 of the EEC Treaty and then with that of the taxation of the products imported from Spain and Portugal from the point of view of the prohibition of discrimination embodied in the Agreements between the EEC and those two countries.

2.1. Consideration from the point of view of the EEC Treaty

The plaintiff considers that the imported spirits suffered discrimination with respect to similar or competing domestic products in the period in question, namely from 23 February to 17 March 1976. It maintains that, vis-à-vis imported spirits, the fixing of the selling price for spirits performs a characteristic function of a monopoly and that therefore Article 37 of the EEC Treaty is applicable. Since that price, in turn, performed a function with regard to the calculation of duty, in so far as it determined the amount of the import duties, there was also an infringement of Article 95.

Apart from those general considerations, the plaintiff contends that the taxation of imported spirit-based products which is at issue in this case is discriminatory in four specific respects which I will now briefly reexamine.

2.2. Consideration of the provisions of the Agreements with Spain and the Portuguese Republic

Both the Agreement with Spain and the Agreement with the Portuguese Republic contain provisions similar to Article 95 of the EEC Treaty concerning the tax treatment of imported products. However, the Agreements in question contain no provision comparable with Article 37 of the EEC Treaty, so that there is no need to examine them in that regard.

Article 3 of the Agreement with Spain reads as follows:

The first paragraph of Article 21 of the Agreement with the Portuguese Republic, which has already been interpreted by the Court in Hauptzollamt Mainz v C. A. Kupferberg (Case 104/81), provides as follows:

The judgment in Case 104/81 has already established that Article 21 of the Agreement with the Portuguese Republic covers port wine from Portugal.

As the Commission has, in my view, demonstrated, it must also be accepted that Spanish sherry falls within the scope of Article 3 of the Agreement with Spain.

In Case 104/81 the Court of Justice further held that Article 21 of the Agreement with the Portuguese Republic is directly applicable and that traders may rely upon that article before courts in the Community. In view of the wording of Article 3 of the Agreement with Spain and the structure and objectives of that Agreement, that article, as the Commission cogently argues, may not be treated any differently.

In the light of the judgment in Case 104/81 9 it may also be assumed that the two provisions have the same aim as Article 95 but a more limited scope given the narrower objectives of the Agreements as compared with the EEC Treaty. Arguing from the greater to the lesser, it can therefore be held that if no objection can be taken under Article 95 to the action of the Federal Monopoly Administration there can a fortiori have been no infringement of the two provisions of the Agreements.

As a subsidiary point, it should also be mentioned in conclusion that it is implicit in the judgment in Case 104/81 that traders may rely upon the prohibition of discrimination set out in those two provisions only if there are on the domestic market products which are similar as regards both the method of their manufacture and their characteristics which have in fact benefited from a reduction.

I therefore suggest that the question put to the Court should be answered as follows :

Articles 37 and 95 of the EEC Treaty, Article 3 of the Agreement with Spain and Article 21 of the Agreement with the Portuguese Republic must be interpreted as meaning that a comparison of the taxes that were actually and generally applied to imported products, on the one hand, and corresponding domestic products, on the other, is an important factor in considering the question whether a tax levied on imported spirit-based products is compatible with the said articles.

In particular, there are no grounds in the aforementioned articles to justify criticism of the fact that during the period in question, from 23 February 1976 to 17 March 1976, the Federal Monopoly Administration levied a uniform tax on consumption of DM 1500 per hectolitre of spirit on imported and similar domestic spirits contrary to the method of calculation stipulated in the Law on the Monopoly in Spirits.

1 Translated from the German.

2 Judgment of 3 February 1976 in Case 59/75, Pubblico Ministero v Flavia Manghera and Others, [1976] ECR 91.

3 Judgment of 17 February 1976 ¡n Case 45/75, Rewe-Zentrale des Lebensmittel-Großhandels GmbHv Hauptzollamt Landau/Pfalz, [1976] ECR 181.

4 Judgment of 17 February 1976 in Case 91/75, Hauptzollamt Göttingen and Bundesfinanzminister v Wolfgang Miritz GmbH & Co., [1976] ECR 217.

5 Judgment of 13 March 1979 in Case 91/78, Hansen GmbH & Co. v Hauptzollamt Flensburg, [1979] ECR 935 (the second Hansen case).

6 Judgment of 29 April 1982 in Pabst & Riehan KG v Hauptzollaml Oldenburg, [1982] ECR 1331.

7 Judgment of 10 October 1978 in Case 148/77, H. Hansen jun. & O.C. Salle GmbH & Co. v Hauptzollamt Flensburg, [1978] ECR 1787 (the first Hansen Case).

8 Judgment of 13 March 1979 in Case 91/78, Hansen GmbH & Co. v Hauptzolhmt Flensburg, [1979] ECR 935 (the second Hansen case).

9 Judgment of 13 March 1979 in Case 91/78, Hansen GmbH & Co. v Hauptzollamt Flensburg, [1979] ECR 935 (the second Hansen case).

10 Judgment of 13 March 1979 in Case 91/78, Hamen GmbH & Co. v Hauptzollamt Flensburg, [1979] ECR 935 (the second Hansen case).

11 Judgment of 25 May 1977 in Case 105/76, Interzuccheri SpA v Società Rezzano e Cavana, [1977] ECR 1029.

12 Judgment of 21 May 1980 in Case 73/79, Commiuion of the European Communities v Italian Republic, [1980] ECR 1533.

13 Judgment of 26 October 1982 in Case 104/81, Hauplzollamt Mainz v CA. Kupferberg & Cie. KG a. A., [1982] ECR 3641.

14 Judgment of 26 October 1982 in Case 104/81, Hauplzollamt Mainz v CA. Kupferberg & Cie. KG a. A., [1982] ECR 3641.

15 Judgment of 26 October 1982 in Case 104/81, Hauplzollamt Mainz v CA. Kupferberg & Cie. KG a. A., [1982] ECR 3641.

16 Judgment of 26 October 1982 in Case 104/81, Hmplzollamt Mainzv CA. Kupferberg & Cie. KG a. A., [1982] ECR 3641.