law://eu/cjeu/1978/c-131-78/hd_1_1_2_2@2026-11-15The plaintiff claims that in so far as sorghum is concerned, Regulation No 1427/74 of the Council fixing the threshold prices for cereals for the 1974/75 marketing year is invalid and is inapplicable because it conflicts with the provisions of Article 5 (1) of Regulation No 120/67/EEC and moreover involves a mistaken appraisal. In fact, when the cost factors were calculated and fixed for the purpose of establishing the threshold price for the above-mentioned marketing year (transport costs, transhipment charges and trading margin), insufficient account was taken of the actual facts and of the foreseeable inflationary development in costs.In the opinion of the plaintiff it is necessary to take into account marketing expenses for the 1974/75 marketing year as follows:(a) As transport costs between Rotterdam and Duisburg it is necessary to adopt an amount of 2 units of account (that is, DM 7.33) per tonne, as follows from the table which was produced to the national court and forms Annex 2 to the observations of the plaintiff. The calculation of this amount is described in detail in Annex 3 to those observations and was carried out according to the same method and on the basis of the same documents as those used for the calculation of the costs of the transport of common wheat within the context of Case 131/78.If, contrary to this argument, objections must be raised to the calculation of the transport costs which must be taken into consideration, the plaintiff claims as a precaution that the transport costs amounting to 1.25 units of account per tonne calculated by the Commission for the 1974/75 marketing year are in no way realistic. At the beginning of 1974 — at the time of the Commission's calculations — such transport costs were nowhere foreseeable. In the case of annual contracts for the transport of cereals from Rotterdam to Duisburg it was possible to foresee at the beginning of 1974 that the ship's freight rates for cargoes of 300 to 500 tonnes (the customary unit) would amount to at least DM 6 per tonne (that is, 1.64 units of account per tonne) in the case of a contract from February 1974 to January 1975. In support of this argument, the plaintiff annexes to its observations a letter from Rhenus-WTAG Aktiengesellschaft of 9 August 1978.(b) The transhipment charges should have been fixed at exactly DM 2.72, as follows from the documents relating to those charges produced by the plaintiff in the context of Case 131/78.(c) As regards the trading margin, it is necessary to adopt an amount of DM 6.52 (that is, 1.78 units of account) per tonne, in the calculation of which the plaintiff has already taken into account (see Annex 2 to its observations) customs formalities, inspection of plant species, cost of the obligatory import security and the cost of the inspection on receipt.The Council observes that the national court is mistaken in wishing the Court to examine the compatibility of the fixing of the threshold price of sorghum with Article 5 (1) of Regulation No 120/67/EEC. In fact, sorghum is not among the cereals referred to in the first paragraph. Sorghum is not a cereal indigenous to Europe and must be classified under tariff heading 10.07 of the Common Customs Tariff (for 1974, in the version contained in Regulation (EEC) No 1/74 of the Council of 17 December 1973 amending Regulation (EEC) No 950/68 on the Common Customs Tariff, Official Journal L 1 of 1 January 1974, p. 1, at p. 54). Sorghum is therefore one of the products referred to in Article 1 (a) of Regulation 120/67/EEC (now Regulation (EEC) No 2727/75). It is necessary to apply to sorghum Article 5 (2) of Regulation No 120/67/EEC (now Regulation (EEC) No 2727/75) which provides as follows:‘For a standard quality of each of the products listed in Article 1 (a) which are not mentioned in paragraph 1 above, a threshold price shall be fixed for the Community in such a way that the price for those cereals mentioned in paragraph 1 which are in competition with these products shall reach the target price on the Duisburg market’.It follows that the threshold price of sorghum cannot be fixed in the same way as the threshold price of common wheat. There is no target price for sorghum. In the case of sorghum it is necessary to fix the threshold price in such a way that the competing products reach the target price on the Duisburg market. In the case of sorghum, these competing products are in particular maize and barley (the nutritive value of sorghum is comparable to that of maize). In the contested regulation, the Council fixed the threshold prices of maize and barley respectively at 106.60 and 107.70 units of account per 1000 kilograms, whereas it fixed the threshold price of sorghum at 105.55 units of account per 1000 kilograms, an amount which is more favourable. The levy to be paid is therefore lower. Moreover, the Council refers in the present case to the Commission's statement for supplementary information. It is impossible to state that the Council may have acted wrongly in any way at all in fixing this price.In conclusion, the Council suggests that the Court should find that consideration of the question raised has disclosed no factor of such a kind as to affect the validity of Regulation No 1427/74.The Commission also points out that the national court is mistaken in considering that the threshold price of sorghum is fixed as in the case of wheat in application of Article 5 (1) of Regulation No 120/67/EEC and recalls that the threshold price of sorghum must be fixed in such a way that the price of the indigenous fodder cereals which are in competition with sorghum reaches the amount of the target prices on the Duisburg market. This method of calculation does not place the Council under a duty to calculate the threshold price mathematically on the basis of the market and guidance data available to it but leaves it the power to find the necessary relationship between the threshold price of sorghum and that of the competing indigenous fodder cereals, in particular barley and maize.The Council judged that the conditions of competition of sorghum in relation to barley were reflected in the prices on the world market. As regards the 1973/74 marketing year, the prices of sorghum fluctuated between 83 % and 107 % of the price of barley and of maize, mostly reaching more than 90 % and on average more than 92 % and 95 %.In view of the objective of the levy on sorghum, in other words the stabilization of the competitive position of Community barley and maize, the fixing of the threshold price in question at a level below that of the threshold price of the competing products cannot be criticized.Regulation No 1427/74 is valid and applicable also to the threshold price of sorghum.
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