C-204/80

J U D G M E N T OF T H E C O U R T 16 FEBRUARY 1982 1

Procureur de la République and Others v Guy Vedel and Others (reference for a preliminary ruling from the Tribunal Correctionnel, Montpellier)

(Aperitifs — Compatibility of national legislation)

Case 204/80

Agriculture — wine-based aperitifs — Community definition — None — Power of Member States to enact rules as to quality — Requirement of minimum proportion of alcohol — Permissibility — Conditions (Council Regulations No 816/70, Annex II, point 10, and No 337/79, Annex II, point 11)

The appellation "wine-based aperitifs" is and marketing of national products not at present governed by Community called wine-based aperitifs. Therefore a regulations which exclude the application Member State may not be prevented of the national legislation of the Member from subjecting the manufacturer of States. wine-based aperitifs to special quality rules, depending on the characteristics of Since there are no applicable Community that kind of beverage. If a requirement regulations the Member States continue of a minimum proportion of alcohol is to have the power to define the within the Community limits, it meets standards applicable to the manufacture that criterion of quality.

JACQUES VEDEL,

HENRI LEJEUNE

on the question whether national legislation laying down the minimum percentage and alcoholic strength of wine required for a product to be called a "wine-based aperitif" is compatible with the common organization of the market in wine,

THE COURT

composed of: J. Mertens de Wilmars, President, G. Bosco, A. Touffait, O. Due (Presidents of Chambers), P. Pescatore, Lord Mackenzie Stuart, A. O'Keeffe, T. Koopmans, U. Everling, A. Chloros and F. Grévisse, Judges,

Advocate General: S. Rozès Registrar: A. Van Houtte

Therefore the conditions which must be Guy Vedel fulfilled for a product to be lawfully marketed in France under the description Charged with the same offences of wine-based aperitif are: committed in the period from 1 July 1976 to 31 May 1978 on taking over (a) an alcoholic strength exceeding 23°, duty from Jacques Vedel as warehouse or manager of Saint-Raphaël SA; (b) a content of at least 80 % of liqueur wine, grape must, or Henri Lejeune

JUDGMENT OF 16. 2. 1982 — CASE 204/80

Lastly, alcohol is added, with colouring 2. If the answer to Question 1 is in the agents, aromatic extracts and spirits, to negative, has Regulation (EEC) N o that base to obtain 100 hectolitres of 816/70 of the Council of 28 April aperitif at 16° to 18°. 1970, by defining, in point 11 of Annex II thereto, table wine to which it is lawful to add alcohol for the purpose of producing products 4. Without denying the facts alleged falling within the above-mentioned against them, the accused submitted that tariff heading 22.06 as a wine which the 1930 Decree is no longer applicable must have natural alcoholic strength because it is incompatible with the of not less than 8.5°, when Article 5 relevant provisions of Community law. of the Decree of 31 January 1930 They claim that the minimum alcoholic prohibits in France the possession, strength required by the Community transportation and sale under the regulations is only 8.5° and not 10° and appellation of wine-based aperitifs or that the proportion of 80 % of wine any other name reserved for that required by the French decree is not a purpose of beverages containing less valid requirement either because, since than 80 % of genuine ordinary wine the same Community regulations allow of merchantable quality having a wines of 8.5° to be used to make natural alcoholic strength of not products falling within heading 22.06 of less than 10°, made this latter the Common Customs Tariff, they have requirement of 10° inapplicable and rendered Article 5 of the Decree of replaced it with a strength of 8.5° ? 31 January 1930 entirely inapplicable.

7. On hearing the report of the Judge- which vermouth is only one kind and a Rapporteur and the views of the name commonly used for wine-based Advocate General the Court decided to aperitifs. Secondly, because of their open the oral procedure without any definition on the basis of content, which preparatory inquiry. It did however ask definition is that of a product made from the French Government to reply in flavoured wine. They point out moreover writing to two questions on the reason that even the Public Prosecutor's Office for the maintenance of the rule in the has never cast any doubt on whether French decree in question requiring a vermouths and wine-based aperitifs fall minimum alcoholic strength of 10° and within tariff heading 22.06. the Commission to submit two documents cited in the observations of the parties. The requests were complied However, they deny that, simply because with within the time allowed. The Court they are classified in heading 22.06, also expressed its wish that the French wine-based aperitifs are subject to Government be represented at the Community regulations, as the first hearing and that its representative be question submitted by the Tribunal accompanied by a specialist in wines. Correctionnel appears to imply. They contend that a customs tariff is a fiscal instrument which sets out, according to their characteristics, the products on which customs duty is levied. Therefore II — W r i t t e n o b s e r v a t i o n s s u b - the tariff may not by its nature regulate mitted to the C o u r t u n d e r the method by which the product which A r t i c l e 20 of t h e P r o t o c o l it taxes is made. on t h e S t a t u t e of t h e C o u r t of J u s t i c e of t h e E E C Furthermore, the Common Customs Tariff, and consequently heading 22.06, was adopted well before the 1. In their observations Guy and Community's first overt action on wine- Jacques Vedel, the accused in the main based aperitifs which they say did not proceedings, maintain their argument take place until 1971 when Regulation that the French decree of 1930 under No 1598 was adopted. which they are being prosecuted no longer complies with Community law. They also say that there are no clear-cut Community regulations by way of legal instruments which might form a body of Question 1 rules regulating wine-based aperitifs and their manufacture. In this connection they quote a passage from a letter of 21 The accused contend that wine-based November 1980 sent by Mr Burke, a. aperitifs fall within heading 22.06 of the Commissioner, to the President of the Common Customs Tariff although they Committee of Professional Wine- are not expressly named in that heading Growers in the EEC. The passage runs : and that they do so for two reasons. First, because of their customary appellation as "vermouth" which appears "The Commission sees the urgent need in tariff subheading 22.06; they claim to enact rules at Community level on, that the French legislation (and par- amongst other things, the composition ticularly the decree at issue) recognizes and manufacturing characteristics of that wine-based aperitif is a genus of spirits and flavoured wines (within the

meaning of heading 22.06 of the Modifications of that prohibition, which Common Customs Tariff) given the was gradually lifted, were made: likelihood that the differences existing between the national provisions might First by Regulation N o 1093/70 which impede free movement and create allowed alcohol to be added to table unequal conditions of competition". wines exported to certain countries, in particular The statement of reasons in the preamble to Regulation N o 351/79 also shows ". . . to prevent climatic conditions or that the Community intended to adopt transport from affecting the quality of provisions supplementing or harmonizing the exported wines". definitions of products falling within heading 22.06. Then, by a new regulation on wine- based aperitifs, No 1598/71, enacted on They claim moreover that there are the ground that simply exemptions introduced by a regu- lation which, pending the enactment of "the preparation of products falling the regulations promised on wine-based within heading N o 22.06 of the aperitifs, nevertheless preclude criminal Common Customs Tariff requires the proceedings against the Saint-Raphaël addition of alcohol to some of the company. products listed in Article 1 (2) of Regu- lation (EEC) No 816/70; whereas in these cases such preparation is significant Question 2 enough to justify derogation from the prohibition". Guy and Jacques Vedel submit that the Community regulations, which they Hence Article 1 thereof which, by claim expressly permit the use of table extending Article 1 of Regulation (EEC) wine at 8.5°, have rendered inapplicable N o 1093/70, permits alcohol to be the French Decree of 1930, which added in particular to prohibited the use of wine of less than 10° " 1 . (c) (ii) Tables wines . . . intended for the preparation of products They point out that besides two other falling within heading N o conditions, Article 5 of the 1930 Decree 22.06 of the Common requires that a wine-based aperitif should Customs Tariff". be prepared in particular from a genuine ordinary wine of merchantable quality having an alcoholic strength of not less They point out that this regulation was than 10°. confirmed by two subsequent regu- lations, N o 1876/71 and N o 680/75, and that table wines were defined by the They claim however that the Community Community regulations in Annex II to 'regulations allow by way of exception an the consolidated Regulation N o 337/79 alcoholic strength of 8.5° for table wines. as wines having an alcoholic strength of In their analysis the Community regu- 8.5°. lations have come through the following stages.

whether, should Question 2 be answered required to contain 80 % by volume of to the effect that the alcoholic strength so-called genuine wine because genuine of 10° required by national legislation wine is no longer required at all. has been replaced with an alcoholic strength of 8.5° by the Community Since, therefore, the two basic regulations, it follows that the other requirements of Article 5 of the 1930 requirement of the national legislation, Decree have been set aside by the namely that wine-based aperitifs should Community regulations, they submit that contain a proportion of 80 % of "liqueur the Court's answer to the Tribunal wine, grape must or genuine ordinary Correctionnel, Montpellier, should be wine of merchantable quality", has been that Article 5 is entirely inapplicable. set aside. 2. After giving a brief summary of the They explain what is meant under facts which led to this reference from the national and Community law by Tribunal Correctionnel, Montpellier, and "genuine" wine of "merchantable of the arguments of the accused, the quality". They conclude that in French Commission of the European Communities law as well as in Community law wine is basically makes the following obser- the product: vations as to the law: "obtained exclusively from the total or partial alcoholic fermentation of fresh Question 1 grapes. . ." (point 8 of Annex II to Regulation N o 337/79). The Commission states that wine-based aperitifs fall within heading 22.06 of the Consequently wine is not genuine wine Common Customs Tariff and can be unless it is pure. distinguished from other beverages falling within Chapter 22 of the Nor is it genuine if alcohol has been Common Customs Tariff. As a result of added to it after it has fermented. that classification the duties fixed in the Common Customs Tariff are imposed on The addition of more alcohol, even those products when they are imported alcohol made from wine, to a wine into the Community from non-member prevents its being described as wine countries but that does not mean that under Community regulations and it is they are governed by the common not possible to say that wine is genuine organization of the market in wine. The wine if it does not consist exclusively of Commission draws that conclusion from the product obtained from the fermen- the fact that Council Regulation N o tation of fresh grapes. 337/79 of 5 February 1979 does not list the products falling within heading 22.06 But they claim that, unlike the Decree of and Article 1 (2) thereof does not 31 January 1930, the Community regu- mention them at all whereas for example, lations allow table wine to which alcohol it expressly refers to those falling within has been added to be used to make a heading 22.05. wine-based aperitif. Consequently, the Commission observes, Therefore there can be no question in Annex II referred to in Article 1 (4) (b) future of requiring a wine-based aperitif does not give any definition of wine- to contain genuine wine; which leads based aperitifs whereas it contains, for them to believe that a fortiori a wine- example, a definition of table wine (point based aperitif may not in future be 11) and liqueur wine (point 12).

The Commission goes on to point out definition thereof given at point 11 of that Council Regulation N o 351/79 of Annex II to Regulation N o 337/79 is 5 February 1979 concerning the addition complied with. of alcohol to products in the wine sector mentions vermouths and wine-based As regards the alcoholic strength of table aperitifs but does not define them. It wine, it should not be less than 8.5° and observes that in principle Article 42 (1) not more than 15° or 17°, as the case of Regulation N o 337/79 prohibits the may be. addition of alcohol to the products covered by that regulation, subject to A national definition requiring table wine Article 42 (2) which permits derogations. of less than 8.5° or more than 15° or It points out that the aim of Regulation 17° to be used in the making of wine- No 351/79 is precisely to make provision based aperitifs would therefore be for such derogations and that Article contrary to Community law. 1 (3) thereof permits the addition of Where, however, the national legislation alcohol to certain products, including is within the limits set down in point 11, table wine (Article 1 (3) (d)) intended for as in this case, the Commission believes the preparation of products falling within that it still complies with the Community heading N o 22.06. This continues to regulations. make it possible to produce flavoured wines in the Community such as those at Failing therefore a Community definition issue in this case. of wine-based aperitifs, a definition by national law of such products which It claims that this is unlikely to simply requires a minimum alcoholic undermine the conclusion that there is strength for table wine and complies with no Community definition of wine-based the Community definition of table wine aperitifs; quite the reverse, because is compatible with Community law. Regulation N o 351/79 is only concerned with the addition of alcohol to the products referred to in Article 1 (2) of Question 3 Regulation N o 337/79, that is to say those governed by the common or- The Commission believes moreover that ganization and themselves defined in the absence of any Community definition Annex II. of wine-based aperitifs also leaves Member States free to prescribe the Those observations lead the Commission minimum percentage of wine necessary to conclude that the first question should before an aperitif may purport to be be answered in the negative with the "wine-based". result that the national legislation continues to apply as regards the Secondly, the Commission does not appellation "wine-based aperitif". believe that there is any connection between the two conditions requiring the wine used to have a minimum alcoholic Question 2 strength and a minimum percentage of 80 % which, should one of them be The Commission contends that the compatible with Community law, would addition of alcohol, within the meaning make the other condition incompatible of Regulation N o 351/79, to products too. governed by the common organization is permissible only in compliance with the It does believe however that because it is Community definitions of the products possible under Community law to use in question. Where table wine is table wine of 8.5° there is a technical concerned, it is essential that the justification for requiring 80 % wine so

as to ensure that a sufficient proportion Government stresses that the fact that of the alcohol obtained does come from liqueur wines are not enriched through the wine used. The alcohol content of an the addition of saccharose and that they aperitif of 18° composed, for example, must be of sufficient quality to be of 50 % wine of 8.5° is in the end due suitable for consumption in their actual much more to the alcohol added than to state, particularly without flavouring, the wine which it contains. was a guarantee of the quality of those

1. In its answer to the questions asked growing areas, by the addition of sac- by the Court, the French Government charose, whereas under previous national basically argues that the national law, although no minimum alcoholic legislation on wine-based aperitifs strength was fixed for wine products remains valid in the absence of relevant used to make liqueur wines, enrichment Community regulations. through the addition of saccharose was nevertheless prohibited. It does admit however that a result of Regulation No 1093/70 is that the Furthermore, the limit of actual alcoholic manufacture of products falling within strength (18°) of vermouths and wine- heading 22.06 of the Common Customs based aperitifs and the minimum Tariff is affected because the regulation alcoholic strength by volume of liqueur determines the raw materials which may wines (15°) means that as little liqueur be used to make them. wine as possible has to be used to obtain

wines. The French Government also observes, that as far as vermouths and wine-based The question also arises whether Regu- aperitifs are concerned, Article 5 of the lation (EEC) No 1093/70 applies to the Decree of 31 January 1930 therefore lays manufacture of products falling within down a minimum alcoholic strength by heading 22.06 of the Common Customs volume only for the wines used (genuine, Tariff and consequently whether the sound, ordinary wines of merchantable alcoholic strength by volume of the must quality) whereas that rule does not or wine used to make products which apply to liqueur wines. The French used to be called "liqueur wines" should

2. At the Court's request the The French Government considers that Commission produced a draft proposal the rule requiring a minimum alcoholic of 16 February 1981 for a Council regu- strength of 10° by volume should be lation laying down general rules on the retained for the preparation of definition, description and presentation vermouths and wine-based aperitifs made of spirituous beverages and of vermouths straight from wine. and of other wines of fresh grapes flavoured with aromatic extracts. The Commission stated however that the draft has not yet been examined by all its The French Government therefore departments and that it covers spirituous replies as follows to the questions put to beverages and aromatized wines in the it by the Court of Justice to ascertain the same regulation. According to the draft, reason for the introduction and retention the term "aromatized wine" means "a of the requirement in the French Decree beverage . . . consisting of wine or must, of 31 January 1930 that wines used to with or without added ethyl alcohol of make wine-based aperitifs must have a agricultural origin". The draft regulation minimum alcoholic strength of 10°. also provides that aromatized wines must have a minimum total alcoholic strength of 10 % by volume and wine or must present in a proportion of not less than (a) The French Decree of 31 January 75 % . 1930, which was kept in force after the Decree of 21 April 1972 came into effect, fixed the minimum alcoholic strength of "ordinary wines" used to make vermouths and wine-based aperitifs at 10° in order IV — O r a l p r o c e d u r e to make it necessary to select base wines according to their quality, seeing that alcoholic strength was the analysis factor which, in conjunction At the hearing on 7 July 1981 oral with organoleptic tests, enabled an argument was presented by the adequate quality to be guaranteed. following: A. Lénard, Advocate, for the defendant in the main proceedings, A. Carnelutti, a Foreign Affairs Secretary, assisted by M. Tinloc, (b) Since legislation on vermouths and Inspector General of the Office for the wine-based aperitifs has not been Suppression of Fraud, for the French

4 The accused were prosecuted for making and marketing during 1975 and until 31 May 1978 under the description of wine-based aperitif at least 221 327.34 hectolitres of aperitif not containing the minimum percentage of 80 % of wine and of which moreover 218 715.67 hectolitres had been made using wine with a strength of less than 10°.

JUDGMENT OF 16. 2. 1982 — CASE 204/80

5 The accused claimed that the French Decree of 31 January 1930 was not applicable on the ground that it was incompatible with Community law because the minimum alcohol content which the Community regulations require table wine contained in wine-based aperitifs to have is 8.5° instead of 10° as required by the French legislation.

6 They claim that Article 5 of the Decree of 31 January 1930 has therefore become inapplicable in its entirety because the fact that the rule which it contains on the alcoholic strength of table wine used in wine-based aperitifs is incompatible with Community regulations makes the rule as to the minimum percentage of 80% incompatible as well.

7 In order to be able to decide whether the national provisions are compatible with Community law the national court referred the following three questions to the Court:

" 1 . May the description 'wine-based aperitif' be regarded as covered by an EEC regulation precluding the application of national law in so far as heading 22.06 of the Common Customs Tariff refers to products defined as 'vermouths, and other wines of fresh grapes flavoured with aromatic extracts with an alcoholic strength not exceeding 22°' and if the answer is in the affirmative, must such a product have characteristics other than those specified in the said definition?

9 Nor is such a definition to be read into the Community regulations because of the fact that at the time of the events in question products falling within heading 22.06 of the Common Customs Tariff were referred to in Article 1 (3) of Regulation (EEC) N o 1876/74 of the Council of 15 July 1974 concerning the addition of alcohol to products in the wine sector, as amended by Regulation (EEC) N o 680/75 of the Council of 4 March 1975. At the present time this is also the case under Article 1 (3) of Council Regu- lation (EEC) N o 351/79 of 5 February 1979 concerning the addition of alcohol to products in the wine sector. The aim of that regulation is to make derogations from Article 42 (1) of Council Regulation (EEC) N o 337/79 and thus to allow the addition of alcohol to certain products to be used to make products falling within tariff heading 22.06 which include table wine.

10 It follows that wine-based aperitifs are not at present governed by Community regulations. This has been accepted by all the interested parties who have submitted observations to the Court and is moreover shown by the draft proposal for a Council regulation drawn up by the Commission on 16 February 1981 laying down general rules on the definition, description and presentation of spirituous beverages and of vermouths and of other wines of fresh grapes flavoured with aromatic extracts.

JUDGMENT OF 16. 2. 1982 — CASE 204/80

1 1 The fact that wine-based aperitifs belong to heading 22.06 of the Common Customs Tariff can be no substitute for such regulations. The purpose of the Common Customs Tariff is to classify goods so that customs duties can be collected and not to regulate the methods by which the products which it taxes are made.

PROCUREUR DE LA RÉPUBLIQUE v VEDEL

table wine used to make wine-based aperitifs requires wine of an alcoholic strength of less than 8.5° or more than 15° or 17° to be used, that rule is not compatible with Community law.

16 Since there are no applicable Community regulations the Member States continue to have the power to define the standards applicable to the manu- facture and marketing of national products called wine-based aperitifs. Therefore a Member State may not be prevented from subjecting the manu- facturer of wine-based aperitifs to special quality rules, depending on the characteristics of that kind of beverage. If a requirement of a minimum pro- portion of alcohol like that contained in Article 5 of the French Decree of 31 January 1930 is within the Community limits, it meets that criterion of quality.

17 It does not appear that the power which Member States therefore have is restricted by the provisions of Community law governing the marketing of products used to make wine-based aperitifs and, in this case, table wine.

18 Point 10 of Annex II to Regulation N o 816/70 of the Council and now point 11 of Council Regulation N o 337/79 limit the alcoholic strength of table wine to between 8.5° at the minimum and 15° or 17° at the maximum, as the case may be; however, that provision deals only with wines intended for direct consumption in their present state which may therefore be imported and may circulate freely in the Community, although under the relevant national legislation they may not be used to make wine-based aperitifs if their alcoholic strength is not that fixed by that legislation.

On those grounds,

THE COURT,

in answer to the questions submitted to it by the Tribunal Correctionnel, Montpellier, by order dated 29 September 1980 hereby rules:

1. The appellation "wine-based aperitifs" is not at present governed by Community regulations which exclude the application of the national legislation of the Member States.

2. Regulation No 816/70 of the Council of 28 April 1970 laying down additional provisions for the common organization of the market in wine does not preclude national legislation on the preparation of wine-based aperitifs from containing a provision such as that referred to by the national court.

Mertens de Wilmars Bosco Touffait