C-388/95

Under Articles 1(2) and 15 of Regulation No 823/87 only wines which are covered by that regulation and 'by other specific or implementing regulations and which satisfy the provisions of national rules' (rules The relevant Community provisions governing production) may be designated by one of the recognised Community terms (such as the term 'quality wines p.s.r') or by a specific term traditionally used in the Member States to designate certain wines. 2. There are many sources of Community In Spain, such traditional terms include the law on the wine sector that are relevant for terms 'denominación de origen' and 2 the purposes of the present case. They will 'denominación de origen calificada'. be considered when the time comes to examine the arguments of the parties as to substance. However, in view of its impor­ 3 — Council Regulation (EEC) No 821/87 of 16 March 1987 laying down special provisions relating to quality wines produced i n specified regions (OJ 1987 I. 84, p. 59), as amended in particular by Council Regulation (HFC) * Original language: Italian. No 20.13/89 of 12 June 1989 amending Regulation (EEC) No 823/87 laying down special provisions relating to 1 — [ 1 9 9 2 ] ECR I-3669. quality wines produced in specified regions (OJ 1989 2 — Sources include Council Regulation (IiF.C) No 2392/89 of 1. 202, p. 1) and most recently by Council Regulation 24 July 1989 laying down general rules for the description (EC) No 1426/96 of 26 June 1996 amending Regulation and presentation of wines and grape musts (OJ 1989 L 232. (EEC) No 823/87 laying down special provisions relating to p. 13) and Commission Regulation (EEC) N o 2238/93 of quality wines produced in specified regions (Oļ 1996 I. 184, 26 July 1993 on the accompanying documents for the p. 1). Regulation No 823/87 superseded ¡he preceding carriage of wine products and the relevant records to be regulation on the same subject. Council Regulation kept (OJ 1993 L 200, p. 10). No 138/79 of 5. February 1979 (OJ 1979 L 54, p. 48).

As regards the production process in parti- that States are in any event required to cular, Regulation No 823/87 (in conjunc- observe. 5 tion with the national provisions expressly cited) identifies and lays down rules on a number of 'factors' characterising the pro- duction of quality wines. 4Those factors include the demarcation of the area of production, production methods and tech- niques, and tests to determine the charac- teristics of such wines. The responsibility As regards the tests to which wines must be for specifying the production methods is submitted, Article 13 of Regulation left to the producer States. Thus Arti- No 823/87 (as amended by Regulation cle 8(1) provides that 'the specific vinifica- No 2043/89) provides that 'producers shall tion and manufacturing methods used for be obliged to submit wines for which they obtaining quality wines psr shall be laid are requesting the designation "quality down for each of those wines by each wine psr" to an analytical and to an producer Member State concerned'. The organoleptic test' and specifies (a) that twelfth recital in the preamble to that 'the analytical test shall at least measure regulation states that 'as regards the devel- the factors enabling the quality wine psr in opment of the particular quality character- question to be distinguished, as listed in istics of each quality wine psr, Member Annex I' 6and (b) that 'the organoleptic States should be given a certain amount of test shall relate to colour, clarity, smell and freedom to specify the wine-making and taste'. The 16th recital in the preamble to preparation methods for each wine within that regulation explains that such tests have the framework of the oenological practices been laid down 'to encourage producers to permitted in the Community'. Article 18 keep a constant watch on the quality of provides, in particular, that 'producer quality wines psr, and in particular the Member States may, taking into account development of their special characteris- fair and traditional practices, ... determine tics'. Article 16 provides that each Member such other conditions of production as shall State is to be responsible for the control be obligatory for quality wines psr'. That and protection of quality wines. 7It should regulation also lays down, for each pro- a l s o be n o t e d t h a t R e g u l a t i o n duction method, certain minimum criteria No 2048/89, 8laying down general rules on controls in the wine sector, empowers the Commission to intervene in the sector in cooperation with the competent national authorities and establishes structures for

4. Royal Decree No 157 of 22 February 1988 laid down the conditions for granting The relevant national provisions the designation 'denominación de origen calificada'. In particular, Article 19(1) pro- vides that in order to qualify for that designation: (a) a wine must be marketed exclusively after being bottled in the cellars 3. Under Spanish Law No 25 of 2 Decem- from which it originates (bodegas de ori- ber 1970 laying down the basic rules gen); (b) the quantity and quality of the concerning vines, wines and spirits (herein- product must have been monitored by the after 'Law No 25/70'), the term 'denomi- Governing Council from its production to nación de origen' 9 is to be applied to its release onto the market; and (c) the certain wines 10 and a Governing Council cellar from which the wine originates must (Consejo Regulador) established for each of affix numbered labels or seals to the

by virtue of that law. In the case of Rioja Council for Rioja wine issued circular wine, the regulation drawn up by the No 17/88, in which it stated that it had Governing Council was adopted by Order gradually increased the proportion of Rioja wine sold in bottles and reduced the proportion sold in bulk. As regards 9 — Under Article 79 of Law No 25/70, 'Denominación de exports, it reported that sales in bulk Origen' (designation of origini means 'el nombre geográfico de la región, comarca, lugar o localidad empleado para accounted for 5% of total annual turnover. designar un producto procedente de la vid, del vino o los alcoholes de la respectiva zona, que tengan calidades y

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to qualify for the designation 'denomina- companies, Promalvin, registered in Bel- ción de origen calificada'. Rioja wine was gium, and Bodegas Unidas SA, registered in granted that designation by Ministerial Spain, arising from those two companies' Order of 3 April 1991. The new regulation failure to fulfil a contract to supply a bulk on the 'Denominación de Origen Calificada consignment of Rioja wine to Delhaize to Rioja' and its Governing Council 12 was be bottled in Belgium by that company, the annexed to the order. As regards, in parti- court before which the case was brought cular, the obligation to bottle the wine and asked the Court, pursuant to Article 177 of the conditions governing its movement, the Treaty, whether the Spanish legisla- that regulation adds little to the rules tion — in particular Royal Decree governing Rioja wines of designated ori- No 157/88 — on the production and mar- gin, 13 expressly requiring that they be keting of quality wines, which required bottled in the area of origin. wines to be bottled in the region of production, constituted a measure having an effect equivalent to a restriction on exports within the meaning of Article 34 of the Treaty.

The judgment in Delhaize

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10. Nor did the Court consider that the 14 — It should he noted that the Kingdom or Spain had argued that, in any ease. Royal Decree No 157/8H was instilled on national rules at issue could be justified in grounds of tile protection or industrial property within the Community law on the basis of Article 18 meaning of Article 36 of the EC 'treaty inasmuch as it was designed to protect producers from unfair competition and of Regulation No 823/87, cited above, consumers from commercial fraud and that the rules to under which the Member States may lay protect designations of origin laid down in the Lisbon Arrangement on the protection of designations of origin down additional or more stringent condi- and their international registration of 31 October 1 1958 are comparable to tile rules on trade-marks and designations tions of movement than those laid down in of origin and should therefore be regarded as 'collective trade-marks', that is to say trade-marks belonging to all the regulation for quality wines. According producers operating in a given geographical area and using to the Court, that article 'cannot be inter- specific production techniques to manufacture a product that has particular characteristics attributable to the region preted as authorising the Member States to in which it was produced. impose conditions contrary to the Treaty

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rules on the movement of goods' (para- The infringement of Article 34 graph 26 of the judgment).

12. In order to ascertain whether the Span- ish Government has in fact failed to fulfil its obligations as claimed, it must first be 14. The Spanish Government contends on determined whether the relevant Spanish the contrary that its legislation is consistent legislation is contrary to the Community with Article 34 of the Treaty inasmuch as it provisions on the free movement of goods, does not restrict the export of quality wine in particular Article 34 of the Treaty, and in bulk but merely prohibits any improper Article 18 of Regulation No 823/87, cited and uncontrolled use of designations of above, and, if so, whether that legislation is origin. In effect, the Spanish Government justified under Article 36 of the Treaty. It says, wine produced in the Rioja region will also have to be ascertained whether, in could be freely exported in bulk to places requiring that Rioja wine be bottled in the outside the area of production and bottled region of production, Spain has failed to there even though, in that case, it could not fulfil its obligations under Community law be marketed under the Rioja designation of as interpreted in the judgment in Delbaize. origin.

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15. That argument is not convincing. It is in their legislation provisions that may lead sufficient in this connection to observe that to restrictions on the movement of wines the Court has already stated, in Delhaize, within the Community, those restrictions that national rules such as those under may not, as the Court stated in its 1992 consideration 'have the specific effect of judgment in Delhaize, be as comprehensive restricting exports of wine in bulk and, in as those contained in the Spanish legisla- particular, of procuring a special advantage tion, which effectively amount to a ban on for bottling undertakings situated in the bulk exports of quality wine and are thus region of production' (paragraph 14 of the clearly contrary to the EC Treaty rules on judgment). 15 the movement of goods.

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on quality wines and states expressly that it particular case of wine produced in the is incompatible with the Community legal Rioja region the conditions for the applica- order. tion of Article 36 were not satisfied, since it had not been 'shown that the bottling of the wine in question [Rioja] in the region of p r o d u c t i o n w a s an o p e r a t i o n w h i c h endowed it with particular characteristics or was essential in order to maintain the 19. It only remains, therefore, to note that specific characteristics acquired by it'. the Spanish legislation at issue is contrary to Article 34 of the EC Treaty in so far as it has the effect of specifically restricting the flow of exports of Rioja wine and leading to unequal treatment of domestic trade and export trade, to the detriment of trade with other Member States and the disadvantage 2 1 . It therefore remains to be determined of bottling undertakings situated in other whether that has been shown in the present countries. case. To do so, it will be necessary to ascertain in the light of the evidence produced in the course of the procedure whether the requirement that Rioja wine be bottled in the region of production is justified, under Article 36 of the Treaty, on grounds of the protection of industrial and commercial property and, in particular, The application of Article 36 of the Treaty by the concern to ensure that the Rioja designation of origin fulfils its function.

In particular, the Spanish Government contends that the requirement that wines bearing the designation 'denominación de origen calificada' be bottled in the place of production is justified essentially on two grounds: first, because exporting Rioja wine in bulk to other States involves transport in containers over considerable (a) The effects of bottling non in loco on distances, with the result that the specific the quality of wine characteristics of the wine might be altered; second, because the circulation of wine of inferior quality bearing the designation 'denominación de origen calificada' which properly applies to wine bottled in the area of origin, could damage the reputation of the product in question. 24. As regards the effects of bottling opera- tions on the quality of wine, the experts all consider that those operations do not consist of merely filling empty bottles but usually involve, before the wine is actually decanted, a number of complex oenological 23. That said, in order to determine whe- procedures (filtration, clarification, cold ther in the present case the restrictions on treatment, and so on) which, if not prop- the movement of Rioja wine resulting from erly conducted may impair the quality and the requirement that it be bottled in the alter the characteristics of the wine. region of production can be justified within the meaning of Article 36 of the Treaty, it is necessary, first, to ascertain whether in fact bottling outside the area of production has (or could have) effects on the quality of the product and then to consider whether those effects could damage the reputation of Rioja wine producers holding industrial and commercial property rights which may As the Commission expert, Professor Alain be protected under Article 36 of the Treaty. Bertrand, explained at the hearing, such The first point involves technical consid- operations are even more complex and erations and the opinions of the experts consequently require special equipment consulted by both sides must therefore be and expert staff when appropriate proce- taken into account; the second point con- dures have to be employed to correct any cerns the reputation of the wine and deoxidation the wine may have suffered as consideration must therefore be given to a result of being transported for hundreds

of kilometres in containers 17 and such tions beaucoup plus nuisibles au vin que le procedures may alter the colour, flavour simple pompage une fois, qui a lieu lors de and aroma of the product. The Commis- la mise en bouteilles'. sion expert therefore said he was convinced 'à titre personnel, après trente années de recherche en oenologie, que, sans qu'il soit possible de le démontrer de manière irréfu- table, les caractères intrinsèques d'un vin d'une appellation donnée seraient certaine- ment mieux préservés si les raisins étaient acheminés au lieu d'élaboration finale du vin, sans transport du vin avant la mise en bouteilles'. He said that, in any event, it 25. The United Kingdom expert's opinion was not absolutely impossible for the on the subject is, in substance, virtually the specific characteristics of the wine to be same as Professor Bertrand's. He maintains preserved even if the wine was bottled in his report that when wine is bottled outside the area of production but for that outside the area of production the quality to happen it would have to be transported of the wine may still be guaranteed if under perfect conditions and all the opera- special technical precautions are taken tions before and during bottling would during transport, in particular if insulated have to be performed properly. In that containers are used which maintain low connection, Professor Bertrand said during temperatures. He observes that, in any the oral procedure that 'lorsque le vin est case, the risk of oxidation when wine is pompé dans la citerne de transport, il est moved outside the area of production is oxydé, immanquablement. Lorsque ce also present when it is moved within that transport s'effectue pendant une longue area, so that even in that case certain période, une partie de cette oxygène est technical rules will have to be observed and consommée par le vin, la moitié, environ, the same measures will have to be taken pendant deux ou trois jours, surtout si la during pumping operations if the risk is to température est un peu élevée. Lorsqu'il est be avoided (or at least reduced). pompé de nouveau pour être déchargé dans les récipients du négociant éleveur, il est de nouveau oxydé. Entre-temps, se créent ... des peroxydes qui créent des transforma-

cally complex and may, if not properly ing. In order to prevent infringements of performed, have an appreciable effect on the wine rules, the regulation empowers the quality and characteristics of the wine. officials of the Commission 'to intervene in this sector in cooperation with the autho- rities instructed by the Member States to carry out controls in the wine sector' (Article 1(1)). Article 8 of that regulation also provides for various forms of 'hori- 27. That being so, the only effective way to zontal' cooperation between the national provide producers and consumers with control authorities, specifying that at the guarantees as to the quality of a product reasoned request of the competent autho- bottled by a purchaser in a country other rity of a Member State, the corresponding than the country in which it is produced is authority of the State in which the wine to to submit bottling operations to systematic be controlled is situated 'shall perform or controls in the country where they are take the necessary steps to perform special carried out. It now remains to be seen surveillance or controls enabling the whether, and if so what, arrangements are desired objectives to be achieved' (Arti- allowed or imposed by the relevant Com- cle 8(2)). The applicant authority in agree- munity provisions to control the quality of ment with the 'requested' authority may wine and detect any alterations in wine also send its own officials to the Member transported in bulk. State where the wine is, to obtain informa- tion relating to the application of the rules in the wine sector or to control activities (Article 8(4) and (5)). In that context, the said officials 'may request the competent authority of another Member State to 28. As I have already pointed out, under collect samples' which they may hold for Article 13 of Regulation No 823/87 pro- analysis (Articles 12 and 13). ducers are required to carry out a number of analytical and organoleptic tests for their wines to be designated as quality wines psr but only producers are required to carry out those tests and the regulation does not state when they are to be carried out. The Commission observed in this connection during the oral procedure that in wine- producing States such tests have to be Controls on wine placed on the market carried out before and after bottling. outside the Member State in which it is produced are also provided for in Council Regulation No 2392/89 laying down gen- eral rules for the description and presenta- tion of wines and grape musts. 18 Article 42 of that regulation provides that 'for the In addition, Regulation No 2048/89, cited purposes of the monitoring and control of above, laying down general rules on con- products to which this Regulation applies, trols in the wine sector, provides for a number of controls to be carried out at the various stages of production and market- 18 — See footnote 2.

the competent authorities may, with due the provenance of table wines entitled to a regard to the general rules of procedure geographical ascription' when those indica- adopted by each Member State, require the tions are 'validated by the competent bottler or a person who has been involved authority by means of its stamp, the date in distribution and who is indicated either and the signature of the person responsible, in the description or on the presentation of as appropriate' Article 7(1)(c).

In that case, the authority is required to 'provide the com- petent authority of the country of establish- 29. As regards national legislation on the ment of the bottler . . . with all the informa- subject, it is clear from the information tion necessary to enable the latter authority supplied by the parties that some Member to require such proof . . .'. 'If the competent States expressly lay down when and how authorities find that such proof is not controls on quality wines are to be carried provided, the information in question shall out. The Spanish legislation, in particular, be regarded as not complying with this provides that quality wines must be sub- Regulation'. mitted to organoleptic and analytical tests

Article 3(1) of that regulation also clear from the statements made by the provides that persons 'who carry out or parties during the oral procedure that not cause to be carried out a carriage operation all the Member States had made provision involving a wine product must complete on for systematic controls on the quality of their own responsibility a document which must accompany the carriage' and which is called 'the accompanying document'. That 20 — In Italy, Article 13 of Law N o 164 of 10 February 1992 on document 'shall be regarded as attesting the the new rules governing designations of origin of wines provides that, in the case of wines bearing the designation designation of origin of quality wines psr or 'denominazione d'origine controllata e garantita' (DOCG), 'l'esame organolettico deve essere ripetuto, partita per partita, nella fase dell'imbottigliamento' ('the organoleptic examination must be repeated for each batch at the bottling stage') (GURI N o 4 7 of 26 February 1992, 19 — See footnote 2. p. 3).

imported wine. 2 1 Belgium was a case in bulk and bottled in that State but merely point. The Belgian Government represen- have the option of doing so. tative himself acknowledged that the con- trols generally carried out on wines sold in national territory were those laid down in Regulation N o 2238/93 on the carriage of wines and that they related only to accounts and quantities, and to the aspect covered by the generic term 'health': thus the controls were not concerned at all with the oenological characteristics of the pro- 31. The question arises at this point whe- duct and could not therefore provide pro- ther bottling in the region of production is ducers and consumers with any guarantee still the only true guarantee that, when it as to the quality of the wine. reaches the consumer, quality wine has its specific characteristics or at least that those characteristics have not suffered any altera- tion during bottling.

More- which producer States are required to carry over, even when it is transported within the o u t u n d e r Article 13 of R e g u l a t i o n region of production, not only does the risk N o 8 2 3 / 8 7 , it is possible t h a t wine of alteration to the wine appear to be less exported to another Member State may likely because the distance between the not be submitted to any other quality place where it is produced and the place- controls before it is sold to the final where it is bottled is less (in the Rioja consumer. It must therefore be concluded region, according to information supplied that, as Community law now stands, the by the defendant State and not contested by authorities of the importing State are not the other parties, the maximum distance is obliged to carry out appropriate general 100 kilometres), but any alteration to the controls on the quality of wine imported in wine would in any case be detected by the strict controls to which the product is submitted before it is granted the designa- 21 — T h i s was pointed out by tile Commission, in particular, tion 'denominación de origen calificada which cited it to justify the change in us position since Rioja'. 22 It remains to be seen whether Delbaize. It stated that 'le régnne de surveillance mis en place par le règlement (EEC) no 2238/91 relatif aux documents accompagnant Ics transports des produits viti- vinicolcs et aux registres à tenir dans le secteur viti-vinicole ne garantit ni la préservation de la qualité du vm 22 — furthermore, under Article 1 Sa „I Regulation No 823/87, transporté en vrac, ni son identité d'origine ou état following such controls as may he carried out aller it has originaire, puisqu'il établit un contrôle purement docu- been transported, the authorities of the producer State may mentaire des quantités transportées avec, dans la pratique, downgrade a quality wine, such as RIOJA wine, to a table prédominance des contrôles fiscaux'. wine.

such a situation justifies the requirement psr to be carried out within the specified that wine be bottled exclusively in the region of production'. 23 region of production as a condition for it to be designated a quality wine. The answer can only be that it does, for the following reasons. It must in point of fact be con- sidered that, since there is a real risk that the quality and characteristics of the wine may be altered if it is transported over 32. It might appear that the Court took a considerable distances and bottled in a different view in its judgment in Delhaize, a region other than the region of production view that is inconsistent with the analysis and above all since the Community provi- now proposed, but on closer examination it sions do not require appropriate controls of is clear that the inconsistency is only the product in the country where it is

That conclusion does not appear to be inconsistent with the Court's decision in Bagli Pennacchiotti 23 — Case C-315/88 Bagli Pennacchiotti [1990] ECR I-1323. It with regard to the requirement imposed is interesting to note that, in his Opinion in that case, the Advocate General stated that he shared the Commission's by the national legislature that the opera- view that it is 'only after the processing of the grapes into wine, whether sparkling or not, is completely finished — tions in connection with the vinification of that is to say, at the end of the minimum ageing

Article 13 of the Ministerial Order of 3 April 1991 prescribes a similar vinification which have not yet become procedure for the ageing of 'Rioja' wine bearing the quality wine psr or quality sparkling wine designation 'denominación de origen calificada'. For a decision on the same lines as the judgment in Bagli Pennacchiotti, see the judgment in Case 311/87 Goldenes Rheinhessen [1988] ECR 6295, in which the Court adopted a strict interpretation of the provisions of Regulation No 355/79 laying down general rules for the description and presentation of wines and grape musts, holding that the use of the description 'Erzeugerabfüllung' by a group of vineyards 'is subject to the condition that the entire operation must take place under the actual direction and strict, continuous supervision of that group and at its sole responsibility' (operative part of the judgment).

conclusion reached in the specific context various arguments to show that bottling in of the earlier preliminary ruling procedure. an area other than the area of production has nothing to do with that reputation. The Belgian Government argues that-that repu- tation is based not only on the quality the wine has acquired as a result of careful observance of specific rules on production, which are stricter than the rules governing the production of table wines, but also on (b) The effects of bottling non in loco on the excellent work done by dealers who the reputation of quality wines have invested time and money over a long period in promoting knowledge and appre- ciation of the wine among consumers. The United Kingdom submits that the reputa- 33. In justification of the measures restrict- tion of Rioja wine was established at a time ing the export of Rioja wine, the Spanish when it was exported in bulk and that the Government cites the risk that the quality name 'Rioja' is consequently associated of the product may be altered as a result of with wine that comes from the Rioja region being transported in containers over long but is not necessarily bottled there. distances — the aspect of the dispute that I have just been considering — and also contends that the circulation of a wine that bears the designation 'denominación de origen calificada Rioja' but has been bot- tled outside the area of origin and conse- quently does not exhibit the specific char- acteristics of traditional Rioja wine bearing that designation would damage the reputa- tion that wine now enjoys. The defendant 34. The reference to the reputation of Rioja State points out that Rioja wine is intended wine developed by the Spanish Government for a particular clientele and cannot there- in its defence draws attention to a specific fore be released onto the market without an interest attaching to certain characteristics assurance that the traditional production of the product, which arc only partly procedure has been followed, ending with protected by the provisions of Community bottling in the area of origin. The purpose law on designations of origin and the of the Spanish legislation is therefore to instruments available to ensure their exclu- protect the reputation of the Rioja desig- sive use. I shall therefore now consider, nation and consequently the associated first, what the reputation of the product at industrial and commercial property rights issue actually is, then whether and to what of producers in the Rioja area. extent Community secondary legislation is appropriate for the purpose of ensuring respect for the reputation of Rioja quality wine and, lastly, to what extent the con- tested national legislation may be justified within the meaning of Article 36 of the The other parties in the case do not deny Treaty inasmuch as it affords a measure of that Rioja wine has a particular reputation protection to the Rioja designation of among consumers but they have advanced origin.

35. As regards the first aspect, there can in and taking advantage of the reputation my view be no doubt that Rioja is a wine associated with it. The Commission adds intended for members of the public who are that the function of a designation of origin, particularly demanding in respect of the which is to guarantee the origin and quality quality and integrity of the product. The of a product, cannot be fully effective designation 'denominación de origen cali- unless the industrial property right of the ficada' is used to designate high-quality person entitled to use the designation is wines in cases where all stages of produc- itself protected. That right, according to the tion and bottling are carried out under the Commission, is identified with the com- direction and control of the producer. This mercial assets of the holder of the designa- is confirmed by the strict rules producers tion of origin and therefore with his are required to observe in order to be reputation. allowed to use the designation.' I note, in this connection, that according to informa- tion supplied by the Commission only 1 0 % of the quality wines exported in the Eur- opean C o m m u n i t y are subject to the requirement that they be bottled in the area of production.

. . designation of origin has two principal and therefore to protect him against com- aims: (a) to guarantee that the product petitors wishing to take advantage of the from a particular geographical area has status and reputation of the trade-mark by certain specific characteristics and meets selling products illegally bearing that trade- the requirements as to quality laid down by mark' (paragraph 7). There can be no the public authorities, and (b) by recognis- ing the exclusive right conferred by the designation, to prevent producers from 24— Case 102/77 Hoffmann-La Roche [1978] ECR 1139, in other areas from using the designation particular paragraph 7.

doubt that the producers of a wine bearing 36. The applicant State claims that, to a designation of origin are entitled to avoid damaging the reputation of Rioja similar protection in respect of the reputa- wine, it is sufficient to state on the label tion of their product. In its judgment in that the wine was bottled in a region other Exportur too, the Court held that the than the region of production. I cannot reputation of a distinctive sign was impor- share that view. As the Spanish and Italian tant and was entitled to protection. It ruled Governments point out, such a statement that 'geographical names [which, like des- would have the opposite of the desired ignations of origin, are registered distinc- effect, in that it would ultimately damage tive signs within the meaning of Regulation the reputation of the product.

custom''. The Court consequently conclu- contrary to the general rule that products ded that geographical names 'are therefore bearing a designation of origin must be entitled to protection'. 25 Similarly, in its specific and unique, two separate markets judgment on 'méthode champenoise', the might gradually be created, one for Rioja Court held that in order to achieve the with the designation 'denominación de objective of protecting registered designa- origen calificada' which is produced and tions or indications of geographical origin bottled in the same region and one for it is essential 'that the producer should not Rioja also bearing the designation 'denomi- derive advantage, for his own product, nación de origen calificada' which under- from a reputation established for a similar goes operations that differ from the normal product by producers from a different production process and is subject to con- region'. 2 6 trols that are less rigorous than the controls on wine bottled in the area of origin.

Genera! Ruiz Jarabo's Opinion delivered on 24 June 1997 from products traditionally associated with in Case C-317/95 Camnlme Cheese Trading [1997] ECR I-4681. a certain geographical name. Similarly, in 26 — Case C-306/93 Winzersekt [1994] ECR 5 5 5 5 . The issue in its judgment in Bristol-Myers Squibb con- that case was the validitv of a provision of Regulation cerning the repackaging of a pharmaceuti- N o 233.1/92 of 13 July 1992 laying down general rules for the description and presentation of sparkling wines and cal product by a person other than the aerated sparkling wines (OJ 1992 1. 231, p. 9).

owner of the trade-mark, the Court con- order contains specific provisions on meth- firmed that the trade-mark owner is enti- ods of protecting the reputation of desig- tled to oppose repackaging by a third party nations of origin of quality wines, it must if the presentation of the repackaged pro- be observed that the provisions on the duct may damage the reputation of the subject do not cover cases like the present trade-mark and its owner (paragraph 75), one. Regulation No 823/87 on quality even if the person who carried out the wines psr, cited above, only sets out the repackaging is indicated on the packa- conditions that must be satisfied for wine ging. 2 7 to be regarded as a quality wine and does not lay down any rules on the sort of improper use of designations of origin that might arise in the present case.

37. As regards the last aspect of my analy- account of a case such as the present one, sis, namely whether the Community legal which is characterised by the fact that the product is submitted to operations per- formed by a person other than the proprie- 2 7 — To be precise, the Court stated in Joined Cases C-427/93, C-429/93 and C-436/93 Bristol-Myers Squibb [1996] ECR tor of the name before it is sold to the final I-3457 that 'even if the person w h o carried out the repackaging is indicated on the packaging of the product, consumer. 29 Even if such operations were there remains the possibility that the reputation of the allowed by the undertaking exporting the trade-mark, and thus of its owner, may nevertheless suffer from an inappropriate presentation of the repackaged wine, they could alter the quality of the

. . it is shown that the relabel- 2 9 — It should be noted that Article 4(1) of Commission ling cannot affect the original condition of the product Regulation (EC) N o 881/98 of 24 April 1998 laying down [and] the presentation of the relabelled product is not such detailed rules for the protection of the additional tradi- as to be liable to damage the reputation of the trade-mark tional terms used to designate certain types of quality wine and its owner.

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BELGIUM V SPAIN

38. In those circumstances, given the char- case, the Spanish legislation, which requires acteristics of the product in question, the that wine bearing the designation 'denomi- reputation it has acquired on the market nación de origen calificada' be bottled in and the fact that Community secondary loco and is consequently a measure having legislation contains no specific provisions equivalent effect to a quantitative restric- to protect quality wine against intervention tion on exports within the meaning of by undertakings other than the producers Article 34 of the Treaty, must be regarded before it is sold to the final consumer, as justified under Article 36 on the ground national rules such as the Spanish rules at that it is designed to protect industrial and issue in the present case may be regarded as commercial property, in this case the right c o n s i s t e n t w i t h C o m m u n i t y law on to exclusive use of the designation 'denomi- grounds of the protection of one of the nación de origen calificada Rioja' and the general interests covered by Article 36, associated right to preserve the reputation namely the interest in the correct use of a of the product. designation of origin constituting industrial and commercial property of producers in the Rioja area. That interpretation is sup- ported by the recent Gorgonzola judgment, in which the Court held that Articles 30 and 36 of the Treaty do not preclude the application of non-Community rules on the protection of indications of provenance and Infringement of Article 5 of the EC Treaty designations of origin and that 'A fortiori they do not preclude Member States from taking the measures necessary for the protection of names registered in accor- dance with Regulation N o 2 0 8 1 / 9 2 ' , 40. As regards the claim that Spain is in including designations of origin. -,0 breach of Article 5 of the Treaty, the Belgian Government claims that, by failing to take the necessary measures to comply with Article 34 of the Treaty as interpreted by the Court in the judgment in Delbaize, the defendant State has disregarded the principle of cooperation incumbent on it by virtue of Article 5 of the EC Treaty.

In the present case, the applicant State is nevertheless to be regarded as justified claims that the Court should declare that, under Article 36 of the Treaty on the by not taking appropriate measures to ground that it is designed to protect remedy the incompatibility between Com- industrial and commercial property, there munity law and national law identified in is no incompatibility between the Commu- the grounds and the operative part of the nity legal order and the Spanish provisions, judgment in Delhaize, Spain has failed to which require that wine bearing the desig- fulfil its obligations. In order to determine nation 'denominación de origen calificada whether that incompatibility still exists, Rioja' be bottled in loco, and the claim that account must be taken of the interpretation the Kingdom of Spain has failed to fulfil its of Community law given in the preliminary obligations under Community law, includ- ruling and all the elements of fact and law ing its obligations under Article 5 of the which were not examined in the previous Treaty, is consequently unfounded. case but are relevant for the purpose of reaching a decision on the substance in the present one. That said, in view of the fact that the Court's ruling in 1992 was based on the information supplied by the parties and was confined to the aspects of law raised in the question referred by the national court, in considering the present action brought under Article 170 of the EC Costs Treaty to determine whether a Member State has failed to fulfil its obligations, the Community Court must take account of all the information supplied and all the argu- ments advanced by the parties, even if this is the first time that it has been called upon 41. Under Article 69(2) of the Rules of to consider that information and those Procedure, the unsuccessful party is to be arguments. If new elements have been ordered to pay the costs if they have been presented that were not presented in the applied for in the successful party's plead- course of the procedure for a preliminary ings. In the present case, the Kingdom of ruling, the Community Court may after Spain has asked for the Kingdom of examining them and assessing them in their Belgium to be ordered to pay the costs. entirety reach the conclusion that the Since the Kingdom of Belgium has been alleged conflict between the Community unsuccessful, it must be ordered to pay the and national legal orders does not exist. costs incurred by the Kingdom of Spain that are recoverable under Article 73 of the Rules of Procedure.

(2) order the Kingdom of Belgium to pay the costs incurred by the Kingdom of Spain;

(3) order the interveners to bear their own costs.

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