C-155/99

BUSOLIN AND OTHERS

OPINION OF ADVOCATE GENERAL COSMAS delivered on 22 June 2000 *

Table of contents

I — Introductory observations I - 9040 II — Legal legislation I-9041 A — Community legislation I - 9041 1. Council Regulation (EEC) No 822/87 I-9041 2. Commission Regulations I - 9047 (a) Commission Regulation (EEC) No 441/88 I - 9047 (b) Commission Regulation No 343/94 I-9047 B — National legislation I - 9048 III — Facts I-9048 IV — Questions submitted for a preliminary ruling I - 9049 V — Replies to the questions submitted I - 9050 A — Zaninotto judgment I - 9051 B — Issues concerning the validity of Commission Regulation No 343/94 I - 9053 1. First and fourth questions: fulfilment of the basic condition of a 'significant difference' I-9053 (a) Issues raised I - 9053 (b) Commission's implementing powers I - 9054 (c) Examination of the issues raised I - 9055 2. Second question: infringement of the obligation to provide a statement of reasons I - 9058 3. Third question: infringement of the principles of reasonableness, I-9060 C — Problems concerning the validity of the provisions of Council Regulation I - 9062 1. Fifth question: problems concerning the validity of the provision of subparagraph (b) of the second subparagraph of Article 39(11) of Regula- tion No 822/87 I-9062 (a) Admissibility I-9063 (b) Substance I-9064

* Original language: Greek.

I - 9039

I - 9040

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I I— Legal legislation intervention and other measures to improve market conditions. In order to enable the statistical data essential for an accurate reflection of the market situation to be collected, a system of harvest and stock declarations was introduced, in conjunc- A — Community legislation 2 tion with the compilation of an annual forward estimate (Article 31). 5

1. Council Regulation (EEC) No 822/87

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8. The withdrawal from the market of 10. More specifically, under Article 39(1) certain quantities of wine (usually of infer- of Regulation No 822/87: ior quality) for the purpose of distillation is intended to support prices. However, the purpose of this measure is also to manage or, more specifically, to absorb surpluses and address the serious imbalance in the market. Producers may subtract the quan- tities of wine delivered to preventive dis- ' 1 . Where, in respect of a given wine year, tillation from the quantity to be delivered the market in table wine and wine suitable to compulsory distillation. 8 for yielding table wine is in a state of serious imbalance, compulsory distillation of table wine shall be decided on.

BUSOLIN AND OTHERS

from the beginning of a wine year for a distillation to eliminate production sur- period to be determined'. 9 pluses and thus restore a normal market situation, in particular as regards the levels of foreseeable availabilities at the end of a wine year and prices.

11. The allocation between different pro- duction regions of the quantities of table wine to be delivered to compulsory distilla- tion, during a given wine year, is effected on the basis of two procedures. First, the quantity to be distilled is fixed, in light of 3. The total quantity to be distilled, deter- the market situation obtaining, and the mined in accordance with paragraph 2, situation concerning production and stocks shall be shared between the various wine- during the wine year in question (Arti- growing regions of the Community, cle 39(2) of Regulation No 822/87); then, grouped together by Member State. the quantity to be distilled is shared between the different production regions in accordance with the production achieved in previous reference periods (Article 39(3) of Regulation No 822/87). That distinction between the two procedures is important because the present case concerns the latter The quantity for distillation for each wine- procedure. growing region shall be proportional to the difference between:

12. More specifically, in accordance with Article 39(2), (3) 10 and (4): 11 — on the one hand, the production of table wine and of products upstream of table wine to be determined, obtained in the region and in the year in '2. The Commission shall fix the quantities question, and that are to be delivered for compulsory

From 1994/95 onwards, the uniform per- centage and consecutive reference years shall be determined by the Commission, which shall fix: 13. Under Article 39(9) of Regulation No 822/87:

— the uniform percentage on the basis of the quantities that must be distilled in 'The following shall be adopted in accor- accordance with paragraph 2 in order dance with the procedure laid down in to eliminate the production surplus for Article 83: the year in question,

15. The second subparagraph of Arti- — the criteria for delimiting wine-grow- cle 39(11) 14 defines the limits of the com- ing regions, grouped together by Mem- petence conferred in principle on the Com- ber State as referred to in paragraph 3, mission to adopt the necessary measures for and the delimitation of those regions, the effective implementation of compulsory distillation. The enabling provision allows the Commission to adjust the procedure for allocating between the different production regions in the Community the quantity to — the fixing of the uniform percentage be distilled depending on market trends and the consecutive reference years, given that normal use, that is to say the and the allocation of the quantities to consumption of wine, has decreased in be distilled among the regions grouped recent years, while the reference quantities together by Member State, referred to have increased. More specifically, this pro- in paragraph 3, vision is formulated as follows:

— the progressive scale and the percen- tages referred to in paragraph 4.' 'Such measures:

14. Under the first subparagraph of Arti- (a) may relate only to the provisions cle 39(H): 13 contained in this Article to the exclu- sion of those relating to:

'If, during the 1987/88 to 1993/94 wine years, difficulties likely to jeopardise the — the apportionment between the execution or balanced application of the various regions of production,

13 — As in force after the replacement of the first subparagraph 14 — As in force after amendment by Article 1 (21(b) of Regula- by Article 1(5) of Regulation No 1566/93. tion No 1972/87.

15 — More specifically, according to Article82 of Regulation No 822/87: '1. A Management Committee for Wine (hereinafter called "the Committee") is hereby set up consisting of represen- tatives of Member States and chaired by a representative of 17. Finally, Articles 82 and 83 lay down the Commission. the rules governing the establishment, 2. Within the Committee the votes of Member States shall be weighted in accordance with Article 148(2) of the composition and operation of the Manage- Treaty. The Chairman shall not vote.'

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The Council, acting by a qualified majority, regions of the Community: region 1 corre- may take a different decision within one sponds to Germany, region 2 to Luxem- month.' bourg, region 3 to France, region 4 to Italy, region 5 to Greece, region 6 to Spain and region 7 to Portugal.

2. Commission Regulations 2 0 . A r t i c l e 4 (3) of R e g u l a t i o n No 441/88 18 provides that:

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22. Article 1 of Regulation No 343/94 is ber 1987, imposes an administrative fine in worded as follows: the event of failure to comply with the distillation obligation referred to in Arti- cle 39 of Regulation No 822/87 and in the other Community legislation implementing that regulation. ' 1 . Distillation as provided for in Arti- cle 39(1) of Regulation (EEC) No 822/87 is hereby adopted for the 1993/94 wine year.

III— Facts 2. The total quantity of table wine to be distilled shall be 18 200 000 hectolitres.

Is the Commission's decision to allo- cate the quantity for compulsory dis- IV — Questions submitted for a prelimin- tillation between the various produc- ary ruling tion regions for the year 1993/94 (contained in Regulation (EC) No 343/94) invalid, inasmuch as it appears to be invalid for infringement 27. More specifically, the Pretore di Tre- of Article 190 of the EC Treaty (or for viso, sezione distaccata di Oderzo, referred an "inadequate statement of reasons") to the Court the following six questions for in that neither Regulation No 343/94 a preliminary ruling relating to the validity nor the measures and documents pre- of various Community provisions regulat- ceding it refer to any assessment as to ing compulsory distillation: the existence of the legislative precon- dition that the ratio between "quanti- ties available" and "normal consump- tion" for the year 1993/94 should differ significantly from that for the reference years 1981/82, 1982/83 and '1. Is the Commission's decision to allo- 1983/84? cate the quantity for compulsory dis- tillation between the various produc- tion regions for the wine year 1993/94 (contained in Regulation (EC) No 343/94) invalid for infringement of Article 39(11)(b) of Regulation 3. Is Regulation (EC) No 343/94, requir- (EEC) No 822/87 (as amended by ing Italy to distil 12 150 000 hectoli- Regulation (EEC) N o 1972/87) tres, invalid for infringement of the through failure to establish the exis- principle of reasonableness, manifest tence of the prerequisite laid down in error and inconsistency in relation to that same legislation, namely a "sig- the object pursued, in the light of the nificant difference" in the ratio "system of calculation" used by the between "quantities available" and Commission as described in its answer "normal consumption" for 1993/94 of 13 March 1998, on account of the unreasonableness and illogicality of the updating of the figure of 85%, com- 21 — Cited above in footnote 1. paring parameters that were entirely

5. In the alternative to Questions 3 and 4: 28. In reply to the questions raised by the national court, I think it is useful to recall the reasoning followed by the Court in its reply to the first question referred to it in Zaninotto, cited above (A), before proceed- ing to examine the questions in two groups. In the event that Article 39(11)(b) of In the first group, I will analyse the first and Regulation (EEC) No 822/87 (as fourth questions, which raise issues con- amended by R e g u l a t i o n (EEC) cerning compliance with the basic condi- No 1972/87) is to be interpreted as tions to be fulfilled in order that the authorising such a system of calcula- Commission may modify the reference tion, is Article 39(11)(b), for the rea- percentage of 85%, then the second and sons and in the light of the calculations finally the third questions, which in princi- set out in the order for reference, ple raise issues concerning the validity of unlawful for infringement of the prin- Commission Regulation No 343/94 (B).

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Subsequently, I will analyse the fifth and the quality of table wine. Since Italy's sixth questions, which in principle raise production was much larger than that of issues concerning the validity of the provi- any other region, the burden of distillation sions of Article 39 of Council Regulation borne by it had to be proportionate to its No 822/87 (C). overall production.

A — Zaninotto judgment

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32. The Commission stated, next, that the total reference quantity for the Community initial reference percentage of 8 5 % 26laid set out in Article 4(3) of Regulation down in subparagraph (b) of the second N o 441/88, namely 145 069 000 hl. 27 subparagraph of Article 39(11) of Regula- The result was a percentage of 5 5 . 0 1 % . 2 8 tion N o 822/87, as amended by Regulation N o 1972/87, had to be adjusted in order to take account of the change in consumption, which had decreased significantly over time. 34. That percentage had to be applied uniformly to the reference quantity of each region, as laid down in Article 4(3) of Regulation N o 441/88. On the basis of the difference between the annual produc- 3 3 . That is why, in the 1993/94 wine year, tion of each region and the updated refer- the ratio had to be determined between ence quantity, each region's share of the normal utilisation of 79 807 000 hl and the total difference was calculated as follows:

Reference Reference quality Production Surplus Difference % Member State quality 1993/94 Wine 1993 Year

D 1 342 738 630 — — F 40 182 22 104 23 500 1 396 11.09 I 64 163 35 296 45 025 9 729 77.31 EL 4 632 2 548 3 645 1 097 8.72 E 27 500 15 128 15 490 362 2.88 P 72 501 3 988 3 050 — — Total 145 069 79 802 91 365 12 584 100.00

27 — Region 2, which corresponds to Luxembourg, was exclu- 26 — This percentage was laid down initially in the first indent ded from the calculation on account of its low production. of the third subparagraph of Article 39(3} of Regulation 28 — 79 807 000 hi multiplied by 100 and then divided by No 822/87. 145 069 000 hi.

29 — Meeting in accordance with the procedures laid down in Articles 82 and 83 of Regulation No 822/87. 39. In its fourth question, the national 30 — Zaninotto, cited above, paragraph 31. court raises the issue of the validity of

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OPINION OF MR COSMAS — CASE C-155/99

Regulation No 343/94, requiring the Ita- in the years 1981/82,1982/83 and 1983/84 lian Republic to distil 12 150 000 hi, which and normal consumption in the year is alleged to infringe Article 39(11)(b) of 1984/85. According to the referring court, Regulation No 822/87, as amended by this does not comply with the Council's Regulation No 1972/87, because it permits enabling provision with the result that the the alteration of the new percentage which reduction in the percentage from 85% to was determined by amending the ratio 55% is illegal. between 'production' in 1981/82, 1982/83 and 1983/84 (145 000 000 hi) and normal consumption for 1993/94 compared to the ratio between 'production' in 1981/82, 1982/83 and 1983/84 and normal con- sumption in 1984/85. 41. Having analysed the solution which the Court adopted in Zaninotto I shall examine the points which require more detailed analysis, after summarising the Court's case-law in relation to the Commission's implementing powers.

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Treaty in which Article 155 [now Arti- years, laid down in the second indent of cle 211 EC] must be placed and also from subparagraph (a) of the second subpara- practical requirements that the concept of graph of Article 39(11) of Regulation implementation must be given a wide 822/87, as amended by Regulation interpretation. Since only the Commission No 1972/87. The Commission, therefore, is in a position to keep track of agricultural was not authorised by the Council under market trends and to act quickly when any circumstances to amend those reference necessary, the Council may confer on it years, namely 1981/82, 1982/83 and wide powers in that sphere. Consequently, 1983/84. the limits of those powers must be deter- mined by reference to the essential general aims of the market organisation'.

44. Further, the Court held that, in the agricultural sector, the Commission 'is 46. In order to determine, on the one hand, authorised to adopt all the measures which the total quantity of table wine to be are necessary or appropriate for the imple- distilled in the Community and, on the mentation of the basic legislation, provided other, the quantities to be distilled in the that they are not contrary to such legisla- various regions, 33 the Commission relied tion or to the implementing legislation on objective data and took into considera- adopted by the Council'. 32 tion total production, stocks and quantities available at the end of the wine year for all producers in the European Union, 34 which led the Commission to adjust the percen- tage from 85% to 55%. 35

the basis of the objective facts at its tage figure in question of 85%, on the basis disposal, such as the forward estimate for of the new, objectively quantifiable data 38 the 1993/94 wine year published in the for 1993/94, it would have meant that, for Official Journal, it considered that the that wine year (1993/94), which was char- condition that there be a 'significant differ- acterised by considerable surpluses in table ence' in the ratio between the quantities wine, no region would have been bound by available and normal consumption for that an obligation to distil, since the quantity year compared with that for the 1981/82, determined by the percentage figure of 1982/83 and 1983/84 reference years was 85% would have been less than the pro- fulfilled. Whether a 'significant difference' duction of each region for that year. exists is a matter to be adjudged separately for each wine year on the basis of the forward estimate for that year and the need to balance and stabilise the market.

49. Further, I recall that, under Arti- cle 39(11)(b), the necessary measures for the effective implementation of compulsory distillation that the Commission is author- ised to take may include an adjustment of the percentage figure of 85%, 39 'only in so far as, for a given wine year, the ratio between the quantities available and nor- mal consumption for table wine differs significantly from that of the reference years referred to in the third subparagraph of paragraph 3' (emphasis added).

53. Moreover, the alternative solution which appears to be favoured by the reasoning of the referring court 43 cannot be accepted since it is dependent on an amendment to the reference years, whereas, as set out above, such amendment is 51. Further, I consider that the progressive expressly prohibited by subparagraph (b) and continuing decrease recorded in table of the second subparagraph of Arti- wine consumption, which led to a signifi- cle 39(11) of Regulation No 822/87. cant reduction in estimated normal con- sumption for the 1993/94 wine year, entailed a modification in the ratio between the quantities available and normal con- sumption of table wine during the wine year in question compared with the ratio for the reference years. 41 As has already 54. Thus, I consider that it is otiose, in the been emphasised, that modification war- present case, to examine the question ranted the adjustment by the Commission whether some other percentage higher of the percentage figure of 85% in order to (than 55%), determined on the basis of restore the conditions originally envisaged data provided from more recent reference so as to determine for the 1993/94 wine years, would be more compatible with year the ratio between normal consumption Regulation No 822/87 since that, as I have pointed out, is prohibited under that reg- ulation. 4 4 40 — As may be seen from the table — drawn up and submitted by the Italian Government in Zaninotto — appended as Annex II to the Commission's observations, taking into account a reference percentage greater than 55%, and 42 — Zaninotto, cited above, paragraph 27. more specifically the percentage of 73%, as suggested by 43 — I would recall that the national court considers that the the national court, Italy would be bound, in view of the allocation should be determined by application of the obligation to distil 18 200 000 hl of table wine, to distil corrected percentage figure of 73% obtained on the basis practically the whole quantity of the amount fixed for of the three reference years preceding 1993/94. delivery to distillation throughout the Community. 44 — Regardless of whether that would have the effect of 41 — In accordance with the clear provision of subparagraph (b) exacerbating the situation in Italy which would be obliged of the second subparagraph of Article 39(11) of Regula- to distil a quantity greater than that provided for by the tion No 822/87. Commission.

55. Accordingly, the foregoing analysis has 'Although the reasoning required by Arti- revealed no factor of such a kind as to cle 190 of the EC Treaty must show clearly affect the validity of Commission Regula- and unequivocally the reasoning of the tion No 343/94. Community authority which adopted the contested measure so as to enable the persons concerned to ascertain the reasons for the measure and to enable the Court to exercise its review ..., it is not required to go into every relevant point of fact and law. The question of whether a statement of reasons satisfies those requirements must 2. Second question: infringement of the be assessed with reference not only to its obligation to provide a statement of rea- wording, but also to its context and the sons whole body of legal rules governing the matter in question. Consequently, if the contested measure clearly discloses the essential objective pursued by the institu- 56. In its second question, which is sub- tion, it would be excessive to require a mitted in the alternative, the referring specific statement of reasons for each of the court, basing itself on the fact that Arti- technical choices made by the institution'. cle 39(11)(b) of Regulation No 822/87 constitutes a derogation from the general rule and that the amendment of the per- centage figure of 85% constitutes an exception, on the ground that it 'does not come within' the Community regulatory framework in relation to compulsory dis- tillation, raises an issue concerning the inadequacy of the statement of reasons in Commission Regulation N o 343/94. 58. Furthermore, Article 4(3) of Commis- According to the referring court, Arti- sion Regulation No 441/88 states that cle 190 of the EC Treaty (now Article 253 average Community production in the EC) required the Commission to state clear three consecutive wine years 1981/82, and cogent reasons for its decision to 1982/83 and 1983/84 amounted in total amend the relevant percentage figure and to 145 069 000 hl. From the Community to specify the various matters of fact and forward estimate for the 1993/94 wine law underpinning that decision. year, 46 that is to say on the basis of objective data, for that period an imbalance in the market was to be inferred.

59. Thus, I observe that, in adopting Reg- 'While I consider, on the basis of the ulation No 343/94, in implementation of explanations given by the Commission, Council Regulation No 822/87, the Com- that the statement of grounds for Regula- mission relied on a series of objective data. tion No 343/94 is not vitiated by any Reference is made in that regard to the first defect ... it was not necessary for the recital of Regulation No 343/94 which percentage (55%), which was fixed in a states that 'whereas the data available at perfectly legal manner, to be mentioned in present to the Commission, and in particu- the preamble to that regulation — the lar those in the forward estimate for the Italian Government pointed out its 1993/94 wine year, show that a feature of absence ... — in order for the quantity to the current year is an imbalance on the be distilled to be more easily determined by market for table wine and wine suitable for the reader of that regulation. I therefore yielding table wine; whereas the conditions consider, in the light also of the recitals in laid down in Article 39(1) of Regulation the preamble to Regulation No 343/94 set (EEC) No 822/87 for initiating compulsory out above, that no error is to be found in distillation are therefore fulfilled'. the statement of grounds for the disputed regulation, since the detailed description of the Commission's reasoning constitutes a choice of a technical nature which could have been omitted without prejudicing the grounds of the measure adopted.'

3. Third question: infringement of the principles of reasonableness, manifest error and inconsistency in relation to the object pursued 65. As regards the question of the infringe- ment of the principle of non-discrimina- tion, I refer again to Zaninotto, cited above, in which the Court held 48 that, on the basis of the calculations applied by the Commission in order to determine the quantity that the Italian Republic was to deliver into compulsory distillation, that 63. By its third question, the referring court country suffered no different or unfair seeks to ascertain whether Regulation treatment in relation to the other Member No 343/94, which imposes on Italy the States. obligation to distil 12 150 000 hl, is invalid for infringement of the principles of reason- ableness, manifest error and inconsistency in relation to the object pursued, owing to the 'system of calculation' of the quantity to be distilled by Italy, applied by the Commission. It is thus calling in question the correctness of the calculation made in 66. Moreover, it needs only to be pointed order to adjust the percentage figure from out that the reasoning of the national court, 85% to 55%. It considers that, on account under which it arrives at 73% as the figure of the reduction in normal consumption which should have been taken into con- during 1993/94, the actual ratio between sideration in order to determine the corre- Community production and normal con- sponding quantity for the Italian Republic, sumption for the period was not 55%, but is based on a mistaken assumption. As I 73%. It arrives at that conclusion on the noted above, pursuant to the second indent basis of the ratio between average produc- of subparagraph (a) of the second subpar- tion for the last three years preceding the agraph of Article 39(11) of Regulation 1993/94 period (108 000 000 hl) and nor- No 822/87, as amended and in force at mal consumption for the 1993/94 period the material time, the measures which the (79 807 000 hl), which is 73%. 47 Commission is authorised to adopt in order to secure the implementation or balanced

68. Moreover, the solution arrived at by the 70. I consider that these objectives, namely Commission is consistent with the objective the reduction of table wine surpluses on the pursued by the Community legislature, wine market and measures to combat the namely the stabilisation of the market. As serious imbalance on that market by estab- stated in the 45th recital in the preamble to lishing precise criteria for evaluating that Regulation No 822/87, '... compulsory dis- imbalance, 52 come within the terms of the tillation appears to be the most effective common agricultural policy, as enumerated measure to absorb surpluses of table wine in Article 39(1)(b) and (c) of the EC Treaty (now Article 33(1)(b) and (c) EC). 53 By means of the distillation measure, the 49 — That is to say 1990/91, 1991/92 and 1992/93. Council is seeking to reconcile the different 50 — In the instant case, it is pointless to consider whether the objectives of Article 33 EC, that of stabilis- Commission, had it taken other more recent reference years, in flagrant violation of the Council's ban, would ing the wine-growing market 5 4 whilst, at have exacerbated Italy's situation by requiring it to distil larger quantities. the same time, observing the need to 51 — Moreover, that would entail changing the extent to which the different regions were obliged to participate in compulsory distillation, based on, for example, the effort made to reduce the wine-growing area, in the context of 52 — And also the objectives of the fair distribution of obliga- the policy of grubbing up vines applied by wine-growers in tions between producers on the basis of their yield per certain regions. According to the Commission (para- hectare (hl/ha) and the taking into account of the graph 43 of its written observations), if reference were differences observed in each production region. made to the three years immediately preceding the 1993/94 wine year, that would favour wine-growers who produced 53 — I stressed this in paragraph 126 of my Opinion in more and who contributed to the increase in table wine Zaninotto, cited above in footnote 1. surpluses, while penalising countries which produced less 54 — See, for example, Case 116/82 Commission v Germany and contributed to the stabilisation of the market. [1986] ECR 2519, paragraph 28.

72. In the fifth question, submitted in the alternative to the third and fourth ques- tions, the referring court raises the question 71. In conclusion, in light of the analysis of the validity of Article 39(11)(b) of conducted in order to reply to the first two Regulation No 822/87, as amended by questions, I consider that the calculation of Regulation 1972/87, inasmuch as it the percentage figure of 55% arrived at by authorises the system of calculation for the Commission is not incorrect, since the the new reference percentage arrived at by assessment of the facts was manifestly not the Commission. It submits that, in this mistaken, nor was the principle of non- case, Article 39(11)(b) of Regulation discrimination infringed; moreover, the cal- No 822/87 is unlawful for infringement of culation is reasonable in the sense that it is the principles of reasonableness, manifest consistent with both the enabling provision error and inconsistency in relation to the and the rationale of Council Regulation objective pursued, and for infringement of No 822/87. the prohibition on discrimination laid down in Article 40 of the EC Treaty.

C — Problems concerning the validity of the provisions of Council Regulation No 822/87 73. Essentially, that means that should the Court rule Regulation No 343/94 to be valid on the ground that it faithfully applies subparagraph (b) of the second subpara- graph of Article 39(11) of Regulation 1. Fifth question: problems concerning the No 822/87, the referring court is calling validity of the provision of subpara- in question the validity of that regulation because it permits the calculation of a uniform percentage based on the ratio 55 — See, for example, Commission v Council (cited above in between normal utilisation in the wine year footnote 37, paragraph 24); Joined Cases C-133/93, C-300/93 and C-362/93 Crispoltoni and Others [1994] ECR I-4863, paragraph 32 and Case C-280/93 Germany c in question and production for the refer- Council [1994] ECR I-4973, paragraph 47. ence years 1981/82, 1982/83 and 1983/84.

75. The Commission, which expresses reservations in general as to the usefulness of the questions, considers the fifth ques- tion to be inadmissible on two grounds, in particular. First, the referring court does not explain the grounds on which it might 77. The referring court does not give a be unlawful to take into account the ratio detailed explanation of the grounds on between utilisation for the wine year in which it considers the abovementioned question and production for the reference provision of Regulation No 822/87 to be years. Secondly, should the question be invalid. None the less, since it analyses at deemed admissible, the reply would not be length the grounds on which it considers useful because, if the reference percentage Commission Regulation No 343/94 imple- were reduced, the reference quantity for menting Regulation No 822/87 to be inva- Italy would be reduced, whereas if that - lid, that is, in my opinion, sufficient to percentage were increased, the quantity enable this question to be deemed admis- would be increased. In other words, should sible since, in order to give a complete reply that provision be adjudged invalid, that to the questions referred, I consider that it could lead the competent Community would have been necessary to deal with the bodies to require Italy to distil a greater quantity of table wine in the course of the contested 1993/94 wine year, thus imposing 57 — Only in exceptional cases has the Court accepted the possibility of refusing a reply, where it is evident that the provision of Community law it is called upon to interpret or on whose validity it is asked to rule on has no bearing on the facts or the subject-matter of the main case; see, for 56 — In other words, why a percentage may not be used example, Case 126/80 Salonia [1981] ECR 1563, para- reflecting the ratio between production of a region for graph 6 and Case C-368/89 Crispoltoni [1991] 1993/94 and normal utilisation for the period in question. ECR I-3695, paragraph 11.

80. More specifically, in Regulation No 1972/87, the Council adopted the sec- ond subparagraph of Article 39(11) at issue in these proceedings on the basis of the (b) Substance fact 59 that '... on the implementation of these arrangements [laid down in Arti- cle 39 of Regulation No 822/87], many serious difficulties arose; ... it was only possible to overcome these difficulties, in 78. I consider that many of the issues raised order to ensure the effective execution of by this question have already been the distillation operation, by allowing the answered during the foregoing analysis of Commission, on a temporary basis, to the third and fourth questions in which I waive certain rules; ... in order to apply concluded that there were no factors such compulsory distillation in an effective and as to affect the validity of Regulation fair manner, the temporary provisions No 343/94. should be taken again for three wine years which allow the Commission to adopt, without calling into question the essential elements of the arrangements, measures necessary to overcome any difficulties that are likely to jeopardise the execution of the distillation operation'. 79. In the present case, I would add that no issue concerning the validity of the provi- sion of subparagraph (b) of the second subparagraph of Article 39(11) of Council Regulation No 822/87 arises. I reach that conclusion on the basis of the settled case- 81. Further, the first subparagraph of Arti- law of the Court to the effect that 'when cle 39(11) 60 extended until the 1993/94 implementation by the Council of the wine year the possibility of taking the Community's agricultural policy necessi- necessary measures for guaranteeing the tates the evaluation of a complex economic effective implementation of distillation situation, its discretion does not apply should difficulties arise that are likely to exclusively to the nature and scope of the measures to be taken but also, to some extent, to the finding of basic facts inas- 58 — See, for example, Case C-4/96 NIFPO and Northern Ireland Fishermen's Federation [1998] ECR I-681, para- much as, in particular, it is open to the graph 42; Commission v Council, cited above in foot- Council to rely if necessary on general note 37, paragraph 18, and Case 138/79 Roquette v Council [1980] ECR 3333, paragraph 25. findings. In reviewing the exercise of such a 59 — See the third recital in the preamble to Regulation power the Court must confine itself to No 1972/87. 60 — As in force after the replacement of the first subparagraph examining whether there has been a man- by Article 1(5) of Regulation No 1566/93.

83. In the sixth question, the referring court raises the issue whether the provi- sions of Article 39(3), (4) and (11) of Regulation No 822/87, as amended by Regulation No 1566/93 and Regulation No 343/94, which implements the former 82. The Council's judgment was based on measures, are unlawful for infringement of objective data concerning the situation in the principles of reasonableness, manifest the wine market and on estimates for its error, misuse of powers and infringement of development. In view of the wide discre- the principle of proportionality. tionary power of the Council in implement- ing Community agricultural policy, which entails the need to evaluate complex eco- nomic situations, I consider that this judg- ment is not manifestly mistaken. Further, there is nothing in the case-file to suggest that, in the present case, the Council exceeded its discretionary powers in 84. The argument of the referring court is authorising the Commission to amend the threefold, (a) First, it contends that, on the figure of 85%, since the situation in the basis of the available data, the figure of wine market in the course of that wine year 85% could never be applied because it was called for such a measure, even though that not consistent with the real situation in the situation had occurred repeatedly during wine market. The Commission was autho- preceding wine years. Accordingly, the rised by the Council 62 to invoke subpara- assessment of the facts on which the graph (b) of the second subparagraph of adoption of this measure was based is not Article 39(11) in order to make it possible manifestly mistaken.

in practice to implement the compulsory of 85%, whilst conferring on the Commis- distillation provided for in Article 39 of sion the power to determine a different Regulation No 822/87. The consequence of percentage depending on the need to bal- that was that Article 39(3) was not applied. ance and stabilise the wine market and to It follows therefrom that the assessment is ensure the success of the compulsory dis- manifestly mistaken and the contested tillation measures, cannot be regarded as provision is irrational, 63 principally invalidating the provision in question on because the Council indicated in Regula- the grounds relied on by the referring court. tion No 1566/93 that the uniform percen- The power conferred on the Commission tage would continue to be 85%. (b) The did not permit it to alter the fundamental reinstatement of the figure of 85% in 1993 principles governing compulsory distilla- constituted an infringement of the principle tion. of proportionality, because the Council ought reasonably to have known that the market conditions were not suited to its application, (c) In that context, the main- tenance in force of the provision allowing application of the reference figure of 85% further constituted a misuse of power because, in making provision for that percentage which was in practice inapplic- able, the Council permitted the Commis- sion to operate, as it wished, the compul- 86. First, the Community legislature, asses- sory distillation mechanism by implement- sing a complex economic reality, was ing subparagraph (b) of the second subpar- entitled to fix the reference years 64 given agraph of Article 39(11) of Regulation that, in general terms, as I indicated above, No 822/87 which, according to the it has broad discretionary power as to the national court, provides for a derogation nature and extent of the measures taken. from paragraph 3 of that article, which However, that discretionary power must be constitutes the normal rule and refers to the exercised in full compliance with higher- reference percentage of 85%, despite the ranking general principles, including the fact that that percentage was not applicable principle of proportionality. in practice.

Council would have committed a manifest to stabilising market conditions. 68 The error in the exercise of its discretionary adoption of such provisions could entail power and violated the principle of non- the discretionary powers being exceeded discrimination 65 had it not restricted itself and certain producers being treated unfa- to those reference years (1981/82, 1982/83 vourably compared to others. and 1983/84), 66 on the basis of which it had to verify whether the Member States had fulfilled their obligation not to exceed their reference quantity, but had taken into consideration the new subsequent reference periods before the necessary provisions were drawn up and without having all the necessary data concerning, for example, the implementation of the grubbing up policy (c) Infringement of the principle of propor- and the reduction of wine-growing areas tionality involved, which only producers in certain regions had carried out. 67 The reason for that is that it would in practice be favour- ing those regions which had made less effort to adapt to market conditions and penalising those which, by reducing their 88. Furthermore, the Council must fully production, had contributed progressively respect the principle of proportionality in exercising its wide discretionary power to adopt measures implementing the Commu- nity's agricultural policy.

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OPINION OF MR COSMAS — CASE C-155/99

question; when there is a choice between organise, under certain conditions, compul- several appropriate measures recourse must sory distillation for the purpose of restoring be had to the least onerous, and the the balance in and stabilising the wine disadvantages caused must not be dispro- sector. 72 As it transpires from the 45th portionate to the aims pursued'. 69 recital in the preamble to Regulation No 822/87, compulsory distillation to absorb the surplus table wine on the market is the most effective measure, and is triggered, on the basis of certain criteria, when it appears that there is a serious 90. Furthermore, as regards judicial review imbalance in the market. As regards the of the application of the principle of allocation of the total quantity to be proportionality by the Community legisla- distilled, the 46th recital refers to the effect ture in the context of the common agricul- of climatic conditions and the consequences tural policy, the Court has consistently held of the structural policy, which can give rise that 70 'the Community legislature has a to a different trend in production in the discretionary power which corresponds to different regions of the Community. the political responsibilities given to it by Articles 40 to 43 of the Treaty. Conse- quently, the legality of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate having regard to the objective which the compe- tent institution is seeking to pursue' 71 93. Having regard to these objectives, 73 (emphasis added). the Council considered that the most appropriate criterion was to designate and maintain the specific wine reference years (1981/82, 1982/83 and 1983/84) so that, on that basis, it could be determined whether Member States had contributed 91. In my opinion, the Council, in adopting to the effort to restore the balance in and the provisions of Article 39(3), (4) and stabilise the wine market. In order to (11), does not appear to have infringed achieve this aim, it opted to authorise the the principle of proportionality.

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BUSOLIN AND OTHERS

Commission to amend the envisaged figure obliged to assess the future effects of rules of 85% whenever necessary in order to to be adopted and those effects cannot be achieve the objectives of compulsory dis- accurately foreseen, its assessment is open tillation. to criticism only if it appears manifestly incorrect in the light of the information available to it at the time of the adoption of the rules in question'.

94. The option exercised by the Council cannot, in my opinion, be regarded as manifestly inappropriate for achieving the 96. Consequently, an issue concerning the aim intended by the adoption of the invalidity of the provisions of Article 39(3), compulsory distillation measure. Moreover, (4) and (11) of Regulation No 822/87 for the referring court does not explain how a infringement of the principle of proportion- change in the reference years or the deter- ality would arise only if those provisions mination of a new fixed reference percen- were manifestly inappropriate or unneces- tage, rather than a measure adapted to the sary to meet the objectives pursued and situation of each wine year, 74 would con- their disadvantages outweighed their stitute a more appropriate and less restric- advantages which, however, according to tive measure than the mechanism provided the foregoing analysis, is not the situation for in the provision in question. 75 in the present case.

99. I should also recall that the Manage- ment Committee procedure referred to in Article 83 of Regulation No 822/87 is intended both for the application of sub- paragraph (b) of the second subparagraph of Article 39(11) and for fixing the uniform 98. I consider that, in the present case, percentage and reference years (Arti- there are no grounds for considering that cle 39(9)). That means that the amendment this is a case of misuse of procedure or of of the fixed percentage of 85%, provided powers or that the objective of Article 39 for in paragraph 3, and the adjustment of of Regulation No 822/87, as amended, is to that percentage for a given wine year are enable the Commission to manage compul- carried out in accordance with the same sory distillation as it wishes and, with it, procedure. the allocation between the different regions of the Community of the quantity to be delivered to compulsory distillation under the procedure involving the Management Committee for Wine provided for in Arti- 100. Accordingly, in light of the foregoing cle 83 of Regulation No 822/87, and in considerations, I consider that the Council contravention of the procedure laid down has not committed a misuse of procedure or by Article 43 of EC Treaty (now, after of its powers given that it maintained the amendment, Article 37 EC). To uphold uniform percentage of 85%, even though it that argument, advanced by Mr Busolin adopted Regulation No 1566/93, amend- and restated by the referring court, would ing Regulation No 822/87, whilst at the be to misconstrue the role played by the same time providing for the application of Commission, under the EC Treaty, in subparagraph (b) of the second subpara- implementing the Council's acts. This graph of paragraph 11 in the 1993/94 wine means that the Commission must strictly year; the contentions to the contrary are remain within the framework laid down on unfounded. each occasion by the Council, while fully observing the conditions laid down by the 80 — The Council and the Commission point out (in para- graphs 47 and 48 respectively of their written observa- tions) that the Committee procedure (laid down in Articles 82 and 83 of Regulation No 822/87) is recognised 79 — See, for example, Case 2/57 Compagnie des hauts four- by the EC Treaty and may result in a Council decision. For neaux de Chasse v High Authority [1958] ECR 199 and that reason, the argument that such a procedure could lead Joined Cases 32/87, 52/87 and 57/87 ISA and Others v to the unchecked overturning of the compulsory distilla- Commission [1988] ECR 3305, paragraph 19. tion scheme at the behest of the Commission is unfounded.

— Commission Regulation (EC) No 343/94 of 15 February 1994 opening compulsory distillation as provided for in Article 39 of Council Regulation (EEC) No 822/87 and derogating for the 1993/94 wine year from certain detailed rules for the application thereof.

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