Opinion of Mr Advocate General Van Gerven delivered on 2 May 1990. - Weingut Dietz-Matti v Federal Republic of Germany. - Reference for a preliminary ruling: Verwaltungsgericht Frankfurt am Main - Germany. - Agriculture - Aid for the distillation of wine - Types of wine - Specification - Definition. - Case C-158/89.



European Court reports 1990 Page I-02013



Opinion of the Advocate-General

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Mr President,

Members of the Court,

1 . The questions referred to the Court for a preliminary ruling by the Verwaltungsgericht ( Administrative Court ) Frankfurt am Main relate to the role of the Member States in filling lacunae in Community law, more specifically as regards the provisions relating to aid for the distillation of table wine .

The facts

2 . The dispute between the parties to the main proceedings is concerned with the grant of aid for the distillation of table wine during the 1983/84 wine-growing year . I shall now briefly summarize the rules of Community law which are relevant to this case and the way in which the Bundesamt fuer Ernaehrung und Forstwirtschaft ( Federal Office for Food and Forestry, hereinafter referred to as "the Bundesamt ") has filled the gaps in those rules .

The basic regulation in force during the 1983/84 wine-growing year was Council Regulation ( EEC ) No 337/79 on the common organization of the market in wine . ( 1 ) The common organization of the market aimed, among other things, to stabilize the wine market by adjusting resources to needs . To that end, the regulation provided, inter alia, for the possibility of granting aid for the preventive distillation of certain table wines ( see Article 11 of Regulation No 337/79 ). The general rules on ( voluntary and compulsory ) preventive distillation were taken over by Council Regulation ( EEC ) No 2179/83 . ( 2 ) Under that regulation there are two ways of obtaining aid for the voluntary distillation of wine . Producers can conclude a delivery contract with a distiller and submit it to the competent intervention agency for approval ( see Article 4 of the regulation ). Alternatively, producers who themselves possess distillation plants or who intend to have their wine distilled on their behalf in the plant of an approved distiller working under contract can submit a declaration of delivery for distillation to the competent intervention agency for approval ( see Article 5 ). The intervention agency pays the aid for the distillation operations in question upon "the submission of proof that the total quantity of wine mentioned in the contract or declaration ... has been distilled" ( see Article 7(3 ) ).

3 . Detailed implementing rules governing the grant of aid for the distillation of wine in the 1983/84 wine-growing year were set out in Commission Regulation ( EEC ) No 2373/83 . ( 3 ) That regulation fixes the amount of aid on the basis of the actual alcoholic strength by volume per hectolitre of the product of distillation . The amount of aid also differs depending on the type of wine used to obtain the product of the distillation ( see Article 5 ). As far as the distillation of white table wine, which is at issue in the main proceedings, is concerned, three different percentages of aid are granted depending on whether the wine is white table wine of Type A I, A II or A III, the highest percentage being granted for wine of Type A III and the lowest for wine of Type A I . Those types of table wine are defined in Council Regulation ( EEC ) No 340/79 . ( 4 ) Article 2 of that regulation defines the types of white table wine as follows :

"( a ) white table wine, other than that referred to under ( b ) and ( c ), with an actual alcoholic strength by volume of not less than 10% vol which shall be known as 'Type A I' ;

( b ) white table wine from vine varieties of the Sylvaner or Mueller-Thurgau type, which shall be known as 'Type A II' ;

( c ) white table wine from vine varieties of the Riesling type, which shall be known as 'Type A III' ".

Article 3 of the regulation provides as follows :

"The lists of vine varieties referred to in ... (( Article )) 2(b ) and ( c ) shall be adopted according to the procedure provided for in Article 67 of Regulation ( EEC ) No 337/79 ". ( 5 )

At the material time, the lists of wine varieties referred to in Article 3 of Regulation No 340/79, had still not been adopted . This the first of the two lacunae at issue in this case . As the Commission points out in its observations, the representatives of the Member States on the management committee had not reached agreement on a number of Commission proposals whereby it was intended to define uniform classification criteria and to adopt lists on the basis of those criteria . Faced with this lacuna, the Bundesamt itself classified the German table wines in a "Bekanntmachung" ( notice ), which was published in the Bundesanzeiger ( Official Gazette ) of 21 March 1979 . Table wines from the vine varieties Auxerrois, weisser Burgunder, weisser Riesling and Rulaender were classed as Type A III . All other wine table wines were classed as Type A II; hence, according to the Bekanntmachung there are no German wines of Type A I .

4 . The other lacuna at issue in this case is to be found in the rules of Community law concerning the particulars which must be specified in the distillation contracts or declarations of delivery for distillation to which reference has already been made . The combined provisions of Articles 4(2 ) and 5(2 ) of Council Regulation No 2179/83 ( cited above ) provide that the contract or declaration is to "specify at least the quantity, the colour and the actual alcoholic strength by volume of the wine ". Article 2(2 ) of Commission Regulation No 2373/83 sets out these particulars in more detail . Under that provision, contracts and declarations are to specify "at least" ( the words "at least" are omitted from the English version ):

"( a ) the quantity, colour and actual alcoholic strength by volume of the wine to be distilled, stating whether it is table wine or wine suitable for yielding table wine;

( b ) the name and address of the producer;

( c ) the place where the wine is stored;

( d ) the name of the distiller or of the distillery;

( e ) the address of the distillery ".

These provisions do not expressly stipulate that the contract or declaration must specify the type of table wine for which aid is sought . This is a major lacuna, since according to Article 5 of Commission Regulation No 2372/83 the amount of the aid is to be fixed, not only on the basis of the alcoholic strength by volume of the product of the distillation, but also on the basis of the type ( A I, A II or A III ) of the wine to be distilled ( see paragraph 3 above ). Since table wine of Types A II and A III ( unlike wine of Type A I ) is not defined by reference to the wine' s actual alcoholic strength by volume, the amount of the aid for the distillation of such wine cannot be determined unless the type of wine distilled is specified in the contract or declaration . As is clear from the national court' s order and from what the Bundesamt' s representative said at the hearing, the Bundesamt, in order to make good this lacuna, took the initiative of asking the undertaking seeking the aid to provide it with certain particulars as to the type of the wine .

5 . The facts which led to the main proceedings can be summarized as follows . On 14 January 1984, Weingut Dietz-Matti ( which I shall refer to as "the wine producer "), the plaintiff in the main proceedings, submitted a declaration of delivery of table wine for distillation by an approved distillery . As has already been mentioned, it also was asked to specify in the declaration required by the Bundesamt certain particulars relating to the type of wine submitted for distillation . According to the declaration made by the wine producer, aid was sought for the distillation of 178 hectolitres of table wine of the Type "A III Riesling ". This therefore resulted in the grant of the highest percentage of aid ( see paragraph 3 above ). By decision of 15 August 1984, aid in the amount of DM 24 379.65 was granted to the wine producer . However, during an inspection it was discovered that the quantity distilled contained a total of 18.35% Kerner and 1.76% Gewuerztraminer . Since it took the view that those two wines fell under Type A II without the proportions used in the blend being indicated in the declaration, the Bundesamt, by decision of 3 October 1985, revoked the decision granting the aid and demanded repayment of the whole of the amount of the aid, on the ground that the wine actually distilled was not as specified in the declaration .

6 . On 15 October 1985, the wine producer lodged a complaint against that decision with the Bundesamt in which it claimed that wine from the grape variety Kerner consisted principally of Riesling and could therefore be regarded as falling within Type A III . The Bundesamt rejected that complaint by decision of 5 June 1986 on the ground that the wine distilled did not tally with the description of the wine in the declaration . The wine producer brought an action against that decision in the Verwaltungsgericht Frankfurt am Main, which suspended the proceedings and referred the following questions to the Court for a preliminary ruling :

"( 1 ) Under Article 2(2 ) of Commission Regulation ( EEC ) No 2373/83 is specification of the correct type of wine in the distillation declaration a precondition for entitlement to aid?

( 2 ) Can vine varieties other than those mentioned in Article 2 of Council Regulation ( EEC ) No 340/79 be classified under Type A II or Type A III wine? According to what criteria must that classification be made?

( 3 ) ( a ) Can a blend which under German designation rules may be marketed with the mention of only one vine variety be classified under the type of wine which corresponds to that vine variety?

If not :

( b ) In the case of another mixture of wine of Types A II and A III before distillation, can aid be granted in accordance with the proportions of the types of wine?

If not :

( c ) As a fall-back provision, can aid be granted in such circumstances as for wine of Type A I?"

7 . Before getting down to the preliminary questions proper, I would first consider the question of the legality of action taken by an agency in the Member States in order to remedy lacunae in rules on a Community-level market organization .

Assessment of the Bundesamt' s action

8 . In its judgments the Court has confirmed on several occasions that, where the Community has exercised its powers exhaustively in order to create a common organization of the market in a particular sector, the Member States are no longer entitled to legislate in that sector . Lacunae ( 6 ) and imprecise provisions ( 7 ) do not as such confer on Member States independent jurisdiction to lay down rules, but must in principle be overcome in the light of the aims of the common organization of the markets in question .

On the other hand, it can be inferred from the state and the aims of a given organization of the market that the Member States have nevertheless a certain margin of legislative competence . In the 1984 judgment in Pluimveeslachterijen Midden-Nederland and Van Miert ( 8 ) the Court held that where the Council has failed to adopt the implementing measures necessary for a common organization of the market, the Member States are entitled on a provisional basis to retain or introduce national measures, provided that they are compatible with the principles of the common organization of the market and compatible with its aims . ( 9 ) The earlier judgment in Scheer had already confirmed that where a basic Council regulation cannot be fully effective owing to the absence of Commission implementing measures and, as a result, the proper operation of the system is jeopardized, the Member States are entitled and, under Article 5 of the EEC Treaty, under a duty to ensure that all the provisions of the regulation are effective . ( 10 )

As has already been stated, therefore, it appears from the case-law of the Court that the validity of actions of the national authorities is provisional : the underlying idea is that the Member States act in the common interest to fill a lacuna while taking into account the aims of the common organization of the market .

9 . Let us now consider how the principles set out in the case-law of the Court are to be applied to the way in which the Bundesamt filled the lacunae in the common organization of the market in wine which I described earlier .

As regards the obligation to specify the exact type of wine in the distillation declaration, the legality of the national measure cannot seriously be contested . Indeed, as has already been mentioned, under Commission Regulation No 2373/83 the amount of aid differs according to the type of wine and, under Article 2 of Council Regulation No 340/79, Types A I and A II are defined on the basis of the grape varieties from which they are made . It follows that the aid cannot be granted and the correctness of the declaration cannot be checked in the absence of particulars concerning the type of wine or the grape variety from which the wine to be distilled was made . The Bundesamt' s action was therefore completely consistent with the aims of the regulation, since it consisted in filling the lacunae in Articles 4 and 5 of Council Regulation No 2179/83 and Article 2 of Commission Regulation No 2373/83 . Moreover, the terms (" at least ") used in the aforesaid provisions do not preclude the manner in which the Bundesamt filled the said lacuna .

10 . Neither does it seem to me to have been unlawful to fill the second lacuna by drawing up a list of vine varieties in accordance with Article 3 of Regulation No 340/79 . The Bundesamt' s action must be assessed in the light of the fact that no agreement was reached on the management committee as to the actual content of the implementing measures referred to in the said Article 3 . However, it was necessary to draw up a list in order to be able to calculate the amount of distillation aid pursuant to Commission Regulation No 2373/83 . It must be considered on the basis of the principle set out in the judgments in Pluimveeslachterijen Midden-Nederland and Van Miert and Scheer whether the classification criteria used in the aforesaid Bekanntmachung of the Bundesamt are compatible with the principles of the common organization of the market and compatible with its aims .

The classification provided for in Council Regulation No 340/79 aims to fix for each type of table wine a guide price representative of Community production . As is stated in the preamble to the regulation, the extent to which a table wine is representative can be assessed on the basis either of its actual alcoholic strength by volume ( which is the case with Type A I ) or of its "characteristics ". In the case of Types A I and A II, those "characteristics" consist of a reference to the grape variety or varieties from which they are made . As the Commission stated at the hearing, those references are not, however, of a "biological" nature and the list is not exhaustive . On the contrary, the references are in the nature of examples and qualitative : they seek to provide an example of varieties which, in view of their quality, are eligible for aid in the upper or intermediate category .

In its Bekanntmachung the Bundesamt classed varieties not mentioned by name in Article 2 of Council Regulation No 340/79 in Type A II or A III . It did this on the basis of the characteristics of the wine made from those varieties, characteristics which determine the price . The Commission approved this method of classification : it is based on an objective criterion - quality and price - which is consistent with the aim of the regulation in question, namely the fixing of a guide price ( and of the amount of distillation aid ) for table wine . In view of the further fact that, as the Commission stressed at the hearing, it is difficult to define classification criteria which are generally acceptable given that the way in which varieties are assessed varies very greatly from one Member State to another, it can be considered that, pending uniform Community rules on the matter, the classification criteria employed in the Bundesamt' s Bekanntmachung are not incompatible with the aims of the common organization of the market .

In view of the conclusion which we have reached with regard to the compatibility with Community law of the classification criteria employed by the Bundesamt, the three questions referred for a preliminary ruling can be dealt with fairly succinctly .

The first question

11 . It follows from the foregoing that there is nothing to prevent the Bundesamt from making the grant of aid conditional on specifying the correct type of wine in the declaration . Even if this were not required expressly by a national implementing regulation, it would still be necessary for the correct operation of the system of distillation aid for white table wine . Furthermore, since correct specification of the type of wine in the declaration is essential, it is a genuine condition for the grant of the aid, and not just a element enabling the amount of the aid to be fixed . ( 11 )

In practice, therefore, in order for aid for the distillation of white table wine of Types A II and A III to be able to be granted, the contract or declaration must specify the type of wine to be distilled or the grape variety from which the wine was made . As regards white table wine of Type A I, which Article 2 of Regulation No 340/79 defines only on the basis of its actual alcoholic strength per volume, it can be inferred from the Community rules in force that the requirements are somewhat less strict, in so far as it is sufficient in that regard if the declaration does not specify the type of wine that it should specify the actual alcoholic strength by volume and that it should be possible to infer from the alcoholic strength that the wine is a wine of Type A I, that is to say a wine whose strength is not less than 10% or more than 12 %.

I therefore suggest that the Court' s answer to the first question should be that, in the case of wines of Types A II and A III, specification of the correct type of wine in the distillation declaration referred to in Article 2(2 ) of Regulation No 2373/83 is a condition for the grant of the aid . In the case of wines of Type A I, correct specification of the actual alcoholic strength by volume is sufficient .

The second question

12 . The question whether wines of Types A II and A III may come from vine varieties other than those listed in Article 2 of Council Regulation No 340/79 was raised because the wine producer indicated on the declaration form that the wine was "A III Riesling" whereas the quantity distilled contained some Kerner and Gewuerztraminer . According to the Bundesamt, those two wines should fall within Type A II ( which, according to the Bekanntmachung, is a residual category for German white table wines ). However, the wine producer argued before the national court that wine from the variety Kerner was principally Riesling and that the quantity distilled could therefore be classed as Type A III, having regard in addition to the tolerance which existed in the wine-growing year in question for blended wines ( see paragraph 13 below ).

The national court asks in this regard whether the term Riesling which appears in Regulation No 340/79 is used as a generic term, with the result that the Bundesamt rightly also mentioned in its Bekanntmachung other vine varieties, such as Auxerrois, weisser Burgunder and Rulaender under the heading of "Riesling" and whether it rightly decided that Kerner and Gewuerztraminer should not be classed as Type A III but as Type A II . In the event that the first part of this question is answered in the affirmative and second part in the negative, it might be that the declaration of the wine producer does not contain incorrect statements .

As regards the first part of this question, it appears from the general considerations set out above that the varieties referred to in Article 2(b ) and ( c ) of Regulation No 340/79 were mentioned as examples and that other varieties could also be included by means of lists to be drawn up pursuant to Article 3 of that regulation . It appears also from the foregoing that until such time as those lists were issued the Bundesamt was right to base itself on the classification indicated in the Bekanntmachung .

As regards the second part of this question, I take the view that the problems connected with the application of the classification contained in the Bekanntmachung to a given vine variety must be determined by the national court in the light of the aims of the existing organization of the market . Consequently, the national court must determine whether in the Bekanntmachung wine from Kerner and Gewuerztraminer varieties must be classed as Type A II or A III .

The third question

13 . In its third question, the national court seeks to establish on the basis of what criteria aid may be granted for the distillation of a blended wine ( that is to say a wine obtained from mixing table wines of Types A I, A II and/or A III ).

In the first limb of the question, the national court asks whether a blended wine may be classified in the light of the German rules on designations . This question must be answered in the negative . As the Commission and the Bundesamt rightly observed, the designation rules pursue aims - essentially protection of consumer interests - which are irrelevant to the classification of types of table wines for the purposes of Council Regulation No 340/79 .

This state of affairs is not affected by the fact that the Commission agreed, as regards the 1983/84 wine-growing year, not to ask wine producers who had indicated in their declarations only one wine type ( or variety ) where the distillation of a blended wine was involved ( 12 ) to reimburse the aid paid under Regulation No 2373/83, at least provided that the wines in question were blended wines which, under the national rules on designations, ( 13 ) could be marketed under the designation of the wine type indicated in the contract or declaration . ( 14 )

That concession on the part of the Commission related to applications for the reimbursement of amounts of aid and is probably explicable in terms of considerations relating to legitimate expectations . It cannot affect the conditions for the grant of the aid . Moreover, it does not appear relevant to the wine producer in the main proceedings : the national court observes that the blended wine at issue could in no event have been marketed under the designation "Riesling", because it contained more than 15% Kerner, namely 18.35 %.

14 . Since the German rules on designations cannot provide a valid criterion, rules must be determined for calculating the amount of the aid for the distillation of blended wine .

Let us consider, first of all, the second limb of the third question . The system of rules of Community law which we examined earlier according to which the amount of the distillation aid is to be fixed on the basis of the actual alcoholic strength per volume and depends on the type of wine ( see paragraph 3 above ) means that the amount of aid for a blended wine must be calculated on the basis of the proportion of each variety - unless, of course, all the constituents of a blended wine can be classed as being of the same wine type . However, it is not possible to calculate the amount of the aid on a proportional basis unless the contract or declaration shows, separately for each constituent, the quantity, the actual alcoholic strength per volume and the type . ( 15 ) Indeed, without these particulars it is impossible to verify the correctness of the declaration .

It follows that no aid may be granted for the distillation of wine where it appears from an inspection that the wine is a blend and that fact is not mentioned in the contract or the declaration . In the same way as the details of the actual alcoholic strength per volume and the proportion of each type of wine used in the blended wine, the provision of details of the type ( or types ) of wine is a condition for the grant of aid . On this view, neither may aid be granted solely on the basis of the proportion of the type of wine which was stated in the declaration . If that were allowed it would encourage fraud : as the Commission and the Bundesamt rightly observe, that might encourage wine producers to submit applications for aid in respect of blended wine while indicating in the contract or declaration only one wine type ( the type qualifying for the highest rate of aid ) without that disqualifying them, in the event of a subsequent check, from still claiming aid for the type of wine used in the blend which was mentioned in the declaration .

15 . The above considerations directly answer the third limb of the third question . Where the contract or the declaration does not contain the aforementioned particulars it is obvious that the conditions for the grant of the aid have not been fulfilled . In such case, it is not possible to grant an aid on the basis of the percentage applicable to Type A I . Moreover, it must be observed that Type A I is not a residual category of white table wines but the type of white table wine for which the lowest aid may be granted and which must have an actual alcoholic strength by volume of not less than 10% and not more than 12 %.

Conclusion

16 . In view of the foregoing, I suggest that the Court should answer the questions referred for a preliminary ruling by the Verwaltungsgericht Frankfurt am Main in the following terms :

"( 1 ) In the case of wines of Types A II and A III, specification of the correct type of wine in the distillation declaration referred to in Article 2(2 ) of Regulation No 2373/83 is a condition for the grant of the aid . In the case of wines of Type A I, correct specification of the actual alcoholic strength by volume is sufficient .

( 2 ) In the case of the 1983/84 wine-growing year, the German intervention agency was entitled to classify white table wine as Types A I, A II or A III, within the meaning of Article 2 of Council Regulation ( EEC ) No 340/79, on the basis of criteria such as those set out in the Bekanntmachung of the Bundesamt fuer Ernaehrung und Forstwirtschaft published in the Bundsanzeiger of 21 March 1979 .

( 3)(a ) A blended wine may not be classed as one of the types of wine referred to in Article 2 of Council Regulation ( EEC ) No 340/79 on the basis of national rules on designations .

( b ) In the case of a blend of wines of Type A II and A III, distillation aid may be granted on the basis of the proportions of the wine types used in the blend, provided that the contract or declaration indicates, for all the constituents of the blended wine, the quantity, the actual alcoholic strength by volume and the type of wine and that the quantity actually distilled tallies with those particulars . Otherwise, no aid may be granted, not even to the extent of the type of wine used in the blend which is indicated in the declaration or on the basis of the wine' s classification as Type A I ."

(*) Original language : Dutch .

( 1 ) Regulation of 5 February 1979 ( OJ 1979, L 54, p . 1 ). That regulation has since been replaced by Council Regulation ( EEC ) No 822/87 of 16 March 1987 ( OJ 1987, L 84, p . 1 ).

( 2 ) Regulation of 25 July 1983 laying down general rules for distillation operations involving wine and the by-products of wine-making ( OJ 1983, L 212, p . 1 ).

( 3 ) Regulation of 22 August 1983 laying down, for the 1983/84 wine-growing year, detailed implementing rules concerning the distillation provided for in Article 11 of Regulation ( EEC ) No 337/79 ( OJ 1983, L 232, p . 5 ).

( 4 ) Regulation of 5 February 1979 determining the types of table wines ( OJ 1979, L 54, p . 60 ). This regulation replaced Council Regulation ( EEC ) No 945/70 of 26 May 1970 ( OJ, English Special Edition 1970 ( I ), p . 267 ).

( 5 ) This is a "management committee" procedure . We shall be coming back to this later on .

( 6 ) See the judgment of 30 January 1974 in Case 159/73 Hannoversche Zucker AG Rethen-Weetzen v Hauptzollamt Hannover (( 1974 )) ECR 121, in which the Court held that Member States were not entitled to adopt transitional rules for the entry into force of a regulation establishing a common organization of the market in the sugar sector even though no provision was made in the regulation for such transitional rules .

( 7 ) See the judgment of 18 June 1970 in Case 74/69 Hauptzollamt Bremen v Krohn (( 1979 )) ECR 451 . This case was concerned with an imprecise provision in the Common Customs Tariff as regards the importation of starch .

( 8 ) Judgment of 28 March 1984 in Joined Cases 47 and 48/83 (( 1984 )) ECR 1721 .

( 9 ) See paragraphs 19 to 28 of the judgment .

( 10 ) Judgment of 17 December 1970 in Case 30/70 Otto Scheer v Einfuhr - und Vorratsstelle fuer Getreide und Futtermittel (( 1970 )) ECR 1187 . In that judgment the Court conceded that during a transitional period the Member States retained jurisdiction pending the adoption by the Commission of implementing rules relating to the common organization in the cereals sector .

( 11 ) Moreover, as the representative of the Bundesamt rightly pointed out, this is borne out by Article 7(3 ) of Council Regulation ( EEC ) No 2179/83, which provides as a condition for the grant of the aid that proof must be submitted that the total quantity of wine mentioned in the contract or declaration has been distilled; in other words, there must be proof that the quantity of wine mentioned in the contract or declaration and the quantity of wine actually distilled tally . This also shows that the exact specification of the particulars, which is necessary in order to grant the aid, constitutes a condition for the grant of the aid .

( 12 ) According to information provided by the Bundesamt in its observations, those producers wrongly assumed that the German designation rules were also applicable in order to determine the wine type on the basis of which the aid was to be calculated .

( 13 ) According to the Bundesamt' s observations, these are the German Weinverordnung, in the version indicated in the Bekanntmachung of 4 August 1983, Bundesgesetzblatt I, p . 1078 .

( 14 ) This means in practice that at least 85% of the blended wine must have come from the vine variety indicated in the contract or declaration .

( 15 ) It is true that it follows from the answer given to the first question ( see paragraph 11 above ) that, in the case of a blend consisting of wines all of which have an actual alcoholic strength by volume of not less than 10% and not more than 12% ( which therefore must be classed as type A I ), it is not necessary to mention the wine type of each of the constituents in the declaration .