Commission of the European Communities v Italian Republic (141/87)

Contents

Judgment of the Court25 April 1989^noteIn Case 141/87Commission of the European Communities, represented by its Legal Advisers Peter Karpenstein and Giuliano Marenco, acting as Agents, with an address for service in Luxembourg at the office of Georgios Kremlis, a member of the Commission's Legal Department, Wagner Centre, Kirchberg.vItalian Republic, represented by Luigi Ferrari Bravo, Head of the Department for Contentious Diplomatic Affairs, acting as Agent, assisted by Ivo M. Braguglia, avvocato dello Stato, with an address for service in Luxembourg at the Italian Embassy,THE COURTcomposed of: R. Joliet, President of Chamber, acting as President, T. F. O'Higgins and F. Grévisse (Presidents of Chambers), G. F. Mancini, F. A. Schockweiler, J. C. Moitinho de Almeida and G. C. Rodríguez Iglesias, Judges,Advocate General: F. G. JacobsRegistrar: D. Louterman, Principal Administratorhaving regard to the Report for the Hearing and further to the hearing on 22 November 1988,after hearing the Opinion of the Advocate General delivered at the sitting on 31 January 1989,gives the following

Judgment

1By application lodged at the Court Registry on 7 May 1987, the Commission of the European Communities brought an action before the Court under Article 169 of the EEC Treaty for a declaration that by including in the area of production of the ‘denominazione di origine controllata’ wines ‘Caldaro’ and ‘Lago di Caldaro’ certain winegrowing areas in the province of Trento whose wine does not fulfil the conditions entitling it to that designation under Council Regulation No 338/79 of 5 February 1979 laying down special provisions relating to quality wine produced in specified regions (Official Journal 1979, L 54, p. 48) the Italian Republic has failed to fulfil its obligations under the Treaty.

2According to Article 1 of Council Regulation No 338/79, the Community expression ‘quality wines produced in specified regions’ (hereinafter called ‘quality wines psr’) may be used only in regard to wines which satisfy the provisions of that regulation and those national rules adopted pursuant thereto.

3Article 2(1) of the same regulation provides that the provisions applicable to quality wines psr referred to in Article 1(1) are to take into account the traditional conditions of production in so far as these are not such as to prejudice the policy of encouraging quality production and the creation of a single market and are to be based on the following factors: demarcation of the area of production, vine varieties, cultivation methods, winemaking methods, minimum natural alcoholic strength by volume, yield per hectare and analysis and assessment of organoleptic characteristics. According to Article 2(2), the Member States may determine the above factors and, ‘taking into account fair and traditional practices’ may lay down additional conditions of production and characteristics.

4According to Article 3(1) of the regulation, ‘specified region’ means a winegrowing area or combination of winegrowing areas which produces wine possessing special quality characteristics and whose name is used to designate those of its wines which constitute quality wines psr within the meaning of Article 1.

5Finally, Article 3(2) provides that each specified region is to be precisely demarcated, as far as possible on the basis of the individual vineyard or vineyard plot. Such demarcation is to be effected by each of the Member States concerned and is to take into account the factors which contribute towards the quality of the wines produced in those regions, such as the nature of the soil and subsoil, the climate and the situation of the individual vineyard or vineyard plot.

6By decrees of 23 March 1970 (GURI 115, 9.5.1970, p. 2872) and 22 September 1981 (GURI 92, 3.4.1982, p. 2607), the President of the Italian Republic included in the production area of ‘Caldaro’ or ‘Lago di Caldaro’ wine areas situated in 12 local administrative areas in the province of Bolzano and eight in the province of Trento.

7In a letter of 18 November 1983, the Commission informed the Italian Republic that it considered that the demarcation thus carried out was not in accordance with Regulation No 338/79 and called upon the Italian Republic to submit its observations. Since the Italian Republic insisted that the demarcation was in accordance with both national and Community rules, on 17 July 1985 the Commission delivered the reasoned opinion provided for in Article 169 of the EEC Treaty. Since the Italian Republic refused to comply, the Commission brought this action before the Court.

8Reference is made to the Report for the Hearing for a fuller account of the facts, the course of the procedure and the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

9The Commission makes two claims in support of its application. The first, based on a failure to take account of traditional production practices, alleges that certain areas included in the Caldaro or Lago di Caldaro production area by the decrees of the President of the Italian Republic do not produce wines known under that designation. In its second claim, the Commission alleges that the Italian rules do not take account of the essential homogeneity of natural factors which characterize areas capable of producing a wine under a given designation, as set out, in particular, in Article 3(2) of the regulation.

10In its defence, the Italian Republic contends, principally, that the Commission, and consequently the Court, may verify, in regard to a given production area, only whether the Member State concerned has taken account of the criteria laid down in the Community rules and has not relied on different criteria. Neither the Commission nor the Court, on the other hand, is entitled to review the facts or the technical assessment of the facts made by the Italian authorities for the purpose of carrying out the demarcation procedure. Under Community rules, that is a national prerogative. Since it is not contested that in demarcating the Caldaro and Lago di Caldaro production areas the Italian authorities relied on the criteria laid down in the Community rules, the Commission's application must be dismissed.

11The Italian Republic's arguments on that point cannot be upheld.

12Although it is for the national authorities to carry out the precise demarcation of the winegrowing area, as far as possible on the basis of individual vineyards or vineyard plots, as is required by Article 3(2) of Regulation No 338/79, and although in carrying out that demarcation the national authorities necessarily have a certain discretion, the criteria which they must use for that purpose are essentially, at least in regard to the criteria at issue in this case, criteria laid down by Community law.

13Those criteria give effect to the common rules laid down in the Council regulations on quality wines psr for the purpose of developing a policy of quality production of wine and protecting producers against unfair competition and consumers against confusion and trickery. Those objectives could not be achieved if the application of the criteria laid down in the Community regulations for defining an area in which quality wine is produced under a given designation was a matter for the national authorities' discretion and facts could be taken into account and assessments and interpretations of those facts in the light of Community law could be made which might differ from one Member State to another without those differences being justified by the diversity, considerable though it is, of the characteristics of the Community's winegrowing areas.

14That would be the case if, in the exercise of the powers conferred on them by the Treaty, the Commission and the Court were required, as the Italian Government argues, merely to satisfy themselves that in demarcating a production area the Member State concerned had taken account of the criteria laid down at Community law, without verifying whether or not the facts which were relied upon and the assessments and interpretations made of them by the national authorities responsible for demarcating the production area were relevant and correct. Without such verification, the powers of review of the Commission and the Court would be purely formal and of no real significance, and could not contribute to the ‘common attempt to harmonize quality requirements’ which according to the third recital in the preamble is one of the objectives of Regulation No 338/79 or ensure the consistent application in the Member States of the Community rules on quality wines psr.

15However, it must be borne in mind that when, as in this case, an action is brought before the Court under Article 169 of the Treaty alleging failure by a Member State to fulfil its obligations, the Court has decided on several occasions, most recently in its judgment of 22 September 1988 in Case 272/86 Commission v Hellenic Republic [1988] ECR 4875, that it is incumbent upon the Commission to prove that the obligation has not been fulfilled.

16For all of those reasons of law, the Court is entitled to consider whether the Commission has produced evidence in support of its allegation that some of the areas included in the area of production of Caldaro or Lago di Caldaro wine by the decrees of the President of the Italian Republic do not produce wines known under that designation and that the area demarcated does not fulfil the conditions permitting it to be regarded as a single area in accordance with the criteria laid down in the Community rules.

17In that regard, it should be pointed out that when the Commission applies to the Court for a declaration that a Member State has failed to fulfil its obligations under the Treaty, it must itself provide evidence of the alleged failure. The application for an expert's report made by the Commission for that purpose must therefore be refused.

Traditional use of the designation

18In regard to quality wines, the ‘traditional conditions of production’ referred to in Article 2(1) of Regulation No 338/79 comprise not merely the tradition of the place of production, which must be sufficiently long-established and permanent to acquire a reputation, but also cultivation and winemaking methods.

19Although it is true that the demarcation decree of 23 October 1931 (GURI 290, 17.12.1931) granted the right to apply the designation ‘Caldaro’ only to wines made from grapes grown on vines in the local administrative areas of Appiano and Caldaro and the right to apply the designation ‘Lago di Caldaro’ only to those coming from certain parts of the local administrative area of Caldaro, overlooking the lake of the same name, there was nothing to prevent the Italian Government from extending the area of production involved, as the second paragraph of Article 1 of the decree of 12 July 1963 expressly permits it to do, if there was an established practice of producing and marketing wines under the ‘Caldaro’ or ‘Lago di Caldaro’ designations in the areas newly included in the area of production.

20With regard to the existence of such a practice, it is true, as the Commission points out, that in the various publications concerning designations of origin the designation ‘Caldaro’ appeared only in the mid-1960s for wines from the Trento area and that the Regional Subcommittee for the study of the ‘Caldaro’ designation expressed doubts as to the existence of a tradition of producing a wine under that designation in the province of Trento.

21However, the report of that subcommittee states that ‘in certain places in the province of Trento wine similar to Caldaro has always been produced and sold under that designation, with the same vine varieties, the same traditional winemaking methods and the same chemical and organoleptic characteristics’.Moreover, the Italian Republic has produced several documents concerning the sale and export of Caldaro or Lago di Caldaro wines from the province of Trento, of which certain date from the beginning of the 1950s.

22Although the Commission claims that those documents reflect improper practices and that there is doubt as to the origin of the wine in question, it produces no evidence making it possible to assess whether its allegations are well founded.

23In any event, although ‘the traditional conditions of production’ mentioned in Article 2 of Regulation No 338/79 include a traditional place of production, they do not preclude the modification and in particular extension of the traditional area of production if the areas newly included possess the same characteristics as the traditional area and are capable of producing the same wine, and the wine is produced there in the traditional manner, in particular in regard to vine varieties, cultivation methods and winemaking methods.

24In this respect the Commission does not even allege that the traditional conditions of production of ‘Caldaro’ or ‘Lago di Caldaro’ are not observed in the province of Trento.

Homogeneity of the area of production

25The Commission claims that the production area defined in 1970 and 1981 is not homogenous in regard to the nature of the soil and subsoil or to the climate and situation of the vineyards, with the result that the organoleptic characteristics of wines from the Caldaro region are different from those from the Trento region.

26It should be pointed out in limine that the production area as demarcated in the decrees of 1970 and 1981 covers about 50 kilometres of mountains in a north-south direction on either side of the Adige approximately between Bolzano in the north and Trento in the south.

27The area thus defined may be divided into several sectors: Nalles and Andriano furthest north, Caldaro, Bronzolo and Ora in the centre, and, in the south, the areas whose classification is contested by the Commission, the area around Rovere de la Luna and Mezzocorona on the right bank of the Adige and the area around San Michele all'Adige, Lavis and Cembra on the left bank.

28The Commission argues that from a geological point of view the land is calcareo-morainic in the area around Caldaro whereas it is porphyritic in certain parts of the Trento area.

29However, it is apparent from the documents before the Court that in the region both of Bolzano and of Trento the production area as defined in the decrees of 1970 and 1981 covers land of dolomitic origin with a calcareo-morainic element and quartziferous land. The Commission has not therefore shown how the inclusion of the contested region destroys the unity of the production area from a geological point of view.

30The Commission also claims that there are significant differences of climate between the Caldaro and Trento districts and that most of the vines in the latter district are at a higher altitude.

31The comparisons of levels of sunshine and rainfall made by the Commission are not entirely convincing because they are based on information from the Bolzano weather station, which is outside the area of production and (as is not contested) enjoys exceptional climatic conditions. Furthermore, the Commission has not shown that the differences in regard to sunshine and rainfall, however significant they may be as between the various parts of the area of production, have a significant influence on the characteristics of the wine produced in the areas concerned. In the report mentioned above, the Regional Subcommittee for the study of the designation ‘Caldaro’, regards it as undeniable that a wine ‘practically identical’ to Caldaro is produced and sold in the province of Trento. Moreover, the Commission has provided no specific information in regard to the Val di Cembra, although it contests the inclusion of that sector more than any other in the area of production.

32Although it is apparent from the maps before the Court that the area of production around Lake Caldaro is situated at an altitude of between 212 and 556 metres, whereas the area of production in the Trento district is situated at between 339 and 654 metres, the Commission has provided no evidence concerning the situation of the vineyards making it possible to assess precisely the extent of the differences of altitude or to verify whether those differences have any real influence on the characteristics of the wine produced.

33Finally, with regard to the organoleptic and chemical characteristics of the wines at issue, the Commission claims that those coming from the Trento district are ‘acidulous’ whereas those from Caldaro ‘have a low level of acidity’.

34Although it is true that according to the statement of the reasons on which Regulation No 338/79, and for that matter, Council Regulation No 822/87 of 16 March 1987 (Official Journal 1987, L 84, p. 1), are based, ‘acidity is a factor in assessing the quality of wine and in determining its behaviour’, the Commission has provided no evidence making it possible to determine how the differences in acidity and thus in phosphate content entail significant differences between the wines involved, whereas other factors such as, for example, the sugar content, which is comparable, have not been taken into account.

35Consequently, some of the differences relied on by the Commission between the sectors in the area of production have not been proved and it has not been shown that the others had significant consequences. Under those circumstances, the lack of homogeneity of the area of production cannot be regarded as proved.

36It follows from the foregoing that the Commission has not discharged its burden of proof in relation either to the allegation that Caldaro or Lago di Caldaro wine is not traditionally produced in the Trento region or to the allegation that the area of production of those wines as defined by the decrees of the President of the Italian Republic of 23 March 1970 and 22 September 1981 is not homogeneous. Consequently, its application must be dismissed.

Costs

37Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the applicant has failed in its submissions, it must be ordered to pay the costs.

Operative part

On those grounds,THE COURThereby:

(1).Dismisses the application;

(2).Orders the Commission to pay the costs.

Delivered in open court in Luxembourg on 25 April 1989.