Report for the Hearing delivered in Case 0-315/88

I — The relevant legislation

1. The essential provisions governing the organization of the market in wine were consolidated in Council Regulation (EEC) No 822/87 of 16 March 1987 (Official Journal 1987, L 84, p. 1).

2. Council Regulation (EEC) No 823/87 of 16 March 1987 (Official Journal 1987, L 84, p. 59) consolidates the special provisions relating to quality wines produced in specified regions.

3. Regulation (EEC) No 1698/70 of the Commission of 25 August 1970 (Official Journal, English Special Edition 1970 (II), p. 579) defines the circumstances in which Member States may derogate from the principle that the vinification of a quality wine psr must take place within the region of production.

II — The facts

1. Angelo Bagli Pennacchiotti is the President of a wine-growers' cooperative at Monte Porzio, Latium, Italy.

2. Criminal proceedings have been brought on that account against Mr Bagli Pennacchiotti, on the basis of Article 515 of the Penal Code, which concerns commercial fraud, and Article 28 of Decree No 930 of the President of the Republic of 12 July 1963, which lays down penalties for the production, sale, offering for sale or distribution in any manner for consumption under a registered or registered and certified designation of origin wines which do not fulfil the conditions laid down for the use of such a designation ... .

3. The defendant, referring to the existence in Italian law of inconsistent administrative measures concerning the movement of grapes outside the area in which they were harvested, requested that the national court should seek, under Article 177 of the EEC Treaty, a preliminary ruling from the Court of Justice on whether Council Regulation No 822/87 entailed an outright prohibition of such transfers or whether it authorized Member States to adopt different rules in that regard.

4. The national court considered that the question was material to the decision on the defendant's criminal liability; it allowed the request and, by order of 21 September 1988, sought a preliminary ruling from the Court on the following question:

5. The order for reference was received at the Court Registry on 27 October 1988.

6. In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities, written observations were submitted by

7. 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. It nevertheless requested the Commission to reply in writing to two questions; the Commission complied with that request within the allotted time.

8. By decision of 6 December 1989, the Court assigned the case to the Third Chamber.

III — Written observations submitted to the Court

1. (a) In Mr Bagli Pennacchiotti's submission, the relevant Community provisions are contained in: (i) Council Regulation No 338/79, especially Article 2(2), concerning the power of Member States to define other conditions of production for quality wines psr, and Article 6(2), concerning the processing of grapes and grape musts outside the area of production; (ii) Regulation No 822/87, Article 15(2) of which, read in conjunction with Annex VI thereto, authorizes, subject to certain conditions, movement outside the area of production in order to carry out operations such as aeration and heat treatment. (b) According to Mr Bagli Pennacchiotti, the internal legislative provisions and regulations of the Italian Republic are inconsistent with regard to that question: (i) Article 5 of the Decree of the President of the Republic of 8 August 1983 regulating the production of Frascati wine prohibits vinification operations outside the area of production; (ii) the Decree of the President of the Republic of 12 July 1963, which has legislative force, and the Decree of the President of the Republic of 31 October 1979, on the other hand, authorize such practices in the circumstances specified in Circular No 12 of the Minister for Agriculture and Forestry. That circular authorizes the movement both inside and outside the area of production of wines which have not yet acquired the characteristics required by the regulations. Such movement is authorized provided that the products concerned are accompanied by administrative documents indicating their precise nature. The wines may be brought back into their area of production in order to complete their preparation (in that case, the period spent outside the area is not counted when calculating the ageing of the wine). (c) Mr Bagli Pennacchiotti proposes that, because of those contradictions in the Italian legislative and other provisions, the national court's question should be interpreted as seeking a ruling on whether the movements authorized by Circular No 12 are compatible with Anieles 2 and 6 of Regulation No 338/79. (d) Mr Bagli Pennacchiotti proposes that the question, interpreted in that manner, should be answered as follows: (i) Movements for technical and/or economic reasons which do not affect the identity of the vinification are covered by the powers conferred on the States by the Community provided that a system of control exists; (ii) Inasmuch as they exclude any part of the preparation process, the Italian provisions authorizing storage outside the area of production are consistent with Community law even without reference to Article 6 of Regulation No 338/79, which authorizes Member States to adopt derogating measures with regard to the place where the vinification process is to be carried out.

2. The Commission, the Italian Republic and the Kingdom of Spain agree that:

3. The Commission points out that, with one exception which is immaterial to the present case, the right of derogation granted by Community law has not been used in the Italian rules in connection with Frascati wine.

4. The Italian Republic asserts that the national rules governing Frascati wine are contained in the Decree of the President of the Republic of 3 March 1966, as amended by the Decrees of 1 August 1983 and 18 November 1987.

5. The Kingdom of Spain lists the requirements to be met when operations in the vinification process are carried out outside the area of production.

IV — Answers of the Commission to the questions put by the Court

1. First question

The Commission is requested to state the legal reasons for which Regulation No 1698/70 applies to quality sparkling wines psr.

Answer

Pursuant, inter alia, to Article 6 of the basic regulation, Regulation No 823/87 (the provisions of which are identical to those of Regulation No 817/70, previously the basic regulation), Regulation No 1698/70 lays down certain derogations concerning the production of quality wines psr. Those provisions and that regulation are therefore identical in scope. At the material time in the case before the national court, before the formal amendments introduced by Council Regulation (EEC) No 2044/89 of 19 June 1989 (Official Journal 1989, L 202, p. 8), Article 6 of Regulation No 823/87 applied without distinction to all quality wines psr, including quality sparkling wines produced in specified regions.

2. Second question

The Commission is requested to state the legal reasons for which the mere storage of products during the course of vinification outside the limits of the specified region is prohibited by the Community legislation governing quality wines psr and quality sparkling wines psr.

Answer

The production of a quality sparkling wine psr includes its storage during the production process as defined by Article 17 of Council Regulation (EEC) No 358/79 of 5 February 1979 on sparkling wines produced in the Community (Official Journal 1979, L 54, p. 130).

The second subparagraph of Article 6(2) of Regulation No 823/87, which provides that the vinification process must be carried out within the specified region, therefore applies to such storage.

1 Language of the case: Italian.

2 Grapes from which quality wines psr are made.