Judgment — ECLI:EU:C:1998:517
Date: 1998-10-29
Language of the case: Italian
Court formation: Fifth Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Agriculture and Fisheries;Wine
Concepts: Jurisdiction of the Court of Justice;General
Procedure: Reference for a preliminary ruling
Origin: Italy

summary of the producers' harvest,production and stock declarations and the final results of the breakdown ofproduction by yield class of the table wine production obtained on their territory. 38. Even though the Italian Republic had not forwarded the table wine productionfigures and the breakdown of that production by yield class by 1 March 1994, as isrecorded in the sixth recital in the preamble to Regulation No 465/94, theCommission nevertheless had, on the opening of compulsory distillation, the dataforwarded by the Member States, and therefore also by the Italian Republic, forthe purpose of the drawing up of the forward estimate. 39. As is clear from the first recital in the preamble to Regulation No 343/94, theforward estimate had already been drawn up, at the very latest, by15 February 1994. On that date the Commission was in possession of the data ofthe Member States relating to the harvest and stock declarations for products inthe wine sector and also had, as is apparent in particular from paragraph 28 above,information forwarded by the Member States on wine production. 40. As regards the purported inaccuracy of the data supplied by the Italian authorities,it should be noted that, in any event, the fact that the reserves actually recordedat the end of the 1992/93 wine year were 80% higher than the estimates isirrelevant when assessing the accuracy of the forward estimate for the 1993/94 wineyear. 41. It thus has not been established that the data supplied by the Italian authoritieswere inaccurate. Even if they were inaccurate, the applicant in the mainproceedings has not, in any event, adduced any evidence that their inaccuracyoperated against Italian producers rather than in their favour. Carrying-over of undistilled quantities from one wine year to the next 42. The applicant in the main proceedings further asserts that the total quantity fordistillation imposed on Italy also discriminated against wine-growers subject to theobligation to distil, because they were required to assume responsibility forquantities of table wine which should have been distilled by other (defaulting)producers during the preceding wine year. Those quantities, which were still on themarket a year later, were treated as part of the stock of the current wine year, sothat the calculation of the current quantity for distillation was distorted by takingthem into account (having a 'decanting effect). That calculation is thereforeunlawful. 43. In the submission of the applicant in the main proceedings, producers who havedischarged their obligation may not be penalised to the benefit of those who havecontravened the law. The effect of that measure was that honest producers hadto buy wine from their fellow producers for distillation because they had alreadysold their own production. In that way a market in distillation was created, fromwhich criminal organisations benefited. 44. The Spanish Government considers that an apportionment of the costs isunavoidable in order for the system to work each year and that a similarapportionment is made in all sectors. Furthermore, a producer such as theapplicant in the main proceedings who is late in complying with his obligationscannot use such an increase in the quantity to be distilled in the following year asan excuse for not discharging those obligations. 45. The Commission states that the calculation of wine stocks on the market mustinclude quantities which, in breach of the legislation in force, were not distilled, butwere put on sale and are therefore on the market. It refers, in that regard, to thesecond recital in the preamble to Regulation No 343/94, which states that 'in viewof the prices and the desirable level of availability at the end of the year, thedistillation of 18 200 000 hectolitres of table wine appears necessary in theCommunity; ... that quantity is based on the forward estimate to take account ofthe unbalanced situation, characterised in particular by stocks carried over fromone wine year to the next, which are higher than the estimates used as the basis forestablishing the financial data for the wine year. The Commission states that ifwine which was not distilled during the preceding wine year were to remain on themarket indefinitely without being incorporated into the following year's stock, thatwould undermine the purpose of compulsory distillation and harm all producers,in particular those who had duly fulfilled their obligations and might thus, by reasonof infringements committed by others, be in the position of having distilled wine tono avail because market conditions had not improved; that objective thereforejustified taking account of stocks of the preceding wine year. The burden of thesurplus at issue was not placed on Italian producers alone; it was redistributedamong all Community producers in accordance with the principle of solidarity, an approach consistent with the prohibition of discrimination as interpreted by theCourt. Irrespective of the fact that defaulting producers are punished severely,there is an overriding need to remove undistilled quantities from the market inorder for the objective of the system to be achieved. 46. In that regard, it should be recalled that the Community institutions have a widediscretionary power in regard to the common agricultural policy which reflects theresponsibilities which the Treaty imposes on them (see, in particular, Joined CasesC-133/93, C-300/93 and C-362/93 Crispoltoni and Others v Fattoria AutonomaTabacchi and Donatab [1994] ECR I-4863, paragraph 31.) Thus, by virtue of theenabling provision contained in Article 39(2) of Regulation No 822/87, theCommission has a wide discretion when, in pursuit of the objective of improvingconditions in the wine market, it sets the quantities for distillation. 47. In the context of that objective, all Community producers, regardless of theMember State in which they are based, must together, in an egalitarian manner,bear the consequences of the decisions which the Community institutions are ledto adopt in the exercise of their powers in order to respond to the risk of animbalance which may arise in the market between production and market outlets(Crispoltoni and Others, paragraph 52). 48. Accordingly, it does not appear that the carrying over of undistilled quantities fromone wine year to the next, as effected by the Commission, gave rise todiscrimination between wine-growers subject to the obligation to distil. Question 2 49. By its second question, the referring court asks whether the fourth indent ofArticle 1(3) of Regulation No 343/94, and Article 1(1)(c) and the secondsubparagraph of Article 1(2) of Regulation No 465/94, as amended by RegulationNo 610/94, are not invalid on the ground that they contravene the principle of theprotection of legitimate expectations. It inquires whether the unequalapportionment of the quantity for distillation, the obvious inaccuracies in thecalculation of that quantity and the carrying over of quantities not distilled duringthe 1992/93 wine year as stocks of the 1993/94 wine year did not thwart thelegitimate expectations of Italian wine-growers who, having fulfilled the obligationto distil in the 1992/93 wine year, believed that they would not subsequently beburdened with other liabilities which relate in reality to the 1992/93 wine year andwere imposed on them only because other wine-growers had not complied withtheir own obligations. 50. It is settled case-law that in the sphere of the common organisation of the markets,whose purpose involves constant adjustments to meet changes in the economicsituation, economic agents cannot legitimately expect that they will not be subjectto restrictions arising out of future rules of market or structural policy (see Case C-63/93 Duff and Others v Minister of Agriculture and Food, Ireland, and the AttorneyGeneral [1996] ECR I-569, paragraph 20). Moreover, the principle of theprotection of legitimate expectations may be invoked as against Community rulesonly to the extent that the Community itself has previously created a situationwhich can give rise to a legitimate expectation (Case C-177/90 Kühn vLandwirtschaftskammer Weser-Ems [1992] ECR I-35, paragraph 14). Thearguments relied on by the referring court, and adopted by the applicant in themain proceedings, in support of the contention that the legitimate expectations ofItalian wine-growers were thwarted are not such as to establish that the Communitycreated such a specific situation. Question 3 51. By its third question, the referring court asks whether the fourth indent ofArticle 1(3) of Regulation No 343/94, and Article 1(1)(c) and the secondsubparagraph of Article 1(2) of Regulation No 465/94, as amended by RegulationNo 610/94, are not invalid because their enactment by the Commission was ultravires and, in particular, because Article 31 of Regulation No 822/87 was infringed. 52. More precisely, the referring court inquires whether the Commission's setting of thequantity for compulsory distillation applicable to Italy was not misconceived in sofar as the yield per hectare, which is calculated by dividing the volume ofproduction by the area under vines, could not be determined correctly for thatregion in the absence of a reliable national register. Notwithstanding its legalobligation and the extra time granted to it, the Italian Republic has failed to set upthe necessary vineyard register. As a result, it forwarded incorrect data. It followsthat the entire mechanism for allocating quantities for distillation to producers isdistorted, which could result in serious harm to wine-growers. 53. The applicant in the main proceedings, who agrees with that analysis, adds that theCommission was perfectly aware that the national data were inaccurate. In thosecircumstances, the fact that the act at national level, on which the measures of theCommission are founded, is unlawful means that those measure are void. 54. The Commission, while finding it regrettable that there is no operational vineyardregister in Italy despite the obligation in that regard, states that the purpose of sucha register is nevertheless merely to facilitate checks and not to provide data relatingto the collection and the stocks of a particular product. As the SpanishGovernment has also pointed out, the data on which the criteria as to yield perhectare are based are duly provided by the Member States on the basis of thewine-growers' production declarations, and not on the basis of acreage, which is allthat a register could prove. 55. In that regard, it is apparent from Article 39(3) of Regulation No 822/87 that, whendetermining the volume of table wine to be distilled in respect of each MemberState, account is not taken of the surface areas from which the wine originates, butonly of that State's volume of production, which is ascertained on the basis of theharvest declarations in particular. It follows that the absence of a vineyard registerdid not affect the determination of the quantities for distillation. 56. While particulars contained in a vineyard register may make it easier to determinethe yield per hectare which, as has been stated, is calculated by dividing the volumeof production by the area under vines, there is nothing to support the conclusionthat, in the absence of such a register, the calculation would be distorted. It isfrom the information provided by wine-growers that the Member States collate thedata on which the criteria of yield per hectare are based, and which are thenforwarded to the Commission. The accuracy of those data does not depend onthere being an operational vineyard register. Question 4 57. By its fourth question, the referring court asks whether Article 39(4) of RegulationNo 822/87, under which the quantities for distillation are to be apportioned amongthe various producers in a region on the basis of yield per hectare, is not invalidbecause it contravenes the principle of proportionality. 58. According to the applicant in the main proceedings, the criterion of yield perhectare adopted by the Council is inappropriate for pursuing the objective ofimproving conditions in the wine market and penalises excessively winegrowers whoare not overproducing, while simultaneously encouraging those producing poorquality wine. 59. He points out, moreover, that to resort to the criterion of yield per hectare aloneis not appropriate for establishing either that the wine obtained is of mediocrequality or that it is the result of overproduction. On the contrary, high-yield winesoften sell very easily, which gives rise to the absurd situation of producers subjectto the obligation to distil having already sold all their production and beingconstrained to buy an additional quantity in order to have it distilled. 60. Furthermore, it is possible to envisage another method which is equally effective,but less prejudicial than relying on yield per hectare, namely the criterion of end-of-year stocks, which shows perfectly whether or not there is overproduction. TheCommission itself has acknowledged that that criterion is more relevant than thecriterion of yield per hectare, since it had recourse to it in its proposals for thereform of the common organisation of the market in wine. 61. The Council, the Commission and the Spanish Government consider, however, thatthe validity of Article 39(4) of Regulation No 822/87 cannot be called into question. In their view, to select one intervention measure or another, such as the criterionof yield per hectare, is a political choice falling within the responsibilities of theCouncil itself. The Community legislature cannot be in a position to foreseeaccurately all the future effects of an adopted measure and, if certain measuressubsequently prove less effective than anticipated, it does not automatically followthat they were unlawful when adopted. 62. The Council and the Commission assert that the criterion of yield per hectare isappropriate for fulfilling the objective of improving market conditions, because highyields generally correspond to lower-quality wines which do not find a marketeasily. The criterion of yield per hectare is also necessary, inasmuch as there areno alternative criteria in view of the objective pursued: a criterion based on end-of-year stocks would be too difficult to monitor; a criterion based on the reduction ofareas under vine could result in a loss of producer activity, while preserving highyields; a criterion based on wine prices could result in all low-priced wine beingeliminated from the market without taking account of market segmentation. Theprinciple of proportionality was therefore complied with. 63. In that regard, it is to be remembered that the principle of proportionality, whichis one of the general principles of Community law, requires that measures adoptedby Community institutions do not exceed the limits of what is appropriate andnecessary in order to attain the objectives legitimately pursued by the legislation inquestion; when there is a choice between several appropriate measures recoursemust be had to the least onerous, and the disadvantages caused must not bedisproportionate to the aims pursued (see, Crispoltoni and Others, cited above,paragraph 52, and Case C-157/96 The Queen v Ministry of Agriculture, Fisheries andFood and Another ex parte National Farmers' Union and Others [1998] ECR I-2211,paragraph 60). 64. So far as concerns judicial review of compliance with the abovementionedconditions, in matters concerning the common agricultural policy the Communitylegislature has a discretionary power which corresponds to the politicalresponsibilities given to it by Articles 40 to 43 of the Treaty. Consequently, thelegality of a measure adopted in that sphere can be affected only if the measureis manifestly inappropriate having regard to the objective which the competentinstitution is seeking to pursue (see Crispoltoni and Another, paragraph 42, and TheQueen v Ministry of Agriculture, Fisheries and Food and Another, paragraph 61). 65. In this case, as the Advocate General has observed in point 128 of his Opinion, thechoice to apportion obligations between wine producers from the same regionaccording to their yield per hectare is not vitiated by a manifest error, since it isdesigned to impose most of the burden of compulsory distillation on the producerswho are principally responsible for the overproduction in the table wine market,while not penalising producers who achieve low yields. That measure thereforecannot be regarded as disproportionate in relation to the objective pursued which is to absorb surpluses of table wine on the market, as is apparent from the forty-fifth recital in the preamble to Regulation No 822/87. 66. As regards the argument put forward by the applicant in the main proceedings thatthe Commission has acknowledged, in its new legislative policy for the commonorganisation of the market in table wine, that the criterion of end-of-year stockswas more appropriate than that of yield per hectare, it should be recalled that thelegality of a Community act cannot depend on retrospective considerations of itsefficacy (Crispoltoni and Another, paragraph 43). It is clear from settled case-lawthat, where the Community legislature is obliged to assess the future effects of rulesto be adopted and those effects cannot be accurately foreseen, its assessment isopen to criticism only if it appears manifestly incorrect in the light of theinformation available to it at the time of the adoption of the rules in question (seeCrispoltoni and Another, paragraph 43). 67. Accordingly, since it has been found that it was not manifestly incorrect, when therules were adopted, to take account of the criterion of yield per hectare, the factthat other criteria are envisaged for the future cannot render the initial criterionunlawful retroactively. Question 5 68. By its fifth question, which concerns the validity of the fourth indent of Article 4(2)of Regulation No 441/88, the referring court calls into question the decision of theCommission to equate the territories of the Member States with the wine-growingregions in the Community, in particular to equate Italy with wine-growing zone C. 69. The applicant in the main proceedings argues that, since Italy's national territoryis made up of areas which obviously differ widely both from a geographical andfrom an oenological point of view, the Commission, which did not take account ofthose realities, exceeded the limits of its discretion. 70. He also asserts that the classification adopted by the Commission fails to takeaccount of the fact that production has developed differently in the various regionsof the Community due to the effects of climate and of structural policy. It wasaccordingly necessary to delimit the wine-growing regions according to theirhomogeneous features and not to place the whole of Italy in a single region, anapproach which appears irrational and inequitable. 71. The Commission and the Spanish Government consider, however, that determiningthe production regions by reference to the territories of the various Member Statesis, from an administrative point of view, the only method which reliably enablesdata on stocks and production to be collected by the national authorities. Thus, thehistorical bases, namely the reference wine years, which are used to determinewhether compulsory distillation must be carried out under Article 39(3) of Regulation No 822/87, are constituted from the data collated by the Member Statesfor their territory. The same approach should prevail with regard to the dataforming the basis of the forward estimate, which itself is at the origin of a decisionas to whether or not there should be compulsory distillation. The Commissionpoints out in addition that, as regards climate and oenology, the differentcharacteristics of certain production areas in Italy in any event cancel each otherout naturally, so that the determination finally proves to be balanced. Besides, theItalian Government gave its agreement to that delimitation. 72. In that regard, it must be held that in an entity composed of Member States, suchas the European Community, it is clearly reasonable to take the territory of thoseMember States as a point of reference for administrative purposes. Even thoughgeographical and economic conditions may not be identical in the various parts ofnational territory, the Commission was therefore entitled, in the exercise of itsdiscretion, to regard the whole of the territory of a Member State as a singleregion, provided that such a decision was not manifestly unsuited to the structuresof the Member State in question (for the comparable case of a decision of aMember State to regard the whole of its territory as a single region for thepurposes of implementing the additional levy on milk within a regional framework,see Joined Cases C-267/88 to C-285/88 Wuidart and Others v Laiterie CoopérativeEupenoise and Others [1990] ECR I-435, paragraph 35). 73. The choice of the Commission to determine the wine-growing regions by referenceto the territory of the wine-growing Member States being therefore prima facie areasonable solution, which, moreover, was adopted with the agreement of theMember State concerned, only serious arguments based on specific circumstancescould result in its being called into question. In this case, the mere reference, ingeneral terms and without supporting evidence, to variable climatic conditions andthe effects of structural policy cannot establish such circumstances. Questions 6 and 7 74. By its sixth and seventh questions, the referring court asks whether Article 1(1) ofRegulation No 3151/94, which extended to 29 January 1995 the time-limit fordelivering table wine to a distillery in respect of the 1993/94 wine year, is valid. Inaccordance with Article 12 of Regulation No 441/88, that time-limit would normallyhave expired in July 1994. In the view of the referring court, compulsorydistillation, as a short-term instrument, is founded on the premiss that it helps tostabilise the imbalance in the current wine year. When it takes place subsequently,that premiss is absent and the measure is unlawful because it is adopted in breachof Article 39(1) of Regulation No 822/87 and of the principle of proportionality,inasmuch as it appears to be neither appropriate nor necessary in order to achievethe objective of stabilisation in the 1993/94 wine year. 75. The applicant in the main proceedings adds that the surpluses of the 1993/94 wineyear were in fact exhausted by August 1994 and that, in order to comply with theirobligation to distil, producers had to resort to their new harvest. That reducesdistillation to a formal obligation devoid of any real and tangible purpose. 76. In the Commission's view, the answer to those questions has no relevance to theoutcome of the dispute since the applicant in the main proceedings did not makeuse of the extended period. 77. In that regard, it is clear from the order for reference that the Ministry imposeda penalty on Mr Zaninotto for the non-distillation of the quantities to be deliveredby him during the 1993/94 wine year. That presupposes, therefore, that MrZaninotto did not make use of the additional possibility of carrying out distillationsubsequently and avoiding the penalty in that way. 78. The validity of the provision in issue thus manifestly has no bearing on the outcomeof the main proceedings. 79. In accordance with settled case-law, it must be held that the questions referred tothe Court for a preliminary ruling do not involve an interpretation of Communitylaw objectively required for the decision to be taken by the national tribunal (see,in particular, Case C-361/97 Nour v Burgenländische Gebietskrankenkasse [1998]ECR I-3101, paragraph 15 and the case-law cited). 80. Accordingly, the Court lacks jurisdiction to answer the sixth and seventh questions. 81. The answer to the questions raised by the Pretura Circondariale di Treviso musttherefore be that examination thereof has disclosed no factor of such a kind as toaffect the validity of the provisions referred to. Costs 82. The costs incurred by the Italian and Spanish Governments, the Council and theCommission, which have submitted observations to the Court, are not recoverable.Since these proceedings are, for the parties to the main proceedings, a step in theaction pending before the national court, the decision on costs is a matter for thatcourt. On those grounds, THE COURT (Fifth Chamber), in answer to the questions referred to it by the Pretura Circondariale di Treviso,Sezione Distaccata di Conegliano, by order of 2 November 1996, hereby rules: Examination of the questions raised has disclosed no factor of such a kind as toaffect the validity of:  the fourth indent of Article 1(3) of Commission Regulation (EC) No 343/94of 15 February 1994 opening compulsory distillation as provided for inArticle 39 of Council Regulation (EEC) No 822/87 and derogating for the1993/94 wine year from certain detailed rules for the application thereof;  Article 1(1)(c) and (2) of Commission Regulation (EC) No 465/94 of1 March 1994 fixing for the 1993/94 wine year the percentages of table wineproduction to be delivered for compulsory distillation as provided for inArticle 39 of Council Regulation (EEC) No 822/87, in Regions 3 and 6, asamended by Commission Regulation (EC) No 610/94 of 18 March 1994;  Article 39(1) and (4) of Council Regulation (EEC) No 822/87 of16 March 1987 on the common organisation of the market in wine; or  the fourth indent of Article 4(2) of Commission Regulation (EEC)No 441/88 of 17 February 1988 laying down detailed rules for applyingcompulsory distillation as referred to in Article 39 of Regulation No 822/87. Jann Gulmann Edward Sevón Wathelet Delivered in open court in Luxembourg on 29 October 1998. R. Grass J.-P. Puissochet Registrar President of the Fifth Chamber 1: Language of the case: Italian.