CELEX: 61978CC0233
Language: en
Date: 1979-05-31
Title: Opinion of Mr Advocate General Capotorti delivered on 31 May 1979. # Benedikt Lentes and others v Federal Republic of Germany. # References for a preliminary ruling: Verwaltungsgericht Frankfurt am Main - Germany. # Place of storage. # Joined cases 233, 234 and 235/78.

OPINION OF MR ADVOCATE GENERAL CAPOTORTI
      DELIVERED ON 31 MAY 1979 (
            1
         )
      
         Mr President,
      
         Members of the Court,
      
               1. 
            
            
               The question of interpretation which must be decided in the three Joined Cases 233, 234 and 235/78 is clearly defined: it is necessary to ascertain the meaning of the expression ‘place of storage’ which appears in Articles 4 (2) (c) and 14 (a) of Commission Regulation (EEC) No 2015/76 of 13 August 1976 on storage contracts for table wine, grape must and concentrated grape must.
               As far as the facts are concerned, it is sufficient to recall that the plaintiffs in the main actions are wine producers and that they had lodged applications to the competent German intervention agency for the conclusion of a storage contract for table wine benefiting from Community aid; however, in order to reach the minimum quantity of 100 hectolitres required by Article 5 of the above-mentioned regulation, Regulation No 2015/76, it was necessary to add together the smaller quantities which each of those concerned kept separately in his own cellar. The intervention agency however refused to enter into the storage contract because the whole quantity of 100 hectolitres was not kept in a single place.
               After the objections lodged against the above-mentioned negative decision had been rejected, the plaintiffs in the main actions brought legal proceedings before the Verwaltungsgericht [Administrative Court] Frankfurt-am-Main. Within the context of the proceedings thus brought, the Verwaltungsgericht, by three orders which were separate but identical in content and wording, referred to this Court the following question:
               ‘Must Commission Regulation (EEC) No 2015/76 of 13 August 1976 on storage contracts for table wine, grape must and concentrated grape must (Official Journal L 221 of 14 August 1976) be understood, in particular on account of the expression “place of storage” used in Article 4 (2) (c) and Article 14 (a) of that regulation and because of the rule laid down in Article 5 as to the minimum quantity of 100 hectolitres in the case of wine and must, as meaning that the contracts which must be concluded relating to a minimum quantity of 100 hectolitres in the case of wine and must (Article 5 of the regulation) may, where a contract is concluded with producers in groups (first subparagraph of Article 2 (1) of the regulation), be concluded only if the whole minimum quantity of 100 hectolitres is stored in one cellar or in the cellars of one set of premises?’
            
         
               2. 
            
            
               The provisions of the above-mentioned Commission Regulation No 2015/76 naturally come, as specific implementing measures, within the framework of the system of the common organization of the market in wine. It is necessary however to refer first of all to Regulation No 816/70 of the Council of 28 April 1970 which takes inter alia as its basis the consideration that in the wine sector, the general objectives of stabilizing markets and ensuring a fair standard of living for the agricultural community concerned make it desirable to take intervention measures ‘in the form of aid for private storage and, where appropriate, by the distillation of table wines’ (see the second recital of the preamble to that regulation). Articles 5 and 6 of the same regulation provide in particular that private storage aid is granted in respect of table wines when the forward estimates for a winegrowing year show that the quantity of table wine available at the beginning of the wine-growing year considerably exceeds total foreseeable requirements; and moreover they make the grant of the benefits conditional upon the conclusion of special contracts between the producers concerned and the national intervention agencies.
               By Regulation No 1437/70 of 20 July 1970, the Commission, for the purpose of guaranteeing that the storage contracts were concluded according to the same criteria throughout the Community, lays down with regard to such contracts the detailed rules for the implementation of the provisions introduced by the Council. Subsequently, Regulation No 1437/70 was replaced by Regulation No 2015/76 of 13 August 1976 and we have seen that the Court has now been asked to give a preliminary ruling on the interpretation precisely of certain provisions of the latter regulation.
            
         
               3. 
            
            
               The two opposing arguments relating to the meaning — or perhaps rather the implications — of the expression ‘place of storage’ contained in Articles 4 and 14 of Regulation No 2015/76 may be summarized in this way. According to the plaintiffs in the main actions it is not necessary for there to be a single place of storage: in their opinion, in fact, a group of producers may enter into storage contracts even if the minimum quantity (100 hectolitres in the case of wine and 50 in the case of must) laid down in Article 5 of the above-mentioned regulation is kept in different cellars. The intervention agency of the Federal Republic of Germany however maintains that storage contracts — including contracts with several wine producers relating to part quantities — may be entered into only when ‘the whole quantity is stored in a single place’ (see the decision taken by the German intervention agency on 22 July 1978). The Commission, in its written statement of 19 December 1978, supported in substance the second argument.
               I shall say at once that the viewpoint held by the German authorities and by the Commission seems to me to be too restrictive. In my opinion it is more reasonable and in accordance with Regulation No 2015/76 to accept that within certain limits (the nature of which I shall specify) groups of producers who have each stored in a separate cellar quantities of wine or must smaller than respectively 100 or 50 hectolitres may jointly enter, into storage contracts and thus benefit from the Community aid, provided, naturally, that by adding together the separate part quantities of the product the minimum quantity required by Article 5 of the regulation in question is reached. However, at the hearing the Commission's representative himself stated that in the written stage he pleaded a restrictive interpretation of the expression ‘place of storage’ in order to point out to the Court the extreme case of such wide dispersal of the product as to make very difficult and at any rate very costly public control on the quantities of wine or must forming the subject-matter of the contracts. He then acknowledged that the real problem is to establish in each case when it is possible to enter into a contract in spite of the fact that the minimum quantity of wine or must is spread over separate cellars and when on the contrary the dispersal of the product is so great that the national authorities may refuse to conclude contracts.
            
         
               4. 
            
            
               In support of the argument of the unity of the place of storage a literal argument is first of all put forward: the observation is made that both in Article 4 and in Article 14 the expression ‘place of storage’ is used in the singular and it is deduced from this that it must in each case be a single place. It may be pointed out in opposition to that argument that as regards the technical data listed in Article 4 (c) of the regulation (that is: quantity, colour, the total alcoholic strength, the actual alcoholic strength, the total acidity content and the volatile acidity content and sulphur dioxide content) the expressions are all used in the singular although some at any rate of those data might reasonably also be listed in the plural since within the context of the three categories (wine, grape must and concentrated grape must) there is no provision that the goods must be homogeneous. It is possible for example to imagine a total quantity of 100 hectolitres composed of wines of different origin and quality: in this case the wines, necessarily put into different vessels, would be divided into various quantities and might be of. different ‘colours’, different ‘alcoholic strengths’, different ‘acidity contents’ and so forth. The same considerations apply also to the expressions ‘vine variety’ and ‘production region’ used in the singular in Article 4 (3) (a). As precisely the court making the reference has emphasized, in the points of Article 4 of the regulation which have been indicated ‘it would be possible at any rate to insert each time for the purpose of clarification the word “respective” in front of the details … used in the singular’. Nor do there seem to me to be special reasons why a restricted meaning corresponding to the singular form should be attached only to the expression ‘place of storage’.
               As for Article 14 (a) of the regulation, which imposes on producers the duty to inform the national intervention agency of every change which may be made in the place of storage, it does not provide any useful indication in support of the argument of the unity of that place. That provision also uses the singular form but it is simply a restatement of the terms adopted in the preceding Article 4.
               In any case, beyond the considerations relating to the literal contents of the two above-mentioned articles, I consider that a criterion for interpretation of much greater value is that of the objectives which the Community legislature intended to pursue by the institution of a system of incentives to the storage of table wine and grape must. If such a criterion is taken into due account, the conclusion is reached that there was no reason for the regulation to lay down as a rigid general rule that of the unity of the place of storage.
               Aids to private storage represent, in the view of the Community institutions, a means of influencing the price trend through reducing supply temporarily and subsequently putting the product on the market again when the selling conditions have become more favourable. This is stated clearly in the recitals of the preambles to Regulations Nos 816/70 and 2015/76 and is confirmed in the above-mentioned Article 5 of Regulation No 2015/76. In fact, the requirement that the subject-matter of the contracts must be ‘a minimum quantity of 100 hectolitres in the case of wine and 50 hectolitres in the case of must and concentrated must’ is explained by the intention of storing considerable quantities and therefore that of having an effect on market prices (see to this effect in particular the sixth recital of the preamble to Regulation No 2015/76). If this is the logic on which the system of aid is based it is clear that the fact that the product is stored in a single cellar or in several cellars situated in different places is irrelevant: the important factor is that the contract ensures the obligation to store a sufficiently substantial total quantity.
            
         
               5. 
            
            
               A factor of great importance for the purposes of the solution of this case is that of the check. The Commission and the German intervention agency maintain that the expression ‘place of storage’ must be understood as meaning ‘single place’ because it is necessary to ensure that the checks which must be made on producers by the competent national intervention agencies under Article 7 of Regulation No 2015/76 so as to ensure that the conditions to which the grant of aid is subject are being complied with, can be carried out.
               The above-mentioned Article 7 (1) provides in fact that ‘Member States shall take all measures to ensure that the necessary checks are made, and in particular that the identity of the product under contract may be verified and that the volume of the product stored agrees with that specified in the contract’.
               There is no doubt that there is a certain objective link between the place of storage and the check procedures in the sense that the checks will be easier and therefore more effective and less costly if the product to be checked is kept in a single place. The existence of a large number of places of storage, in particular if they are distant from one another, would make it more difficult to carry out those checks, the need for which is emphasized in Article 7 quoted above as well as in the recitals of the preamble to the regulation (see in particular the fourth recital of the preamble thereto).
               It does not seem to me however that it is possible to draw the conclusion from the above-mentioned connexion between the system of checks and the place of storage that the place of storage must in each case be a single one. It is necessary to consider in this respect that the problem may arise in essentially the same terms both in the case of a contract concluded with several associated producers each of which keeps the different part quantity of the prescribed quantity in his own cellar and in the case of a single producer who keeps his own products in several stores. Similar difficulties in carrying out the checks also arise when a single producer puts different types of table wine in the store (this possibility has been expressly taken into account by the national implementing provisions put into effect by the Federal Republic of Germany: see Bundesanzeiger 1977, No 243); each type of wine must in fact be kept in a different container and this makes it essential to repeat the technical check operations as many times as there are different containers. It is possible to say on the other hand that essentially similar difficulties would arise with regard to the checks whenever producers kept the wine in different containers even within the same cellar.
               I consider however that the interpretation according to which the place of storage does not have to be a single one to be more correct in that it is more in keeping with the interests involved and with the objectives of the Community rules. This does not prevent the national intervention agency from being able, in certain limited cases in which the product which is the subject-matter of the contract is divided up into small quantities stored in places distant from each other, to appraise, within the context of the reasonable discretion conferred upon it by the regulation, whether the factual conditions are such as to permit of well-timed and effective checks and to ascertain at the same time whether those checks have not become too costly as regards the objectives pursued by the system of aid. It will in short be for the competent national authorities to establish in each case according to the criteria which have been set out above whether the multiplicity of the places of storage is so great and fragmented as to prevent the conclusion of the contracts.
               The solution proposed is significantly confirmed in the judgment of this Court of 11 July 1973 in Case 3/73, Hessische Mehlindustrie Karl Schöttler KG v Einfuhr- und Vorratsstelle für Getreide und Futtermittel [1973] ECR 745, the purpose of which was a preliminary ruling on the interpretation of Regulation No 172/67/EEC of the Council and of Regulation (EEC) No 1403/69 of the Commission. Article 4 (3) of the latter regulation provided that the granting of the denaturing premium to cereal products was ‘subject to supervision by the intervention agency of the process of denaturing’. The Court held in this respect that the Community legislature, by not laying down detailed rules for the procedure for supervision, intended to leave the Member States the power to regulate them on their own responsibility and that for that reason it was for the national legislature to ensure by adequate supervision that denaturing was carried out in accordance with the relevant provisions and that claims for premiums were well founded.
               However, Articles 7 and 17 of Regulation No 2015/76 of the Commission also provide as regards aid to wine producers paid through the system of storage contracts that the national intervention agencies must carry out checks which are adequate to guarantee that the conditions for the grant of the aid are being complied with, without laying down the detailed rules according to which such checks must be carried out. Thus a certain margin of discretion is left to the Member States within the context, of course, of the objectives to be pursued defined by the regulation. I consider that the national intervention agencies may, in exercise of such discretion, also refuse to conclude contracts in certain limited cases where the product is excessively dispersed.
            
         
               6. 
            
            
               In the procedure the meaning to be given to the expression ‘producers … in groups’ which appears in Article 2 (1) of the regulation and the possible connexion between that concept and the problem of the place of storage was discussed. The Commission maintained that permanent groups, such as for example co-operatives, come within the Community concept but not producers who have formed a group solely for the purpose of signing together a single storage contract. In the opinion of the Commission a wider interpretation would give rise to complex problems concerning liability ‘if just one of those concerned does not fulfil the prescribed conditions and the others must also be liable’ (see the statement of 19 December 1978, para. 4).
               The Commission would draw from this premise the conclusion that the cases put before this Court would be outside the scope of the regulation since they each involve producers in groups without lasting legal links between them.
               This aspect of the case seems to me to be irrelevant for the purposes of the reply to be given to the question referred to this Court by the German court. This Court has not been in fact asked to give a ruling on the concept of producers in groups. I would observe however that the argument put forward in the statement is contradicted by the information provided by the Commission itself to the German Minister for Agriculture in a telex message of 19 January 1978, which was recalled during the hearing by counsel for the plaintiffs in the main actions and was not denied by the Commission's representative, in which it is made clear that ‘producers … in groups’ must be understood as meaning also a number of producers without legal ties between them who have come together for the purpose of putting together the minimum quantity of the product laid down in Article 5 of the regulation and thus to benefit from Community aid. Nor would I say that associations of this kind are outside the scope of the regulation under consideration in this case. On the contrary, they appear to be in accordance with the objectives upon which all the rules on storage contracts are based. On the other hand the restrictive view is in no way confirmed by the wording or scheme of the regulation. It is certainly impossible that the existence of several parties to the contract, all equally and jointly and severally liable for complying with the conditions laid down therein, might constitute a technical obstacle to the functioning of the rules on liability.
            
         
               7. 
            
            
               In conclusion, therefore, in my opinion the following answer should be given by this Court to the sole question referred to it by the Verwaltungsgericht Frankfurt-am-Main by three orders of 10 October 1978:
               ‘Within the meaning of Commission Regulation No 2015/76 of 13 August 1976 and in particular of Articles 4 (2) (c) and 14 (a) thereof, storage contracts relating to a minimum quantity of 100 hectolitres in the case of wine and 50 hectolitres in the case of must may be concluded with producers as individuals or in groups even where the above-mentioned minimum quantity is not all stored in a single place. The national intervention agency may however refuse to conclude a contract if the product put in store and belonging to a single producer or several producers is divided into small quantities and stored in places so distant from one another that it prevents or makes it excessively difficult to carry out the checks provided for in Article 7 of that regulation’.
            
         (
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         )	Translated from the Italian.