Judgment — ECLI:EU:C:2002:753
Date: 2002-12-12
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Agriculture and Fisheries;State aids;Competition;Wine
Concepts: Controls of wine planting;Rules on aid in connection with the common organization of the agricultural markets;Rules on competition;Commission discretion
Procedure: Action for annulment - unfounded
Origin: France

Summary of the Judgment 
1. Agriculture — Common agricultural policy — Priority over the objectives of the 
Treaty in the field of competition — Consequences as regards application of the State 
aid provisions in a sector covered by a common organisation of the market 
(Arts 36 EC, 87 EC, 88 EC and 89 EC) 
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SUMMARY — CASE C-456/00 
2. Agriculture — Common organisation of the markets — Wine — State aid relating to 
products covered by a common organisation of the market — Incompatibility of the 
aid with the provisions governing that common organisation 
(Council Regulations Nos 822/87 and 1493/1999) 
3. State aid — Prohibition — Derogations — Commission's discretion — Review by 
the Court — Limits 
(Art. 87(3) EC) 
1. The Commission's assessment of State 
aid in a sector where common organi­
sation of the market has been estab­
lished involves examining the effect 
which such aid may have on the 
operation of that common organi­
sation, since the Member States are 
under an obligation to refrain from 
taking any measures which might 
undermine or create exceptions to it. 
In other words, recourse by a Member 
State to the provisions of Articles 87 
EC, 88 EC and 89 EC cannot receive 
priority over the provisions of the 
regulation on the common organi­
sation of the market concerned. More­
over, Article 36 EC recognises the 
priority of the common agricultural 
policy over the objectives of the Treaty 
in the field of competition. 
(see paras 31-33) 
2. Since cognac is a potable spirit 
obtained from wine, it is excluded 
from the category of agricultural prod­
ucts and, consequently, is not among 
the products regulated under the com­
mon organisation of the market in 
wine. Thus, if areas planted with vines 
of the ugni blanc variety, the yield from 
which is used to make a spirit which, as 
an industrial product, is not sold on the 
wine market, are converted into areas 
intended for the production of local 
wines sold on that market, the quantity 
of such wines produced in the region in 
question will necessarily increase, 
which runs counter to the objective of 
balance between production and 
demand pursued by the common 
organisation of the market in wine. 
Accordingly, national aid designed to 
promote the grubbing of vines of the 
ugni blanc variety and their replace­
ment with varieties of vine from which 
local wines can be produced is incom­
patible with the provisions governing 
that common organisation. 
(see paras 35, 37-39) 
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FRANCE v COMMISSION 
3. The Commission enjoys a wide discre­
tion for the purposes of applying 
Article 87(3) EC, the exercise of which 
involves assessments of an economic 
and social nature which must be made 
within a Community context. The 
Court, in reviewing whether that free­
dom was lawfully exercised, cannot 
substitute its own assessment for that 
of the competent authority but must 
restrict itself to examining whether the 
authority's assessment is vitiated by a 
manifest error or misuse of powers. 
(see para. 41) 
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