Report for the Hearing deliveredin Case 311/87

I — Facts and Procedure

1. Legal Background

Under Article 12 (2) (q) of Council Regulation No 355/79 of 5 February 1979 laying down general rules for the description and presentation of wines and grape musts, in the case of quality wines produced in specified regions (psr) the description on the labelling may be supplemented by a statement that the wines were bottled:

Article 17 of Commission Regulation (EEC) No 997/81 of 26 March 1981 laying down detailed rules for the description and presentation of wines and grape musts (Official Journal 1981, L 106, p. 1) specifies in this connection that the statement provided for in the abovementioned Article 12 (2) (q) is to be, for German wines and wines from the province of Bolzano, Erzeugerabfüllung.

2. Background to the case

Erzeugergemeinschaft Goldenes Rheinhessen is a group of vineyards recognized by the State that produces wine, grape must and grapes in the winegrowing region of Rheinhessen, where it owns cellars. The grapes harvested in the vineyards of its members are first made into wine in those vineyards. The winemaking operations must, however, comply with the rules on production and quality laid down by the group. The group then collects its members' wines in large containers in its cellars at Bornheim, where the wines are treated with fining agents and sweetened with unfermented grape must.

The group concluded a contract for the bottling of the wines with Weinkellerei Parco GmbH of Rüdesheim, which was later taken over by another firm. For that purpose the wine was transported to Weinkellerei's cellars. The delivery note accompanying the wine was addressed to Weinkellerei and indicated that delivery was made for bottling on a contract basis. The transport costs were borne by Weinkellerei, however. In Weinkellerei's cellars, the wine was placed in containers labelled with the words property of the producers' group. The wine was subsequently bottled on the basis of a written order from the group, after the bottling date had been agreed by telephone. Bottling was carried out by Weinkellerei's specialized staff under the supervision of one of the group's employees, who was empowered to give instructions. The group then requested an official inspection number for the wine. Once that number had been issued to it, the group sold the wine, in bottles with labels bearing the indication Erzeugerabfüllung Erzeugergemeinschaft Goldenes Rheinhessen, to Weinkellerei. Under the abovementioned contract, Weinkellerei had been granted the exclusive right to market the wines in question in Germany.

As a result of an inspection by the Chemisches Untersuchungsamt (Chemical Investigation Office) Mainz, this bottling procedure was brought to the knowledge of the Ministry of the Environment and Health of the Land Rheinland-Pfalz. By two letters, the Ministry informed the group that the use of the description Erzeugerabfüllung in those circumstances appeared to be illegal.

The group brought an action before the Verwaltungsgericht (Administrative Court) Mainz for a declaration that the wines produced by the group but bottled under the agreement with Weinkellerei could bear the description Erzeugerabfüllung. The Verwaltungsgericht dismissed the application on the ground that the right to distribute a wine bearing the description Erzeugerabfüllung requires that the wine should have been made and bottled in the group's undertaking. Since in the present case the wine had been made at the vineyards of the members of the group, the first condition was not fulfilled. In those circumstances there was no need to look any further into the question of bottling. The group lodged an appeal on 19 January 1987.)

3. Preliminary questions

Judging that the resolution of the dispute depended on the interpretation of Community Law, the Oberverwaltungsgericht (Higher Administrative Court) decided, by an order of 29 September 1987, to stay the proceedings and refer the following question to the Court of Justice for a preliminary ruling:

In the reasons for its order, the Oberverwaltungsgericht states that the second indent of Article 12 (2) (q) of Regulation No 355/79 may be interpreted either broadly, in accordance with its wording, or narrowly, in reliance on the general scheme and purpose of the regulation.

According to the broader interpretation, importance should be attached only to the identity of the bottler, regardless of the undertaking in which the wine was made or bottled. In this case, the producers' group was the bottler of the wine in question because it carried out, or arranged, the bottling on its own account. The group was, moreover, still owner of the wines at the time of bottling. By this interpretation the group would be entitled to use the description Erzeugerabfüllung on the label.

The restrictive interpretation would lead to the opposite conclusion. By this interpretation it would appear from the context of the regulation that a producers' group cannot be subject to less stringent requirements than the individual producers themselves who are members of the group. Moreover, the purpose of the regulations is to afford the actual producer, and organizations treated on the same footing, a marketing advantage over wine traders inasmuch as the statement that the wine was bottled by the producer indicates a particularly close connection between the production and bottling of the wine. Finally, from the consumer's point of view, the term Erzeugerabfüllung implies that the harvesting of the grapes and the making and bottling of the wine are performed by the same person. This interpretation would require that bottling take place within the economic unit constituted by the producers group.

That is not the case here. The Oberverwaltungsgericht holds that the contract between the producers' group and Weinkellerei does not constitute a lease of the bottling equipment. Noting that bottling was carried out by Weinkellerei's employees, and after examining other points of the contract, such as duration, risk, transport costs and the subsequent sale to Weinkellerei, the court arrives at the conclusion that the legal relationship must be considered to consist only in the bottling of the wine on a contract basis in Weinkellerei's facilities on behalf of the group.

4. Procedure

The order of the national court was lodged at the Court Registry on 12 October 1987.

Under Article 20 of the Statute of the Court of Justice (EEC), written observations were submitted by the Goldenes Rheinhessen producers' group, the plaintiff in the main proceedings, represented by Hermann Böckel, Rechtsanwalt, Mainz, the Land Rheinland-Pfalz, the defendant in the main proceedings, represented by Regierungsdirektor Dr Jürgen Faltin, of the Ministry of Environment and Health, and the Commission of the European Communities, represented by Peter Karpenstein, a member of its Legal Department, acting as Agent.

By a decision of 16 March 1988 pursuant to Article 95 (1) and (2) of the Rules of Procedure the Court assigned the case to the Fourth Chamber. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry.

II — Summary of written observations submitted to the Court

The producers' group, in substance, argues that it is impossible in practice to achieve a situation in which the harvesting of the grapes and the making and bottling of the wine are performed by the same person. In the present case, the members of the group perform a number of operations during the production of the wine, but they do so for their association and in accordance with rules laid down by the association. The group carries out the remaining operations. In particular, the group's practice with regard to bottling has in the past been expressly approved by the wine inspection authority.

The Land Rheinland-Pfalz points out first of all that a group of winegrowers cannot be subject to requirements less stringent than those applicable to an individual producer.

The Land goes on to state that if the group appears on the label as the producer of the wine, this implies that it must be able to exert an influence on the quality of the wine at the earliest possible stage. In this case, however, the group can have no control over the cellar practices of the individual growers, who are responsible, in particular, for the stabilization of the wine. The only influence the group exerts on the quality of the wine thus lies in the addition of filtered grape must.

The Land also maintains that a distinction must be made between the terms Erzeugerabfüllung (bottled by the producer) and Kellereiabfüllung (bottled at a winery). Kellereiabfüllung covers inter alia the bottling of wines ready for bottling from legally independent suppliers, while the term Erzeugerabfüllung implies that the producer himself has sole responsibility for bottling. Such a distinction would be impossible under a broad interpretation of the provisions in issue. Finally, the Land observes that the group's practice of contracting out its bottling does not comply with the requirement that the producer be responsible for bottling his wine.

The Commission considers that the preliminary question actually involves two distinct questions. First, the Oberverwaltungsgericht wishes to know whether producer groups enjoy a privileged status with regard to the use of the term Erzeugerabfüllung inasmuch as they are not required to have themselves produced the wine which is bottled. The second question is whether the description Erzeugerabfüllung may also be used when bottling is carried out in facilities belonging not to the group but to another firm.

The Commission addresses more particularly the first question. In its view, it is clear from the wording of Article 12 (2) (q) of Regulation No 355/79 that the term Erzeugerabfüllung may only be used if the wines were produced by the bottler himself. This requirement that producer and bottler be the same person also applies to producer groups. If the group wishes to use the description Erzeugerabfüllung, it must itself make the wine. Any other interpretation would lead to a privileged status for producers' groups, and there is no basis for this. Such an interpretation might even result in discrimination within the meaning of Article 40 (3) of the EEC Treaty. On the basis of these considerations, the Commission proposes that the preliminary question be answered in the following terms:

With regard to the second question, the Commission confines itself to observing that the performance of bottling operations outside the producer's premises is incompatible with the basic idea justifying the description Erzeugerabfüllung unless the producer himself or a representative who is responsible and competent in all respects continuously supervises the bottling.

1 Language of the Case: German.