C-88/78

1. The definition of types of wines 2. The combined provisions of Article 6 contained in Article 2 of Regulation of Regulation 1380/75 of the 945/70 is to be viewed in the context Commission and Article 8 of Regu­ lation 192/75 of the Commission of the Community rules on wine not for the purposes of tariff classification must be interpreted as meaning that a blended wine which does not fulfil the but for those of the price system conditions for being treated, as an created by those rules; the distinction entity, as table wine of Type A II between various types of table wines cannot benefit, on exportation to a made in that regulation is accordingly non-member country, from monetary based on the characteristics of price compensatory amounts proportionate formation on the various markets of to the quantity of wine of Type A II the Community. which it contains.

In Case 88/78

REFERENCE to the Court under Article 177 of the EEC Treaty by the Bundesfinanzhof for a preliminary ruling in the proceedings pending before that court between

Hauptzollamt Hamburg-Jonas

I — Language of the Case: German

JUDGMENT OF 30. 11. 1978 — CASE 88/78

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of the compensatory amounts in respect of procedure and the observations wines as established by Regulation submitted pursuant to Article 20 of the 2021/75 of the Commission of 31 July Protocol on the Statute of the Court of 1975 fixing the monetary compensatory Justice of the EEC may be summarized amounts and certain rates for their as follows: application (Official Journal L 205 of 4 August 1975, p. 1), save in Germany in respect of "table wines of types A II and I — Facts and procedure A III within the meaning of Regulation (EEC) 945/70 ...". Regulation 2448/75 1. Article 1 of Regulation 2448/75 of entered into force on 26 September 1975. the Commission of 25 September 1975 suspending the monetary compensatory Article 2 of Regulation 945/70 of the amounts for certain wines (Official Council of 26 May 1970 determining the Journal L 250 of 26 September 1975, p. types of table wines (Official Journal, 29) suspended the monetary English Special Edition 1970 (I), p. 267)

HAUPTZOLLAMT HAMBURG-JONAS v KENDERMANN

. . shall be classified as if they consisted of the (c) white table wine from vine varieties material . . . which gives them their of the Riesling type, which shall be essential character . . .". In the view of known as 'Type A III'." the Finanzgericht that provision applies by reason of Article 12 (1) of Regulation 2. Between 3 and 15 October 1975 the 816/70 of the Council of 28 April 1970 plaintiff and respondent to the appeal in laying down additional provisions for the the main action, Firma Hermann common organization of the market in Kendermann, exported wine from wine (Official Journal, English Special Germany to Canada. The wines were Edition 1970 (I), p. 234) which provides: blends of Sylvaner and Müller-Thurgau with 30 % French white wine of the vine "The general rules for the interpretation of the Common Customs Tariff and the variety Chenin, with 0.1 to 0.2 % Italian white wine of the vine variety Trebbiano special rules for its application shall or with 1.3 % of the Chenin variety. The apply to the tariff classification of plaintiff in the main action applied for products covered by this regulation;.

3. After unsuccessful objections the point of law to the Bundesfinanzhof. plaintiff in the main action brought By order dated 28 February 1978 the proceedings in the Finanzgericht Bundesfinanzhof stayed the proceedings Hamburg. It alleged in particular that and referred the following questions to the exported wines had the typical the Court for a preliminary ruling under flavour of the German wine of the Article 177 of the EEC Treaty: Sylvaner and Müller-Thurgau vine

1970? monetary compensatory amount is payable in respect of the whole quantity 2. Does the blended wine mentioned in exported or at least in respect of the Question 1 then belong in any case to

"Type A II" within the meaning of than those specified in the tariff Article 2 (b) of Regulation (EEC) nomenclature then the terms in which 945/70 if the proportion of wine of those other characteristics are set out are "Type A I" in it is negligible? If the alone decisive. answer to this question is in the affirm The Hauptzollamt contends that the ative, what are the conditions under relevant regulation for classifying the which the proportion of "Type A I" exported wines is Regulation 945/70.

Other white (proportionate) monetary compensa tory amounts may be granted on its table wine with an alcoholic strength of not less than 10° and not more than 12°, being exported from Germany? which does not fall within "Type A II" 4. Is Regulation (EEC) 2448/75 valid if and "Type A III" is, according to Article it has to be interpreted as meaning 2 (a) of Regulation 945/70, to be known that monetary compensatory amounts as "Type A I". A blended wine which is shall not be paid when blends of the made up of a more or less large pro type specified in Questions 1 and 2 portion of "Type A I" table wine in are exported and they shall not be addition to "Type A II" table wine can paid either in respect of that pro no longer be classified wholly under portion of such blends which falls "Type A II". The protection which high within "Type A II"? guide prices were designed to give to "Type AII" table wines would be

provisions. The reference in Article 12 classification of the blended wine in (1) of Regulation 816/70 to the general "Type A II" would lead to distortions. rules for the interpretation of the If, in the case of blended wines, Common Customs Tariff, according to monetary compensation in respect of the express terms thereof, applies only to "Type A II" wine were also to be paid in tariff classification. If a Community respect of the proportions of table wine measure refers to characteristics other of "Type A I", although such pro-

The plaintiff in the main action and the groups with a certain uniform character. Commission of the European This is apparent in article 2 (a) as Communities submitted written obser­ regards "Type A I": the criterion is not vations in accordance with Article 20 of the vine variety but the alcoholic the Protocol on the Statute of the Court strength. It is the same as regards the of Justice of the European Communities. following groups. Regulation 945/70 After hearing the report of the Judge- does not require that a given wine to be Rapporteur and the views of the classified as "Type A II" or "Type A III" Advocate General, the Court decided to should be produced exclusively from a open the oral procedure without any particular vine variety but rather the type preparatory inquiry. of wine should be particularized. As By order dated 12 July 1978 the Court regards types of red table wine this is referred the present case to the Second even clearer: the only vine variety Chamber under Article 95 (1) of the determining a type in Article 1 of the Rules of Procedure. said regulation is the Portugieser, and otherwise there is reference only to the alcoholic strength. II — Written observations sub­ mitted to the Court In the view of the plaintiff in the main action in the case of blends of the said vine varieties the decisive type of the 1. Observations of the plaintiff in the main action wine is determined by application of the general rules for the interpretation of the nomenclature of the Common Customs (a) In the view of the plaintiff in the Tariff. In its view the Common Customs main action the first question referred to Tariff applies to the present question. the Court for a preliminary ruling should be answered in the affirmative. Article 12 (1) of Regulation 816/70 expressly so provides and refers to the The fact that in Article 3 of Regulation said general rules for interpretation; this 945/70 there is provision for the is particularly clear in the present case adoption of lists of vine varieties in itself because of the close internal connexion indicates the answer to this question: if between customs law, in the narrow white table wines produced 100 % from sense, on the one hand and the law Miiller-Thurgau or Sylvaner vine concerning refunds, including monetary varieties were alone included, there compensatory amounts, on the other. would be no need for any special list. Such a comprehensive reference is In the view of the plaintiff in the main provided for and is general in organ­ action it is necessary to establish, in izations of the market in other products,

for example, as regards cereals, in Article The plaintiff in the main action then 18 (1) of Regulation 2727/75 of the stresses that since in its view the first Council of 29 October 1975 on the question must be answered in the affirm common organization of the market in ative, it is making observations on the cereals (Official Journal L 281 of 1 following questions only as a precaution November 1975, p. 1). That reference is and in the alternative. particularly pertinent to the present question since it refers to Regulation (b) As regards the second question 2729/75 of the Council of 29 October referred to the Court for a preliminary 1975 on the import levies on mixtures of ruling the plaintiff in the main action cereals, rice and broken rice (Official again stresses that the important factor in Journal L 281 of 1 November 1975, p. Regulation 945/70 is the type of wine.

Thus wines. In the view of the plaintiff in the according to Article 8 of the German main action the Finanzgericht Hamburg wine regulation of 15 July 1971 (Bür rightly and convincingly rejected this: gerliches Gesetzblatt I p. 926) the the classification of types of table wines appellation of the main vine variety may must be regarded in the light of its be used providing the addition of other vine varieties does not exceed 25 %. A

It

Community law that refunds and The plaintiff in the main action refers, monetary compensatory amounts are payable in respect of components even but only as a very minor issue, to a where they have been combined with further defect in Regulation 2448/75: it other products. was adopted on 25 September and published on 26 September 1975 in the It states further that the objective of the Official Journal but had as its date for export refund and the monetary taking effect 29 September 1975. The compensator. amount is to encourage plaintiff in the main action had already the exportation of agricultural products entered into the relevant contracts before from the Community to third countries. such date, that is at a time when there It makes no difference in this respect was not yet any question of suspending whether such products are exported the monetary compensatory amount. from the Community in an unaltered Legally this means that having regard to state and then mixed or mixed wit­ the principle of the protection of hin the Community and then legitimate expectations the suspension exported. could not apply to quantities which had been contracted for before the regulation (d) As regards the fourth question was adopted. In this connexion the referred to the Court for a preliminary plaintiff in the main action refers to the ruling the plaintiff in the main action judgment of the Court of 18 March 1975 observes that if Regulation 2448/75 has in Case 78/74 DEUKA, Deutsche Kraft­ to be interpreted according to the futter GmbH v Einfuhr-und Vorratsstelle premise of Question 4, then it does not für Getreide und Futtermittel, [1975] ECR contain a sufficient statement of reasons 421.

the legislation concerning wine, adapted from the Stabilisierungsfond für Wein to the objectives and requirements of the (Stabilization Fund for Wine) of 16 common organization of the market in February 1972 (BAnz. No 38 of 24 wine. February 1972, p. 1), which for the In the Commission's view there is purposes of intervention defines Type A III as "German table wine of the white nothing in Regulation 945/70 to limit the definition "white table wine from Riesling, Rulander, white Burgunder and Auxerrois vine varieties" and states: vine varieties of the Sylvaner or Müller- Thurgau type" to such wines. Regulation "All other white German table wines 816/70 each time expressly indicated come under Type A II." when a wine must be produced In the light of this, which relates mainly exclusively from a particular vine variety in order to satisfy a particular definition, to problems of markets and prices, the question in the Commission's view is as for example in Article 30 (2). The whether blends of table wines of the said wording in question here in Regulation 945/70 contains no such limitation. vine varieties of Type A II with other wines are marketable as table wines of The Commission further observes that the said vine varieties and may be sold as the basis for the distinction made in Sylvaner or Müller-Thurgau. Regulation 945/70 between the various varieties of table wines lies in the charac­ Article 26 of Regulation 816/70, subject teristics of price-formation in the various to certain conditions, treats as "table markets of the Community. In view of wines" within the meaning of the these objectives it is not necessary to common organization of the market in distinguish precisely between the types of wine such wines "resulting from the wines and vine varieties according to coupage between table wines". strict organoleptic characteristics. Rather A permissible blend of wines of the is it a question of which wines of which Sylvaner and Müller-Thurgau vine vine varieties can be marketed and sold varieties might, in the view of the as being wines of the same type. Commission, subject to certain Type A II is accordingly not limited to conditions be described as wine from wines of any single vine variety. Regu­ those vine varieties and so marketed. lation 945/70 lists under that type two Regulation 2133/74 of the Councul of 8 vine varieties which are. closely related in August 1974 laying down general rules terms of price-formation, namely for the description and presentation of Sylvaner and Müller-Thurgau. wines and grape musts (Official Journal

L 227 of 17 August 1974, p. 1) allows been regarded as of Type A II, but only the indication of the name of a vine in so far, and subject to all the other variety, "if the product concerned is provisions, as they were marketed under obtained at least 85 % from grapes of the appellation Sylvaner or Müller- the variety specified and if this variety Thurgau. It is not for the Commission to determines the nature of the product in judge the extent to which the present question." Since that regulation case in fact complies with those governing description applied only as conditions. It is for the competent from 1 September 1976, then in the view German court to make the necessary of the Commission in the present circum­ findings. stances the permissible description as wine from a particular vine variety must (b) As regards the third question still be determined according to national referred to the Court for a preliminary law, which is here German law, and ruling the Commission observes that accordingly the aforesaid German wine according to the relevant wording of regulation. As regards domestic wine the Regulation 2448/75 the exported wine latter allows the indication of a vine must come as such under Type A II in variety "if it is produced in a proportion order to give entitlement to the monetary of at least 75 % from grapes of the given compensatory amount. In its view there vine variety and if that proportion orig­ is no claim to a proportionate payment inates exclusively from the stated geo­ on the basis of the provisions of Article 6 graphical locality and the stated year and of Regulation 1380/75 in conjunction if that vine variety determines its with Article 8 of Regulation 192/75; essential character (Article 8 (1)). Such although under Article 6 of Regulation indication is also lawful if German wine 1380/75 the provisions concerning is blended in Germany with other than the granting of export refunds apply domestic wine (Article 10 (2)). to monetary compensatory amounts, Regarding the question whether the nevertheless under Article 8 of Regu­ blend in issue here was subject as "table lation 192/75 the refund in respect of an wine of Type A II within the meaning of individual component of an exported Regulation 945/70" to the monetary product is payable only if a refund has compensatory amount laid down by a been fixed on the basis of a component Regulation 2021/75, it is apparent in the or components of that product. Those view of the Commission from the above conditions, however, are not fulfilled considerations that it depends on here since no compensatory amount is whether it is possible to market that wine provided for table wine of Type A II as table wine of Type AII, that is which is exported as a component of any whether it is possible to describe it as mixture, that is of a product with its such and whether it was so described. own, different character. From the particulars at the Commission's disposal it cannot judge whether the (c) Regarding the final question referred blend produced by the plaintiff is "table to the Court for a preliminary ruling the wine" at all within the meaning of Commission observes that the conditions

In adopting Regulation 2448/75 the legitimate expectation; it had entered Commission states that it was guided by into the export contracts as early as 1974 the fact that although the market trend but did not perform them until late in at the time allowed the German market 1975. The Community in no way gave to be opened up, by suspending the the plaintiff cause to expect any such monetary compensatory amount, to long-term continuous subsidizing of its foreign table wines which, as a result of transactions. their special qualities, were sufficiently distinguishable from the typical domestic wines of Types A II and A III, it was necessary to maintain the protection III — Oral procedure against foreign wines which directly corresponded to and were in competition At the hearing on 28 September 1978 the with them. Blends of the kind exported plaintiff in the main action, represented by the plaintiff, containing a large pro­ by Werner Kleinmann, Rechtsanwalt, portion of foreign wine, did not come and the Commission, represented by its within that category since they were not Legal Adviser, Peter Kalbe, presented marketable as wines of Type A II. In oral observations. view of this fact there can be no question of discrimination. The Advocate General delivered his

In the Commission's view the plaintiff opinion at the hearing on 9 November cannot rely on the protection of 1978.

Decision

1 By order dated 28 February 1978, received at the Court on 30 March 1978, the Bundesfinanzhof referred four questions to the Court for a preliminary ruling under Article 177 ot the EEC Treaty concerning the interpretation of certain provisions of Community law in relation to the common organization of the market in wine and the system of monetary compensatory amounts in respect to wine.

4 However, the definition of types of wines contained in Article 2 of Regu­ lation 945/70 is to be viewed in the context of the Community rules not for the purposes of tariff classification but for those of the price system created by those rules. Regulation 945/70 was adopted in particular to implement Article 2 of Regulation 816/70 which provided that a guide price should be fixed annually for each type of table wine representative of Community production. The distinction between various types of table wines made in Regulation 945/70 is accordingly based on the characteristics of price- formation on the various markets of the Community.

5 Type A II is restricted neither to wines of a single vine variety nor to wines of the two expressly mentioned vine varieties, namely Sylvaner and Müller- Thurgau, but may include other vine varieties from which wines similar to those varieties are obtained. From the point of view of price-formation it is moreover in accordance with market conditions within certain limits to allow wine of Type A II not to be produced exclusively from a single vine variety.

6 Since Community law did not prescribe the permitted extent of coupage at the time of the facts in question it was for the Member States to adopt the appropriate provisions. Accordingly the provisions of Article 8 and 10 of the German wine regulation of 15 July 1971 which allow a coupage of up to 25 % can be taken into account.

JUDGMENT OF 30. 11. 1978 — CASE 88/78

7 It is therefore appropriate to answer that for the purposes of the payment of monetary compensatory amounts under Regulation 2448/75 of the Commission, Article 2 of Regulation 945/70 of the Council must be interpreted as meaning that at the time of the facts in question wines orig­ inating from the coupage of table wines of Types A II and A I belonged to Type A II to the extent to which the coupage was authorized by national provisions.

HAUPTZOLLAMT HAMBURG-JONAS v KENDERMAN

Question 4

11 The fourth question asks whether Regulation 2448/75 of the Commission is valid even if from its provisions in conjunction with the other relevant provisions it appears that on the export of the blended wine in question no monetary compensatory amount is to be paid. This question has become devoid of purpose since from the answers given to the first two questions it is apparent that monetary compensatory amounts may be paid in respect of blends of wine.

14 The answer must accordingly be given that consideration of the question raised has disclosed no factor of such a kind as to affect the validity of Regu­ lation 2448/75 of the Commission.

JUDGMENT OF 30. 11. 1978 — CASE 88/78

Costs

15 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action 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.

On those grounds

THE COURT (Second Chamber)

A. Van Houtte A. J. Mackenzie Stuart Registrar President of the Second Chamber