61984CJ0243_EN
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Parties
IN CASE 243/84
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE OESTRE LANDSRET ( EASTERN DIVISION OF THE HIGH COURT ) OF DENMARK FOR A PRELIMINARY RULING IN THE PROCEEDINGS PENDING BEFORE THAT COURT BETWEEN
JOHN WALKER & SONS LTD, A COMPANY INCORPORATED UNDER ENGLISH LAW, HAVING ITS REGISTERED OFFICE IN LONDON,
AND
MINISTERIET FOR SKATTER OG AFGIFTER ( MINISTRY FOR FISCAL AFFAIRS )
Subject of the case
ON THE INTERPRETATION OF ARTICLE 95 OF THE EEC TREATY,
Grounds
1 BY JUDGMENT OF 27 SEPTEMBER 1984, WHICH WAS RECEIVED AT THE COURT ON 5 OCTOBER 1984, THE OESTRE LANDSRET REFERRED TO THE COURT OF JUSTICE FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A NUMBER OF QUESTIONS CONCERNING THE INTERPRETATION OF ARTICLE 95 OF THE EEC TREATY, IN ORDER TO ENABLE IT TO ASSESS THE COMPATIBILITY WITH THAT PROVISION OF A SYSTEM OF DIFFERENTIAL TAXATION APPLIED UNDER DANISH TAX LEGISLATION TO SCOTCH WHISKY AND FRUIT WINE OF THE LIQUEUR TYPE .
2 ACCORDING TO LAW NO 98 OF 17 MARCH 1971 CHARGING DUTY ON WINE AND FRUIT WINE, AS MOST RECENTLY AMENDED BY LAW NO 149 OF 11 APRIL 1984, FRUIT WINE OF THE LIQUEUR TYPE OF AN ALCOHOLIC STRENGTH NOT EXCEEDING 20% BY VOLUME IS SUBJECT TO A SPECIFIC DUTY CALCULATED PER LITRE OF THE PRODUCT . SCOTCH WHISKY, HOWEVER, LIKE OTHER SPIRITS, AS WELL AS FRUIT WINE OF THE LIQUEUR TYPE OF AN ALCOHOLIC STRENGTH EXCEEDING 20% BY VOLUME AND GRAPE WINE OF THE LIQUEUR TYPE EXCEEDING 23% BY VOLUME ARE, ACCORDING TO LAW NO 153 OF 6 MAY 1980 CHARGING DUTY ON SPIRITS, AS MOST RECENTLY AMENDED BY LAW NO 149 OF 11 APRIL 1984, SUBJECT TO DUTY CONSISTING OF A SPECIFIC DUTY IMPOSED PER LITRE OF PURE ETHYL ALCOHOL AND A DUTY PROPORTIONATE TO THE HIGHEST SELLING PRICE CHARGED BY WHOLESALERS .
3 THE DANISH TAX LEGISLATION DOES NOT DEFINE FRUIT WINE . ACCORDING TO A CIRCULAR ISSUED BY THE DIRECTORATE-GENERAL FOR CUSTOMS, FRUIT WINE IS A PRODUCT OBTAINED BY THE FERMENTATION OF FRUIT JUICE OR HONEY AND CONTAINS AT LEAST ONE LITRE OF FERMENTED ALCOHOL PER 100 LITRES ; THE ALCOHOL CONTENT OF THE END PRODUCT MAY BE INCREASED BY THE ADDITION OF NEUTRAL DISTILLED ALCOHOL, THAT IS TO SAY EXCLUDING FLAVOURED ALCOHOL, SUCH AS COGNAC, RUM OR WHISKY . IT BECAME APPARENT DURING THE PROCEEDINGS THAT THE ALCOHOLIC STRENGTH ACHIEVED BY NATURAL FERMENTATION VARIES, IN PRACTICE, BETWEEN 6% AND 8% BY VOLUME .
4 THE ORDER FOR REFERENCE INDICATES THAT JOHN WALKER & SONS LTD, THE PLAINTIFF IN THE MAIN PROCEEDINGS, PRODUCES SCOTCH WHISKY OF AN ALCOHOLIC STRENGTH OF 40% BY VOLUME WHICH IT MARKETS, AMONGST OTHER COUNTRIES, IN DENMARK . IN 1982 IT INSTITUTED PROCEEDINGS AGAINST THE DANISH MINISTRY FOR FISCAL AFFAIRS BEFORE THE OESTRE LANDSRET FOR A DECLARATION THAT TAXATION WHICH DIFFERENTIATES BETWEEN SCOTCH WHISKY AND FRUIT WINE OF THE LIQUEUR TYPE, DANISH PRODUCTS WHICH IT REGARDS AS EITHER SIMILAR TO, OR IN COMPETITION WITH, SCOTCH WHISKY, IS CONTRARY TO ARTICLE 95 OF THE EEC TREATY .
5 IN ORDER TO ENABLE IT TO DETERMINE WHETHER ARTICLE 95 OF THE EEC TREATY HAS BEEN INFRINGED, THE NATIONAL COURT REFERRED TO THE COURT OF JUSTICE THE FOLLOWING QUESTIONS FOR A PRELIMINARY RULING :
( 1 ) MUST THE FIRST PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY BE INTERPRETED AS MEANING THAT SCOTCH WHISKY AND FRUIT WINE OF THE LIQUEUR TYPE ARE TO BE REGARDED AS ' SIMILAR . . . PRODUCTS ', THE ONE BEING IMPORTED AND THE OTHER OF DOMESTIC ORIGIN, WITH THE RESULT THAT IT IS CONTRARY TO THAT PROVISION TO MAINTAIN TAX RULES WHEREBY WHISKY, LIKE OTHER DISTILLED SPIRITS, IS SUBJECT TO A COMBINED DUTY CALCULATED PARTLY ON THE BASIS OF ITS ALCOHOL CONTENT AND PARTLY ON THE BASIS OF ITS PRICE, WHILST THE TAX ON FRUIT WINE ( AND WINE MADE FROM GRAPES ) IS CALCULATED SOLELY IN RELATION TO THE QUANTITY OF THE BEVERAGE, WHERE THE TAX RULES RESULT IN A LOWER DUTY ON FRUIT WINE ( AND WINE MADE FROM GRAPES ) THAN ON WHISKY, WHERE THOSE RULES DO NOT MAKE A DISTINCTION ON THE BASIS OF THE BEVERAGES '
COUNTRY OF ORIGIN, WHERE NO WHISKY IS MANUFACTURED IN THE MEMBER STATE CONCERNED ( DENMARK ), BUT APPROXIMATELY THREE-QUARTERS OF THE BEVERAGES CONSUMED WHICH ARE SUBJECT TO THE HIGHER DUTY ( THAT APPLICABLE TO SPIRITS ) ARE OF DOMESTIC ORIGIN, AND WHERE MORE THAN 99% OF THE FRUIT WINE OF THE LIQUEUR TYPE CONSUMED IS OF DOMESTIC ORIGIN?
( 2)MUST THE SECOND PARAGRAPH OF ARTICLE 95 BE INTERPRETED AS MEANING THAT IN THE CIRCUMSTANCES SET OUT IN QUESTION 1 A COMPARISON BETWEEN THE DUTIES ON SCOTCH WHISKY AND ON FRUIT WINE OF THE LIQUEUR TYPE SHOULD BE UNDERTAKEN? IF SO, IS IT CONTRARY TO THAT PROVISION IF THE DUTIES, CONSIDERED IN RELATION TO THE BEVERAGE ' S PRICE, QUANTITY AND ALCOHOL CONTENT, ARE AS DESCRIBED IN THE ANNEX TO THE OESTRE LANDSRET ' S DECISION?
( 3)FOR THE PURPOSE OF ANSWERING QUESTIONS 1 AND 2 IS IT RELEVANT THAT THE HISTORICAL BASIS FOR THE RULES ON THE TAXATION OF FRUIT WINE IS A DESIRE TO PROVIDE FRUIT GROWERS WHO WORK IN DIFFICULT CLIMATIC CONDITIONS WITH A WIDER MARKET FOR THEIR PRODUCE?
6 WRITTEN OBSERVATIONS WERE SUBMITTED BY THE PLAINTIFF IN THE MAIN PROCEEDINGS, BY THE GOVERNMENT OF THE KINGDOM OF DENMARK, BY THE GOVERNMENT OF THE ITALIAN REPUBLIC AND BY THE COMMISSION OF THE EUROPEAN COMMUNITIES .
THE FIRST PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY
7 IN THE FIRST QUESTION, THE COURT IS ASKED TO INTERPRET THE CONCEPT OF ' SIMILAR . . . PRODUCTS '
WITHIN THE MEANING OF THE FIRST PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY .
8 ACCORDING TO THE PLAINTIFF IN THE MAIN PROCEEDINGS, SCOTCH WHISKY AND FRUIT WINE OF THE LIQUEUR TYPE ARE COMPARABLE AND SIMILAR PRODUCTS WHICH MEET THE SAME NEEDS FROM THE POINT OF VIEW OF CONSUMERS . THE DECISIVE CRITERION FOR ESTABLISHING SIMILARITY IS THE POSSIBLE DEGREE OF SUBSTITUTION AND NOT THE RAW MATERIAL USED TO MAKE THE PRODUCT, OR THE METHOD OF MANUFACTURE OR THE CLASSIFICATION OF THE PRODUCT IN THE COMMON CUSTOMS TARIFF . THE PLAINTIFF EMPHASIZES IN PARTICULAR THAT 95% OF THE ALCOHOL CONTENT OF LIQUEUR WINE CAN CONSIST OF ADDED DISTILLED ETHYL ALCOHOL, THAT THE FLAVOUR AND COLOUR OF SUCH WINE IS ALTERED BY THE ADDITION OF AROMATIC EXTRACTS OR SUBSTANCES AND THAT SCOTCH WHISKY IS NORMALLY CONSUMED DILUTED, WHEN IT HAS AN ALCOHOLIC STRENGTH EQUAL TO, OR EVEN LOWER THAN, THAT OF LIQUEUR WINE .
9 THE DANISH GOVERNMENT, SUPPORTED BY THE ITALIAN GOVERNMENT, OBSERVES THAT SCOTCH WHISKY AND FRUIT WINE OF THE LIQUEUR TYPE DIFFER IN TERMS OF BOTH THE RAW MATERIALS USED AND THE METHOD OF MANUFACTURE ( DISTILLATION IN THE CASE OF WHISKY AND NATURAL FERMENTATION IN THE CASE OF FRUIT WINE ) AND IN TERMS OF THEIR CHARACTERISTICS AND ORGANOLEPTIC PROPERTIES . FOR THAT REASON, IN ITS VIEW, THE PRODUCTS ARE CLASSIFIED UNDER DIFFERENT HEADINGS OF THE COMMON CUSTOMS TARIFF . THE ADDITION OF NEUTRAL ALCOHOL CANNOT TRANSFORM FRUIT WINE INTO SPIRITS .
10 THE COMMISSION SHARES THE VIEW THAT THE PRODUCTS IN QUESTION DO NOT HAVE SIMILAR AND COMPARABLE USES AND CANNOT BE REGARDED AS SIMILAR PRODUCTS WITHIN THE MEANING OF THE FIRST PARAGRAPH OF ARTICLE 95 .
11 IN ORDER TO DETERMINE WHETHER PRODUCTS ARE SIMILAR WITHIN THE TERMS OF THE PROHIBITION LAID DOWN IN THE FIRST PARAGRAPH OF ARTICLE 95 IT IS NECESSARY TO CONSIDER, AS THE COURT STATED IN ITS JUDGMENT OF 17 FEBRUARY 1976 IN CASE 45/75 ( REWE V HAUPTZOLLAMT LANDAU ( 1976 ) ECR 181 ), WHETHER THEY HAVE SIMILAR CHARACTERISTICS AND MEET THE SAME NEEDS FROM THE POINT OF VIEW OF CONSUMERS . THE COURT ENDORSED A BROAD INTERPRETATION OF THE CONCEPT OF SIMILARITY IN ITS JUDGMENTS OF 27 FEBRUARY 1980 IN CASE 168/78 ( COMMISSION V FRANCE ( 1980 ) ECR 347 ) AND 15 JULY 1982 IN CASE 216/81 ( COGIS V AMMINISTRAZIONE DELLE FINANZE DELLO STATO ( 1982 ) ECR 2701 ) AND ASSESSED THE SIMILARITY OF THE PRODUCTS NOT ACCORDING TO WHETHER THEY WERE STRICTLY IDENTICAL, BUT ACCORDING TO WHETHER THEIR USE WAS SIMILAR AND COMPARABLE . CONSEQUENTLY, IN ORDER TO DETERMINE WHETHER PRODUCTS ARE SIMILAR IT IS NECESSARY FIRST TO CONSIDER CERTAIN OBJECTIVE CHARACTERISTICS OF BOTH CATEGORIES OF BEVERAGES, SUCH AS THEIR ORIGIN, THE METHOD OF MANUFACTURE AND THEIR ORGANOLEPTIC PROPERTIES, IN PARTICULAR TASTE AND ALCOHOL CONTENT, AND SECONDLY TO CONSIDER WHETHER OR NOT BOTH CATEGORIES OF BEVERAGES ARE CAPABLE OF MEETING THE SAME NEEDS FROM THE POINT OF VIEW OF CONSUMERS .
12 IT SHOULD BE NOTED THAT THE TWO CATEGORIES OF BEVERAGES EXHIBIT MANIFESTLY DIFFERENT CHARACTERISTICS . FRUIT WINE OF THE LIQUEUR TYPE IS A FRUIT-BASED PRODUCT OBTAINED BY NATURAL FERMENTATION, WHEREAS SCOTCH WHISKY IS A CEREAL-BASED PRODUCT OBTAINED BY DISTILLATION . THE ORGANOLEPTIC PROPERTIES OF THE TWO PRODUCTS ARE ALSO DIFFERENT . AS THE COURT HELD IN REWE ( SUPRA ), THE FACT THAT THE SAME RAW MATERIAL, FOR EXAMPLE ALCOHOL, IS TO BE FOUND IN THE TWO PRODUCTS IS NOT SUFFICIENT REASON TO APPLY THE PROHIBITION CONTAINED IN THE FIRST PARAGRAPH OF ARTICLE 95 . FOR THE PRODUCTS TO BE REGARDED AS SIMILAR THAT RAW MATERIAL MUST ALSO BE PRESENT IN MORE OR LESS EQUAL PROPORTIONS IN BOTH PRODUCTS . IN THAT REGARD, IT MUST BE POINTED OUT THAT THE ALCOHOLIC STRENGTH OF SCOTCH WHISKY IS 40% BY VOLUME, WHEREAS THE ALCOHOLIC STRENGTH OF FRUIT WINE OF THE LIQUEUR TYPE, TO WHICH THE DANISH TAX LEGISLATION APPLIES, DOES NOT EXCEED 20% BY VOLUME .
13 THE CONTENTION THAT SCOTCH WHISKY MAY BE CONSUMED IN THE SAME WAY AS FRUIT WINE OF THE LIQUEUR TYPE, AS AN APERITIF DILUTED WITH WATER OR WITH FRUIT JUICE, EVEN IF IT WERE ESTABLISHED, WOULD NOT BE SUFFICIENT TO RENDER SCOTCH WHISKY SIMILAR TO FRUIT WINE OF THE LIQUEUR TYPE, WHOSE INTRINSIC CHARACTERISTICS ARE FUNDAMENTALLY DIFFERENT .
14 THE ANSWER TO THE FIRST QUESTION MUST THEREFORE BE THAT THE FIRST PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY MUST BE INTERPRETED AS MEANING THAT PRODUCTS SUCH AS SCOTCH WHISKY AND FRUIT WINE OF THE LIQUEUR TYPE MAY NOT BE REGARDED AS SIMILAR PRODUCTS .
THE SECOND PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY
15 IN ITS SECOND QUESTION THE NATIONAL COURT SEEKS TO ASCERTAIN WHETHER, IF THEY ARE NOT SIMILAR PRODUCTS, SCOTCH WHISKY AND FRUIT WINE OF THE LIQUEUR TYPE ARE TO BE REGARDED AS COMPETING PRODUCTS AND, IF SO, WHETHER TAXATION THAT DIFFERENTIATES BETWEEN THE TWO PRODUCTS, OF THE KIND IMPOSED BY THE AFORESAID DANISH LEGISLATION, IS TO BE REGARDED AS INCOMPATIBLE WITH THE SECOND PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY .
16 THE PLAINTIFF IN THE MAIN PROCEEDINGS MAINTAINS THAT, ACCORDING TO THE RELEVANT CASE-LAW, IT IS NECESARY TO CONSIDER, IN ANALYSING THE COMPETITIVE RELATIONSHIP, THE POSSIBILITIES FOR MARKET DEVELOPMENT AND THE POTENTIAL FOR THE SUBSTITUTION OF PRODUCTS . SCOTCH WHISKY IS TO THE AVERAGE ENGLISH OR SCOTTISH CONSUMER WHAT FRUIT WINE IS TO THE AVERAGE DANISH CONSUMER . AS REGARDS THE RATIO BETWEEN THE TAX BURDEN ON THE ONE HAND AND ON THE OTHER THE QUANTITY, THE ALCOHOL CONTENT AND THE PRICE OF THE PRODUCT, WHICH THE COURT ADOPTED AS CRITERIA FOR COMPARISON, WHISKY IS SUBSTANTIALLY OVER-TAXED BY COMPARISON WITH THE COMPETING DANISH PRODUCT .
17 THE DANISH GOVERNMENT AND THE GOVERNMENT OF THE ITALIAN REPUBLIC MAINTAIN IN THEIR OBSERVATIONS THAT HAVING REGARD TO THEIR SPECIFIC CHARACTERISTICS, THEIR ORGANOLEPTIC PROPERTIES AND, IN PARTICULAR, THEIR DIFFERENT ALCOHOLIC STRENGTH, SCOTCH WHISKY AND LIQUEUR WINES ARE NOT COMPETING PRODUCTS . IN THEIR VIEW, THE MEMBER STATES ARE ENTITLED TO TAX SPIRITS MORE HEAVILY THAN WINE AND THE DANISH LEGISLATION HAS NEITHER THE PURPOSE NOR THE EFFECT OF PROTECTING A SPECIFIC CATEGORY OF BEVERAGES . THE DANISH GOVERNMENT ALSO POINTS OUT THAT THE DANISH TAX SYSTEM HAS NOT HAD THE EFFECT OF CURBING IMPORTS . IT MAINTAINS THAT THE STATISTICS SHOW THAT BETWEEN 1980 - THE YEAR IN WHICH THE PRESENT TAX SYSTEM WAS ADOPTED AS A RESULT OF THE COURT ' S JUDGMENT OF 27 FEBRUARY 1980 IN CASE 171/78 ( COMMISSION V DENMARK ( 1980 ) ECR 447 ) HOLDING THAT THE LEGISLATION PREVIOUSLY IN FORCE DISCRIMINATED IN FAVOUR OF AQUAVIT - AND 1985, IMPORTS OF WHISKY INCREASED BY OVER 30%, EVEN THOUGH THERE WAS A DECLINE IN THE PLAINTIFF ' S OWN SALES .
18 ACCORDING TO THE COMMISSION, IT IS NECESSARY TO CONSIDER WHETHER THE DANISH TAX SYSTEM FAVOURS DOMESTIC PRODUCTION . IN THAT REGARD IT POINTS OUT THAT HEAVILY TAXED SPIRITS ARE FOR THE MOST PART PRODUCTS OF DOMESTIC ORIGIN . A SYSTEM WHICH RELIES IN THE CASE OF WHISKY AND DOMESTICALLY-PRODUCED SPIRITUOUS BEVERAGES ON ALCOHOLIC STRENGTH AND PRICE AND IN THE CASE OF DOMESTIC AND IMPORTED LIQUEUR WINE ON VOLUME ALONE IS COMPATIBLE WITH THE SECOND PARAGRAPH OF ARTICLE 95 IF A SIGNIFICANT PROPORTION OF DOMESTIC PRODUCTION FALLS WITHIN EACH OF THE RELEVANT TAX CATEGORIES .
19 THE SECOND PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY PROVIDES THAT NO MEMBER STATE MAY IMPOSE ON THE PRODUCTS OF OTHER MEMBER STATES ANY INTERNAL TAXATION OF SUCH A NATURE AS TO AFFORD INDIRECT PROTECTION TO OTHER DOMESTIC PRODUCTS .
20 THAT PROVISION THEREFORE PURSUES THE GENERAL AIM OF GUARANTEEING FISCAL NEUTRALITY AND SEEKS TO ENSURE THAT MEMBER STATES DO NOT DISCRIMINATE AGAINST PRODUCTS ORIGINATING IN OTHER MEMBER STATES BY FAVOURING DOMESTIC PRODUCTS UNDER THEIR NATIONAL TAX LEGISLATION, THEREBY CREATING BARRIERS TO THE FREE MOVEMENT OF GOODS BETWEEN THE MEMBER STATES .
21 IT IS CLEAR FROM THE DOCUMENTS FORWARDED BY THE NATIONAL COURT AND FROM THE OBSERVATIONS SUBMITTED TO THE COURT OF JUSTICE THAT THE PRODUCT WHICH BEARS THE LIGHTEST TAX BURDEN IS MANUFACTURED ALMOST EXCLUSIVELY IN DENMARK AND THAT WHISKY, WHICH IS EXCLUSIVELY AN IMPORTED PRODUCT, IS TAXED NOT AS SUCH BUT AS AN ALCOHOLIC BEVERAGE INCLUDED IN THE TAX CATEGORY OF SPIRITS - THAT IS TO SAY BEVERAGES WITH A HIGH ALCOHOL CONTENT - WHICH COMPRISES OTHER PRODUCTS, THE VAST MAJORITY OF WHICH ARE DANISH .
22 IN ORDER TO ENABLE THE NATIONAL COURT TO DETERMINE WHETHER, IN THOSE CIRCUMSTANCES, THE DIFFERENTIAL TAXATION IMPOSED BY THE DANISH TAX SYSTEM CONSTITUTES AN INFRINGEMENT OF THE SECOND PARAGRAPH OF ARTICLE 95, IT IS NECESSARY TO RECALL THAT THE COURT HAS CONSISTENTLY HELD ( SEE IN PARTICULAR THE JUDGMENT OF 15 MARCH 1983 IN CASE 319/81 COMMISSION V ITALY ( 1983 ) ECR 601 ) THAT COMMUNITY LAW AT ITS PRESENT STAGE OF DEVELOPMENT DOES NOT RESTRICT THE FREEDOM OF EACH MEMBER STATE TO LAY DOWN TAX ARRANGEMENTS WHICH DIFFERENTIATE BETWEEN CERTAIN PRODUCTS ON THE BASIS OF OBJECTIVE CRITERIA, SUCH AS THE NATURE OF THE RAW MATERIALS USED OR THE PRODUCTION PROCESSES EMPLOYED . SUCH DIFFERENTIATION IS COMPATIBLE WITH COMMUNITY LAW IF IT PURSUES OBJECTIVES OF ECONOMIC POLICY WHICH ARE THEMSELVES COMPATIBLE WITH THE REQUIREMENTS OF THE TREATY AND ITS SECONDARY LEGISLATION, AND IF THE DETAILED RULES ARE SUCH AS TO AVOID ANY FORM OF DISCRIMINATION, DIRECT OR INDIRECT, IN REGARD TO IMPORTS FROM OTHER MEMBER STATES OR ANY FORM OF PROTECTION OF COMPETING DOMESTIC PRODUCTS .
23 ACCORDINGLY, WITHOUT THERE BEING ANY NEED TO ASCERTAIN WHETHER THERE EXISTS A COMPETITIVE RELATIONSHIP BETWEEN SCOTCH WHISKY AND FRUIT WINE OF THE LIQUEUR TYPE, THE ANSWER TO THE SECOND QUESTION MUST BE THAT AT THE PRESENT STAGE OF ITS DEVELOPMENT COMMUNITY LAW, AND IN PARTICULAR THE SECOND PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY, DOES NOT PRECLUDE THE APPLICATION OF A SYSTEM OF TAXATION WHICH DIFFERENTIATES BETWEEN CERTAIN BEVERAGES ON THE BASIS OF OBJECTIVE CRITERIA . SUCH A SYSTEM DOES NOT FAVOUR DOMESTIC PRODUCERS IF A SIGNIFICANT PROPORTION OF DOMESTIC PRODUCTION OF ALCOHOLIC BEVERAGES FALLS WITHIN EACH OF THE RELEVANT TAX CATEGORIES .
24 IN VIEW OF THE ANSWERS GIVEN TO THE FIRST TWO QUESTIONS, THERE IS NO NEED TO ANSWER THE THIRD QUESTION .
Decision on costs
COSTS
25 THE COSTS INCURRED BY THE GOVERNMENT OF THE KINGDOM OF DENMARK, THE GOVERNMENT OF THE ITALIAN REPUBLIC AND THE COMMISSION OF THE EUROPEAN COMMUNITIES, WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT, ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE, IN SO FAR AS THE PARTIES TO THE MAIN PROCEEDINGS ARE CONCERNED, IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT, THE DECISION ON COSTS IS A MATTER FOR THAT COURT .
Operative part
ON THOSE GROUNDS,
THE COURT,
IN ANSWER TO THE QUESTIONS SUBMITTED TO IT BY THE OESTRE LANDSRET BY JUDGMENT OF 27 SEPTEMBER 1984, HEREBY RULES :
( 1 ) THE FIRST PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY MUST BE INTERPRETED AS MEANING THAT PRODUCTS SUCH AS SCOTCH WHISKY AND FRUIT WINE OF THE LIQUEUR TYPE MAY NOT BE REGARDED AS SIMILAR PRODUCTS .
( 2)IN THE PRESENT STAGE OF ITS DEVELOPMENT, COMMUNITY LAW, AND IN PARTICULAR THE SECOND PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY, DOES NOT PRECLUDE THE APPLICATION OF A SYSTEM OF TAXATION WHICH DIFFERENTIATES BETWEEN CERTAIN BEVERAGES ON THE BASIS OF OBJECTIVE CRITERIA . SUCH A SYSTEM DOES NOT FAVOUR DOMESTIC PRODUCERS WHERE A SIGNIFICANT PROPORTION OF DOMESTIC PRODUCTION OF ALCOHOLIC BEVERAGES FALLS WITHIN EACH OF THE RELEVANT TAX CATEGORIES .