C-141/87

(f) yield per hectare, 2. Regulation No 24 of 4 April 1962 on the progressive establishment of a common organization of the market in wine (Official Journal, English Special Edition 1959-62, p. 123) recognized in its preamble that 'it (g) analysis and assessment of organoleptic accords with the policy of encouraging characteristics'. quality production that the required charac­ teristics of a quality wine produced in specified regions should be defined'. Accordingly, Article 4(1) provided that before 31 December 1962 the Council 3. Article 4(3) permitted Member States, in should adopt Community rules regarding addition to the above factors and taking quality wines produced in specified regions. into account 'fair and traditional customs', According to Article 4(2), those rules were to determine 'such other conditions of to take into account 'traditional conditions production and characteristics as shall be of production' and were to be based on the obligatory for quality wines produced in following factors: specified regions'.

* Original language: English.

COMMISSION v ITALY

OPINION OF MR JACOBS —CASE 141/87

'The area of production referred to in the area of production is made up of the area previous paragraph may, in addition to the defined in an earlier decree of 23 Octo­ territory indicated by the designation of ber 1931 (GURI 290, 17.12.1931), origin in question, include neighbouring supplemented by neighbouring areas which territories where analogous natural fulfil the conditions of Article 1, second conditions exist there and, on the date of paragraph, of the decree of 12 July 1963 entry into force of the present decree, wines (set out in paragraph 9 above). The area of have been produced and marketed there production was accordingly defined to under the same designation for at least 10 include territory in 12 communes in the years, provided that those wines possess province of Bolzano and seven in the analogous physico-chemical and organo­ province of Trento, namely: Rovere della leptic characteristics and have been Luna, Faedo, San Michele all'Adige, Lavis, produced from grapes originating from Giovo, Lisignago and Cembra. Under traditional vine varieties in the area Artide 8 of the rules of production, the according to the methods generally used in additional specification 'classico' is reserved that area.' for wine produced in the nine Bolzano communes which formed the 'traditional' area of production defined in the decree of 23 October 1931.

10. Article 4 of the decree of 12 July 1963 provides for the recognition of designations of origin and for the approval of rules of production by presidential decree. Under 12. A further decree of the President of the Article 6, the request for recognition is to Republic of 22 September 1981 (GURI 92, be submitted by interested parties who must 3.4.1982, p. 2607) extended the area of supply documentary evidence concerning production by the addition of further inter alia local use of the designation, wine territory in Lavis and Giovo and by the varieties and wine-making methods, and the inclusion of territory in an eighth Trentine characteristics of the wine produced. The commune, Mezzocorona. Regional Committee for Agriculture and the National Committee for the Protection of Designations of Origin are required to report, on the request for recognition.

14. The Commission does not question the essential conformity with Community legis­ lation of the Italian enabling law of 16. According to the Commission, it is not 3 February 1963 and the Presidential decree traditional to produce and market wines of of 12 July 1963. Nor is there any dispute as the designation 'Caldaro' or 'Lago di to the inclusion in the area of production, Caldaro' in the province of Trento. by the decree of 23 March 1970, of the Moreover, the characteristics of the part of 'traditional' production zone bordering the the area of production situated in the Lake of Caldaro and of other territory in province of Trento — as regards the soil the province of Bolzano. The dispute and subsoil, the climate and situation of the centres on the inclusion, by the decrees of vineyards — are clearly different from those 23 March 1970 and 22 September 1981, of of the part situated in the province of certain territory in the province of Trento. Bolzano, with the result that the wine In the Commission's view, in including that produced in Trento also differs from that territory Italy failed to comply with produced in Bolzano. Community rules and, indeed, with superior Italian legislation, namely the decree of 12 July 1963. The latter point is relevant because, as indicated above, in order to meet the definition of a quality wine produced in a specified region, a wine must 17. The Italian Government for its part comply not only with the provisions of raises a preliminary issue concerning the Regulation No 823/87 but also with the scope of supervision by the Commission and national rules adopted pursuant to that of judicial control by the Court. It argues regulation. that the Community legislation leaves the Member States the power to demarcate the areas of production, subject only to the requirement that in exercising that power they should take account of the criteria laid down in that legislation. According to the Italian Government, it follows that the only 15. The Commission argues that it follows review which may be carried out by the from the Community legislation that the Commission, or, by extension, the Court, is 'specified region' is the primary factor to verify whether or not those criteria have which distinguishes and characterizes a been taken into account. quality wine produced in a specified region. For that reason, the demarcation of the region, i. e. of the area of production, must be carried out selectively. When determining the area of production, Member States may go beyond the territory indicated by the 18. Alternatively, in the event that the designation in question and include neigh­ Court does not accept its objection on the bouring territory. However, in so doing preliminary issue, the Italian Government they must observe two fundamental criteria. argues that the actual demarcation of the

21. Were the Italian Government's argument to be accepted, the rules of 19. Essentially, the argument of the Italian Community law such as those at issue in the Government is that where, in a case such as present case would rapidly cease to be either the present, Community legislation provides common or binding. It would be sufficient a framework for Member State action, for a Member State to establish a purely laying down certain criteria to govern the formal compliance with Community obli­ exercise of its powers, the supervisory role gations, but actual compliance could not be of the Commission and, by extension, the verified either by the Commission or the power of review of the Court, are limited to Court. A Member State would merely have verifying whether a Member State has taken to show — for instance, by an appropriate those criteria into account in its appraisal of reference in the recitals of the national the factual situation. It is not, however, for legislation — that at some stage it had taken the Commission or the Court to seek to the Community provisions into verify whether the appraisal itself, or the consideration, and would then be free, in outcome of the appraisal, are in compliance practice, to set aside or ignore any of those with Community requirements, since to do provisions which proved inconvenient or so would involve undertaking a new inappropriate. technical assessment and thus a usurpation of the proper role of the national auth­ orities. Once it is established that the Member State has relied on the correct criteria, the Commission or the Court should only intervene if the outcome is manifestly unfair or illogical. 22. It is the task of the Commission, under Article 155 of the EEC Treaty, to monitor and enforce compliance with the rules of Community law. Equally, it is the task of the Court under Article 164 to ensure that those rules are observed. In both cases, the 20. The Italian Government appears to be task can only be properly carried out if the suggesting that the Court should adopt, in Commission and the Court are able where Article 169 proceedings of this nature, a necessary to evaluate the technical findings similar view of the scope of judicial control and assessment of facts undertaken by a to that which it has assumed in relation to Member State when purportedly applying

(2) homogeneity of the area of production and of the wine, 26. According to the Commission, it is not possible to show a tradition of production of 'Caldaro' or 'Lago di Caldaro' wines in (3) economic consequences of the Trento going back at least 10 years, i. e. to extension of the area of production. 1953. Rather, it points out that the 'Schiava' grapes, traditionally used for the production of 'Caldaro' wines in the original pre-1970 area of production, were not common in The first two heads mentioned above Trento before 1960 and that the wine correspond to the two fundamental criteria produced in that region was sold under the which, in the Commission's view, must be different name of 'Sorni'.

OPINION OF MR JACOBS —CASE 141/87

30. The subcommittee took the view that under the decree of 12 July 1963, the 28. The Commission further points to the criterion of traditional use of the desig­ discrepancies between the area of nation must attach to the actual area to be production as determined by the decree of determined as the area of production. 23 March 1970 and the recommendations However, on the basis of the documentary made, as part of the pre-legislative process, evidence presented to it, the subcommittee by the Regional Agricultural Committee for found that such traditional use as there was the Trentino-Alto Adige Region appeared to attach to certain firms and wine (comprising the provinces of Bolzano and cooperatives, which were established both in Trento) and the National Committee for the Trento and Bolzano, rather than to ident­ Protection of Designations of Origin. The ifiable physical areas in Trento. The crucial Regional Agricultural Committee, in its passage of the report reads as follows: report of 20 June 1966, recommended against the inclusion of territory in any of the six Trentine communes put forward by Trentine interests. The National Committee recommended the inclusion of three out of the six. The eventual decree, however, as already mentioned, included territory in 'It therefore appears to the subcommittee seven Trentine communes, including, that a tradition of production and sale of a according to the Commission, one that had wine analogous to "Caldaro" in the not even been requested by Trentine province of Trento is incontestable in a producers and dealers, the commune of general way; however, it must be pointed Lisignago. out that that tradition attaches less to

certain areas of production than to certain two invoices bearing dates in 1969 issued by firms or wine cooperatives in the the Dorigati firm, which is also based in Trentino-Alto Adige region which obtained Mezzocorona. Of those documents, the last and still obtain in Trento a wine which is two, dated 1969, are of too recent an origin practically identical to that of the zone of to assist in establishing traditional use. As Caldaro.' regards the other five, it is notable that they all originate from a single cooperative, thus adding weight to the conclusion of the Regional Subcommittee, mentioned above, that traditional production in Trento, in so far as it existed, was the province of In the absence of evidence linking the tradi­ particular cooperatives or traders. It is also tional use to actual areas in Trento, the notable that all seven invoices originate subcommittee was unable to reach a from Mezzocorona, which was not added consensus on the demarcation of the area of to the area of production until the decree of production in that province. 22 September 1981. Those documents therefore tell us nothing about the extent of traditional production in the seven Trentine communes first included in the 'Caldaro' area of production by the decree of 31. I agree with the view of the subcom­ 23 March 1970. mittee that it follows from the wording of the decree of 12 July 1963 that the tradi­ tional use of the designation should attach to an identifiable physical area rather than merely to identifiable commercial interests. I am also of the view that that requirement is implicit in the Community legislation, 33. The Italian Government also relies on notably Article 2(1) of Regulation an undated document entitled 'Report on No 823/87, which in effect provides that the Production of "Auslese" wine in the when laying down the provisions governing Trentino-Alto Adige Region' (comprising quality wines produced in specified the provinces of Bolzano and Trento) regions — inter alia the rules concerning which, inter alia, is concerned with the the demarcation of the area of results of quality testing carried out on production — Community and national 'Caldaro' wine in 1964. However, there is rules are to take account of traditional nothing in the report to confirm that any of conditions of production. the 'Caldaro' wine in question was produced and marketed in Trento.

wine in question was marketed in bulk. It vations to which I will return later, find for adds that it was common practice for the Commission. traders in the province of Bolzano to buy wine in bulk from producers in Trento and sell or export it as 'Caldaro' wine. In my view, that explanation assists the Commission by confirming that it was not the usage both to produce and market 'Caldaro' wine as such in Trento in the (2) Homogeneity relevant period, as required by the terms of the decree of 12 July 1963, and by further supporting the view of the subcommittee referred to above that such traditional practice as there was attached primarily to certain commercial interests based both in 36. The Commission argues that Regulation Bolzano and Trento. No 823/87, and especially Article 3, requires that the demarcation of an area of production for a wine produced in a specified region must be carried out in the light of factors such as the soil and subsoil, the climate and the situation of the vineyards, all of which ensure a certain homogeneity in the area of production and 35. To sum up on this issue, I am satisfied consequently in the wine produced there. that the evidence supplied by the That requirement of homogeneity is duly Commission provides sufficient indications reflected in the decree of 12 July 1963 that any traditional production and which allows an area of production to marketing of 'Caldaro' wine in Trento in include not only the area indicated by the the 10 years prior to the adoption of the designation of origin in question but also decree of 12 July 1963 was not such as to neighbouring areas, provided that analogous justify the extension of the area of natural conditions exist there. In the production into Trento on the scale effected Commission's view, there is a distinct lack by the decrees of 1970 and 1981. It of homogeneity as regards those factors therefore falls to the Italian Government to between the 'traditional' part of the area of refute those indications and this, in my production situated in the vicinity of the view, it has signally failed to do. Although it Lake of Caldaro in the province of Bolzano repeatedly referred, both in written and the newer part situated in the province pleadings and at the hearing, to the of Trento. The Italian Government, while in 'abundant documentation' which, allegedly, general not denying the relevance of the supports it on this issue, and which it says factors referred to by the Commission, was available to the Italian authorities when rejects the Commission's assessment of making the decree of 23 March 1970 and those factors. to the Italian Council of State in reaching its judgment of 13 February 1973, it has failed, despite ample time and opportunity (including a specific written question from the Court), to produce any documentary evidence other than that which I have considered above (paragraphs 32 and 33). I 37. In reviewing the evidence, it is again must therefore, on the question of tradi­ convenient more or less to follow the order tional use, and subject to certain reser­ adopted by the Commission, as follows:

38. The Commission points out that in the Trentine communes of Giovo, Faver and Lavis, the soil is porphyritic in nature whereas in the 'traditional' Caldaro area the (b) Climate land is calcareo-morainic. In answer to written questions from the Court, the Italian Government argues that, on the contrary, the geological conditions of production are practically identical, and that some parts of 40. The Commission argues that the two the area of production in both provinces are climatological factors of essential signif­ situated on dolomitic limestone (five icance for wine-growing are rainfall and Trentine and four Bolzano communes) and sunshine. It points out that published figures other parts are situated on quartziferous for average rainfall based on readings taken porphyry belonging to the 'Alto Adige at two meteorological stations in Trento, porphyritic rock formation' (three Trentine namely Trente and San Michele all'Adige, and eight Bolzano communes). It also points and at Bolzano, show that rainfall is signifi­ out that at no time has territory in the cantly higher in Trento. On the other hand,

OPINION OF MR JACOBS —CASE 141/87

COMMISSION v ITALY

in Bolzano province and the part in Trento. paas of the area of production showing However, I am reluctant to read too much inter alia altitude above sea level. into figures which, bearing in mind the geographical variety of the region, appear sparse and selective. I am particularly concerned by the lack of any readings from a station or stations in the Val di Cembra, and by the fact that the readings for 47. Examination of those maps reveals, Bolzano itself were taken at a station according to the contour figures, that the located outside the area of production. 'traditional' area of production in the vicinity of the Lake of Caldaro is situated at between 212 and 556 metres: the area of production in the Val di Cembra, on the other hand, is situated at between 339 and 654 metres. Those figures give some support 45. Quite apart from these doubts as to to the Commission's argument. However, their representative nature, it appears to me the maps also appear to indicate that the that the Commission has made little effort situation of the Trentine area outside the to place the figures in context. The Court is Val di Cembra is broadly comparable in implicitly invited to accept that differences terms of range of altitude with that of the in rainfall or hours of sunshine of the 'traditional' Caldaro area. Moreover, the degree shown must have an impact on the maps, while delimiting the area of production of the type of wine in question; production, do not indicate the distribution however, the Commission has not adduced of the vineyards. I am therefore once again any evidence in this respect. I am therefore forced to the conclusion that the evidence forced to the conclusion that the evidence as before the Court is inconclusive. to climatic differences is inconclusive.

the list) show overall a higher level of 51. Also damaging to the Commission's acidity and a lower phosphate content than case is the report of the subcommittee the Bolzano wines. The second table, dated referred to above (paragraphs 29 and 30). 14 January 1983, was produced in answer As already mentioned, this is the only to written questions from the Court and document produced to the Court which shows inter alia the total acidity of 44 'Lago dates from the period of the preparation of di Caldaro Auslese' wines in 1982. Of the the decree of 23 March 1970 and which 23 Trentine wines on the second list (which purports to give a technical assessment of to some extent overlaps with the first), 15 the evidence then available. At several places have a total acidity of 5 mg or more per in that report, the subcommittee accepts that litre, whereas only 6 of the 21 Bolzano the wine produced in Trento was analogous wines listed reach that level. to or nearly identical to that produced in Bolzano. In one passage it even states that the Trentine wine possesses 'the same chemical and organoleptic characteristics' as the wine of Bolzano.

49. The Italian Government suggests that the figures are misleading because wine in its raw and unrefined state can possess a high level of acidity which can be adjusted 52. I therefore conclude that the prior to bottling. The Commission, on the Commission has failed to establish that the contrary, asserts that the acidity level of natural characteristics of the part of the area wine is fixed as soon as it is produced. of production in Trento are different from Neither party produces evidence to support those of the part in Bolzano, or that the its assertion. wine produced in Trento is different in type from that produced in Bolzano.

54 000 hectolitres, climbing to 65 442 The burden of proof hectolitres in 1985. Even before the second extension of the area of production in 1981, Trentine 'Caldaro' commanded a price one-third below that of 'Caldaro' from the 'traditional' production zone of the Alto Adige, causing the price of the latter to drop while other wines from that region 55. Taken as a whole, the evidence as to held their value. During the last 10 years, homogeneity appears inconclusive, and the the relationship between the price of evidence as to economic consequences 'Caldaro' on the one hand and 'Bardolino' inadequate, to support the Commission's and "Valpolicella' on the other (wines which application for a declaration. The are comparable as regards type and use) Commission appears to be aware of this, at changed from 2:1 to 1:1. In addition, any rate as regards the issue of homo­ exports of 'Caldaro' wine from the Alto geneity, because in its Application to the Adige fell from 286 000 hectolitres in 1973 Court, it makes a number of submissions on to 170 000 hectolitres in 1985 and 1986. the discharge of the burden of proof. It argues that in a case of this kind, where the Commission is required to verify compliance with technical criteria, it is very much dependent on the cooperation of the Member State in question. Such cooperation was not forthcoming in the instant case. In particular, the Italian Government refused to agree to the Commission's proposal to appoint two independent Swiss experts to carry out a technical evaluation of the equivalence or otherwise of the natural conditions affecting production in the two parts of the 'Caldaro' area of production. The Commission argues that in the face of 54. Interesting though those statistics are, I that lack of cooperation, it has furnished hesitate to read too much into them. The solid elements of proof and that it is now Commission does not point to any inde­ for the Italian Government to establish that pendent source for the figures and, as the it has acted in conformity with Community Italian Government correctly points out, law. Alternatively, it argues that the Court they cannot be said conclusively to indicate itself, applying Article 49 of the Rules of that the decline in the price and level of Procedure, should obtain an expert's exports of 'Caldaro' wine is specifically due opinion on the technical aspects of the case. to production of 'inferior' Trentine 'Caldaro'. The figures produced by the Commission are not detailed enough to exclude, for instance, the possibility that the addition to the 'traditional' area of production by the decree of 23 March 1970 of further territory in the province of 56. In my view, neither a reversal of the Bolzano might also have affected price and burden of proof nor the ordering export levels, or that the changes in the of an expert's opinion is appropriate in price relationship between 'Caldaro' and this case. As the Court stated in Case other comparable wines might be due to a 96/81 Commission v Netherlands [1982] rise in the prices of those other wines. ECR 1791:

'It should be emphasized that in proceedings for the most part originally supplied by the under Article 169 of the EEC Treaty for Italian Government. failure to fulfil an obligation, it is incumbent upon the Commission to prove the alle­ gation that the obligation has not been fulfilled. It is the Commission's responsi­ bility to place before the Court the infor­ 59. As regards the ordering of an expert's mation needed to enable the Court to report by the Court, even were it not for the establish that the obligation has not been Commission's own lack of initiative, I fulfilled and in so doing the Commission would still be reluctant to recommend such may not rely on any presumption.' a course which appears to me to be essen­ tially incompatible with the nature of the proceedings under Article 169 of the Treaty, under which it is the Commission which establishes the parameters of the 57. In its recent judgment of 22 September action and under which, as indicated above, 1988 in Case 272/86 Commission v Greece, it is essentially incumbent upon the the Court allowed a partial reversal of this Commission to prove its allegations. I would burden of proof. In that case, the Court add that in its judgment in Commission found that the Commission had furnished v Netherlands, referred to above, the Court sufficient elements of proof to indicate that also ruled that failure by a Member State to an infringement had occurred, and that it provide information to enable the was therefore incumbent on the Member Commission to determine whether the State to refute the allegations in a Member State has correctly implemented a substantial and detailed manner. However, directive amounts to a breach of the obli­ it appears to me that the Court's willingness gation of cooperation under Article 5 of the to allow that reversal was connected to the Treaty and may of itself justify recourse to exceptional circumstances of the case, in the procedure under Article 169. The which the Member State concerned had Commission is thus not powerless in the shown a marked reluctance to cooperate face of a Member State's intransigence. with the Commission (and, indeed, with the Court) and in which the Commission was almost entirely dependent on that cooperation in order to frame its case. Conclusion

61 . None the less, the Commission is formally entitled to a declaration substan­ tially in the terms sought , and I am therefore of the opinion that the Court should:

(1) declare that , by including in the area of production of 'Caldaro' or 'Lago di Caldaro' wine certain districts in the province of Trento in which wine has not traditionally been marketed under that denomination , in breach of Council Regulation No 823 / 87 (formerly Council Regulation No 338 / 79 ), the Italian Republic has failed to fulfil its obligations under the Treaty ;

(2) order the parties to bear their own costs.